THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
OR
QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, OR THE SECURITIES LAWS
OF ANY
STATE OR FOREIGN JURISDICTION AND
MAY
NOT BE OFFERED OR SOLD IN THE U.S. OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS)
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT
OF 1933).
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED
FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, A DISPOSITION IN ACCORDANCE WITH
THE
PROVISIONS OF REGULATION S, RULE 144, PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED UNDER THE U.S. SECURITIES
ACT OF
1933 OR ANY STATE AND APPLICABLE FOREIGN SECURITIES LAWS.
HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE U.S. SECURITIES ACT OF 1933.
SOLAR
ENERTECH CORP.
RESTRICTED
STOCK AGREEMENT
(For
Participants Resident in The Peoples Republic of China)
Solar
Enertech Corp. has granted to the Participant named in the
Notice
of Grant of Award
(the
“
Grant
Notice
”
)
to
which this Restricted Stock Agreement (the
“
Agreement
”
)
is
attached an Award (the
“Award”
)
consisting of certain shares of Stock (the
“
Shares
”
)
subject
to the terms and conditions set forth in the Grant Notice and this Agreement.
The Award has been granted pursuant and shall in all respects be subject
to the
terms conditions of the Solar Enertech Corp. 2008 Restricted Stock Plan
(the
“
Plan
”
),
as
amended to the Grant Date, the provisions of which are incorporated herein
by
reference. By signing the Grant Notice, the
Participant
:
(a) acknowledges receipt of and represents that the
Participant
has read
and is familiar with the Grant Notice, this Agreement and
the
Plan
,
(b) accepts the Award subject to all of the terms and conditions of the
Grant Notice, this Agreement and the Plan and (c) agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Committee
upon any questions arising under the Grant Notice, this Agreement or
the
Plan.
1.
Definitions
and Construction
.
1.1
Definitions
.
Unless
otherwise defined herein, capitalized terms shall have the meanings assigned
in
the Grant Notice or the Plan. Wherever used herein, the following terms
shall
have their respective meanings set forth below:
(a)
“
Grant
Date
”
means
the effective Grant Date of the Award as set forth in the Grant
Notice
.
(b)
“
Total
Number of Shares
”
means
the total number of Shares subject to the Award as set forth in the Grant
Notice
and as adjusted from time to time pursuant to Section
8
.
1.2
Construction
.
Captions
and titles contained herein are for convenience only and shall not affect
the
meaning or interpretation of any provision of this Agreement. 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.
2.
Administration
.
All
questions of interpretation concerning the Grant Notice, this Agreement
and the
Plan shall be determined by the Committee. All determinations by the
Committee
shall be final and binding upon all persons having an interest in the
Award as
provided by the Plan. Any Officer shall have the authority to act on
behalf of
the Company with respect to any matter, right, obligation, or election
which is
the responsibility of or which is allocated to the Company herein, provided
the
Officer has apparent authority with respect to such matter, right, obligation,
or election.
3.
The
Award
.
3.1
Grant
and Issuance of Shares.
On the
Grant Date, the Participant shall acquire and the Company shall issue,
subject
to the provisions of this Agreement, a number of Shares equal to the
Total
Number of Shares. As a condition to the issuance of the Shares, the Participant
shall execute and deliver the Grant Notice to the Company, and, if required
by
the Company, an Assignment Separate from Certificate duly endorsed (with
date
and number of Shares blank) in the form provided by the Company.
3.2
No
Monetary Payment Required.
The
Participant is not required to make any monetary payment (other than
applicable
tax withholding, if any) as a condition to receiving the Shares, the
consideration for which shall be past services actually rendered and/or
future
services to be rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable state corporate
law,
the Participant shall furnish consideration in the form of cash or past
services
rendered to a Participating Company or for its benefit having a value
not less
than the par value of the Shares issued pursuant to the Award.
3.3
Beneficial
Ownership of Shares; Certificate Registration
.
The
Participant hereby authorizes the Company, in its sole discretion, to
deposit
the Shares with the Company’s transfer agent, including any successor transfer
agent, to be held in book entry form during the term of the Escrow pursuant
to
Section
7
.
Furthermore, the Participant hereby authorizes the Company, in its sole
discretion, to deposit, following the term of such Escrow, for the benefit
of
the Participant with any broker with which the Participant has an account
relationship of which the Company has notice any or all Shares which
are no
longer subject to such Escrow. Except as provided by the foregoing, a
certificate for the Shares shall be registered in the name of the
Participant
,
or, if
applicable, in the names of the heirs of the
Participant
.
3.4
Issuance
of Shares in Compliance with Law
.
The
issuance of the Shares shall be subject to compliance with all applicable
requirements of United States, federal, state or foreign law or Local
Law (as
defined below in Section 15.1) with respect to such securities. No Shares
shall
be issued hereunder if their issuance would constitute a violation of
any
applicable United States, federal, or foreign securities laws, including
Local
Law, or other law or regulations or the requirements of any stock exchange
or
market system upon which the Stock may then be listed. The inability
of the
Company to obtain from any regulatory body having jurisdiction the authority,
if
any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance of any Shares shall relieve the Company of any liability in
respect of
the failure to issue such Shares as to which such requisite authority
shall not
have been obtained. As a condition to the issuance of the Shares, the
Company
may require the
Participant
to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the
Company.
4.
Vesting
of Shares
.
4.1
Normal
Vesting.
Except
as provided in Section
4.2
,
the
Shares shall vest and become Vested Shares as provided in the Grant Notice.
Except as set forth in Section 4.2, no additional Shares will become Vested
Shares following the Participant’s termination of Service for any
reason.
4.2
Acceleration
of Vesting
.
Subject
to Section
4.3
,
in the
event of a Change in Control, the vesting of the Shares shall be accelerated
in
full, and the Total Number of Shares shall be deemed Vested Shares effective
as
of the date of the Change in Control, provided that the Participant’s Service
has not terminated prior to such date.
In
addition, if the Participant’s Service is terminated due to his or her death,
Disability or termination by the Company without Cause, the Total Number
of
Shares shall be deemed Vested Shares effective as of the date of
termination.
4.3
United
States Internal Revenue Section 4999 of the Code.
(a)
Excess
Parachute Payment.
To the
extent that Sections 280G and 4999 of the Code applies to a Participant,
and in
the event that any acceleration of vesting pursuant to this Agreement
and any
other payment or benefit received or to be received by the Participant
would
subject the Participant to any excise tax pursuant to Section 4999 of the
Code due to the characterization of such acceleration of vesting, payment
or
benefit as an excess parachute payment under Section 280G of the Code, the
Participant may elect, in his or her sole discretion, to reduce the amount
of
any acceleration of vesting called for under this Agreement in order
to avoid
such characterization.
(b)
Determination
by Independent Accountants.
To aid
the Participant in making any election called for under
Section
4.3(a)
,
upon
the occurrence of any event that might reasonably be anticipated to give
rise to
the acceleration of vesting under Section
4.2
(an
“
Event
”
),
the
Company shall promptly request a determination in writing by independent
public
accountants selected by the Company (the
“
Accountants
”
).
Unless
the Company and the Participant otherwise agree in writing, the Accountants
shall determine and report to the Company and the Participant within
twenty (20)
days of the date of the Event the amount of such acceleration of vesting,
payments and benefits which would produce the greatest after-tax benefit
to the
Participant. For the purposes of such determination, the Accountants
may rely on
reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Participant shall
furnish to the Accountants such information and documents as the Accountants
may
reasonably request in order to make their required determination. The
Company
shall bear all fees and expenses the Accountants may reasonably charge
in
connection with their services contemplated by this Section
4.3(b)
.
5.
Company
Reacquisition Right
.
5.1
Grant
of Company Reacquisition Right
.
Except
to the extent otherwise provided in an employment agreement between a
Participating Company and the Participant, in the event that (a) the
Participant
’
s
Service
terminates for any reason or no reason, with or without cause, or (b) the
Participant, the Participant
’
s
legal
representative, or other holder of the Shares, attempts to sell, exchange,
transfer, pledge, or otherwise dispose of (other than pursuant to an
Ownership
Change Event), including, without limitation, any transfer to a nominee
or agent
of the Participant, any Shares which are not Vested Shares (
“
Unvested
Shares
”
),
the
Company shall automatically reacquire the Unvested Shares, and the Participant
shall not be entitled to any payment therefor (the
“
Company
Reacquisition Right
”
).
5.2
Ownership
Change Event, Dividends, Distributions and Adjustments
.
Upon the
occurrence of an Ownership Change Event, a dividend or distribution to the
stockholders of the Company paid in Shares or other property, or any
other
adjustment upon a change in the capital structure of the Company as described
in
Section 4.3 of the Plan, any and all new, substituted or additional securities
or other property (other than regular, periodic dividends paid on Stock
pursuant
to the Company’s dividend policy) to which the Participant is entitled by reason
of the Participant
’
s
ownership of Unvested Shares shall be immediately subject to the Company
Reacquisition Right and included in the terms “Shares,” “Stock” and “Unvested
Shares” for all purposes of the Company Reacquisition Right with the same force
and effect as the Unvested Shares immediately prior to the Ownership
Change
Event, dividend, distribution or adjustment, as the case may be. For
purposes of
determining the number of Vested Shares following an Ownership Change
Event,
dividend, distribution or adjustment, credited Service shall include
all Service
with any corporation which is a Participating Company at the time the
Service is
rendered, whether or not such corporation is a Participating Company
both before
and after any such event.
6.
Tax
Matters
.
6.1
Tax
Withholding.
(a)
In
General.
At the
time the Grant Notice is executed, or at any time thereafter as requested
by a
Participating Company, the
Participant
hereby
authorizes withholding from payroll and any other amounts payable to
the
Participant
,
and
otherwise agrees to make adequate provision for, any sums required to
satisfy
the federal, state, local and foreign tax (including any social insurance)
withholding obligations of the Participating Company, if any, which arise
in
connection with the Award, including, without limitation, obligations
arising
upon (a) the transfer of Shares to the Participant, (b) the lapsing of
any restriction with respect to any Shares, (c) the filing of an election
to recognize tax liability, or (d) the transfer by the Participant of any
Shares. The Company shall have no obligation to deliver the Shares or
to release
any Shares from the Escrow established pursuant to Section
7
until
the tax withholding obligations of the Participating Company have been
satisfied
by the
Participant
.
(b)
Assignment
of Sale Proceeds; Payment of Tax Withholding by Check.
Subject
to compliance with applicable law and any insider trading policy of the
Company,
the Company may permit the Participant to satisfy the Participating Company’s
tax withholding obligations in accordance with procedures established
by the
Company providing for either (i) delivery by the Participant to the Company
or a broker approved by the Company of properly executed instructions,
in a form
approved by the Company, providing for the assignment to the Company
of the
proceeds of a sale with respect to some or all of the Vested Shares,
or
(ii) payment by check. The Participant shall deliver written notice of any
such permitted election to the Company on a form specified by the Company
for
this purpose at least thirty (30) days (or such other period established
by the
Company) prior to the date on which the Company’s tax withholding obligation
arises (the
“
Withholding
Date
”
).
If the
Participant elects payment by check, the Participant agrees to deliver
a check
for the full amount of the required tax withholding to the applicable
Participating Company on or before the third business day following the
Withholding Date. If the Participant elects payment by check but fails
to make
such payment as required by the preceding sentence, the Company is hereby
authorized, at its discretion, to satisfy the tax withholding obligations
through any means authorized by this Section
6.1
,
including by directing a sale for the account of the Participant of some
or all
of the Vested Shares from which the required taxes shall be withheld,
by
withholding from payroll and any other amounts payable to the
Participant
or by withholding Shares in accordance with Section
6.1(c)
.
(c)
Withholding
in Shares.
The
Company may require the Participant to satisfy all or any portion of
a
Participating Company’s tax withholding obligations by deducting a number of
whole, Vested Shares otherwise deliverable to the Participant or by the
Participant’s tender to the Company of a number of whole, Vested Shares or
vested Shares acquired otherwise than pursuant to this Agreement having,
in any
such case, a fair market value, as determined by the Company as of the
date on
which the tax withholding obligations arise, not in excess of the amount
of such
tax withholding obligations determined by the applicable minimum statutory
withholding rates.
6.2
Election
Under Section 83(b) of the Code.
(a)
The
Participant understands that Section 83 of the Code taxes as ordinary
income the difference between the amount paid for the Shares, if anything,
and
the fair market value of the Shares as of the date on which the Shares
are
“substantially vested,” within the meaning of Section 83. In this context,
“substantially vested” means that the right of the Company to reacquire the
Shares pursuant to the Company Reacquisition Right has lapsed. The Participant
understands that he or she may elect to have his or her taxable income
determined at the time he or she acquires the Shares rather than when
and as the
Company Reacquisition Right lapses by filing an election under
Section 83(b) of the Code with the Internal Revenue Service no later than
thirty (30) days after the date of acquisition of the Shares. The Participant
understands that failure to make a timely filing under Section 83(b) will
result in his or her recognition of ordinary income, as the Company
Reacquisition Right lapses, on the difference between the purchase price,
if
anything, and the fair market value of the Shares at the time such restrictions
lapse. The Participant further understands, however, that if Shares with
respect
to which an election under Section 83(b) has been made are forfeited to the
Company pursuant to its Company Reacquisition Right, such forfeiture
will be
treated as a sale on which there is realized a loss equal to the excess
(if any)
of the amount paid (if any) by the Participant for the forfeited Shares
over the
amount realized (if any) upon their forfeiture. If the Participant has
paid
nothing for the forfeited Shares and has received no payment upon their
forfeiture, the Participant understands that he or she will be unable
to
recognize any loss on the forfeiture of the Shares even though the Participant
incurred a tax liability by making an election under
Section 83(b).
(b)
The
Participant understands that he or she should consult with his or her
tax
advisor regarding the advisability of filing with the Internal Revenue
Service
an election under Section 83(b) of the Code, which must be filed no later
than thirty (30) days after the date of the acquisition of the Shares
pursuant
to this Agreement. Failure to file an election under Section 83(b), if
appropriate, may result in adverse tax consequences to the Participant.
The
Participant acknowledges that he or she has been advised to consult with
a tax
advisor regarding the tax consequences to the Participant of the acquisition
of
Shares hereunder. ANY ELECTION UNDER SECTION 83(b) THE PARTICIPANT WISHES
TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE
PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED.
THE
PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS
THE PARTICIPANT’S SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER
BEHALF.
(c)
The
Participant will notify the Company in writing if the Participant files
an
election pursuant to Section 83(b) of the Code. The Company intends, in the
event it does not receive from the Participant evidence of such filing,
to claim
a tax deduction for any amount which would otherwise be taxable to the
Participant in the absence of such an election.
7.
Escrow
.
7.1
Appointment
of Agent.
To
ensure that Shares subject to the Company Reacquisition Right will be
available
for reacquisition, the Participant and the Company hereby appoint the
Secretary
of the Company, or any other person designated by the Company, as their
agent
and as attorney-in-fact for the Participant (the
“
Agent
”
)
to hold
any and all Unvested Shares and to sell, assign and transfer to the Company
any
such Unvested Shares reacquired by the Company pursuant to the Company
Reacquisition Right. The Participant understands that appointment of
the Agent
is a material inducement to make this Agreement and that such appointment
is
coupled with an interest and is irrevocable. The Agent shall not be personally
liable for any act the Agent may do or omit to do hereunder as escrow
agent,
agent for the Company, or attorney in fact for the Participant while
acting in
good faith and in the exercise of the Agent’s own good judgment, and any act
done or omitted by the Agent pursuant to the advice of the Agent’s own attorneys
shall be conclusive evidence of such good faith. The Agent may rely upon
any
letter, notice or other document executed by any signature purporting
to be
genuine and may resign at any time.
7.2
Establishment
of Escrow
.
The
Participant authorizes the Company to deposit the Unvested Shares with
the
Company’s transfer agent to be held in book entry form, as provided in
Section
3.3
,
and the
Participant agrees to deliver to and deposit with the Agent each certificate,
if
any, evidencing the Shares and, if required by the Company, an Assignment
Separate from Certificate with respect to such book entry Shares and
each such
certificate duly endorsed (with date and number of Shares blank) in the
form
attached to this Agreement, to be held by the Agent under the terms and
conditions of this Section
7
(the
“
Escrow
”
).
Upon
the occurrence of an Ownership Change Event, a dividend or distribution
to the
stockholders of the Company paid in Shares or other property (other than
regular, periodic dividends paid on Stock pursuant to the Company’s dividend
policy), or any other adjustment upon a change in the capital structure
of the
Company, as described in Section 4.3 of the Plan, in the character or
amount of
any outstanding stock of the corporation the stock of which is subject
to the
provisions of this Agreement, any and all new, substituted or additional
securities or other property to which the Participant is entitled by
reason of
his or her ownership of the Shares that remain, following such Ownership
Change
Event, dividend, distribution or change described in Section 4.3 of the
Plan,
subject to the Company Reacquisition Right shall be immediately subject
to the
Escrow to the same extent as the Shares immediately before such event.
The
Company shall bear the expenses of the Escrow.
7.3
Delivery
of Shares to Participant
.
The
Escrow shall continue with respect to any Shares for so long as such
Shares
remain subject to the Company Reacquisition Right. Upon termination of
the
Company Reacquisition Right with respect to Shares, the Company shall
so notify
the Agent and direct the Agent to deliver such number of Shares to the
Participant. As soon as practicable after receipt of such notice, the
Agent
shall cause to be delivered to the Participant the Shares specified by
such
notice, and the Escrow shall terminate with respect to such Shares.
8.
Adjustments
for Changes in Capital Structure
.
Subject
to any required action by the stockholders of the Company, in the event
of any
change in the Stock effected without receipt of consideration by the
Company,
whether through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse
stock
split, split-up, split-off, spin-off, combination of Shares, exchange
of Shares,
or similar change in the capital structure of the Company, or in the
event of
payment of a dividend or distribution to the stockholders of the Company
in a
form other than Shares (excepting normal cash dividends) that has a material
effect on the Fair Market Value of Shares, appropriate and proportionate
adjustments shall be made in the number and kind of Shares subject to
the Award,
in order to prevent dilution or enlargement of the Participant’s rights under
the Award. For purposes of the foregoing, conversion of any convertible
securities of the Company shall not be treated as “effected without receipt of
consideration by the Company.” Any fractional share resulting from an adjustment
pursuant to this Section shall be rounded down to the nearest whole number.
The
adjustments determined by the Committee pursuant to this Section shall
be final,
binding and conclusive.
9.
Legends
.
The
Company may at any time place legends referencing the Company Reacquisition
Right and any applicable federal, state or foreign securities law, including
Local Law, restrictions on all certificates representing the Shares.
The
Participant shall, at the request of the Company, promptly present to
the
Company any and all certificates representing the Shares in the possession
of
the Participant in order to carry out the provisions of this Section.
Unless
otherwise specified by the Company, legends placed on such certificates
may
include, but shall not be limited to, the following:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
SET FORTH
IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR
HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF
THIS CORPORATION.”
“THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S.
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, TRANSFERRED, ASSIGNED,
HYPOTHECATED OR SOLD IN THE U.S. OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS)
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT
OF 1933),
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH REGULATION S OR RULE
144, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY,
STATING THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT OR ANY STATE AND APPLICABLE FOREIGN
SECURITIES
LAWS. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT OF 1933.”
The
Participant is hereby on notice that the Company may refuse to register
on the
books of the Company (or on the records of a duly authorized transfer
agent of
the Company) any transfer, sale, assignment or hypothecation of the Securities
not made in accordance with (i) registration under the Securities Act
(ii)
pursuant to Regulation S under the Securities Act, (iii) Rule 144 under
the
Securities Act or (iv) another available exemption from registration
under the
Securities Act.
10.
Restrictions
on Transfers of Shares
.
No
Shares
may be sold, exchanged, transferred, assigned, pledged, hypothecated
or
otherwise disposed of, including by operation of law, in any manner which
violates any of the provisions of this Agreement and, except pursuant
to an
Ownership Change Event, until the date on which such Shares become Vested
Shares, and any such attempted disposition shall be void. The Company
shall not
be required (a) to transfer on its books any Shares which will have been
transferred in violation of any of the provisions set forth in this Agreement
or
(b) to treat as owner of such Shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such Shares will
have been
so transferred.
In
order
to enforce its rights under this Section, the Company shall be authorized
to
give a stop transfer instruction with respect to the Shares to the Company’s
transfer agent.
11.
Rights
as a Stockholder
.
The
Participant
shall
have no rights as a stockholder with respect to any Shares subject to
the Award
until the date of the issuance of a certificate for such Shares (as evidenced
by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company). No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the
date
such certificate is issued, except as provided in Section 8. Subject the
provisions of this Agreement, the Participant shall exercise all rights
and
privileges of a stockholder of the Company with respect to Shares deposited
in
the Escrow pursuant to Section
7
.
12.
Rights
As Employee, Consultant or Board Member
.
If
the
Participant is an Employee, the Participant understands and acknowledges
that,
except as otherwise provided in a separate, written employment agreement
between
a Participating Company and the Participant, the Participant
’
s
employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service
of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant
’
s
Service
at any time.
13.
Representations
and Warranties
.
In
connection with the grant of Restricted Stock (collectively, the
“
Securities
”
),
the
Participant hereby agrees, represents and warrants as follows:
13.1
Investment
Intent.
The
Participant is acquiring the Securities solely for the Participant’s own account
for investment and not with a view to or for sale in connection with
any
distribution of the Securities or any portion thereof and not with any
present
intention of selling, offering to sell or otherwise disposing of or distributing
the Securities or any portion thereof in any transaction other than a
transaction exempt from registration under the Securities Act. The Participant
further represents that the entire legal and beneficial interest of the
Securities is being acquired, and will be held, neither for the account
and
benefit of the Participant only and neither in whole nor in part for
any other
person.
13.2
Absence
of Solicitation.
The
Participant was not presented with or solicited by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice, or other communication published in any
newspaper, magazine, or similar media, or broadcast over television,
radio or
similar communications media, or presented at any seminar or meeting
whose
attendees have been invited by any general solicitation or general
advertising.
13.3
Residence/Not
a U.S. Person.
The
Participant’s principal residence is located at the address indicated beneath
the Participant’s signature on the Grant Notice. The Participant is
not
a
U.S. person (as defined in Regulation S promulgated under the Securities
Act),
and the Award is not for the benefit of, or for the account of a U.S.
person.
The Securities may not be delivered within the United States unless registered
under the Securities Act or an exemption from such registration is
available.
13.4
Information
Concerning the Company.
The
Participant is aware of the Company’s business affairs and financial condition
and has acquired sufficient information about the Company to reach an
informed
and knowledgeable decision to acquire the Securities. The Participant
further
represents and warrants that the Participant has discussed the Company
and its
plans, operations and financial condition with its Officers, has received
all
such information as the Participant deems necessary and appropriate to
enable
the Participant to evaluate the financial risk inherent in acquiring
the
Securities and has received satisfactory and complete information concerning
the
business and financial condition of the Company in response to all inquiries
in
respect thereof.
13.5
Economic
Risk.
The
Participant realizes that his acquisition of the Securities will be a
highly
speculative investment and that the Participant is able, without impairing
his
or her financial condition, to hold the Securities for an indefinite
period of
time and to suffer a complete loss on the Participant’s investment.
13.6
Capacity
to Protect Interests.
The
Participant has (i) a preexisting personal or business relationship with
the
Company or any of its Officers, directors, or controlling persons, consisting
of
personal or business contacts of a nature and duration to enable the
Participant
to be aware of the character, business acumen and general business and
financial
circumstances of the person with whom such relationship exists, or (ii)
such
knowledge and experience in financial and business matters as to make
the
Participant capable of evaluating the merits and risks of an investment
in the
Securities and to protect the Participant’s own interests in the transaction, or
(iii) both such relationship and such knowledge and experience.
13.7
Restricted
Securities.
The
Participant understands and acknowledges that:
(a)
The
issuance of the Securities to the Participant has not been registered
under the
Securities Act, and the Securities must be held indefinitely unless a
transfer
of the Securities is subsequently registered under the Securities Act
the
transfer or sale is in accordance with Regulation AS promulgated under
the
Securities Act or Rule 144 promulgated under the Securities Act or another
exemption from such registration is available,
(b)
The
Company is under no obligation to register the Securities;
(c)
The
Participant hereby agrees not to engage in hedging transactions with
regard to
the Securities unless in compliance with the Securities Act.
(d)
The
Company will make a notation in its records of the aforementioned restrictions
on transfer and legends.
13.8
Disposition
Under Rule 144.
The
Participant understands that any Shares acquired pursuant to this Award
will be
restricted securities within the meaning of Rule 144 promulgated under
the
Securities Act; that the exemption from registration under Rule 144 will
not be
available in any event for at least one year from the date of acquisition
of the
Shares, and even then will not be available unless (a) a public trading
market
then exists for the Common Stock of the Company, (b) adequate information
concerning the Company is then available to the public, and (c) other
terms and
conditions of Rule 144 are complied with; and that any sale of the Shares
may be
made only in limited amounts in accordance with such terms and conditions.
There
can be no assurance that the requirements of Rule 144 will be met, or
that the
Shares will ever be salable.
13.9
Further
Limitations on Disposition.
Without
in any way limiting the Participant’s representations and warranties set forth
above, the Participant further agrees that the Participant will in no
event make
any disposition of all or any portion of any Shares which the Participant
acquires pursuant to this Award unless:
(a)
There
is
then in effect a Registration Statement under the Securities Act covering
such
proposed disposition and such disposition is made in accordance with
said
Registration Statement; or
(b)
The
Participant will have notified the Company of the proposed disposition
and
furnished the Company with a detailed statement of the circumstances
surrounding
the proposed disposition, and either:
(i)
The
Participant will have furnished the Company with an opinion of the Participant’s
own counsel to the effect that such disposition will not require registration
of
such Shares under the Securities Act or any state and applicable foreign
securities laws, and such opinion of the Participant’s counsel will have been
concurred in by counsel for the Company and the Company will have advised
the
Participant of such concurrence; or
(ii)
The
disposition is made in compliance with Rule 144 or Regulation S after
the
Participant has furnished the Company such detailed statement and after
the
Company has had a reasonable opportunity to discuss the matter with the
Participant.
13.10
Reliance
by Company.
The
Participant understands that the grant pf Restricted Stock has not been
qualified under the Corporate Securities Law of 1968, as amended, of
the State
of California by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Participant’s
representations as expressed herein and/or the position of the Participant
with
the Company. The Participant understands that the Company is relying
on the
Participant’s representations and warrants that the Company is entitled to rely
on such representations and that such reliance is reasonable.
14.
Miscellaneous
Provisions
.
14.1
Termination
or Amendment.
The
Committee may terminate or amend the Plan or this Agreement at any time;
provided, however, that no such termination or amendment may adversely
affect
the Participant’s rights under this Agreement without the consent of the
Participant
unless such termination or amendment is necessary to comply with applicable
law
or government regulation
.
No
amendment or addition to this Agreement shall be effective unless in
writing.
14.2
Further
Instruments.
The
parties hereto agree to execute such further instruments and to take
such
further action as may reasonably be necessary to carry out the intent
of this
Agreement.
14.3
Binding
Effect.
This
Agreement shall inure to the benefit of the successors and assigns of
the
Company and, subject to the restrictions on transfer set forth herein,
be
binding upon the Participant and the Participant’s heirs, executors,
administrators, successors and assigns.
14.4
Delivery
of Documents and Notices.
Any
document relating to participation in the Plan or any notice required
or
permitted hereunder shall be given in writing and shall be deemed effectively
given (except to the extent that this Agreement provides for effectiveness
only
upon actual receipt of such notice) upon personal delivery, electronic
delivery
at the e-mail address, if any, provided for the Participant by a Participating
Company, or upon deposit in the U.S. Post Office or foreign postal service,
by
registered or certified mail, or with a nationally recognized overnight
courier
service, with postage and fees prepaid, addressed to the other party
at the
address of such party set forth in the Grant Notice or at such other
address as
such party may designate in writing from time to time to the other
party.
(a)
Description
of Electronic Delivery
.
The Plan
documents, which may include but do not necessarily include: the Plan,
the Grant
Notice, this Agreement, and any reports of the Company provided generally
to the
Company’s stockholders, may be delivered to the Participant electronically. In
addition, the parties may deliver electronically any notices called for
in
connection with the Escrow and the Participant may deliver electronically
the
Grant Notice to the Company or to such third party involved in administering
the
Plan as the Company may designate from time to time. Such means of electronic
delivery may include but do not necessarily include the delivery of a
link to a
Company intranet or the Internet site of a third party involved in administering
the Plan, the delivery of the document via e-mail or such other means
of
electronic delivery specified by the Company.
(b)
Consent
to Electronic Delivery.
The
Participant acknowledges that the Participant has read Section
14.4(a)
of this
Agreement and consents to the electronic delivery of the Plan documents,
the
Grant Notice and notices in connection with the Escrow, as described
in
Section
14.4(a)
.
The
Participant acknowledges that he or she may receive from the Company
a paper
copy of any documents delivered electronically at no cost to the Participant
by
contacting the Company by telephone or in writing. The Participant further
acknowledges that the Participant will be provided with a paper copy
of any
documents if the attempted electronic delivery of such documents fails.
Similarly, the Participant
u
nderstands
that the Participant must provide the Company or any designated third
party
administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her
consent
to the electronic delivery of documents described in Section
14.4(a)
or may
change the electronic mail address to which such documents are to be
delivered
(if Participant has provided an electronic mail address) at any time
by
notifying the Company of such revoked consent or revised e-mail address
by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery
of
documents described in Section
14.4(a)
.
14.5
Integrated
Agreement.
The
Grant Notice, this Agreement and the Plan, together with any employment,
service
or other agreement between the Participant and a Participating Company
referring
to the Award, shall constitute the entire understanding and agreement
of the
Participant
and the
Participating Company Group with respect to the subject matter contained
herein
or therein and supersede any prior agreements, understandings, restrictions,
representations, or warranties among the
Participant
and the
Participating Company Group with respect to such subject matter other
than those
as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of the Grant Notice, this Agreement
and the
Plan shall survive any settlement of the Award and shall remain in full
force
and effect.
14.6
Applicable
Law.
This
Agreement shall be governed by the laws of the State of California as
such laws
are applied to agreements between California residents entered into and
to be
performed entirely within the State of California. For purposes of litigating
any dispute that arises directly or indirectly from the relationship
of the
parties as evidenced by this Agreement, the parties hereby submit to
and consent
to the jurisdiction of the State of California and agree that such litigation
shall be conducted only in the courts of the County of Santa Clara, California,
or the federal courts of the United States for the Northern District
of
California, and no other courts, where this Agreement is made and/or
performed.
14.7
Counterparts.
The
Grant Notice may be executed in counterparts, each of which shall be
deemed an
original, but all of which together shall constitute one and the same
instrument.
15.
Certain
Conditions of the Award
.
15.1
Compliance
with Local Law.
The
Participant agrees that the Participant will not acquire Shares pursuant
to the
Award or transfer, assign, sell or otherwise deal with such Shares except
in
compliance with the laws and regulations of the People’s Republic of China
(“Local Law”). In addition, the Participant agrees that the Company may take
whatever additional steps it deems necessary to ensure compliance with
Local
Law, including, but not limited to the requirement that the Shares be
held by a
specified broker until sold or otherwise disposed of by the Participant.
15.2
Employment
Conditions.
In
accepting the Award, the Participant acknowledges that:
(a)
Any
notice period mandated under Local Law shall not be treated as Service
for the
purpose of determining the vesting of the Award; and the Participant’s right to
exercise the Award after termination of Service, if any, will be measured
by the
date of termination of the Participant’s active Service and will not be extended
by any notice period mandated under Local Law. Subject to the foregoing
and the
provisions of the Plan, the Company, in its sole discretion, shall determine
whether the Participant’s Service has terminated and the effective date of such
termination.
(b)
The
Plan
is established voluntarily by the Company. It is
discretionary
in
nature and it may be modified, amended, suspended
or
terminated by the Company at any time,
unless
otherwise
provided
in the Plan and this Award Agreement.
(c)
The
grant
of the Award is
voluntary
and
occasional
and does
not create any contractual or other right to receive future grants of
Awards, or
benefits in lieu of Awards, even if Awards have been granted repeatedly
in the
past.
(d)
All
decisions with respect to future
Award
grants,
if any, will be at the sole discretion of the Company.
(e)
The
Participant’s participation in the Plan shall not create a right to further
Service with any Participating Company and shall not interfere with the
ability
of any Participating Company to terminate the Participant’s Service at any time,
with or without cause.
(f)
The
Participant is voluntarily participating in
the
Plan.
(g)
The
Award
is an extraordinary item that does not constitute compensation of any
kind for
Service of any kind rendered to
any
Participating Company
,
and
which is outside the scope of the Participant’s employment contract, if
any.
(h)
The
Award
is not part of normal or expected compensation or salary for any purpose,
including, but not limited to, calculating any severance,
resignation
,
termination
,
redundancy
,
end-of-service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments.
(i)
In
the
event that the Participant is not an employee of the Company, the Award
grant
will not be interpreted to form an employment contract or relationship
with the
Company; and furthermore the Award grant will not be interpreted to form
an
employment contract with any other Participating Company.
(j)
The
future value of the underlying Shares is unknown and cannot be predicted
with
certainty. If the underlying Shares do not increase in value, the Award
will
have
no
value. If the Participant exercises the Award and obtains Shares, the
value of
those Shares acquired upon exercise may increase or decrease in value,
even
below the Exercise Price.
(k)
No
claim
or entitlement to compensation or damages arises from termination of
the Award
or diminution in value of the Award or Shares purchased through exercise
of the
Award resulting from termination of the Participant’s Service (for any reason
whether or not in breach of Local Law) and the Participant irrevocably
releases
the Company and each other Participating Company from any such claim
that may
arise
.
If,
notwithstanding the foregoing, any such claim is found by a court of
competent
jurisdiction to have arisen then, by signing this Award Agreement, the
Participant shall be deemed irrevocably to have waived the Participant’s
entitlement to pursue such a claim.
15.3
Data
Privacy Consent.
(a)
The
Participant hereby explicitly and unambiguously consents to the collection,
use
and transfer, in electronic or other form, of the Participant’s personal data as
described in this document by and among the members of the Participating
Company
Group for the exclusive purpose of implementing, administering and managing
the
Participant’s participation in the Plan.
(b)
The
Participant understands that the Participating Company Group holds certain
personal information about the Participant, including, but not limited
to, the
Participant’s name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality,
job title,
any Shares or directorships held in the Company, details of all Awards
or any
other entitlement to Shares awarded, canceled, exercised, vested, unvested
or
outstanding in the Participant’s favor, for the purpose of implementing,
administering and managing the Plan (“
Data
”).
The Participant understands that Data may be transferred to any third
parties
assisting in the implementation, administration and management of the
Plan, that
these recipients may be located in the Participant’s country or elsewhere, and
that the recipient’s country may have different data privacy laws and
protections than the Participant’s country. The Participant understands that he
or she may request a list with the names and addresses of any potential
recipients of the Data by contacting the Participant’s local human resources
representative. The Participant authorizes the recipients to receive,
possess,
use, retain and transfer the Data, in electronic or other form, for the
purposes
of implementing, administering and managing the Participant’s participation in
the Plan, including any requisite transfer of such Data as may be required
to a
broker or other third party with whom the Participant may elect to deposit
any
Shares acquired upon exercise of the Award. The Participant understands
that
Data
will
be held only as long as is necessary to implement, administer and manage
the
Participant’s participation in the Plan. The Participant understands that he or
she may, at any time, view Data, request additional information about
the
storage and processing of Data, require any necessary amendments to Data
or
refuse or withdraw the consents herein, in any case without cost, by
contacting
in writing the Participant’s local human resources representative. The
Participant understands, however, that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For
more information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may
contact
the Participant’s local human resources representative.