Exhibit 10.3
BUSINESS DEVELOPMENT SOLUTIONS,
INC.
2009 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT [PRC
RESIDENTS]
Unless otherwise
defined herein, the terms in this Stock Appreciation Rights
Agreement (the “ SAR Agreement
”) have the same meanings as defined in the Business
Development Solutions, Inc. 2009 Equity Incentive Plan (the “
Plan ”).
I. NOTICE OF
STOCK APPRECIATION RIGHTS (“SARs”)
GRANT
Optionee:
Address:
You
have been granted SARs with respect to Shares of Common Stock of
the Company, subject to the terms and conditions of the Plan and
this SAR Agreement, as follows:
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Grant
Date:
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Vesting Commencement
Date:
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Exercise Price per
Share:
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[No less than
Fair Market Value at grant date]
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Total Number of Shares
Granted:
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Total Exercise
Price:
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Expiration
Date:
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Ten (10) years
after Grant Date
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Vesting
Schedule:
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Termination
Period:
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To
the extent vested, these SARs will be exercisable for three (3)
months after Optionee ceases to be a Service Provider, unless
termination is due to Optionee’s death or Disability, in
which case these SARs will be exercisable for twelve (12) months
after Optionee ceases to be a Service Provider. Notwithstanding the
foregoing sentence, in no event may these SARs be exercised after
any termination of the Optionee as a Service Provider for Cause or
after the Expiration Date as provided above and these SAR may be
subject to earlier termination as provided in the Plan.
“
Cause ” has the meaning ascribed to such
term or words of similar import in Optionee’s written
employment or service contract with the Company or its Affiliate
and, in the absence of such agreement or definition, means
Optionee’s (i) conviction of, or plea of nolo contendere to,
a felony or any other crime involving moral turpitude; (ii) fraud
on or misappropriation of any funds or property of the Company or
any of its Affiliates, customer or vendor; (iii) personal
dishonesty, incompetence, willful misconduct, willful violation of
any law, rule or regulation (other than minor traffic violations or
similar offenses), or breach of fiduciary duty which involves
personal profit; (iv) willful misconduct in connection with
Optionee’s duties or willful failure to perform
Optionee’s responsibilities in the best interests of the
Company or any of its Affiliates; (v) illegal use or distribution
of drugs; (vi) violation of any rule, regulation, procedure or
policy of the Company or any of its Affiliates; or (vii) breach of
any provision of any employment, non-disclosure, non-competition,
non-solicitation or other similar agreement executed by Optionee
for the benefit of the Company or any of its Affiliates, all as
determined by the board of directors of the Company or its
Affiliate (as the case may be), which determination will be
conclusive.
“
Disability ” means a medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, and that either (1) renders an Optionee
unable to engage in any substantial gainful activity or (2) results
in an Optionee receiving income replacement benefits for a period
of not less than three months under an employee accident and health
plan covering the Optionee.
II.
AGREEMENT
1.
Grant of SAR . The Administrator grants to the Optionee
named in the Notice of SAR Grant in Part I of this SAR
Agreement, an SAR with respct to the number of Shares set forth in
the Notice of SAR Grant, at the exercise price per Share (the
“ Exercise Price ”) set forth in
the Notice of SAR Grant, and subject to the terms and conditions of
the Plan, which is incorporated herein by reference. In the event
of a conflict between the terms and conditions of the Plan and this
SAR Agreement, the terms and conditions of the Plan
prevail.
The
SARs granted hereunder are not intended to qualify as an incentive
stock option within the meaning of Section 422 of the
Code.
2.
Exercise of SARs .
(a) Right to Exercise . These SARs are exercisable
during its term in accordance with the Vesting Schedule set out in
the Notice of SAR Grant and with the applicable provisions of the
Plan and this SAR Agreement.
(b) Method of Exercise . These SARs are
exercisable by delivery of an exercise notice in the form attached
as Exhibit A (the “ Exercise
Notice ”) or in a manner and pursuant to
procedures as the Administrator may determine, which will state the
election to exercise the SARs, the number of Shares with respect to
which the SARs are being exercised, and other representations and
agreements as may be required by the Company. The Optionee may
exercise less than the number of vested SARs covered hereby,
provided that no partial exercise of the SARs may be for less than
1,000 Shares.
The SAR will be deemed to be exercised upon receipt by
the Company of a fully executed Exercise Notice accompanied by any
applicable tax withholding.
Upon exercising the SAR, the Optionee
shall receive from the Company, for each Share subject to the SAR
being exercised, an amount equal to the excess of the Fair Market
Value of a Share as of the date of such exercise minus the Exercise
Price (the “ Appreciation ”). The
Company’s obligation arising upon the exercise of this SAR
shall be paid in cash or whole Shares, in the Company’s sole
discretion. Further, as stated in Section 6 below, in the
Company’s sole discretion, any or all applicable tax
withholding with respect to the SAR may be paid by reducing the
cash or, if permissible under local law, the number of Shares
actually issued to the Optionee. Shares withheld to satisfy any
obligation for applicable tax withholding shall also be valued at
the Fair Market Value on the date of exercise. Any fractional Share
due to the Optionee upon exercise shall be rounded down to the
nearest whole Share and the Optionee shall receive the balance due
to him or her in cash.
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No Shares will be issued pursuant to the
exercise of an SAR unless the issuance and exercise of Shares
complies with Applicable Laws. Assuming compliance, for income tax
purposes the Appreciation will be considered transferred to the
Optionee on the date on which the SAR is exercised with respect to
the Shares.
3.
Restrictions on Exercise . These SARs may not be exercised
(a) until such time as the Plan has been approved by the
stockholders of the Company, or (b) if the method of payment of the
Appreciation would constitute a violation of any Applicable Laws.
The Company will be relieved of any liability with respect to any
delayed payment of Appreciation or its failure to pay the
Appreciation if such delay or failure is necessary to comply with
Applicable Laws.
4.
Non-Transferability of SARs . These SARs may not be
transferred in any manner otherwise than by will or by the laws of
descent or distribution or, upon notice to and consent of the
Company, to family members (as defined in the Plan), and may be
exercised only by Optionee or Designated Beneficiary. The terms of
the Plan and this SAR Agreement are binding upon the executors,
administrators, heirs, successors and assigns of the
Optionee.
5.
Term of SARs . These SARs may be exercised only within the
term set out in the Notice of SAR Grant, and may be exercised
during the term only in accordance with the Plan and the terms of
this SAR Agreement.
6.
No Rights as Stockholder . Unless and until Shares are
issued upon exercise of the SARs (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder exists with respect to the SARs,
notwithstanding the exercise of the SARs. No adjustment will be
made for a dividend or other right for which the record date is
prior to the date of issuance except as provided in the
Plan
7.
Tax Obligations .
(a) Withholding Taxes . Optionee agrees to
arrange for the satisfaction of all national, federal, provincial,
state and local taxes (including income and employment taxes)
required by Applicable Laws to be withheld with respect to the
grant, vesting and exercise of the SARs. Optionee acknowledges and
agrees that the Company may refuse to honor the exercise and refuse
to pay the Appreciation if withholding amounts are not delivered at
the time of exercise. In this regard, the Optionee authorizes the
Company or his/her actual employer to withhold all applicable tax
withholding legally payable by the Optionee from the
Optionee’s wages or other cash compensation payable to the
Optionee by the Company or his/her employer or from any equivalent
cash payment received upon exercise of the SAR. Alternatively, the
Company or the employer may permit the Optionee to satisfy such
withholding or payment on account obligations, in whole or in part
(without limitation) by paying cash. In addition, if permissible
under local law, the Company or the employer, in their sole
discretion and pursuant to such procedures as they may specify from
time to time, may (a) withhold otherwise deliverable Shares having
a Fair Market Value equal to the minimum amount required to be
withheld, and/or (b) sell or arrange for the sale of a sufficient
number of such Shares otherwise deliverable to the Optionee through
such means as the Company may determine in its sole discretion
(whether through a broker or otherwise) equal to the amount
required to be withheld. The Optionee shall pay to the Company or
to the employer any amount of tax that the Company or the employer
may be required to withhold as a result of the grant, vesting or
exercise of the SAR that cannot be satisfied by the means
previously described.
(b) Code Section 409A. Under Section
409A of the Code, an SAR that vests after December 31, 2004 that
was granted with a per Share exercise price that is determined by
the Internal Revenue Service (the “ IRS
”) to be less than the Fair Market Value of a Share on the
Grant Date (a “discount SAR”) may be considered
deferred compensation. For an Optionee subject to U.S. income tax,
an SAR that is a discount SAR may result in (i) income recognition
by the Optionee prior to the exercise of the SAR, (ii) an
additional twenty percent (20%) tax, and (iii) potential penalty
and interest charges. Optionee acknowledges that the Company cannot
and has not guaranteed that the IRS will agree that the per Share
Exercise Price of this SAR equals or exceeds Fair Market Value of a
Share on the Grant Date in a later examination. Optionee agrees
that if the IRS determines that the SAR was granted with a per
Share Exercise Price that was less than the Fair Market Value of a
Share on the Grant Date, Optionee will be solely responsible for
any and all resulting tax consequences.
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8. No Guarantee
of Continued Service . OPTIONEE ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SARs PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE
COMPANY (OR THE AFFILIATE EMPLOYING OR RETAINING OPTIONEE) AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THESE SARs. OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS SAR AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE