UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE
13a-16
OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2024
Commission File Number:
001-38431
iQIYI, Inc.
4/F, iQIYIYouth Center Yoolee Plaza,
No.21, North Road of Workers' Stadium, Chaoyang District Beijing, 100027,
People's Republic of China
Tel: +86 10 6267-7171
(Address of principal executive offices)
Indicate by check mark whetherthe registrant files or will file annual reports
under cover of Form
20-F
or Form
40-F.
Form
20-FForm
40-F
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iQIYI, Inc. Adopted the 2024 Share Incentive Plan
iQIYI, Inc. (the "
Company
") has adopted the 2024 Share Incentive Plan (the "
2024 Plan
"), as approved and authorized by theboard of directors of the Company. The
Company may grant options and restricted share units pursuant to the 2024
Plan. Under the 2024 Plan, the maximum aggregate number of Class A ordinary
shares, par value US$0.00001 per share, of the Company(the "
Shares
") which may be issued pursuant to all awards is 350,000,000. The 2024 Plan
will continue in effect for a term of ten years.
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Exhibit Index
Exhibit 99.1
--
2024 Share Incentive Plan
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf bythe
undersigned, thereunto duly authorized.
iQIYI, Inc.
By: /s/ Jun Wang
Name: Jun Wang
Title: Chief Financial Officer
Date: May 23, 2024
Exhibit 99.1
IQIYI, INC.
2024 SHAREINCENTIVE PLAN
ARTICLE 1
PURPOSE
The purpose ofthe iQIYI, Inc. 2024 Share Incentive Plan (the "
Plan
") is to promote the success and enhance the value of iQIYI, Inc., a company
formed under the laws of the Cayman Islands (the "
Company
"), by linking the personalinterests of Directors, Employees, Consultants and
other individuals as the Committee may authorize and approve, to those of the
Company's shareholders and, by providing such individuals with an incentive
for outstanding performance, togenerate superior returns to the Company's
shareholders. The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of
recipients of share incentives hereunder upon whosejudgment, interest, and
special effort the successful conduct of the Company's operation is largely
dependent.
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicatesotherwise. The singular
pronoun shall include the plural where the context so indicates.
2.1 "
Applicable Laws
" means thelegal requirements relating to the Plan and the Awards under
applicable provisions of the corporate, securities, tax and other laws, rules,
regulations and government orders, and the rules of any applicable stock
exchange or national market system,of any jurisdiction applicable to Awards
granted to residents therein.
2.2 "
Award
" means an Option or Restricted ShareUnit award granted to a Participant
pursuant to the Plan.
2.3 "
Award Agreement
" means any written agreement, contract, orother instrument or document
evidencing an Award, including through electronic medium.
2.4 "
Board
" means the Board ofDirectors of the Company.
2.5 "
Cause
" with respect to a Participant means (unless otherwise expressly provided in
theapplicable Award Agreement, or another applicable contract with the
Participant that defines such term for purposes of determining the effect that
a "for cause" termination has on the Participant's Awards) a termination of
employmentor service based upon a finding by the Service Recipient, acting in
good faith and based on its reasonable belief at the time, that the
Participant:
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(a) has been negligent in the discharge of his or her duties to the Service
Recipient, hasrefused to perform stated or assigned duties or is incompetent
in or (other than by reason of a disability or analogous condition) incapable
of performing those duties;
(b) has been dishonest or committed or engaged in an act of theft,
embezzlement or fraud, a breach of confidentiality, an unauthorizeddisclosure
or use of inside information, customer lists, trade secrets or other
confidential information;
(c) has breached a fiduciaryduty, or willfully and materially violated any
other legal duty, law, administrative order, rule, regulation, public policy,
public order and morality standards; or has been convicted of, or plead guilty
or nolo contendere to, a felony ormisdemeanor (other than minor traffic
violations or similar offenses);
(d) has materially breached any of the provisions of any agreementwith the
Service Recipient, or materially violated any Service Recipient's internal
discipline, employee handbook, anti-corruption requirement or other applicable
governance rules of the Service Recipient;
(e) has engaged in unfair competition with, or otherwise acted intentionally
in a manner injurious to the reputation, business or assets of,the Service
Recipient; or
(f) has improperly induced a vendor or customer to break or terminate any
contract with the Service Recipient orinduced a principal for whom the Service
Recipient acts as agent to terminate such agency relationship.
A termination for Cause shall bedeemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Service Recipient first delivers written notice to the Participant of a
finding of termination for Cause.
2.6 "
Code
" means the Internal Revenue Code of 1986 of the United States, as amended.
2.7 "
Committee
" has the meaning described in ARTICLE 9.
2.8 "
Consultant
" means any consultant or adviser if: (a) the consultant or adviser renders
bona fide services to aService Recipient; (b) the services rendered by the
consultant or adviser are not in connection with the offer or sale of
securities in a capital-raising transaction and do not directly or indirectly
promote or maintain a market for theCompany's securities; and (c) the
consultant or adviser is a natural person who has contracted directly with the
Service Recipient to render such services.
2.9 "
Corporate Transaction
", unless otherwise defined in an Award Agreement, means any of the following
transactions,provided, however, that the Committee shall determine under (d)
and (e) whether multiple transactions are related, and its determination shall
be final, binding and conclusive:
(a) an amalgamation, arrangement or consolidation or scheme of arrangement (i)
in which the Company is not the surviving entity, exceptfor a transaction the
principal purpose of which is to change the jurisdiction in which the Company
is incorporated or (ii) following which the holders of the voting securities
of the Company do not continue to hold more than 50% of thecombined voting
power of the voting securities of the surviving entity;
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(b) the sale, transfer or other disposition of all or substantially all of the
assets of theCompany;
(c) the complete liquidation or dissolution of the Company;
(d) any reverse takeover or series of related transactions culminating in a
reverse takeover (including, but not limited to, a tender offerfollowed by a
reverse takeover) in which the Company is the surviving entity but (A) the
Company's equity securities outstanding immediately prior to such takeover are
converted or exchanged by virtue of the takeover into other property,whether
in the form of securities, cash or otherwise, or (B) in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or
personsdifferent from those who held such securities immediately prior to such
takeover or the initial transaction culminating in such takeover, but
excluding any such transaction or series of related transactions that the
Committee determines shall not bea Corporate Transaction; or
(e) acquisition in a single or series of related transactions by any person or
related group of persons (otherthan the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule
13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of
thetotal combined voting power of the Company's outstanding securities but
excluding any such transaction or series of related transactions that the
Committee determines shall not be a Corporate Transaction.
2.10 "
Director
" means a member of the Board or a member of the board of directors of any
Subsidiary of the Company.
2.11 "
Disability
", unless otherwise defined in an Award Agreement,
means that the Participant qualifies to receivelong-term disability payments
under the Service Recipient's long-term disability insurance program (if any),
as it may be amended from time to time, to which the Participant provides
services . If the Service Recipient to which the Participantprovides service
does not have a long-term disability plan in place, "Disability" means that a
Participant is unable to carry out the responsibilities and functions of the
position held by the Participant by reason of any medicallydeterminable
physical or mental impairment for a period of not less than ninety (90)
consecutive days. A Participant will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment sufficient to
satisfythe Service Recipient in its discretion.
2.12 "
Effective Date
" shall have the meaning set forth in ARTICLE 10.1.
2.13
"Employee"
means any person, including an officer or a Director, who is in the employment
of a Service Recipient, subjectto the control and direction of the Service
Recipient as to both the work to be performed and the manner and method of
performance. The payment of a director's fee by a Service Recipient shall not
be sufficient to constitute"employment" by the Service Recipient.
2.14 "
Exchange Act
" means the Securities Exchange Act of 1934 of theUnited States, as amended.
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2.15 "
Fair Market Value
" means, as of any date, the value of Sharesdetermined as follows:
(a) If the Shares are listed on one or more established stock exchanges or
national market systems, includingwithout limitation, the New York Stock
Exchange or the Nasdaq Stock Market, its Fair Market Value shall be the
closing sales price for such shares (or the closing bid, if no sales were
reported) as quoted on the principal exchange or system on whichthe Shares are
listed (as determined by the Committee) on the date of determination (or, if
no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid
wasreported), as reported on the website maintained by such exchange or market
system or such other source as the Committee deems reliable;
(b) If the Shares are regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securitiesdealer, its
Fair Market Value shall be the closing sales price for such shares as quoted
on such system or by such securities dealer on the date of determination, but
if selling prices are not reported, the Fair Market Value of a Share shall be
themean between the high bid and low asked prices for the Shares on the date
of determination (or, if no such prices were reported on that date, on the
last date such prices were reported), as reported in The Wall Street Journal
or such other source asthe Committee deems reliable; or
(c) In the absence of an established market for the Shares of the type
described in (a) and (b),above, the Fair Market Value thereof shall be
determined by the Committee in good faith and in its discretion by reference
to (i) the placing price of the latest private placement of the Shares and the
development of the Company's businessoperations and the general economic and
market conditions since such latest private placement, (ii) other third party
transactions involving the Shares and the development of the Company's
business operation and the general economic andmarket conditions since such
transaction, (iii) an independent valuation of the Shares, or (iv) such other
methodologies or information as the Committee determines to be indicative of
Fair Market Value.
2.16 "
Fiscal Year
" means the Company's fiscal year, which starts from January 1 and ends on
December 31 of eachcalendar year.
2.17 "
Group Entity
" means any of the Company and Subsidiaries of the Company.
2.18 "
Incentive Share Option
" means an Option that is intended to meet the requirements of Section 422 of
the Code or anysuccessor provision thereto.
2.19 "
Independent Director
" means (i) if the Shares or other securities representingthe Shares are not
listed on a stock exchange, a Director of the Company who is a
Non-Employee
Director; and (ii) if the Shares or other securities representing the Shares
are listed on one or more stockexchange, a Director of the Company who meets
the independence standards under the applicable corporate governance rules of
the stock exchange(s).
2.20 "
Non-Employee
Director
" means a member of the Board who qualifies as a
"Non-Employee
Director" as defined in Rule
16b-3(b)(3)
of the Exchange Act, or any successor definition adopted by the Board.
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2.21 "
Non-Qualified
Share Option
"means an Option that is not intended to be an Incentive Share Option.
2.22 "
Option
" means a right granted to aParticipant pursuant to ARTICLE 5 of the Plan to
purchase a specified number of Shares at a specified price during specified
time periods. An Option may be either an Incentive Share Option or a
Non-Qualified
Share Option.
2.23 "
Participant
" means a person who, as a Director, Consultant or Employee has been granted
an Awardpursuant to the Plan.
2.24 "
Parent
" means a parent corporation under Section 424(e) of the Code.
2.25 "
Plan
" means this 2024 Share Incentive Plan, of iQIYI, Inc., as amended and/or
restated from time to time.
2.26 "
Related Entity
" means any business, corporation, partnership, limited liability company or
other entity in which theCompany, a Parent or Subsidiary of the Company holds
a substantial ownership interest, directly or indirectly, or controls through
contractual arrangements and consolidates the financial results according to
applicable accounting standards, butwhich is not a Subsidiary and which the
Board designates as a Related Entity for purposes of the Plan.
2.27 "
Restricted ShareUnit
" means an Award granted to a Participant pursuant to ARTICLE 6.
2.28 "
Securities Act
" means the SecuritiesAct of 1933 of the United States, as amended.
2.29 "
Service Recipient
" means the Company, or Subsidiary of the Company,to which a Participant
provides services as an Employee, a Consultant, or a Director.
2.30 "
Share
" means Class Aordinary shares of the Company, par value US$0.00001 per share,
and such other securities of the Company that may be substituted for Shares
pursuant to ARTICLE 8.
2.31 "
Subsidiary
" means, any corporation or other entity of which a majority of the
outstanding voting shares or voting poweris beneficially owned or controlled
directly or indirectly by the Company.
2.32 "
Trading Date
" means the closing of thefirst sale to the general public of the Shares
pursuant to a registration statement filed with and declared effective by the
U.S. Securities and Exchange Commission under the Securities Act.
ARTICLE 3
SHARESSUBJECT TO THE PLAN
3.1
Number of Shares
.
(a) Subject to the provisions of ARTICLE 8 and ARTICLE 3.1(b), the maximum
aggregate number of Shares which may be issued pursuant to allAwards
(including Incentive Share Options) under the Plan shall be 350,000,000.
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(b) To the extent that an Award terminates, expires, or lapses for any reason,
any Sharessubject to the Award shall again be available for the grant of an
Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares
issued in assumption of, or in substitution for, any outstanding awards of any
entity acquired in anyform or combination by a Group Entity shall not be
counted against Shares available for grant pursuant to the Plan. Shares
delivered by the Participant or withheld by the Company upon the exercise of
any Award under the Plan, in payment of theexercise price thereof or tax
withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of ARTICLE 3.1(a). Notwithstanding the provisions
of this ARTICLE 3.1(b), no Shares may again be optioned, granted orawarded if
such action would cause an Incentive Share Option to fail to qualify as an
incentive share option under Section 422 of the Code.
3.2
Shares Distributed
. Any Shares distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissuedShares, treasury Shares (subject to Applicable
Laws) or Shares purchased on the open market. Additionally, at the discretion
of the Committee, any Shares distributed pursuant to an Award may be
represented by American Depositary Shares. If thenumber of Shares represented
by an American Depositary Share is other than on a
one-to-one
basis, the limitations of ARTICLE 3.1 shall be adjusted to reflect
thedistribution of American Depository Shares in lieu of Shares.
ARTICLE 4
ELIGIBILITY AND PARTICIPATION
4.1
Eligibility
. Persons eligible to participate in this Plan include Employees, Consultants,
and Directors, as determined bythe Committee.
4.2
Participation
. Subject to the provisions of the Plan, the Committee may, from time to time,
select from amongall eligible individuals, those to whom Awards shall be
granted and shall determine the nature and amount of each Award. No individual
shall have any right to be granted an Award pursuant to this Plan.
4.3
Jurisdictions
. In order to assure the viability of Awards granted to Participants employed
in various jurisdictions, the Committeemay provide for such special terms as
it may consider necessary or appropriate to accommodate differences in local
law, tax policy, or custom applicable in the jurisdiction in which the
Participant resides, is employed, operates or is incorporated.Moreover, the
Committee may approve such supplements to, or amendments, restatements, or
alternative versions of, the Plan as it may consider necessary or appropriate
for such purposes without thereby affecting the terms of the Plan as in effect
forany other purpose;
provided, however
, that no such supplements, amendments, restatements, or alternative versions
shall increase the share limitations contained in ARTICLE 3.1 of the Plan.
Notwithstanding the foregoing, the Committee may nottake any actions
hereunder, and no Awards shall be granted, that would violate any Applicable
Laws.
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ARTICLE 5
OPTIONS
5.1
General
. The Committee is authorized to grant Options to Participants on the
following terms and conditions:
(a)
ExercisePrice
. The exercise price per Share subject to an Option shall be determined by the
Committee and set forth in the Award Agreement which may be a fixed price or
variable price. The exercise price per Share subject to an Option may be
amended oradjusted in the absolute discretion of the Committee, the
determination of which shall be final, binding and conclusive. For the
avoidance of doubt, to the extent not prohibited by Applicable Laws or any
exchange rule, a downward adjustment of theexercise prices of Options
mentioned in the preceding sentence shall be effective without the approval of
the Company's shareholders or the approval of the affected Participants.
(b)
Time and Conditions of Exercise
. The Committee shall determine the time or times at which an Option may be
exercised in whole or inpart, including exercise prior to vesting;
provided
that the term of any Option granted under the Plan shall not exceed ten years,
except as provided in ARTICLE 11.1. The Committee shall also determine any
conditions, if any, that must besatisfied before all or part of an Option may
be exercised.
(c)
Payment
. The Committee shall determine the methods by which theexercise price of an
Option may be paid, the form of payment, including, without limitation (i)
cash or check denominated in U.S. Dollars, (ii) to the extent permissible
under the Applicable Laws, cash or check in Chinese Renminbi,(iii) cash or
check denominated in any other local currency as approved by the Committee,
(iv) Shares held for such period of time as may be required by the Committee
in order to avoid adverse financial accounting consequences and having aFair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof, (v) after the Trading Date the
delivery of a notice that the Participant has placed a market sell order with
a brokerwith respect to Shares then issuable upon exercise of the Option, and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price;
provided
thatpayment of such proceeds is then made to the Company upon settlement of
such sale, (vi) other property acceptable to the Committee with a Fair Market
Value equal to the exercise price, or (vii) any combination of the
foregoing.Notwithstanding any other provision of the Plan to the contrary, no
Participant who is a member of the Board or an "executive officer" of the
Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to paythe exercise price of an Option in any method which would
violate Section 13(k) of the Exchange Act. The Committee may prescribe any
other method of payment (including in respect of the applicable cash currency)
that it determines to beconsistent with Applicable Laws and the purpose of the
Plan.
(d)
Evidence of Grant
. All Options shall be evidenced by an AwardAgreement between the Company and
the Participant. The Award Agreement shall include such additional provisions
as may be specified by the Committee.
(e)
Effects of Termination of Employment or Service on Options
. Termination of employment or service shall have the following effects
onOptions granted to the Participants:
(i)
Dismissal for Cause
. Unless otherwise provided in the Award Agreement, if aParticipant's
employment by or service to the Service Recipient is terminated by the Service
Recipient for Cause, the Participant's Options will terminate upon such
termination, whether or not the Option is then vested and/or exercisable;
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(ii)
Death or Disability
. Unless otherwise provided in the Award Agreement, if aParticipant's
employment by or service to the Service Recipient terminates as a result of
the Participant's death or Disability:
(1) the Participant (or his or her legal representative or beneficiary, in the case of the Participant'sDisability
or death, respectively), will have until the date that is 180 days after the Participant's termination of
Employment to exercise the Participant's Options (or portion thereof) to the extent that such Options were vested
andexercisable on the date of the Participant's termination of Employment on account of death or Disability;
(2) the Options, to the extent not vested and exercisable on the date of the Participant's termination ofEmployment or service,
shall terminate upon the Participant's termination of Employment or service on account of death or Disability; and
(3) the Options, to the extent
exercisable for the
180-day
period followingthe Participant's termination of Employment or service and not exercised
during such period, shall terminate at the close of business on the last day of the
180-day
period.
(iii)
Other Terminations of Employment or Service
. Unless otherwise provided in the Award Agreement, if a Participant's
employmentby or service to the Service Recipient terminates for any reason
other than a termination by the Service Recipient for Cause or because of the
Participant's death or Disability:
(1) the Participant will have until the date that is 90 days after the Participant's
termination of Employmentor service to exercise his or her Options (or
portion thereof) to the extent that such Options were vested and exercisable
on the date of the Participant's termination of Employment or service;
(2) the Options, to the extent not vested and exercisable on the date of the Participant's termination
ofEmployment or service, shall terminate upon the Participant's termination of Employment or service; and
(3) the Options, to the extent exercisable for the
90-day
periodfollowing the Participant's termination of Employment or service and
not exercised during such period, shall terminate at the close of business on the last day of the
90-day
period.
5.2
Incentive Share Options
. Incentive Share Options may be granted to Employees of the Company or
aSubsidiary of the Company. Incentive Share Options may not be granted to
employees of a Related Entity or to Independent Directors or Consultants. The
terms of any Incentive Share Options granted pursuant to the Plan, in addition
to the requirementsof ARTICLE 5.1, must comply with the following additional
provisions of this ARTICLE 5.2:
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(a)
Individual Dollar Limitation
. The aggregate Fair Market Value (determined as ofthe time the Option is
granted) of all Shares with respect to which Incentive Share Options are first
exercisable by a Participant in any calendar year may not exceed $100,000 or
such other limitation as imposed by Section 422(d) of the Code,or any
successor provision. To the extent that Incentive Share Options are first
exercisable by a Participant in excess of such limitation, the excess shall be
considered
Non-Qualified
Share Options.
(b)
Exercise Price
. The exercise price of an Incentive Share Option shall be equal to the Fair
Market Value on the date of grant.However, the exercise price of any Incentive
Share Option granted to any individual who, at the date of grant, owns Shares
possessing more than ten percent of the total combined voting power of all
classes of shares of the Company or any Parent orSubsidiary of the Company may
not be less than 110% of Fair Market Value on the date of grant and such
Option may not be exercisable for more than five years from the date of grant.
(c)
Transfer Restriction
. The Participant shall give the Company prompt notice of any disposition of
Shares acquired by exercise of anIncentive Share Option within (i) two years
from the date of grant of such Incentive Share Option or (ii) one year after
the transfer of such Shares to the Participant.
(d)
Expiration of Incentive Share Options
. No Award of an Incentive Share Option may be made pursuant to this Plan
after the expirationof the Plan.
(e)
Right to Exercise
. During a Participant's lifetime, an Incentive Share Option may be exercised
only by theParticipant.
ARTICLE 6
RESTRICTED SHARE UNITS
6.1
Grant of Restricted Share Units
. The Committee, at any time and from time to time, may grant Restricted Share
Units to Participantsas the Committee, in its sole discretion, shall
determine. The Committee, in its sole discretion, shall determine the number
of Restricted Share Units to be granted to each Participant.
6.2
Restricted Share Units Award Agreement
. Each Award of Restricted Share Units shall be evidenced by an Award
Agreement that shallspecify any vesting conditions, the number of Restricted
Share Units granted, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.
6.3
Form and Timing of Payment of Restricted Share Units
. At the time of grant, the Committee shall specify the date or dates on
whichthe Restricted Share Units shall become fully vested and nonforfeitable.
Upon vesting, the Committee, in its sole discretion, may pay Restricted Share
Units in the form of cash, Shares or a combination thereof.
6.4
Forfeiture/Repurchase
. Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter,upon termination of employment or service during the
applicable restriction period, Restricted Share Units that are at that time
unvested shall be forfeited or repurchased in accordance with the Award
Agreement;
provided, however
, theCommittee may (a) provide in any Restricted Share Unit Award Agreement
that restrictions or forfeiture and repurchase conditions relating to
Restricted Share Units will be waived in whole or in part in the event of
terminations resulting fromspecified causes, and (b) in other cases waive in
whole or in part restrictions or forfeiture and repurchase conditions relating
to Restricted Share Units.
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ARTICLE 7
PROVISIONS APPLICABLE TO AWARDS
7.1
Award Agreement
. Awards under the Plan shall be evidenced by Award Agreements that set forth
the terms, conditions and limitationsfor each Award which may include the term
of an Award, the provisions applicable in the event the Participant's
employment or service terminates, and the Company's authority to unilaterally
or bilaterally amend, modify, suspend, cancel orrescind an Award.
7.2
No Transferability; Limited Exception to Transfer Restrictions
.
7.2.1
Limits on Transfer.
Unless otherwise expressly provided in (or pursuant to) this ARTICLE 7.2, by
applicable law and by the AwardAgreement, as the same may be amended:
(a) all Awards are
non-transferable
and will not be subject in any mannerto sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;
(b) Awards will be exercised only by the Participant; and
(c) amounts payable or shares issuable pursuant to an Award will be delivered only to (or for
the account of), and,in the case of Shares, registered in the name of, the Participant.
In addition, the shares shall be subject to therestrictions set forth in the
applicable Award Agreement.
7.2.2
Further Exceptions to Limits on Transfer
. The exercise and transferrestrictions in ARTICLE 7.2.1 will not apply to:
(a) transfers to the Company or a Subsidiary;
(b) transfers by gift to "immediate family" as that term is defined in SEC Rule
16a-1(e)
promulgated under the Exchange Act;
(c) the designation of a beneficiary to receive benefits if the Participant
dies or, if the Participant has died,transfers to or exercises by the
Participant's beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and distribution; or
(d) if the Participant has suffered a disability, permitted transfers or exercises on
behalf of the Participant bythe Participant's duly authorized legal representative; or
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(e) subject to the prior approval of the Committee or an executive officer or director of the Company authorized
bythe Committee, transfer to one or more natural persons who are the Participant's family members or entities
owned and controlled by the Participant and/or the Participant's family members, including but not limited to
trusts or otherentities whose beneficiaries or beneficial owners are the Participant and/or the Participant's
family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant
to such conditions and procedures as theCommittee or may establish. Any permitted transfer shall be subject
to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for
estate and/or tax planning purposes and on a basis consistent with theCompany's lawful issue of securities.
Notwithstanding anything else in this ARTICLE 7.2.2 to the contrary,
butsubject to compliance with all Applicable Laws, Incentive Share Options and
Restricted Share Units will be subject to any and all transfer restrictions
under the Code applicable to such Awards or necessary to maintain the intended
tax consequencesof such Awards. Notwithstanding clause (b) above but subject
to compliance with all Applicable Laws, any contemplated transfer by gift to
"immediate family" as referenced in clause (b) above is subject to the
condition precedentthat the transfer be approved by the Committee or an
executive officer or director of the Company authorized by the Committee in
order for it to be effective.
7.3
Beneficiaries
. Notwithstanding ARTICLE 7.2, a Participant may, in the manner determined by
the Committee, designate a beneficiary toexercise the rights of the
Participant and to receive any distribution with respect to any Award upon the
Participant's death. A beneficiary, legal guardian, legal representative, or
other person claiming any rights pursuant to the Plan issubject to all terms
and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
theCommittee. If the Participant is married and resides in a community
property state, a designation of a person other than the Participant's spouse
as his or her beneficiary with respect to more than 50% of the Participant's
interest in theAward shall not be effective without the prior written consent
of the Participant's spouse. If no beneficiary has been designated or survives
the Participant, payment shall be made to the person entitled thereto pursuant
to theParticipant's will or the laws of descent and distribution. Subject to
the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the
Committee or an executiveofficer or director of the Company authorized by the
Committee.
7.4
Performance Objectives and Other Terms
. The Committee, in itsdiscretion, shall set performance objectives or other
vesting criteria which, depending on the extent to which they are met, will
determine the number or value of the Awards that will be granted or paid out
to the Participants.
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7.5
Share Certificates
. Notwithstanding anything herein to the contrary, the Companyshall not be
required to issue or deliver any certificates evidencing the Shares pursuant
to the exercise of any Award, unless and until the Committee has determined,
with advice of counsel, that the issuance and delivery of such certificates is
incompliance with all Applicable Laws, regulations of governmental authorities
and, if applicable, the requirements of any exchange on which the Shares are
listed or traded. All Share certificates delivered pursuant to the Plan are
subject to anystop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with all Applicable Laws, and the rules
of any national securities exchange or automated quotation system on which the
Shares are listed, quoted, ortraded. The Committee may place legends on any
Share certificate to reference restrictions applicable to the Shares. In
addition to the terms and conditions provided herein, the Committee may
require that a Participant make such reasonablecovenants, agreements, and
representations as the Committee, in its discretion, deems advisable in order
to comply with any such laws, regulations, or requirements. The Committee
shall have the right to require any Participant to comply with anytiming or
other restrictions with respect to the settlement or exercise of any Award,
including a window-period limitation, as may be imposed in the discretion of
the Committee.
7.6
Paperless Administration
. Subject to Applicable Laws, the Committee may make Awards, provide
applicable disclosure and proceduresfor exercise of Awards by an internet
website or interactive voice response system for the paperless administration
of Awards.
7.7
Foreign Currency
. A Participant may be required to provide evidence that any currency used to
pay the exercise price of any Award was acquired and taken out of the
jurisdiction in which the Participant resides in accordance with ApplicableLaws,
including foreign exchange control laws and regulations. In the event the
exercise price for an Award is paid in Chinese Renminbi or other foreign
currency, as permitted by the Committee, the amount payable will be determined
by conversionfrom U.S. dollars at the official rate promulgated by the
People's Bank of China for Chinese Renminbi, or for jurisdictions other than
the People's Republic of China, the exchange rate as selected by the Committee
on the date of exercise.
ARTICLE 8
CHANGESIN CAPITAL STRUCTURE
8.1
Adjustments
. In the event of any dividend, share split, combination or exchange of
Shares,amalgamation, arrangement or consolidation,
spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to its shareholders, or any other change affecting the numberof
Shares or the share price of a Share, the Committee shall make such
proportionate adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (a) the aggregate number
and type of sharesthat may be issued under the Plan (including, but not
limited to, adjustments of the limitations in ARTICLE 3.1); (b) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteriawith respect thereto); and (c) the
grant or exercise price per Share for any outstanding Awards under the Plan.
8.2
CorporateTransactions
. Except as may otherwise be provided in any Award Agreement or any other
written agreement entered into by and between the Company and a Participant,
if the Committee anticipates the occurrence, or upon the occurrence, of
aCorporate Transaction, the Committee may, in its sole discretion, provide for
(i) any and all Awards outstanding hereunder to terminate at a specific time
in the future and shall give each Participant the right to exercise the vested
portion ofsuch Awards during a period of time as the Committee shall
determine, or (ii) the purchase of any Award for an amount of cash equal to
the amount that could have been attained upon the exercise of such Award (and,
for the avoidance of doubt, ifas of such date the Committee determines in good
faith that no amount would have been attained upon the exercise of such Award,
then such Award may be terminated by the Company without payment), or (iii)
the replacement of such Award with otherrights or property selected by the
Committee in its reasonable discretion or the assumption of or substitution of
such Award by the successor or surviving corporation, or a Parent or
Subsidiary thereof, with appropriate adjustments as to the numberand kind of
Shares and prices, or (iv) payment of such Award in cash based on the value of
Shares on the date of the Corporate Transaction plus reasonable interest on
the Award through the date as determined by the Committee when such Awardwould
otherwise be vested or have been paid in accordance with its original terms,
if necessary to comply with Section 409A of the Code.
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8.3
Outstanding Awards - Other Changes
. In the event of any other change in thecapitalization of the Company or
corporate change other than those specifically referred to in this ARTICLE 8,
the Committee may, in its absolute discretion, make such adjustments in the
number and class of shares subject to Awards outstanding onthe date on which
such change occurs and in the per share grant or exercise price of each Award
as the Committee may reasonably consider appropriate to prevent dilution or
enlargement of rights.
8.4
No Other Rights
. Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision orconsolidation of Shares of any class,
the payment of any dividend, any increase or decrease in the number of shares
of any class or any dissolution, liquidation, merger, or consolidation of the
Company or any other corporation. Except as expresslyprovided in the Plan or
pursuant to action of the Committee under the Plan, and no issuance by the
Company of shares of any class, or securities convertible into shares of any
class, shall affect, and no adjustment by reason thereof shall be madewith
respect to, the number of Shares subject to an Award or the grant or exercise
price of any Award.
ARTICLE 9
ADMINISTRATION
9.1
Committee
. The Plan shall be administered by the Board or a committee (the "
Committee
") of one or more members of the Board to whom the Board may delegate any or
all of the authority to grant or amend Awards to Participantsother than any of
the Committee members. Reference to the Committee shall refer to the Board in
absence of the Committee. Notwithstanding the foregoing, the full Board,
acting by majority of its members in office, shall conduct the generaladministra
tion of the Plan if required by Applicable Laws, and with respect to Awards
granted to the Committee members and for purposes of such Awards the term
"Committee" as used in the Plan shall be deemed to refer to the Board.
9.2
Action by the Committee
. A majority of the Committee shall constitute a quorum. The acts of a
majority of the members present at anymeeting at which a quorum is present,
and acts approved unanimously in writing all members of the Committee in lieu
of a meeting, shall be deemed the acts of the Committee. Each member of the
Committee is entitled to, in good faith, rely or act uponany report or other
information furnished to that member by any officer or other employee of a
Group Entity, the Company's independent certified public accountants, or any
executive compensation consultant or other professional retained by theCompany
to assist in the administration of the Plan.
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9.3
Authority of the Committee
. Subject to any specific designation in the Plan, theCommittee has the
exclusive power, authority and discretion to:
(a) designate Participants to receive Awards;
(b) determine the type or types of Awards to be granted to each Participant;
(c) determine the number of Awards to be granted and the number of Shares to
which an Award will relate;
(d) determine the terms and conditions of any Award granted pursuant to the
Plan, including, but not limited to, the exerciseprice, grant price, or
purchase price, any restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, and any provisionsrelated to
non-competition
and recapture of gain on an Award, based in each case on such considerations
as the Committee in its sole discretion determines;
(e) determine whether, to what extent, and pursuant to what circumstances an
Award may be settled in, or the exercise price ofan Award may be paid in,
cash, Shares, other Awards, or other property, or an Award may be canceled,
forfeited, or surrendered;
(f) prescribe the form of each Award Agreement, which need not be identical
for each Participant;
(g) decide all other matters that must be determined in connection with an
Award;
(h) establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;
(i) interpret the terms of, and any matter arising pursuant to, the Plan or
any Award Agreement;
(j) amend terms and conditions of Award Agreements; and
(k) make all other decisions and determinations that may be required pursuant
to the Plan or as the Committee deems necessaryor advisable to administer the
Plan, including design and adopt from time to time new types of Awards that
are in compliance with Applicable Laws.
9.4
Decisions Binding
. The Committee's interpretation of the Plan, any Awards granted pursuant to
the Plan, any Award Agreement andall decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all
parties.
ARTICLE10
EFFECTIVE AND EXPIRATION DATE
10.1
Effective Date
. The Plan shall become effective as of the date on which the Board adopts the
Plan or as otherwise specified by theBoard when adopting the Plan (the "
Effective Date
").
10.2
Expiration Date
. The Plan will expire on, and no Awardmay be granted pursuant to the Plan
after the tenth anniversary of the Effective Date. Any Award that is
outstanding on the tenth anniversary of the Effective Date shall remain in
force according to the terms of the Plan and the applicable AwardAgreement.
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ARTICLE 11
AMENDMENT, MODIFICATION, AND TERMINATION
11.1
Amendment, Modification, and Termination
. At any time and from time to time, the Board may terminate, amend or modify
the Plan;
provided, however
, that (a) to the extent necessary and desirable to comply with Applicable
Laws or stock exchange rules, the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree asrequired, unless
the Company decides to follow home country practice, and (b) unless the
Company decides to follow home country practice, shareholder approval is
required for any amendment to the Plan that (i) increases the number ofShares
available under the Plan (other than any adjustment as provided by ARTICLE 8),
or (ii) permits the Committee to extend the term of the Plan or the exercise
period for an Option beyond ten years from the date of grant.
11.2
Awards Previously Granted
. Except with respect to amendments made pursuant to ARTICLE 11.1, no
termination, amendment, ormodification of the Plan shall adversely affect in
any material way any Award previously granted pursuant to the Plan without the
prior written consent of the Participant.
ARTICLE 12
GENERALPROVISIONS
12.1
No Rights to Awards
. No Participant, employee, or other person shall have any claim to be granted
any Awardpursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Participants, employees, and other persons uniformly.
12.2
No Shareholders Rights
. No Award gives the Participant any of the rights of a shareholder of the
Company unless and until Sharesare in fact issued to such person in connection
with such Award.
12.3
Taxes
. No Shares shall be delivered under the Plan to anyParticipant until such
Participant has made arrangements acceptable to the Committee for the
satisfaction of any income and employment tax withholding obligations under
Applicable Laws. The Company or any Subsidiary shall have the authority and
theright to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy all applicable taxes (including the
Participant's payroll tax obligations) required or permitted by Applicable
Laws to be withheldwith respect to any taxable event concerning a Participant
arising as a result of this Plan. The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have
the Company withhold Sharesotherwise issuable under an Award (or allow the
return of Shares) having a Fair Market Value equal to the sums required to be
withheld. Notwithstanding any other provision of the Plan, the number of
Shares which may be withheld with respect to theissuance, vesting, exercise or
payment of any Award (or which may be repurchased from the Participant of such
Award after such Shares were acquired by the Participant from the Company) in
order to satisfy any income and payroll tax liabilitiesapplicable to the
Participant with respect to the issuance, vesting, exercise or payment of the
Award shall, unless specifically approved by the Committee, be limited to the
number of Shares which have a Fair Market Value on the date of withholdingor
repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for the applicable income and payroll tax
purposes that are applicable to such supplemental taxable income.
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12.4
No Right to Employment or Services
. Nothing in the Plan or any Award Agreementshall interfere with or limit in
any way the right of the Service Recipient to terminate any Participant's
employment or services at any time, nor confer upon any Participant any right
to continue in the employment or services of any ServiceRecipient.
12.5
Unfunded Status of Awards
. The Plan is intended to be an "unfunded" plan for incentive compensation.
Withrespect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the
Participant any rights that are greater than those of a general creditor of
the relevant Group Entity.
12.6
Indemnification
. To the extent allowable pursuant to Applicable Laws, each member of the
Committee or of the Board shall beindemnified and held harmless by the Company
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which he or she maybe a party or in
which he or she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against
himor her;
provided
he or she gives 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 beexclusive
of any other rights of indemnification to which such persons may be entitled
pursuant to the Company's Memorandum of Association and Articles of
Association, as a matter of law, or otherwise, or any power that the Company
may have toindemnify them or hold them harmless.
12.7
Relationship to Other Benefits
. No payment pursuant to the Plan shall be taken intoaccount in determining
any benefits pursuant to any pension, retirement, savings, profit sharing,
group insurance, welfare or other benefit plan of any Group Entity except to
the extent otherwise expressly provided in writing in such other plan oran
agreement thereunder.
12.8
Expenses
. The expenses of administering the Plan shall be borne by the Group Entities.
12.9
Titles and Headings
. The titles and headings of the Sections in the Plan are for convenience of
reference only and, in the event ofany conflict, the text of the Plan, rather
than such titles or headings, shall control.
12.10
Fractional Shares
. No fractionalShares shall be issued and the Committee shall determine, in
its discretion, whether cash shall be given in lieu of fractional Shares or
whether such fractional Shares shall be eliminated by rounding up or down as
appropriate.
12.11
Limitations Applicable to Section
16 Persons
. Notwithstanding anything herein to the contrary, the Plan, andany Award
granted or awarded to any Participant who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act(including any
amendment to Rule
16b-3
of the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by the Applicable Laws, the Plan and
Awards granted orawarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.
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12.12
Government and Other Regulations
. The obligation of the Company to make paymentof awards in Shares or
otherwise shall be subject to all Applicable Laws, and to such approvals by
government agencies as may be required. The Company shall be under no
obligation to register any of the Shares paid pursuant to the Plan under
theSecurities Act or any other similar law in any applicable jurisdiction. If
the Shares paid pursuant to the Plan may in certain circumstances be exempt
from registration pursuant to the Securities Act or other Applicable Laws, the
Company mayrestrict the transfer of such Shares in such manner as it deems
advisable to ensure the availability of any such exemption.
12.13
Governing Law
. The Plan and all Award Agreements shall be construed in accordance with and
governed by the laws of the Cayman Islands.
12.14
Section 409A
. To the extent that the Committee determines that any Award granted under the
Plan is or may become subject toSection 409A of the Code, the Award Agreement
evidencing such Award shall incorporate the terms and conditions required by
Section 409A of the Code. To the extent applicable, the Plan and the Award
Agreements shall be interpreted inaccordance with Section 409A of the Code and
the U.S. Department of Treasury regulations and other interpretative guidance
issued thereunder, including without limitation any such regulation or other
guidance that may be issued after theEffective Date. Notwithstanding any
provision of the Plan to the contrary, in the event that following the
Effective Date the Committee determines that any Award may be subject to
Section 409A of the Code and related Department of Treasuryguidance (including
such Department of Treasury guidance as may be issued after the Effective
Date), the Committee may adopt such amendments to the Plan and the applicable
Award agreement or adopt other policies and procedures (including
amendments,policies and procedures with retroactive effect), or take any other
actions, that the Committee determines are necessary or appropriate to (a)
exempt the Award from Section 409A of the Code and/or preserve the intended
tax treatment of thebenefits provided with respect to the Award, or (b) comply
with the requirements of Section 409A of the Code and related U.S. Department
of Treasury guidance.
12.15
Appendices
. Subject to ARTICLE 12.1, the Committee may approve such supplements,
amendments or appendices to the Plan as it mayconsider necessary or
appropriate for purposes of compliance with Applicable Laws or otherwise and
such supplements, amendments or appendices shall be considered a part of the
Plan; provided, however, that no such supplements shall increase theshare
limitation contained in ARTICLE 3.1 of the Plan without the approval of the
Board.
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