Exhibit 4.(c).4
CDC CORPORATION,
ASIA PACIFIC ONLINE LIMITED,
AND
XXXXX XXX
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OPTION TRANSFER AGREEMENT
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THIS OPTION TRANSFER AGREEMENT effective as of the Effective Date among CDC
Corporation (formerly, chinadotcom corporation) located at 00/X Xxxxxxxx Xxxxxx,
00 Xxxxxxxxx Xxxx, Xxxxxxxx Xxx, Xxxx Xxxx (the "Company"), Asia Pacific Online
Limited located at Xxxxx 0000, 00/X Xxxxx Xxxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxx Xxxx
("APOL") and Xxxxx Xxx of x/x XXXX, Xxxxx 0000, 00/X Xxxxx Resources Building,
Wanchai, Hong Kong ("Xx. Xxx"). The Company, APOL and Xx. Xxx are collectively
referred to as the "Parties" and each, a "Party".
WHEREAS, APOL has been granted certain share options (together, the "APOL
Options") to purchase an equivalent number of the Company's Class A Common
Shares, par value US$0.00025 per share (the "Common Shares") as set forth in
Schedule A to this Agreement and copies of which option award agreements are
attached hereto under Exhibit A to this Agreement.
WHEREAS, Xx. Xxx has been granted certain share options (together, the "Xx.
Xxx Options") to purchase an equivalent number of the Company's Common Shares as
set forth in Schedule B to this Agreement and copies of which option award
agreements are attached hereto under Exhibit B to this Agreement:
WHEREAS, the Company is willing to agree to permit APOL and Xx. Xxx to
transfer certain of the APOL Options and Xx. Xxx Options to certain non-profit
organizations pursuant to the terms and conditions set forth herein.
WHEREAS, the terms of this Agreement have been approved by the Board of
Directors of the Company (the "Board") and the form of this Agreement has been
ratified by the Board.
NOW, THEREFORE, in consideration of the foregoing mutual covenants and
agreements contained herein, the Parties hereby agree as follows:
1. ACCELERATION AND VESTING OF CERTAIN OPTIONS
1.1 The Company agrees that it shall use its reasonable best efforts to
cause the acceleration and immediate vesting of the APOL Options set
forth in Schedule C-1. As a result, none of the APOL Options or Xx.
Xxx Options shall remain unvested.
2. TRANSFER OF CERTAIN OPTIONS
2.1 Subject to the provisions set forth in Clauses 2.2 through 2.5 herein,
the Company agrees that it shall use its reasonable best efforts to
permit APOL and Xx. Xxx, or a duly authorized alternate or
representative identified to the Company, to transfer the APOL Options
and Xx. Xxx Options set forth in Schedule C-2, in whole or in part, to
Permitted Transferees (as defined below).
2.2 APOL and Xx. Xxx agree that prior to or simultaneously with any
transfer of APOL Options or Xx. Xxx Options set forth in Schedule C-2
to a Permitted Transferee, such Permitted Transferee shall have
executed and delivered to the Company an acknowledgement in form and
substance reasonably satisfactory to the Company (which may be
substantially in the form attached hereto as Exhibit C) that the
Permitted Transferee (a) qualifies as a non-profit organization under
the tax laws of the jurisdiction of its formation, (b) will comply
with the terms of the Company's 1999 Stock Option Plan and the terms
of the relevant option award agreement applicable to APOL or Xx.
Xxx (as the case may be), (c) agrees not to transfer such options or
any portion of the economic consequences associated with ownership of
any such transferred options to any other party; provided, however,
that if the Permitted Transferee is the XX Xxx Foundation or another
trust formed by Xx. Xxx and designated as a Permitted Transferee, such
Permitted Transferee may transfer such options to another Permitted
Transferee (the "Second Permitted Transferee"), provided that such
Second Permitted Transferee satisfies all of the provisions of this
Agreement as if such Second Permitted Transferee was the original
Permitted Transferee, which provisions shall include, but not be
limited to, delivery of the acknowledgement form set forth in Clause
2.2 hereto, (d) will represent, warrant and covenant to the Company
that it shall hold, exercise and use any proceeds from such options
solely and exclusively to advance legitimate causes of such Permitted
Transferee which qualify such Permitted Transferee as a tax exempt,
non-profit organization that serves the public interest, such as
charitable, educational, scientific, religious or literary purposes,
and (e) shall dispose of any Class A Common Shares of the Company
received as a result of the exercise of any such transferred options
(the "Underlying Shares") in an orderly manner which shall be intended
not to cause any excessive movement in the price of the Company's
Class A Common Shares or creating the perception of an overhang in the
Company's Class A Common Shares. For the purposes of effectuating an
orderly disposal, (1) the Permitted Transferee shall dispose of the
Underlying Shares in a manner consistent with the "Manner of Sale"
provisions of Rule 144(f) promulgated under the Securities Act of
1933, as amended, and (2) the amount of Underlying Shares which may be
disposed of, together with disposals of all other Underlying Shares
within the preceding ten trading days, shall not exceed 5% of the
average daily trading volume of the Company's Class A Common Shares on
the Nasdaq National Market (or other market on which such shares are
then listed) during the ten trading days immediately preceding the
date of such sale.
2.3 Simultaneously with any transfer of APOL Options or Xx. Xxx Options
set forth in Schedule C-2 to a Permitted Transferee, APOL or Xx. Xxx,
as the case may be, shall be deemed to have represented and warranted
to the Company as follows:
(a) The Permitted Transferee qualifies as a non-profit organization
under the tax laws of the jurisdiction of its formation;
(b) To the best knowledge of APOL and Xx. Xxx, the Permitted
Transferee shall hold, exercise and use any proceeds from such
options solely and exclusively to advance legitimate causes of
such Permitted Transferee which qualify such Permitted Transferee
as a tax exempt, non-profit organization that serves the public
interest, such as charitable, educational, scientific, religious
or literary purposes.
2.4 Upon any transfer of APOL Options or Xx. Xxx Options set forth in
Schedule C-2 to a Permitted Transferee, each of APOL and Xx. Xxx
covenants to promptly make any and all filings with the U.S.
Securities and Exchange Commission, National Association of Securities
Dealers, and any other governmental or self-regulatory organization
which may be prudent or necessary in connection therewith (including,
but not limited to, any Form 13D or Form 13G).
2.5 APOL agrees and, upon any transfer of APOL Options or Xx. Xxx Options
to the XX Xxx Foundation as a Permitted Transferee, APOL and Xx. Xxx
agree to use their best efforts to cause the XX Xxx Foundation to
agree, to permit representatives of the Company, at the expense of the
Company and upon reasonable prior notice to APOL or
the XX Xxx Foundation, as the case may be, to visit the principal
offices of such entity, to discuss the affairs, finances and accounts
of such entity with the Company, to examine all their respective books
of account, records, reports and other papers, to make copies and
extracts therefrom and to permit the Company to discuss their
respective affairs, finances and accounts with their respective
accountants, for the purposes of confirming and verifying that such
entity qualifies as a legitimate non-profit organization under the tax
laws of the jurisdiction of its formation, and in the case of the XX
Xxx Foundation, is a legitimate tax exempt, non-profit organization
that serves the public interest, such as charitable, educational,
scientific, religious or literary purposes.
3. AMENDMENT TO EXERCISEABILITY OF CERTAIN OPTIONS
3.1 (a) The Company agrees to use its reasonable best efforts,
notwithstanding the terms of the Company's 1999 Stock Option Plan, to
cause the terms of the option award agreements for the APOL Options
and Xx. Xxx Options set forth in Schedule C-3 to be modified and
amended (i) to permit APOL or Xx. Xxx (as the case may be) to exercise
such options until the Option Expiration Date for such respective
options set forth in Schedule A or Schedule B hereto (subject at all
times to Clause 3.1(b)) and (ii) to permit the Permitted Transferee to
exercise such options until the Option Expiration Date for such
respective options set forth in Schedule A or Schedule B hereto
(subject at all times to Permitted Transferee satisfying all of the
terms set forth in the acknowledgement form provided by such Permitted
Transferee pursuant to Clause 2.2 of this Agreement). Prior to
permitting any such exercise pursuant to this Clause 3.1, the Company
shall be permitted to require the Permitted Transferee to provide,
upon request, such reasonable information as the Company may request
to confirm that the Permitted Transferee satisfies such terms set
forth in the acknowledgement form provided pursuant to Clause 2.2 of
this Agreement.
(b) In the event that Xx. Xxx ceases to be a member of the Company's
Board, APOL or Xx. Xxx (as the case may be) shall have until the
earlier of (a) six (6) months from the date Xx. Xxx ceases to be a
member of the Board or (b) the Option Expiration Date to exercise such
vested options set forth in Schedule C-3, at which time all of such
unexercised options shall expire.
4. INDEMNITY FOR TAX LIABILITY
4.1 APOL agrees and warrants to the Company that it shall indemnify the
Company and any Associated Company, and hold the Company and any
Associated Company harmless against the non-payment of any income tax,
professional indemnity, and other national, provincial or local taxes
or assessments by APOL in connection with the APOL Options, any
transfer of such APOL Options, or any exercise of such APOL Options by
any such transferee. In addition, APOL specifically represents,
warrants and covenants to the Company that to the extent that APOL is
subject to any withholding or deduction under income tax laws of any
jurisdiction with respect to the APOL Options, any transfer of such
APOL Options, or any exercise of such APOL Options by any such
transferee, that it will hold the Company and each Associated Company
harmless against any such non-withholding or non-deduction in
connection therewith.
4.2 Xx. Xxx agrees and warrants to the Company that he shall indemnify the
Company and any Associated Company, and hold the Company and any
Associated Company harmless against the non-payment of any income tax,
professional indemnity, and other national,
provincial or local taxes or assessments by Xx. Xxx in connection with
the Xx. Xxx Options, any transfer of such Xx. Xxx Options, or any
exercise of such Xx. Xxx Options by any such transferee. In addition,
Xx. Xxx specifically represents, warrants and covenants to the Company
that to the extent that Xx. Xxx is subject to any withholding or
deduction under income tax laws of any jurisdiction with respect to
Xx. Xxx Options, any transfer of such Xx. Xxx Options, or any exercise
of such Xx. Xxx Options by any such transferee, that he hold the
Company and each Associated Company harmless against any such
non-withholding or non-deduction in connection therewith.
5. MISCELLANEOUS MATTERS
5.1 If any provision of this Agreement, or the application thereof to any
person, place, or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the remainder of
this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect.
5.2 This Agreement may not be modified or amended, except by an instrument
in writing, signed by APOL, Xx. Xxx and a duly authorized
representative of the Company. By an instrument in writing similarly
executed, any Party may waive compliance by the other Parties with any
provision of this Agreement that such other Party was or is obligated
to comply with or perform; provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising
any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy
or power hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy or power provided herein or by
law or in equity.
5.3 The terms of this Agreement are intended by the Parties to be the full
and final expression of their agreement and may not be contradicted by
evidence of any prior or contemporaneous agreement. The Parties
further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other
legal proceeding involving this Agreement. This Agreement fully
supersedes any prior oral or written agreement between the Parties.
5.4 The headings for the clauses of this Agreement are for convenience
only and are not part of this Agreement.
5.5 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and such counterparts together
shall constitute one and the same instrument.
5.6 The Parties acknowledge that (i) they have had the opportunity to
consult counsel in regard to this Agreement if they so desire; (ii)
they have read and understand the Agreement and they are fully aware
of its legal effect; and (iii) they are entering into this Agreement
freely and voluntarily, and based on each Party's own judgment and not
on any representations or promises made by the other Parties, other
than those contained in this Agreement.
6. NOTICE
6.1 All such notices and communications shall be effective (a) when sent
by FedEx or other overnight service of recognized standing, on the
third business day following the deposit with such service; and (b)
when faxed during normal business hours on a day on which the Company
is open for business, upon confirmation of receipt. The Parties shall
be obligated to notify each other in writing of any change of the
below address. Notice of change of address shall be effective only
when done in accordance with this Clause. All notices, requests,
demands, consents, instructions or other communications required or
permitted hereunder shall be in writing and faxed or delivered via
courier to each Party as follows:
If to the Company:
Address: 34/F, Citicorp Centre
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx, Xxxx Xxxx
Facsimile: (000) 0000-0000
Attention: Xx. Xxxxxxx Ch'ien
If to APOL or Xx. Xxx:
Address: Suite 4302
43/F China Resources Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Facsimile: (000) 0000-0000
Attention: Xx. Xxxxx Xxx
7. GOVERNING LAW
7.1 This Agreement shall be governed by and construed under the law of
Hong Kong and each of the Parties hereby irrevocably agrees for the
exclusive benefit of the Company that the Courts of Hong Kong are to
have exclusive jurisdiction to settle any disputes which may arise out
of or in connection with this Agreement.
8. DEFINITIONS
8.1 "Associated Company" means any corporation or other business entity or
entities that directly or indirectly controls, is controlled by, or is
under common control with the Company after the Effective Date or all
other entities in the group of companies of such Associated Companies.
8.2 "Effective Date" means July 15, 2005
8.3 "Permitted Transferee" means those non-profit organizations (a) set
forth on a list submitted to the Company by APOL and Xx. Xxx from time
to time (the "List") and (b) approved by the Board as a Permitted
Transferee in its absolute and sole discretion including the Permitted
Transferees set forth on Schedule D to this Agreement. For the
avoidance of doubt, (i) no transfer of APOL Options or Xx. Xxx Options
is permitted to any party that is not a Permitted Transferee, and (ii)
a Permitted Transferee shall not be permitted to further transfer any
such APOL Options, Xx. Xxx Options or any of the economic consequences
thereof to any other party; provided, however, that if the
Permitted Transferee is the XX Xxx Foundation or another trust formed
by Xx. Xxx and designated as a Permitted Transferee, such Permitted
Transferee may transfer such options to a Second Permitted Transferee,
provided that such Second Permitted Transferee satisfies all of the
provisions of this Agreement as if such Second Permitted Transferee
was the original Permitted Transferee, which provisions shall include,
but not be limited to, delivery of the acknowledgement form set forth
in Clause 2.2 hereto and any such transfer shall be made on or prior
to the date twelve months from the Effective Date of this Agreement.
9. EFFECTIVE DATE
9.1 This Agreement shall become effective as of the Effective Date.
IN WITNESS whereof this Option Transfer Agreement has been signed by or on
behalf of the Parties hereto and is effective as of the Effective Date.
SIGNED by Xxxxx Xxxx ) /s/ Xxxxx Xxxx
Director ) -----------------------------------
on behalf of the CDC Corporation )
in the presence of Xxxxx Xxx )
/s/ Xxxxx Xxx
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Date:
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SIGNED by /s/ Xxxxx Xxx )
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Director )
on behalf of Asia Pacific Online Limited )
in the presence of Xxxxx Xx ) /s/ Xxxxx Xx
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Date:
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SIGNED by Xxxxx Xxx ) /s/ Xxxxx Xx
in the presence of Xxxxx Xx ) -----------------------------------
/s/ Xxxxx Xxx
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Date: Dec 12 2005
SCHEDULE A
CERTAIN OPTION AWARDS GRANTED TO APOL
Total Unvested
Outstanding Options as of
Grant date Options Strike Price Termination Date Option Expiration Date
---------- ----------- ------------ ---------------- -------------------------------------
Jul 12, 1999 1,881,442 US$5.0000 0 Jul 11, 2009 ("7/12/99 APOL Options")
Jun 6, 2002 200,000 US$2.8200 0 Jun 5, 2012 ("6/6/02 APOL Options")
Jun 3, 2003 200,000 US$4.9500 0 Jun 2, 2013 ("6/3/03 APOL Options")
Jun 16, 2003 100,000 US$5.1600 25,000 Jun 15, 2013 ("6/16/03 APOL Options")
Mar 25, 2004 600,000 US$8.2500 500,000 Mar 24, 2014 ("3/25/04 APOL Options")
SCHEDULE B
CERTAIN OPTION AWARDS GRANTED TO XX. XXX
Total Unvested
Outstanding Options as of
Grant date Options Strike Price Termination Date Option Expiration Date
------------ ----------- ------------ ---------------- ----------------------------------------
Jun 22, 1999 60,000 US$ 3.3750 0 Jun 21, 2009 ("6/22/99 Xx. Xxx Options")
May 29, 2000 100,000 US$23.0000 0 May 28, 2010 ("5/29/00 Xx. Xxx Options")
Jan 9, 2001 30,000 US$ 4.2813 0 Jan 8, 2011 ("1/9/01 Xx. Xxx Options")
SCHEDULE C
SCHEDULE C-1
The APOL Options the Company agrees to use its reasonable best efforts to cause
the acceleration and immediate vesting of:
25,000 of the 6/16/03 APOL Options (as defined in Schedule A); and
500,000 of the 3/25/04 APOL Options (as defined in Schedule A).
SCHEDULE C-2
APOL Options and Xx. Xxx Options the Company agrees that it shall use its
reasonable best efforts to permit Xx. Xxx to transfer, in whole or in part, to
Permitted Transferees, subject to Clause 2:
The 7/12/99 APOL Options (as defined in Schedule A);
The 6/6/02 APOL Options (as defined in Schedule A);
The 6/3/03 APOL Options (as defined in Schedule A);
The 6/16/03 APOL Options (as defined in Schedule A);
The 3/25/04 APOL Options (as defined in Schedule A); and
The 5/29/00 Xx. Xxx Options (as defined in Schedule B).
SCHEDULE C-3
Options to be modified and amended to permit APOL or Xx. Xxx (as the case may
be) and the Permitted Transferee (if any) to exercise such options until the
Option Expiration Date for such respective options set forth in Schedule A or
Schedule B (subject at all times to Clause 3.1(b)):
The 7/12/99 APOL Options (as defined in Schedule A);
The 6/6/02 APOL Options (as defined in Schedule A);
The 6/3/03 APOL Options (as defined in Schedule A);
The 6/16/03 APOL Options (as defined in Schedule A);
The 3/25/04 APOL Options (as defined in Schedule A); and
The 5/29/00 Xx. Xxx Options (as defined in Schedule B).
SCHEDULE D
PERMITTED TRANSFEREES
1. XX Xxx Foundation
2. University of Pennsylvania
3. St. Paul's Co-educational College
4. LaSalle College of Hong Kong
EXHIBIT A
[INSERT APOL OPTION AWARD AGREEMENTS]
EXHIBIT B
[INSERT XX. XXX OPTION AWARD AGREEMENTS]
EXHIBIT C
ACKNOWLEDGEMENT FORM FROM
[INSERT NAME OF PERMITTED TRANSFEREE] (THE "PERMITTED TRANSFEREE")
Reference is hereby made to the Option Transfer Agreement dated as of the
Effective Date among CDC Corporation (formerly, chinadotcom corporation) located
at 00/X Xxxxxxxx Xxxxxx, 00 Xxxxxxxxx Xxxx, Xxxxxxxx Xxx, Xxxx Xxxx (the
"Company"), Asia Pacific Online Limited located at Xxxxx 0000, 00/X Xxxxx
Xxxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxx Xxxx ("APOL") and Xxxxx Xxx of x/x XXXX, Xxxxx
0000, 00/X Xxxxx Resources Building, Wanchai, Hong Kong ("Xx. Xxx") (the
"Agreement"). Capitalized terms used herein without definition shall have the
meaning given to such term in the Agreement.
The undersigned Permitted Transferee hereby acknowledges, represents,
warrants and covenants (as the case may be) to the Company as follows:
(1) [Xx. Xxx/APOL] has indicated that [he/it] desires to transfer [INSERT
NUMBER] [Xx. Xxx Options/APOL Options] (the "Transferred Options") to
the Permitted Transferee.
(2) This Acknowledgement Form is being delivered to the Company in
compliance with Clause 2.2 of the Agreement.
(3) It is a condition precedent to the Company permitting [Xx. Xxx/APOL]
to transfer the Transferred Options to the Permitted Transferee that
the acknowledgements, representations, warranties and covenants of the
Permitted Transferee be accurate and complete.
(4) The Permitted Transferee qualifies as a non-profit organization under
the tax laws of the jurisdiction of its formation.
(5) The Permitted Transferee will comply with the terms of the Company's
1999 Stock Option Plan and the terms of the relevant option award
agreement applicable to the Transferred Options.
(6) The Permitted Transferee agrees not to transfer the Transferred
Options or any portion of the economic consequences associated with
ownership of any such Transferred Option to any other party [;
provided, however, that if the Permitted Transferee is the XX Xxx
Foundation or another trust formed by Xx. Xxx and designated as a
Permitted Transferee, such Permitted Transferee may transfer such
options to another Permitted Transferee (the "Second Permitted
Transferee"), provided that such Second Permitted Transferee satisfies
all of the provisions of the Agreement as if such Second Permitted
Transferee was the original Permitted Transferee, which provisions
shall include, but not be limited to, delivery of the acknowledgement
form set forth in Clause 2.2 of the Agreement and any such transfer
shall be made on or prior to the date twelve months from the Effective
Date of the Agreement.] [INCLUDE ONLY IF PERMITTED TRANSFEREE IS THE
XX XXX FOUNDATION OR ANOTHER TRUST FORMED BY XX XXX AND DESIGNATED AS
A PERMITTED TRANSFEREE]
(7) The Permitted Transferee will hold, exercise and use any proceeds from
such options solely and exclusively to advance legitimate causes of
such Permitted Transferee which qualify such Permitted Transferee as a
tax exempt, non-profit organization that serves the public interest,
such as charitable, educational, scientific, religious or literary
purposes.
(8) Upon the disposal of any Underlying Shares, the Permitted Transferee
will undertake an orderly disposal of such Underlying Shares which
shall be intended not to cause any excessive movement in the price of
the Company's Class A Common Shares or creating the perception of an
overhang in the Company's Class A Common Shares. For the purposes of
effectuating an orderly disposal, (1) the Permitted Transferee shall
dispose of the Underlying Shares in a manner consistent with the
"Manner of Sale" provisions of Rule 144(f) promulgated under the
Securities Act of 1933, as amended, and (2) the amount of Underlying
Shares which may be disposed of, together with disposals of all other
Underlying Shares within the preceding ten trading days, shall not
exceed 5% of the average daily trading volume of the Company's Class A
Common Shares on the Nasdaq National Market (or other market on which
such shares are then listed) during the ten trading days immediately
preceding the date of such sale.
(9) The Permitted Transferee acknowledges and agrees that prior to
permitting the Permitted Transferee to exercise Transferred Options,
the Company may request the Permitted Transferee to provide reasonable
information to confirm the representations, warranties and covenants
contained herein.
[NAME OF PERMITTED TRANSFEREE]
By
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Name:
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Title:
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