CHINA MUSIC CORPORATION 2014 SHARE INCENTIVE PLAN
Exhibit 10.3
CHINA MUSIC CORPORATION
Page | ||||||||
SECTION 1. | INTRODUCTION | 1 | ||||||
SECTION 2. | DEFINITIONS | 1 | ||||||
(a) | “Affiliate” | 1 | ||||||
(b) | “Applicable Laws” | 1 | ||||||
(c) | “Award” | 1 | ||||||
(d) | “Award Agreement” | 1 | ||||||
(e) | “Board” | 1 | ||||||
(f) | “Cashless Exercise” | 1 | ||||||
(g) | “Cause” | 2 | ||||||
(h) | “Change in Control” | 2 | ||||||
(i) | “Code” | 2 | ||||||
(j) | “Committee” | 3 | ||||||
(k) | “Company” | 3 | ||||||
(l) | “Consultant” | 3 | ||||||
(m) | “Director” | 3 | ||||||
(n) | “Disability” | 3 | ||||||
(o) | “Employee” | 3 | ||||||
(p) | “Exchange Act” | 3 | ||||||
(q) | “Exercise Price” | 3 | ||||||
(r) | “Fair Market Value” | 3 | ||||||
(s) | “Fiscal Year” | 4 | ||||||
(t) | “Grant Date” | 4 | ||||||
(u) | “Incentive Share Option” | 4 | ||||||
(v) | “Non-Employee Director” | 4 | ||||||
(w) | “Nonstatutory Share Option” | 4 | ||||||
(x) | “Option” | 4 | ||||||
(y) | “Optionee” | 4 | ||||||
(z) | “Ordinary Shares” | 4 | ||||||
(aa) | “Parent” | 4 | ||||||
(bb) | “Participant” | 4 | ||||||
(cc) | “Performance Goals” | 4 | ||||||
(dd) | “Performance Period” | 4 | ||||||
(ee) | “Plan” | 4 |
i
Page | ||||||||
(ff) | “Re-Price” | 5 | ||||||
(gg) | “Restricted Share Unit” | 5 | ||||||
(hh) | “Restricted Share Unit Agreement” | 5 | ||||||
(ii) | “SAR Agreement” | 5 | ||||||
(jj) | “SEC” | 5 | ||||||
(kk) | “Section 16 Persons” | 5 | ||||||
(ll) | “Securities Act” | 5 | ||||||
(mm) | “Service” | 5 | ||||||
(nn) | “Share” | 5 | ||||||
(oo) | “Share Appreciation Right” | 5 | ||||||
(pp) | “Share Grant” | 5 | ||||||
(qq) | “Share Grant Agreement” | 5 | ||||||
(rr) | “Share Option Agreement” | 5 | ||||||
(ss) | “Subsidiary” | 6 | ||||||
(tt) | “10-Percent Shareholder” | 6 | ||||||
SECTION 3. | ADMINISTRATION | 6 | ||||||
(a) | Committee Composition | 6 | ||||||
(b) | Authority of the Committee | 6 | ||||||
(c) | Indemnification | 7 | ||||||
SECTION 4. | GENERAL | 7 | ||||||
(a) | General Eligibility | 7 | ||||||
(b) | Incentive Share Options | 7 | ||||||
(c) | Restrictions on Shares | 7 | ||||||
(d) | Beneficiaries | 8 | ||||||
(e) | No Rights as a Shareholder | 8 | ||||||
(f) | Termination of Service | 8 | ||||||
SECTION 5. | SHARES SUBJECT TO PLAN AND SHARE LIMITS | 9 | ||||||
(a) | Basic Limitation | 9 | ||||||
(b) | Share Count | 9 | ||||||
(c) | Dividend Equivalents | 9 | ||||||
(d) | Limits on Share Grants and Restricted Share Units | 9 | ||||||
SECTION 6. | TERMS AND CONDITIONS OF OPTIONS | 9 | ||||||
(a) | Share Option Agreement | 9 |
ii
Page | ||||||||
(b) | Number of Shares | 9 | ||||||
(c) | Exercise Price | 9 | ||||||
(d) | Exercisability and Term | 9 | ||||||
(e) | Method of Exercise | 10 | ||||||
(f) | Payment for Option Shares | 10 | ||||||
(g) | Modifications or Assumption of Options; No Re-Pricing | 10 | ||||||
(h) | Assignment or Transfer of Options | 10 | ||||||
SECTION 7. | TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS | 11 | ||||||
(a) | SAR Agreement | 11 | ||||||
(b) | Number of Shares | 11 | ||||||
(c) | Exercise Price | 11 | ||||||
(d) | Exercisability and Term | 11 | ||||||
(e) | Exercise of SARs | 11 | ||||||
(f) | Modification or Assumption of SARs; No Re-Pricing | 11 | ||||||
(g) | Assignment or Transfer of SARs | 12 | ||||||
SECTION 8. | TERMS AND CONDITIONS FOR SHARE GRANTS. | 12 | ||||||
(a) | Time, Amount and Form of Awards | 12 | ||||||
(b) | Share Grant Agreement | 12 | ||||||
(c) | Payment for Share Grants | 12 | ||||||
(d) | Vesting Conditions | 12 | ||||||
(e) | Assignment or Transfer of Share Grants | 12 | ||||||
(f) | Voting and Dividend Rights | 12 | ||||||
(g) | Modification or Assumption of Share Grants | 13 | ||||||
SECTION 9. | TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS | 13 | ||||||
(a) | Restricted Share Unit Agreement | 13 | ||||||
(b) | Number of Shares | 13 | ||||||
(c) | Payment for Restricted Share Units | 13 | ||||||
(d) | Vesting Conditions | 13 | ||||||
(e) | Form and Time of Settlement of Restricted Share Units | 13 | ||||||
(f) | Voting and Dividend Rights | 13 | ||||||
(g) | Creditors’ Rights | 14 | ||||||
(h) | Modification or Assumption of Restricted Share Units | 14 | ||||||
(i) | Assignment or Transfer of Restricted Share Units | 14 |
iii
Page | ||||||||
SECTION 10. | PROTECTION AGAINST DILUTION | 14 | ||||||
(a) | Adjustments | 14 | ||||||
(b) | Participant Rights | 14 | ||||||
(c) | Fractional Shares | 15 | ||||||
SECTION 11. | EFFECT OF A CHANGE IN CONTROL | 15 | ||||||
(a) | Change in Control | 15 | ||||||
(b) | Acceleration | 15 | ||||||
(c) | Dissolution | 15 | ||||||
SECTION 12. | LIMITATIONS ON RIGHTS | 15 | ||||||
(a) | Participant Rights | 15 | ||||||
(b) | Shareholders’ Rights | 16 | ||||||
(c) | Regulatory Requirements | 16 | ||||||
SECTION 13. | WITHHOLDING TAXES | 16 | ||||||
(a) | General | 16 | ||||||
(b) | Share Withholding | 16 | ||||||
SECTION 14. | DURATION AND AMENDMENTS | 16 | ||||||
(a) | Term of the Plan | 16 | ||||||
(b) | Right to Amend or Terminate the Plan | 16 |
iv
CHINA MUSIC CORPORATION
SECTION 1. INTRODUCTION.
On August 15th, 2014 the Board adopted this 2014 Share Incentive Plan which shall become effective upon its approval by the Company’s shareholders (the “Effective Date”).
The purpose of this Plan is to promote the long-term success of the Company and the creation of shareholder value by offering Participants the opportunity to share in such long-term success by acquiring a proprietary interest in the Company.
The Plan seeks to achieve this purpose by providing for discretionary long-term incentive Awards in the form of Options (which may be Incentive Share Options or Nonstatutory Share Options), Share Appreciation Rights, Share Grants and Restricted Share Units.
The Plan shall be governed by, and construed in accordance with, Cayman law (except its choice-of-law provisions). Capitalized terms shall have the meaning provided in Section 2 unless otherwise provided in this Plan or any related Award Agreement.
SECTION 2. DEFINITIONS.
(a) “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.
(b) “Applicable Laws” means all applicable laws, rules, regulations and requirements relating to the administration of share plans, including, but not limited to, all applicable Cayman laws, the laws of the People’s Republic of China, U.S. federal and state laws, the rules and regulations of any stock exchange or quotation system on which the Ordinary Shares are listed or quoted, and the applicable laws, rules, regulations or requirements of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan or where Participants reside or provide services, as such laws, rules, regulations and requirements shall be in place from time to time.
(c) “Award” means an Option, SAR, Share Grant or Restricted Share Unit.
(d) “Award Agreement” means any Share Option Agreement, SAR Agreement, Share Grant Agreement or Restricted Share Unit Agreement.
(e) “Board” means the Board of Directors of the Company, as constituted from time to time.
(f) “Cashless Exercise” means, to the extent that a Share Option Agreement so provides and as permitted by Applicable Laws, a program approved by the Committee in which payment of the aggregate Exercise Price and/or satisfaction of any applicable tax withholding obligations may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares subject to an Option and to deliver all or part of the sale proceeds to the Company.
(g) “Cause” means, except as may otherwise be provided in a Participant’s employment agreement, Award Agreement, or other written agreement, (i) Participant’s willful failure to perform his or her duties and responsibilities to the Company or material violation of a written Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company or (v) Participant’s nonpayment of an obligation to the Company; (vi) Participant’s breach of fiduciary duty or deliberate disregard of Company rules resulting in loss, damage or injury to the Company; (vii) Participant’s conduct constituting unfair competition; (viii) Participant’s conduct which induces any Company customer to breach a contract with the Company; and (ix) conduct which induces any principal for whom the Company acts as agent to terminate such agency relationship. The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Committee and shall be conclusive and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s Service at any time as provided in Section 12(a), and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate.
(h) “Change in Control” means the consummation of any of the following transactions:
(i) The sale of all or substantially all of the Company’s assets;
(ii) The merger of the Company with or into another corporation in which securities possessing more than 50% of the total combined voting power of the Company are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction; or
(iii) The acquisition, directly or indirectly, by any person or related group of persons (other than the Company or 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 of the Company representing more than 50% of the total combined voting power of the Company’s then outstanding securities. For purposes of this paragraph, the term “person” shall not include: (1) a trustee of other fiduciary holding securities under an employee benefit plan of the Company, a Subsidiary or an Affiliate; or (2) corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Ordinary Shares.
A transaction shall not constitute a Change in Control if its sole purpose is to change the place of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions.
(i) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.
2
(j) “Committee” means a committee described in Section 3.
(k) “Company” means China Music Corporation, a Cayman Islands corporation.
(l) “Consultant” means an individual who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate, other than as an Employee, Director or Non-Employee Director.
(m) “Director” means a member of the Board who is also an Employee.
(n) “Disability” means that the Participant is classified as disabled under the long-term disability policy of the Company or, if no such policy applies, the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
(o) “Employee” means any individual who is an employee of the Company, a Parent, a Subsidiary or an Affiliate.
(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q) “Exercise Price” means, in the case of an Option, the amount for which a Share may be purchased upon exercise of such Option, as specified in the applicable Share Option Agreement. “Exercise Price,” in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value in determining the amount payable upon exercise of such SAR.
(r) “Fair Market Value” means the market price of a Share as determined in good faith by the Committee. Such determination shall be conclusive and binding on all persons. The Fair Market Value shall be determined by the following:
(i) if the Shares are admitted to trading on any established national stock exchange or market system, including without limitation NASDAQ, on the date in question, then the Fair Market Value shall be equal to the closing sales price for such Shares as quoted on such national exchange or system on such date; or
(ii) if the Shares are admitted to quotation on NASDAQ or are regularly quoted by a recognized securities dealer but selling prices are not reported on the date in question, then the Fair Market Value shall be equal to the mean between the bid and asked prices of the Shares reported for such date.
In each case, the applicable price shall be the price reported in such source as the Committee deems reliable; provided, however, that if there is no such reported price for the Shares for the date in question, then the Fair Market Value shall be equal to the price reported on the last preceding date for which such price exists. If neither (i) or (ii) are applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.
3
(s) “Fiscal Year” means the Company’s fiscal year.
(t) “Grant Date” means the grant effective date of an Award.
(u) “Incentive Share Option” or “ISO” means an incentive stock option described in Code Section 422.
(v) “Non-Employee Director” means a member of the Board who is not an Employee.
(w) “Nonstatutory Share Option” or “NSO” means a share option that is not an ISO.
(x) “Option” means an ISO or NSO granted under the Plan entitling the Optionee to purchase Shares.
(y) “Optionee” means an individual, estate or other entity that holds an Option.
(z) “Ordinary Shares” means the Company’s ordinary shares.
(aa) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns share possessing 50% or more of the total combined voting power of all classes of shares in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.
(bb) “Participant” means an Employee, Director, Non-Employee Director or Consultant who has been selected by the Committee to receive an Award under the Plan or any individual, estate or other entity that holds an Award.
(cc) “Performance Goals” means one or more objective measurable performance goals established by the Committee with respect to a Performance Period based upon one or more factors, including: (i) operating income; (ii) earnings before interest, taxes, depreciation and amortization; (iii) earnings; (iv) cash flow; (v) market share; (vi) sales or revenue; (vii) expenses; (viii) cost of goods sold; (ix) profit/loss or profit margin; (x) working capital; (xi) return on equity or assets; (xii) earnings per share; (xiii) economic value added; (xiv) price/earnings ratio; (xv) debt or debt-to-equity; (xvi) accounts receivable; (xvii) writeoffs; (xviii) cash; (xix) assets; (xx) liquidity; (xxi) operations; (xxii) intellectual property (e.g., patents); (xxiii) product development; (xxiv) regulatory activity; (xxv) manufacturing, production or inventory; (xxvi) mergers and acquisitions or divestitures; and/or (xxvii) financings, each with respect to the Company and/or one or more of its Parent, Subsidiaries, Affiliates or operating units.
(dd) “Performance Period” means any period not exceeding 60 months as determined by the Committee, in its sole discretion. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.
(ee) “Plan” means this China Music Corporation 2014 Share Incentive Plan as it may be amended from time to time.
4
(ff) “Re-Price” means that the Company has lowered or reduced the Exercise Price of outstanding Options and/or outstanding SARs for any Participant(s) whether through amendment, cancellation or replacement grants, or any other means.
(gg) “Restricted Share Unit” means a bookkeeping entry representing the equivalent of one Share awarded under the Plan.
(hh) “Restricted Share Unit Agreement” means the agreement described in Section 9 evidencing a Restricted Share Unit.
(ii) “SAR Agreement” means the agreement described in Section 7 evidencing a Share Appreciation Right.
(jj) “SEC” means the Securities and Exchange Commission.
(kk) “Section 16 Persons” means those officers, directors or other persons who are subject to Section 16 of the Exchange Act.
(ll) “Securities Act” means the Securities Act of 1933, as amended.
(mm) “Service” means service as an Employee, Director, Non-Employee Director or Consultant. A Participant’s Service does not terminate if he or she is an Employee and goes on a bona fide leave of absence that was approved by the Company in writing and the terms of the leave provide for continued service crediting, or when continued service crediting is required by Applicable Laws. However, for purposes of determining whether an Option is entitled to continuing ISO status, an Employee’s Service will be treated as terminating 90 days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. Further, unless otherwise determined by the Committee, a Participant’s Service will not terminate merely because of a change in the capacity in which the Participant provides service to the Company, a Parent, Subsidiary or Affiliate, or a transfer between entities (the Company or any Parent, Subsidiary, or Affiliate); provided that there is no interruption or other termination of Service.
(nn) “Share” means one share of Ordinary Shares.
(oo) “Share Appreciation Right” or “SAR” means a share appreciation right awarded under the Plan.
(pp) “Share Grant” means Shares awarded under the Plan.
(qq) “Share Grant Agreement” means the agreement described in Section 8 evidencing a Share Grant.
(rr) “Share Option Agreement” means the agreement described in Section 6 evidencing an Option.
5
(ss) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns shares possessing 50% or more of the total combined voting power of all classes of shares in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
(tt) “10-Percent Shareholder” means an individual who owns more than 10% of the total combined voting power of all classes of outstanding shares of the Company, its Parent or any of its Subsidiaries. In determining share ownership, the attribution rules of Code Section 424(d) shall be applied.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. The Board or a Committee appointed by the Board shall administer the Plan. The Committee shall generally have membership composition which enables Awards to Section 16 Persons to qualify as exempt from liability under Section 16(b) of the Exchange Act. However, the Board may also appoint one or more separate Committees, each composed of one or more directors of the Company who need not qualify under Rule 16b-3, that may administer the Plan with respect to Participants who are not Section 16 Persons, respectively, may grant Awards under the Plan to such Participants and may determine all terms of such Awards. Members of any such Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.
Notwithstanding the foregoing, the Board shall administer the Plan with respect to all Awards granted to Non-Employee Directors.
The Board and any Committee appointed to administer the plan is referred to herein as the “Committee”.
(b) Authority of the Committee. Subject to the provisions of the Plan, the Committee shall have the full authority, in its sole discretion, to take any actions it deems necessary or advisable for the administration of the Plan. Such actions shall include:
(i) | selecting Participants who are to receive Awards under the Plan; |
(ii) | determining the Fair Market Value; |
(iii) | determining the type, number, Grant Date, vesting requirements and other features and conditions of such Awards; |
(iv) | approving the forms of agreements to be used under the Plan; |
(v) | amending any outstanding Awards; |
(vi) | accelerating the vesting, or extending the post-termination exercise term, of Awards at any time and under such terms and conditions as it deems appropriate; |
(vii) | interpreting the Plan and any Award Agreement; |
6
(viii) | correcting any defect, supplying any omission or reconciling any inconsistency in the Plan or any Award Agreement; |
(ix) | adopting such rules or guidelines as it deems appropriate to implement the Plan; |
(x) | authorizing any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously authorized by the Committee; |
(xi) | making all other decisions relating to the operation of the Plan; and |
(xii) | adopting such plans or subplans as may be deemed necessary or appropriate to comply with the laws of certain countries, allow for tax-preferred treatment of the Awards or otherwise provide for the participation by Participants who reside in such countries. |
The Committee’s determinations under the Plan shall be final and binding on all persons.
(c) Indemnification. To the maximum extent permitted by Applicable Laws, each member of the Committee shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award Agreement, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled to by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
SECTION 4. GENERAL.
7
(d) Beneficiaries. Unless stated otherwise in an Award Agreement and then only to the extent permitted by and enforceable under Applicable Laws, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company or the Company’s designee. A beneficiary designation may be changed by filing the prescribed form with the Company (or the Company’s designee) at any time before the Participant’s death. If no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate or to such other person as the Company may designate.
8
SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.
(a) Basic Limitation. The shares issuable under the Plan shall be authorized, but unissued, or reacquired Shares. The aggregate number of Shares reserved for Awards under the Plan shall be stipulated in the relevant Board resolution, subject to adjustment pursuant to Section 10.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
9
(iii) Other Forms of Payment. Payment may be made in any other form that is consistent with Applicable Laws, regulations and rules and approved by the Committee.
In the case of an ISO granted under the Plan, except to the extent permitted by Applicable Laws, payment shall be made only pursuant to the express provisions of the applicable Share Option Agreement. In the case of an NSO granted under the Plan, the Committee may, in its discretion at any time, accept payment in any form(s) described in this Section 6(f).
10
SECTION 7. TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS.
(a) SAR Agreement. Each SAR granted under the Plan shall be evidenced by a SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. A SAR Agreement may provide for a maximum limit on the amount of any payout notwithstanding the Fair Market Value on the date of exercise of the SAR. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Participant’s compensation.
(d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable and may include performance conditions or Performance Goals. The SAR Agreement shall also specify the maximum term of the SAR which shall not exceed seven (7) years from the Grant Date. A SAR Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability or other events. SARs may be awarded in combination with Options or Share Grants, and such an Award shall provide that the SARs will not be exercisable unless the related Options or Share Grants are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or at any subsequent time, but not later than six (6) months before the expiration of such NSO. Notwithstanding any other provision of the Plan or the SAR Agreement, no SAR can be exercised after the expiration date provided in the applicable SAR Agreement.
(f) Modification or Assumption of SARs; No Re-Pricing. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding share appreciation rights (including share appreciation rights granted by another issuer) in return for the grant of new SARs for the same or a different number of Shares and at the same or a different Exercise Price. Notwithstanding the preceding sentence or anything to the contrary, no modification of a SAR shall, without the consent of the Participant, impair his or her rights or obligations under such SAR and, unless there is approval by the Company shareholders, the Committee may not Re-Price outstanding SARs.
11
(g) Assignment or Transfer of SARs. Except as otherwise provided in the applicable SAR Agreement and then only to the extent such transfer is otherwise permitted by Applicable Laws and is not a transfer for value (unless such transfer for value is approved in advance by the Company’s shareholders), no SAR or interest therein shall be transferred, assigned, pledged or hypothecated by the Participant during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process, other than by will or by the laws of descent and distribution and a SAR may be exercised during the lifetime of the Participant only or by the guardian or legal representative of the Participant.
SECTION 8. TERMS AND CONDITIONS FOR SHARE GRANTS.
(a) Time, Amount and Form of Awards. Awards under this Section 8 may be granted in the form of a Share Grant. A Share Grant may be awarded in combination with NSOs, and such an Award may provide that the Share Grant will be forfeited in the event that the related NSOs are exercised.
12
SECTION 9. TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS.
(e) Form and Time of Settlement of Restricted Share Units. Settlement of vested Restricted Share Units may be made in the form of (i) cash, (ii) Shares or (iii) any combination of both, as determined by the Committee at the time of the grant of the Restricted Share Units, in its sole discretion. Vested Restricted Share Units may be settled in a lump sum or in installments. The distribution may occur or commence when the vesting conditions applicable to the Restricted Share Units have been satisfied or have lapsed, or it may be deferred, in accordance with Applicable Laws, to any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents.
13
SECTION 10. PROTECTION AGAINST DILUTION.
(i) the number of Shares and the kind of shares or securities available for future Awards under Section 5;
(ii) the limits on Share Grants and Restricted Share Units specified in Section 5(d);
(iii) the number of Shares and the kind of shares or securities covered by each outstanding Award; or
(iv) the Exercise Price under each outstanding Option or SAR.
14
SECTION 11. EFFECT OF A CHANGE IN CONTROL.
(a) Change in Control. In the event that the Company is a party to a Change in Control, outstanding Awards shall be subject to the applicable agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Awards by the surviving corporation or its parent, for their continuation by the Company (if the Company is a surviving corporation), for accelerated vesting or for their cancellation with or without consideration, in all cases without the consent of the Participant.
SECTION 12. LIMITATIONS ON RIGHTS.
Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an employee, consultant or director of the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parent, Subsidiaries and Affiliates reserve the right to terminate the Service of any person at any time, and for any reason, subject to Applicable Laws, and any applicable written employment agreement (if any), and such terminated person shall be deemed irrevocably to have waived any claim to damages or specific performance for breach of contract or dismissal, compensation for loss of office, tort or otherwise with respect to the Plan or any outstanding Award that is forfeited and/or is terminated by its terms or to any future Award.
15
SECTION 13. WITHHOLDING TAXES.
SECTION 14. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan shall terminate on August 15th, 2024 and may be terminated on any earlier date pursuant to this Section 14.
(b) Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at any time and for any reason. Any such termination of the Plan, or any amendment thereof, shall not impair any Award previously granted under the Plan. No Awards shall be granted under the Plan after the Plan’s termination. An amendment of the Plan shall be subject to the approval of the Company’s shareholders only to the extent such approval is required by Applicable Laws, regulations or rules.
16