Document:

Exhibit 10-s-1

 

NON-EMPLOYEE DIRECTORS’ COMPENSATION SUMMARY

 

Our
non-employee directors receive a retainer at the rate of $100,000 per year for
service on our board of directors, payable in cash (in quarterly installments
of $25,000 at the beginning of each quarter). 
This structure is effective November 19, 2010, for existing
directors and is effective upon appointment for any new director (prorated as
appropriate).

 

Under
the 2006 Long-Term Incentives Plan, which has been approved by our shareowners
and amended by the Board of Directors (the “Plan”), each director has the
option each year to determine whether to defer all or any part of the cash
portion of his or her retainer by electing to receive additional restricted
stock units of our common stock valued at the Fair Market Value (as defined in
the Plan) on the date the cash portion of the retainer payment would otherwise
be paid.

 

Under
the Plan, each non-employee director upon election as a director is granted an
award of restricted stock units of our common stock determined by dividing
$200,000 by the Fair Market Value on the date of such initial appointment.  In addition, each non-employee director is
granted an award of restricted stock units of our common stock on an annual
basis immediately after each annual meeting of our shareowners beginning with
the shareowners’ meeting following the first anniversary of Board service.  Such award is determined by dividing $100,000
by the Fair Market Value on the date of the shareowners’ annual meeting.

 

An
Audit Committee annual fee is paid to the Audit Committee Chair at a fixed
annual rate of $10,000 and the other Audit Committee members (excluding the
Chair) at a fixed rate of $5,000 each to be paid in cash (quarterly in
advance).  Each Audit Committee member
(including the Chair) has the option each year to determine whether to defer
all or any part of his

 

 

or
her Audit Committee annual fee by electing to receive additional restricted
stock units of our common stock valued at the Fair Market Value on the date the
cash retainer payment would otherwise be paid.

 

An
annual fee is paid to the Compensation Committee Chair at a fixed annual rate
of $10,000, an annual fee is paid to the Board Nominating and Governance
Committee Chair at a fixed annual rate of $5,000 and an annual fee is paid to
the Technology Committee Chair at a fixed annual rate of $5,000, each to be
paid in cash (quarterly in advance). 
Each of these Committee Chairs has the option each year to determine whether
to defer all or any part of his or her annual fee by electing to receive
additional restricted stock units of our common stock valued at the Fair Market
Value on the date the cash retainer payment would otherwise be paid.Exhibit 10.1

 

BONA
FILM GROUP LIMITED

 

2009 STOCK
INCENTIVE PLAN

 

WHEREAS,
Bona International Film Group Limited, a company incorporated under the laws of
the British Virgin Islands (“Bona BVI”) had adopted the Bona International Film
Group Limited 2009 Stock Incentive Plan (the “Original Plan”);

 

WHEREAS,
Bona BVI became a wholly-owned subsidiary of the Company (as such term
is defined herein) in connection a corporate reorganization constituting a
Corporate Transaction (as such term is defined herein) pursuant to the share
exchange agreement dated November 8, 2010 by and among the Company, Bona
BVI and the holders of the then outstanding issued share capital of Bona BVI;

 

WHEREAS,
the Company agrees to Assume (as such term is defined herein) the Awards (as
such term is defined herein) granted under the Original Plan;

 

WHEREAS,
the shareholders of the Company and its Board of Directors have approved this
2009 Stock Incentive Plan on the date hereof to amend and restate the Original
Plan;

 

NOW,
THEREFORE, this Plan is adopted as follows:

 

1.     Purposes of the Plan. 
The purposes of this Plan are to attract and retain the best available
personnel, to provide additional incentives to Employees, Directors and
Consultants and to promote the success of the Company’s business.

 

2.     Definitions.  The
following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award Agreement.  In the event a term is separately defined in
an individual Award Agreement, such definition shall supersede the definition
contained in this Section 2.

 

(a)   “Administrator” means the Board or any of the Committees
appointed to administer the Plan.

 

(b)   “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 promulgated under
the Exchange Act.

 

(c)   “Applicable Laws” means the legal requirements relating to
the Plan and the Awards under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules of
any jurisdiction applicable to Awards granted to residents therein.

 

(d)   “Assumed” means that pursuant to a Corporate Transaction
either (i) the Award is expressly affirmed by the Company or (ii) the
contractual obligations represented by the Award are expressly assumed (and not
simply by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the 

 

 

number and type of
securities of the successor entity or its Parent subject to the Award and the
exercise or purchase price thereof which at least preserves the compensation
element of the Award existing at the time of the Corporate Transaction as
determined in accordance with the instruments evidencing the agreement to
assume the Award.

 

(e)   “Award” means the grant of an Option, SAR, Dividend
Equivalent Right, Restricted Share, Restricted Share Unit or other right or
benefit under the Plan.

 

(f)    “Award Agreement” means the written agreement evidencing
the grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

 

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

 

(h)   “Cause” means, with respect to the termination by the
Company or a Related Entity of the Grantee’s Continuous Service, that such
termination is for “Cause” as such term is expressly defined in a
then-effective written agreement between the Grantee and the Company or such
Related Entity, or in the absence of such then-effective written agreement and
definition, is based on, in the determination of the Administrator, the Grantee’s:  (i) performance of any act or failure to
perform any act in bad faith and to the detriment of the Company or a Related
Entity; (ii) dishonesty, intentional misconduct or material breach of any
agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person.

 

(i)    “Change in Control”  means a change
in ownership or control of the Company after the Registration Date effected
through the following transactions: the direct or indirect acquisition by any
person or related group of persons (other than an acquisition from or by the
Company or by a Company-sponsored employee benefit plan or by a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Company’s outstanding
securities pursuant to a tender or exchange offer made directly to the Company’s
shareholders which a majority of the Directors who are not Affiliates or
Associates of the offeror do not recommend such shareholders accept.

 

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

 

(k)   “Committee” means any committee composed of members of the
Board appointed by the Board to administer the Plan.

 

(l)    “Company” means Bona Film Group Limited, a
company incorporated under the laws of the Cayman Islands or any
successor corporation that adopts the Plan in connection with a Corporate
Transaction.

 

(m)  “Consultant” means any person (other than an Employee or a
Director, solely with respect to rendering services in such person’s capacity
as an Employee or Director) who
is engaged by the Company or any Related Entity to render consulting or
advisory services to the Company or such Related Entity.

 

 

(n)   “Continuous Service” means that the provision of services
to the Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated. 
In jurisdictions requiring notice in advance of an effective termination
as an Employee, Director or Consultant, Continuous Service shall be deemed
terminated upon the actual cessation of providing services to the Company or a
Related Entity notwithstanding any required notice period that must be
fulfilled before a termination as an Employee, Director or Consultant can be
effective under Applicable Laws.  A
Grantee’s Continuous Service shall be deemed to have terminated either upon an
actual termination of Continuous Service or upon the entity for which the
Grantee provides services ceasing to be a Related Entity.  Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence,
(ii) transfers among the Company, any Related Entity, or any successor, in
any capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as
otherwise provided in the Award Agreement). 
An approved leave of absence shall include sick leave, military leave,
or any other authorized personal leave. 
For purposes of each Incentive Share Option granted under the Plan, if
such leave exceeds ninety (90) days, and reemployment upon expiration of such
leave is not guaranteed by statute or contract, then the Incentive Share Option
shall be treated as a Non-Qualified Share Option on the day three
(3) months and one (1) day following the expiration of such ninety
(90) day period.

 

(o)   “Corporate Transaction” means any of the following
transactions, provided, however, that the Administrator shall determine under
parts (iv) and (v) whether multiple transactions are related, and its
determination shall be final, binding and conclusive:

 

(i)            a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
in which the Company is incorporated;

 

(ii)           the
sale, transfer or other disposition of all or substantially all of the assets
of the Company;

 

(iii)          the
complete liquidation or dissolution of the Company;

 

(iv)          any
reverse merger or series of related transactions culminating in a reverse
merger (including, but not limited to, a tender offer followed by a reverse
merger) in which the Company is the surviving entity but (A) the Ordinary
Shares outstanding immediately prior to such merger are converted or exchanged
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than forty
percent (40%) of the total combined voting power of the Company’s outstanding
securities are transferred to a person or persons different from those who held
such securities immediately prior to such merger or the initial transaction
culminating in such merger, but excluding
any such transaction or series of related transactions that the Administrator
determines shall not be a Corporate Transaction; or

 

(v)           acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company
or by a Company-sponsored 

 

 

employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities but excluding any such transaction or series of related
transactions that the Administrator determines shall not be a Corporate
Transaction.

 

(p)   “Director” means a member of the Board or the board of
directors of any Related Entity.

 

(q)   “Disability” means as defined under the long-term
disability policy of the Company or the Related Entity to which the Grantee
provides services regardless of whether the Grantee is covered by such
policy.  If the Company or the Related
Entity to which the Grantee provides service does not have a long-term
disability plan in place, “Disability” means that a Grantee is unable to carry
out the responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment for a period
of not less than ninety (90) consecutive days. 
A Grantee will not be considered to have incurred a Disability unless he
or she furnishes proof of such impairment sufficient to satisfy the Administrator
in its discretion.

 

(r)    “Dividend Equivalent Right” means a right entitling the
Grantee to compensation measured by dividends paid with respect to Ordinary
Shares.

 

(s)   “Drag-Along Event” means the sale of all or substantially all
of the equity or assets or undertaking of the Company approved by holders (i) holding a
majority of each class of shares of the Company, voting separately or (ii) representing two thirds of all shares on an as-if-converted
basis.

 

(t)    “Employee” means any
person, including an Officer or Director, who is in the employ of the Company
or any Related Entity, subject to the control and direction of the Company or
any Related Entity as to both the work to be performed and the manner and
method of performance.  The
payment of a director’s fee by the Company or a Related Entity shall not be
sufficient to constitute “employment” by the Company.

 

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

 

(v)   “Fair Market Value” means, as of any date, the value of
Ordinary Shares determined as follows:

 

(i)            If the Ordinary Shares are traded
on a securities exchange, the value shall be deemed to be the average of the
security’s closing prices on such exchange over the thirty (30) day period
ending one (1) day prior to the distribution,  as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

 

(ii)           If the Ordinary Shares are traded over-the-counter, the value shall be deemed to be the average of the closing bid prices
over the thirty (30) day period ending three (3) days prior to the
distributionas reported in The Wall Street Journal or such other
source as the Administrator deems reliable; and

 

 

(iii)          In the absence of an established market for the Ordinary Shares of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith.

 

The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be adjusted to make an appropriate
discount from the market value determined as above in sub-clauses (i), (ii) or
(iii) to reflect the fair market value thereof as determined in good faith
by the Administrator, or by a liquidator if one is appointed.

 

(w)  “Grantee” means an Employee, Director or Consultant who
receives an Award under the Plan.

 

(x)    “IPO” shall mean the Company’s first firm commitment
underwritten public offering of any of its securities to the general public
pursuant to (a) a registration statement filed under the Securities Act of
1933, as amended, or (b) the securities laws applicable to an offering of
securities in another jurisdiction pursuant to which such securities will be
listed on an internationally-recognized securities exchange.

 

(y)   “Incentive Share Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.

 

(z)    “Non-Qualified Share Option” means an Option not intended
to qualify as an Incentive Share Option.

 

(aa) “Officer” means a person who is an officer of the Company or
a Related Entity within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.

 

(bb) “Option” means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.

 

(cc) “Ordinary Share” means
an ordinary share of US$0.0005 nominal or par value, of the Company having the rights and
restrictions set out in the memorandum and articles of association of the Company, as amended from time to time.

 

(dd) “Parent” means a “parent corporation”, whether now or
hereafter existing, as defined in Section 424(e) of the Code.

 

(ee) “Plan” means this 2009 Stock Incentive Plan.

 

(ff)   “Qualified IPO” shall mean the closing of the Company’s
first firm commitment, underwritten public offering of Ordinary Shares or
securities representing Ordinary Shares in connection with which Ordinary
Shares or such securities (or the shares of a company of which the Company is a
wholly owned subsidiary established for the purpose of listing (the “Listco”)) is listed
and becomes publicly traded on an internationally recognized securities
exchange (including the Stock Exchange of Hong Kong) or the NASDAQ National Market
or the issue or transfer of shares in a company whose shares are listed on an internationally
recognized stock exchange (including the Stock Exchange of Hong Kong) or on 

 

 

NASDAQ National Market for
which shares approval for listing and trading has been duly obtained and which
shares are issued or transferred in consideration of the acquisition of the
Ordinary Shares of the Company or the shares of the Listco, provided, however,
that such transaction or listing shall result in aggregate proceeds to the
Company of at least US$60,000,000 (before deduction for underwriters’
commissions and expenses), and that the market capitalization of the Company or
the Listco immediately after such transaction or listing shall be at least US$300,000,000.

 

(gg) “Registration Date” means the first to occur of (i) the
closing of the first sale to the general public pursuant to a registration
statement filed with and declared effective by the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended, of (A) the
Ordinary Shares or (B) the same class of securities of a successor
corporation (or its Parent) issued pursuant to a Corporate Transaction in
exchange for or in substitution of the Ordinary Shares; and (ii) in the
event of a Corporate Transaction, the date of the consummation of the Corporate
Transaction if the same class of securities of the successor corporation (or
its Parent) issuable in such Corporate Transaction shall have been sold to the
general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, on or prior to the date of consummation of such Corporate
Transaction.

 

(hh) “Related Entity” means any Parent or Subsidiary of the
Company and any business, corporation, partnership, limited liability company or
other entity in which the Company or a Parent or a Subsidiary of the Company
holds a substantial ownership interest, directly or indirectly.

 

(ii)   “Replaced” means that
pursuant to a Corporate Transaction the Award is replaced with a comparable share or stock award or a cash
incentive program of the Company, the successor entity (if applicable) or
Parent of either of them which preserves the compensation element of such Award
existing at the time of the Corporate Transaction and provides for subsequent payout
in accordance with the same (or a more favorable) vesting schedule applicable
to such Award.  The determination of
Award comparability shall be made by the Administrator and its determination
shall be final, binding and conclusive.

 

(jj)   “Restricted Share” means a Share issued under the Plan to
the Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture
provisions, and other terms and conditions as established by the Administrator.

 

(kk) “Restricted Share Units” means an Award which may be earned
in whole or in part upon the passage of time or the attainment of performance
criteria established by the Administrator and which may be settled for cash,
Shares or other securities or a combination of cash, Shares or other securities
as established by the Administrator.

 

(ll)   “Rule 16b-3” means Rule 16b-3 promulgated under
the Exchange Act or any successor thereto.

 

 

(mm)     “SAR”
means a share appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in
the value of Ordinary Shares.

 

(nn) “Share” means an Ordinary Share of the Company.

 

(oo) “Spin-off Transaction” means a distribution by the Company to
its shareholders of all or any portion of the securities of any Subsidiary of
the Company.

 

(pp) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.

 

3.     Shares Subject to the Plan.

 

(a)   Subject to the provisions of Section 10 below, the maximum
aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Share Options) is 209,163  Shares (proportionally adjusted to reflect
any share dividends, share splits, or similar transactions).  For
purpose of this Plan, the Company shall instruct Mr. Yu
Dong  or any company owned by Mr. Yu Dong to transfer the corresponding Shares
registered under its name to the Grantees.

 

(b)   Any Shares covered by an Award (or portion of an Award) which is
forfeited, canceled or expires (whether voluntarily or involuntarily) shall be
deemed not to have been issued for purposes of determining the maximum
aggregate number of Shares which may be issued under the Plan.  Shares that actually have been issued under
the Plan pursuant to an Award shall not be returned to the Plan and shall not
become available for future issuance under the Plan, except that if unvested
Shares are forfeited, or repurchased by the Company at the lower of their
original purchase price or their Fair Market Value at the time of repurchase,
such Shares shall become available for future grant under the Plan.  To the extent not
prohibited by Section 422(b)(1) of the Code (and the corresponding
regulations thereunder), the listing requirements of The Nasdaq National Market
(or other established stock exchange or national market system on which the
Ordinary Shares are traded) and Applicable Law, any Shares covered by an Award
which are surrendered (i) in payment of the Award exercise or purchase
price or (ii) in satisfaction of tax withholding obligations incident to
the exercise of an Award shall be deemed not to have been issued for purposes
of determining the maximum number of Shares which may be issued pursuant to all
Awards under the Plan, unless otherwise determined by the Administrator.

 

4.     Administration of the Plan.

 

(a)   Plan Administrator.

 

(i)            Administration with Respect to Directors and Officers.  With respect to grants of Awards to Directors
or Employees who are also Officers or Directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws and to permit such grants and related transactions under the
Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3.  Once
appointed, such 

 

 

Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.

 

(ii)           Administration With Respect to Consultants and Other
Employees.  With respect to grants of
Awards to Employees or Consultants who are neither Directors nor Officers of
the Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted in such
a manner as to satisfy the Applicable Laws. 
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 
The Board may authorize one or more Officers to grant such Awards and
may limit such authority as the Board determines from time to time.

 

(iii)          Administration Errors.  In the event an Award is granted in a manner
inconsistent with the provisions of this subsection (a), such Award shall
be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

 

(b)   Powers of the Administrator.  Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

 

(i)            to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time hereunder;

 

(ii)           to determine whether and to what extent Awards are granted
hereunder;

 

(iii)          to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

 

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

 

(v)           to determine the terms and conditions of any Award granted
hereunder (including the vesting schedule set forth in the Notice of Stock
Option Award);

 

(vi)          to amend the terms of any outstanding Award granted under
the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Award shall not be made without the
Grantee’s written consent;

 

(vii)         to construe and interpret the terms of the Plan and Awards,
including without limitation, any notice of award or Award Agreement, granted
pursuant to the  Plan;

 

(viii)        to grant Awards to Employees, Directors
and Consultants employed outside the United States on such terms and conditions
different from those specified in the Plan as may, in the judgment of the
Administrator, be necessary or desirable to further the purpose of the Plan; and

 

(ix)           to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

 

 

(c)   Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or as Officers or
Employees of the Company or a Related Entity, members of the Board and any
Officers or Employees of the Company or a Related Entity to whom authority to
act for the Board, the Administrator or the Company is delegated shall be
defended and indemnified by the Company to the extent permitted by law on an
after-tax basis against all reasonable expenses, including attorneys’ fees,
actually and necessarily incurred in connection with the defense of any claim,
investigation, action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any Award
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Company) or paid by them in
satisfaction of a judgment in any such claim, investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such claim, investigation, action, suit or proceeding that such person is
liable for gross negligence, bad faith or intentional misconduct; provided,
however, that within thirty (30) days after the institution of such claim,
investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.

 

5.     Eligibility.  Awards other than Incentive Share Options may
be granted to Employees, Directors and Consultants.  Incentive Share Options may be granted only
to Employees of the Company or a Parent or a Subsidiary of the Company.  An Employee, Director or Consultant who has
been granted an Award may, if otherwise eligible, be granted additional Awards.

 

6.     Terms and Conditions of Awards.

 

(a)   Types of Awards. The Administrator is authorized under the
Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) cash or
(iii) an Option, a SAR, or similar right with a fixed or variable price
related to the Fair Market Value of the Shares and with an exercise or
conversion privilege related to the passage of time, the occurrence of one or
more events, or the satisfaction of performance criteria or other
conditions.  Such awards include, without
limitation, Options, SARs, sales or bonuses of Restricted Share, Restricted
Share Units or Dividend Equivalent Rights, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or
alternative.

 

(b)   Designation of Award. 
Each Award shall be designated in the Award Agreement.  In the case of an Option, the Option shall be
designated as either an Incentive Share Option or a Non-Qualified Share
Option.  However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of Shares
subject to Options designated as Incentive Share Options which become
exercisable for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary of the Company) exceeds
$100,000, such excess Options, to the extent of the Shares covered thereby in
excess of the foregoing limitation, shall be treated as Non-Qualified Share
Options.  For this purpose, Incentive
Share Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares shall be determined as of the
grant date of the relevant Option.

 

 

(c)   Conditions of Award. 
Subject to the terms of the Plan, the Administrator shall determine the
provisions, terms, and conditions of each Award including, but not limited to,
the Award vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other consideration)
upon settlement of the Award, payment contingencies, and satisfaction of any
performance criteria.  The performance
criteria established by the Administrator may be based on any one of, or
combination of, the following: (i) increase in share price, (ii) earnings
per share, (iii) total shareholder return, (iv) operating margin, (v) gross
margin, (vi) return on equity, (vii) return on assets, (viii) return
on investment, (ix) operating income, (x) net operating income, (xi) pre-tax
profit, (xii) cash flow, (xiii) revenue, (xiv) expenses, (xv) earnings
before interest, taxes and depreciation, (xvi) economic value added and (xvii) market
share.  The performance criteria may be
applicable to the Company, Related Entities and/or any individual business
units of the Company or any Related Entity. 
Partial achievement of the specified criteria may result in a payment or
vesting corresponding to the degree of achievement as specified in the Award
Agreement.

 

(d)   Acquisitions and Other Transactions.  The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or
obligations to grant future awards in connection with the Company or a Related
Entity acquiring another entity, an interest in another entity or an additional
interest in a Related Entity whether by merger, share purchase, asset purchase
or other form of transaction.

 

(e)   Deferral of Award Payment. 
The Administrator may establish one or more programs under the Plan to
permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria,
or other event that absent the election would entitle the Grantee to payment or
receipt of Shares or other consideration under an Award.  The Administrator may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of any
such deferral program.

 

(f)    Separate Programs. 
The Administrator may establish one or more separate programs under the
Plan for the purpose of issuing particular forms of Awards to one or more
classes of Grantees on such terms and conditions as determined by the
Administrator from time to time.

 

(g)   Early Exercise.  The
Award Agreement may, but need not, include a provision whereby the Grantee may
elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award.  Any unvested Shares received pursuant to such
exercise may be subject to a repurchase right in favor of the Company or a
Related Entity or to any other restriction the Administrator determines to be
appropriate.

 

(h)   Term of Award.  The
term of each Award shall be the term stated in the Award Agreement, provided, however,
that the term of an Incentive Share Option shall be no more than ten (10) years
from the date of grant thereof.  However,
in the case of an Incentive Share Option granted to a Grantee who, at the time
the Option is granted, owns shares

 

 

 

 

representing more than
ten percent (10%) of the voting power of all classes of shares of the
Company or any Parent or Subsidiary of the Company, the term of the Incentive Share Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.  Notwithstanding the
foregoing, the specified term of any Award shall not include any period for
which the Grantee has elected to defer the receipt of the Shares or cash
issuable pursuant to the Award.

 

(i)    Transferability of Awards. 
Incentive Share Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the lifetime
of the Grantee, only by the Grantee.  Non-Qualified Stock Options and other Awards shall be
transferable (i) by will and by the laws of descent and distribution and
(ii) during the lifetime of the Grantee, to the extent and in the manner
authorized by the Administrator, to certain persons or entities
related to the participant, including but not limited to members of the Grantee’s immediate family, trusts
or other entities controlled by or whose beneficiaries or beneficial owners are
the Grantee and/or members
of the Grantee’s immediate
family, provided
that the transfer and exercise of the Awards shall comply with applicable laws
and provided further that the Administrator has received evidence satisfactory to it
that the transfer (i) is being made for essentially donative, estate and/or tax
planning purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration or in exchange for an interest in a qualified
transferee), and (ii) will not compromise the Company’s ability to rely on Rule 701,
or register Shares issuable under this Plan on Form S-8, under the
Securities Act of 1933, as amended. 
Notwithstanding the foregoing, the transfer and exercise restrictions in this Section 6(i) shall
not apply to: (i) transfer to the Company; (ii) designation  of one or more beneficiaries of
the Grantee’s Award in the event of the Grantee’s death on a beneficiary
designation form provided by the Administrator; (iii) subject to any applicable
limitations on Incentive Share Options, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or ratified
by the Administrator; (iv) if the Grantee has suffered a disability,
permitted transfers or exercises on behalf of the participant by his or her
legal representative; (v) the authorization by the Administrator of “cashless
exercise” procedures with third parties who provide financing for the purpose
of (or who otherwise facilitate) the exercise of awards consistent with
applicable laws and the express authorization of the Administrator.

 

(j)    Time of Granting Awards. 
The date of grant of an Award shall for all purposes be the date on
which the Administrator makes the determination to grant such Award, or such
other date as is determined by the Administrator.

 

7.     Award Exercise or Purchase Price, Consideration and Taxes.

 

(a)   Exercise or Purchase Price. 
The exercise or purchase price, if any, for an Award shall be as
follows:

 

(i)            In the case of an Incentive Share Option:

 

(A)  granted to an Employee who, at the time of the grant of such
Incentive Share Option owns shares representing more than ten percent (10%) of
the voting 

 

 

power of all classes of shares of the Company or any
Parent or Subsidiary of the Company, the per Share exercise price shall be not
less than one hundred ten percent (110%)  of the Fair Market Value per Share on the
date of grant; or

 

(B)  granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)           In the case of a Non-Qualified Share Option, the per Share
exercise price shall be not less than fifteen percent (15%) of the Fair Market Value
per Share on the date of grant unless otherwise determined by the
Administrator.

 

(iii)          In the case of other Awards, such price as is determined by
the Administrator.

 

(iv)          Notwithstanding the foregoing provisions of this
Section 7(a), in the case of an Award issued pursuant to Section 6(d),
above, the exercise or purchase price for the Award shall be determined in
accordance with the provisions of the relevant instrument evidencing the
agreement to issue such Award.

 

(b)   Consideration. 
Subject to Applicable Laws, the consideration to be paid for the Shares
to be issued upon exercise or purchase of an Award including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Share Option, shall be determined at the time of grant).  In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the following:

 

(i)            cash;

 

(ii)           check;

 

(iii)          if the exercise or purchase occurs on or after the Registration
Date, surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require which have
a Fair Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall be
exercised, provided, however, that Shares acquired under the Plan or any other
equity compensation plan or agreement of the Company must have been held by the
Grantee for a period of more than six (6) months (and not  used for another Award
exercise by attestation during such period);

 

(iv)          with respect to Options, if the exercise occurs on or after
the Registration Date, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate
sale of some or all of the purchased Shares and remit to the Company sufficient
funds to cover the aggregate exercise price payable for the purchased Shares
and (B) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order
to complete the sale transaction; or

 

 

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

 

The
Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in
Section 4(b)(iv), or by other means, grant Awards which do not permit all
of the foregoing forms of consideration to be used in payment for the Shares or
which otherwise restrict one or more forms of consideration.

 

(c)   Taxes.  No Shares
shall be delivered under the Plan to any Grantee or other person until such
Grantee or other person has made arrangements acceptable to the Administrator
for the satisfaction of any non-U.S., federal, state, or local income and
employment tax withholding obligations, including, without limitation,
obligations incident to the receipt of Shares or the disqualifying disposition
of Shares received on exercise of an Incentive Share Option.  Upon exercise of an Award the Company shall
withhold or collect from Grantee an amount sufficient to satisfy such tax
obligations.

 

8.     Exercise of Award.

 

(a)   Procedure for Exercise; Rights as a Shareholder.

 

(i)            Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.

 

(ii)           An Award shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Award by the person entitled to exercise the Award and full payment for the
Shares with respect to which the Award is exercised, including, to the extent
selected, use of the broker-dealer sale and remittance procedure to pay the
purchase price as provided in Section 7(b)(iv).

 

(b)   Exercise of Award Following Termination of Continuous Service.

 

(i)            An Award may not be exercised after the termination date
of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee’s Continuous Service only to the extent provided
in the Award Agreement.

 

Where the Award Agreement permits a Grantee to
exercise an Award following the termination of the Grantee’s Continuous Service
for a specified period, the Award shall terminate to the extent not exercised
on the last day of the specified period or the last day of the original term of
the Award, whichever occurs first.

 

(ii)           Any Award designated as an Incentive Share Option to the
extent not exercised within the time permitted by law for the exercise of
Incentive Share Options following the termination of a Grantee’s Continuous
Service shall convert automatically to a Non-Qualified Share Option and
thereafter shall be exercisable as such to the extent exercisable by its terms
for the period specified in the Award Agreement.

 

 

9.     Conditions Upon Issuance of Shares.

 

(a)   Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares
pursuant thereto shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

(b)   As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.

 

(c)   As a condition to the exercise of an Award, the Grantee shall
grant a power of attorney to the Board or any person designated by the Board to
exercise the voting rights with respect to the Shares and the Company may require the
person exercising such Award to acknowledge and agree to be bound by the
provisions of the Members  Agreement, the Right of First Refusal and Co-Sale Agreement and the Voting Agreement entered into
among the shareholders of the Company from time to time, as if the Grantee is an Ordinary Shareholder thereunder.

 

10.  Adjustments Upon Changes in Capitalization.  Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Award, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan, the exercise or purchase price of each such outstanding
Award, the maximum number of Shares with respect to which Awards may be granted
to any Grantee in any fiscal year of the Company, as well as any other terms
that the Administrator determines require adjustment shall be proportionately
adjusted for (i) any increase or decrease in the number of issued Shares
resulting from a share split, reverse share split, share dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Ordinary Shares including a corporate merger, consolidation,
acquisition of property or equity, separation (including a spin-off or other
distribution of shares or property), reorganization, liquidation (whether
partial or complete) or any similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.”  Such adjustment shall be made by the
Administrator and its determination shall be final, binding and
conclusive.  Except as the Administrator
determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason
hereof shall be made with respect to, the number or price of Shares subject to
an Award.  In the event of a Spin-off
Transaction, the Administrator may in its discretion make such adjustments and
take such other action as it deems appropriate with respect to outstanding
Awards under the Plan, including but not limited to: (i) adjustments to
the number and kind of Shares, the
exercise or purchase price per Share and the
vesting periods of outstanding Awards, (ii) prohibit the exercise of
Awards during certain periods of time prior to the consummation of the Spin-off
Transaction, or (iii) the substitution, exchange or grant of Awards to
purchase 

 

 

securities of the Subsidiary; provided that the
Administrator shall not be obligated to make any such adjustments or take any
such action hereunder.

 

11.  Corporate Transactions and Changes in Control.

 

(a)           Termination
of Award to the Extent Not Assumed in Corporate Transaction.  Effective upon the consummation of a
Corporate Transaction, all outstanding Awards under the Plan shall
terminate.  However, all such Awards
shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction.

 

(b)           Acceleration
of Award Upon Corporate Transaction or Change in Control.

 

(i)            Corporate
Transaction.  Except as provided
otherwise in an individual Award Agreement, in the event of a Corporate
Transaction, for the portion of each Award that is neither Assumed nor
Replaced, such portion of the Award shall automatically become fully vested and
exercisable and be released from any repurchase or forfeiture rights (other
than repurchase rights exercisable at Fair Market Value) for all of the Shares
at the time represented by such portion of the Award, immediately prior to the
specified effective date of such Corporate Transaction, provided that the
Grantee’s Continuous Service has not terminated prior to such date.  The portion
of the Award that is not Assumed shall terminate under subsection (a) of
this Section 11 to the extent not exercised prior to the consummation of
such Corporate Transaction.

 

(ii)           Change
in Control.  Except as provided
otherwise in an individual Award Agreement, in the event of a Change in Control
(other than a Change in Control which also is a Corporate Transaction), each
Award which is at the time outstanding under the Plan automatically shall
become fully vested and exercisable and be released from any repurchase or
forfeiture rights (other than repurchase rights exercisable at Fair Market
Value), immediately prior to the specified effective date of such Change in
Control, for all of the Shares at the time represented by such Award, provided
that the Grantee’s Continuous Service has not terminated prior to such date.

 

(c)           Effect
of Acceleration on Incentive Share Options. 
Any Incentive Share Option accelerated under this Section 11 in
connection with a Corporate Transaction or Change in Control shall remain
exercisable as an Incentive Share Option under the Code only to the extent the
$100,000 dollar limitation of Section 422(d) of the Code is not
exceeded.  To the extent such dollar limitation is exceeded, the excess
Options shall be treated as Non-Qualified Share Options.

 

12.  Effective Date
and Term of Plan.  The Plan
shall become effective upon the later to occur of its adoption by
the Board or its approval by the shareholders of the Company.  It shall continue in effect for a term of ten
(10) years unless sooner terminated. 
Subject to Section 17, below, and Applicable Laws, Awards may be
granted under the Plan upon its becoming effective.

 

 

13.  Amendment, Suspension or Termination of the Plan.

 

(a)   The Board may at any time amend, suspend or terminate the Plan;
provided, however, that no such amendment
shall be made without the approval of the Company’s shareholders to the extent
such approval is required by Applicable Laws, or if such amendment would change
any of the provisions of Section 4(b)(vi) or this Section 13(a).

 

(b)   No Award may be granted during any suspension of the Plan or after
termination of the Plan.

 

(c)   No suspension or termination of the Plan (including termination of
the Plan under Section 12, above) shall adversely affect any rights under
Awards already granted to a Grantee.

 

14.  Reservation of Shares.

 

(a)   The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

 

(b)   The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained.

 

15.  No Effect on
Terms of Employment/Consulting Relationship.  The Plan shall not confer upon any Grantee any
right with respect to the Grantee’s Continuous Service, nor shall it interfere
in any way with his or her right or the right of the Company or any Related
Entity to terminate the Grantee’s Continuous Service at any time, with or
without Cause, and with or without notice. 
The ability of the Company or any Related Entity to terminate the
employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee’s Continuous Service has been terminated for
Cause for the purposes of this Plan.

 

16.  No Effect on
Retirement and Other Benefit Plans.  Except as specifically provided in a
retirement or other benefit plan of the Company or a Related Entity, Awards
shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Company or a Related Entity, and
shall not affect any benefits under any other benefit plan of any kind or any
benefit plan subsequently instituted under which the availability or amount of
benefits is related to level of compensation. 
The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee
Retirement Income Security Act of 1974, as amended.

 

17.  Shareholder
Approval.  The grant
of Incentive Share Options under the Plan shall be subject to approval by the
shareholders of the Company within two (2) months after the date
the Plan is adopted excluding Incentive Share Options issued in substitution
for outstanding Incentive Share Options pursuant to Section 424(a) of
the Code.  Such shareholder approval
shall be obtained in the degree and manner required under Applicable Laws.  The Administrator may grant Incentive Share
Options under the Plan prior to approval by the shareholders, but until such
approval is obtained, no such Incentive Share Option shall be exercisable.  In the event that 

 

 

shareholder approval is not obtained within the two (2) month period provided
above, all Incentive Share Options previously granted under the Plan shall be
exercisable as Non-Qualified Share Options.

 

18.  Vesting Schedule.  Except as unanimously
approved by the Board, Options to be issued to the Grantees under the Plan shall be
subject to a vesting schedule as follows: the Shares subject to the Options shall vest in
48 substantially equal monthly installments, with the first installment vesting
on March 1,
2008, and an additional installment vesting on the first day of each of the next
47 months thereafter.

 

19.  Drag-Along
Events.  The
Award Agreement shall include a provision whereby in the event of a Drag-Along
Event, the Grantees who hold any Shares upon exercise of the Award shall sell,
transfer, convey or assign all of their Shares pursuant to, and so as to give
effect to, the Drag-Along Event, and each of such Grantees shall grant to the
then current chief executive officer of the Company or an authorized officer, a
power of attorney to transfer his/her Shares and to do and carry out all other
acts and to sign all other documents that are necessary or advisable to
complete the Drag-Along Event.

 

20.  Qualified
IPO.   The
Award Agreement shall include a provision whereby in the case of a Qualified
IPO, the Grantees shall enter into any agreements with any underwriter,
coordinator, bankers or sponsor elected by the Company for the purpose of the
Qualified IPO, and each of such Grantees shall grants to the then current chief
executive officer or other authorized officer of the Company a power of
attorney to enter into any agreements with any underwriter, coordinator,
bankers or sponsor elected by the Company and to do and carry out all the acts and
to sign all the documents that are necessary or advisable to complete the
Qualified IPO.

 

21.  Unfunded Obligation. 
Any amounts payable to Grantees pursuant to the Plan shall be unfunded
and unsecured obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974, as
amended.  Neither the Company nor any
Related Entity shall be required to segregate any monies from its general
funds, or to create any trusts, or establish any special accounts with respect
to such obligations.  The Company shall
retain at all times beneficial ownership of any investments, including trust
investments, which the Company may make to fulfill its payment obligations
hereunder.  Any investments or the
creation or maintenance of any trust or any Grantee account shall not create or
constitute a trust or fiduciary relationship between the Administrator, the
Company or any Related Entity and a Grantee, or otherwise create any vested or
beneficial interest in any Grantee or the Grantee’s creditors in any assets of
the Company or a Related Entity. The Grantees shall have no claim against the
Company or any Related Entity for any changes in the value of any assets that
may be invested or reinvested by the Company with respect to the Plan.

 

22.          Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular. 
Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.

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