Greater China Media and Entertainment Corp. 2009 Stock Incentive Plan

1.2

1.4

1.6

[2]

1.8

[2]

1.10

[3]

1.12

[3]

1.14

[3]

1.16

[3]

1.18

[3]

1.20

[3]

1.22

[4]

1.24

[4]

1.26

[4]

1.28

[4]

1.30

[4]

3.2

[5]

3.4

[5]

4.2

[6]

5.2

[6]

7.2

[8]

8.2

[10]

9.2

[11]

11.2

[12]

12.2

[13]

13.2

[13]

13.4

[14]

14.2

[15]

15.2

[15]

15.4

[16]

15.6

[16]

15.8

[16]

15.12 

15.14

1.1  

Administrator . means the Board of Directors, any committee or such delegates as shall be administering the Plan in accordance with Article 4.

1.2  

Affiliate . means any corporation, partnership, limited liability company or partnership, association, trust or other organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.

1.3  

Applicable Laws . means the requirements relating to the administration of stock option and stock award plans under U.S. federal, state and local laws, the rules of any national securities exchange or automated quotation system on which the Common Stock is listed, quoted, or traded to the extent provided under the terms of the Company’s agreement with such exchange or quotation system and, with respect to Awards subject to the laws of any foreign jurisdiction where Awards are, or will be, granted under the Plan, the laws of such jurisdiction.

1.4  

Award . means the grant of [Options, Stock Appreciation Rights, Restricted Stock, Bonus Stock or other stock-based grant] under the Plan.

1.5  

Award Agreement . means the agreement between the Company and a Participant pursuant to which a specific Award is granted to the Participant.

1.6  

Board of Directors . means the Board of Directors of the Company.

1.7  

Bonus Stock . means shares of Common Stock granted to a Participant that are subject to the term set forth in Section 9.2 and the applicable Award Agreement.

1.8  

Cause . means “Cause,” as defined in the Participant’s employment agreement, if applicable, or as determined in the sole discretion of the Company, a termination on account of (a) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Company or Affiliate documents or records; (b) the Participant’s material failure to abide by a Company’s or Affiliate’s code of conduct or other policies (including without limitation, policies relating to confidentiality and reasonable workplace conduct); (c) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of the Company or an Affiliate (including, without limitation, the Participant’s improper use or disclosure of confidential or proprietary information); (d) the Participant’s violation of any noncompetition agreement with the Company or an Affiliate; (e) any intentional act by the Participant which has a material detrimental effect on the Company or an Affiliate’s reputation or business; (f) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from the Company or an Affiliate, and a reasonable opportunity to cure, such failure or inability; (g) any material breach by the Participant of any employment or service agreement between the Participant and the Company or an Affiliate, which breach is not cured pursuant to the terms of such agreement; or (h) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with the Company or an Affiliate.

1.9  

Change in Control . means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement or written contract of employment or service, the occurrence, in a single transaction or in a series of related transactions, where (a) the Company will not be the surviving entity in any merger, share exchange, or consolidation (or survives only as a subsidiary of an entity); (b) the Company sells, leases, or exchanges, or agrees to sell, lease, or exchange, all or substantially all of its assets to any other person or entity; (c) the Company is to be dissolved and liquidated; (d) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (e) as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election will cease to constitute a majority of the Board of Directors; provided, however, that a Change in Control will not include (i) any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction, which involves solely the Company and one or more entities wholly-owned, directly or indirectly, by the Company immediately prior to such event, or (ii) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting stock (based upon voting power) of (A) any entity that owns, directly or indirectly, the stock of the Company, (B) any entity with which the Company has merged, or (C) any entity that owns an entity with which the Company has merged.  In the case of an Award the payment of which is subject to Section 409A, Change in Control shall be limited to the extent necessary to satisfy Section 409A.  The Administrator’s reasonable determination as to whether such an event has occurred shall be final and conclusive.

1.10  

Code . means the Internal Revenue Code of 1986, as amended from time to time.

1.11  

Common Stock or Stock . means the Company’s Common Stock and any share or shares of the Company’s capital stock hereafter issued or issuable in substitution for such shares.

1.12  

Continuous Service . means that the Participant’s service with the Company or its Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated.  The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or its Affiliate or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service.  The Administrator, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence, including sick leave, military leave or any other personal leave.

1.13  

Consultant . shall mean any individual who is neither an Employee nor a Director who is engaged by the Company or an Affiliate to render services to such entity as an advisor or consultant.

1.14  

Director . means an individual who is a member the Board of Directors or a member of the board of directors of an Affiliate, who (in either case) is not an Employee.

1.15  

Disability . means disability within the meaning of the long-term disability policy maintained by the Company, or if none, within the meaning of Code Section 22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

1.16  

Effective Date . means the effective date of the Plan, as first set forth above.

1.17  

Employee . means a common law employee of the Company or its Affiliate and any person who has accepted a binding offer of employment from the Company or its Affiliate (provided that, in the case of an Incentive Stock Option, such person has commenced employment as a common law employee), but excludes any individual classified by the Company or its Affiliate as an independent contractor, Consultant or leased employee.

1.18  

Exchange Act . means the Securities Exchange Act of 1934, as amended from time to time.

1.19  

Fair Market Value . means, as of any specified date and at such time as the Common Stock is readily tradable on an established securities market, (a) the closing sale price of the Common Stock on the stock exchange composite tape on that date, or if no sales price is reported on that date, on the last preceding date on which such price of the Common Stock is so reported, (b) if the Common Stock is traded over-the-counter, the closing price of the Common Stock on the most recent date on which the Common Stock was so traded, or (c) in the absence of an established market for shares of Common Stock, the value as determined by the Administrator, in its sole discretion, reasonably and in good faith, in accordance with Applicable Laws.

1.20  

Incentive Stock Option . means any option granted to an eligible Employee under the Plan, which the Company intends at the time the option is granted to be an Incentive Stock Option within the meaning of Code Section 422.

1.21  

Nonqualified Stock Option . means any option granted to an eligible Employee, Consultant or Director under the Plan that is not an Incentive Stock Option.

1.22  

Option . means and refers collectively to Incentive Stock Options and Nonqualified Stock Options.

1.23  

Participant . means any Employee, Consultant or Director who is granted an Award under the Plan.   Participant also means the personal representative of a Participant and any other person who acquires the right to exercise or receive payment pursuant to an Award by bequest or inheritance.

1.24  

Publicly Traded means that the Company or an Affiliates has issued any class of common equity securities registered under section 12 of the Exchange Act.

1.25  

Restricted Stock . means shares of Common Stock granted to a Participant that are subject to the restrictions set forth in Section 9.1 of the Plan and the applicable Award Agreement.   Restricted Stock also means any shares of the Company’s capital stock issued as the result of a dividend on or split of Restricted Stock.  Upon termination of the restrictions, such Common Stock or other capital stock shall no longer be Restricted Stock.

1.26  

Restriction Period . means the period set forth in the applicable Award Agreement that is the period beginning on the date of grant of the Award and ending on the final vesting date of the Restricted Stock.

1.27  

Rule 16b-3 . means Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act, together with any successor rule, as in effect from time to time.  

1.28  

Section 162(m) . means Section 162(m) of the Code and any related Treasury regulations promulgated or IRS guidance issued thereunder.

1.29  

Section 409A . means Section 409A of the Code and any related Treasury regulations promulgated or IRS guidance issued thereunder.

1.30  

Stock Appreciation Right or SAR . means a standalone stock appreciation right that has been granted pursuant to Article 8 of the Plan.

1.31  

Termination Date . means the termination date of the Plan, as first set forth above.

3.1  

Administrator .  The Plan shall be administered by the Board of Directors, unless and until such time as the Board of Directors delegates the administration of the Plan to a committee, which shall be appointed by and shall serve at the pleasure of the Board of Directors.  Any committee member shall be deemed to have resigned automatically from the committee upon his or her termination of service with the Company.  To the extent the Board of Directors considers it desirable, the committee may be constituted so as to permit applicable Awards under the Plan to constitute “performance-based compensation” for purposes of Section 162(m) and/or to be eligible to qualify for an exemption under Rule 16b-3.

3.2  

Meetings and Actions .  The Administrator shall hold meetings at such times and places as it may determine.  A majority of the members of the Administrator shall constitute a quorum, and the acts of the majority of the members present at a meeting or a consent in writing signed by all members of the Administrator shall be the acts of the Administrator and shall be final, binding and conclusive upon all persons, including the Company, its Affiliates, its stockholders, and all persons having any interest in Awards that may be or have been granted pursuant to the Plan.

3.3  

Powers of Administrator .  The Administrator shall have the full and exclusive right to grant and determine terms and conditions of all Awards granted under the Plan and to prescribe, amend and rescind rules and regulations for administration of the Plan.  The Administrator may from time to time in its discretion determine which of the eligible Employees, Consultants and Directors of the Company or its Affiliates should receive Awards, the type of Awards to be granted, and as applicable, the number of shares subject to the Awards, the grant dates, the exercise or purchase price for shares subject to the Awards, the vesting conditions and duration of the Awards and the restrictions applicable to each grant of shares pursuant to the Awards.  In selecting Participants and granting Awards, the Administrator shall take into consideration the contribution the Participant has made or may make to the success of the Company or its Affiliates and such other factors as the Administrator shall determine.

3.4  

Discretion of Administrator .  The determination of the Administrator as to any disputed question arising under the Plan, including questions of construction and interpretation, shall be final, binding and conclusive upon all persons, including the Company, its Affiliates, its stockholders, and all persons having any interest in Awards that may be or have been granted pursuant to the Plan.  Subject to the express provisions of the Plan, the Administrator is authorized, in its sole discretion, to construe the Plan and the respective Award Agreements executed hereunder, to prescribe and enforce such rules and regulations relating to the Plan as it may deem advisable to carry out the intent of the Plan, and to determine and amend, subject to the provisions of Article 13, the terms, restrictions and provisions of any outstanding Award in any manner that is not inconsistent with the provisions of the Plan (including but not limited to cashing out Awards, extending the exercise or effective periods of Awards, accelerating the vesting of Awards, and converting or substituting any or all stock options, stock appreciation rights or other stock awards held by service providers of an entity acquired by the Company) the terms, restrictions and provisions of each Award, including such terms, restrictions and provisions as shall be requisite in the judgment of the Administrator to cause designated Awards to qualify for specific tax treatment, and to make all other determinations necessary or advisable for administering the Plan.  The Administrator may correct any defect or supply any omission or reconcile any inconsistency in any Award Agreement in the manner and to the extent it shall deem expedient to carry it into effect.  The determinations of the Administrator on any Plan matters shall be conclusive and binding on all parties.

4.1  

Plan Limit .

(a)  

Aggregate Limit .  Subject to the provisions of Article 13, the aggregate number of shares of Common Stock that may be issued under Awards granted pursuant to the Plan shall not exceed six million (6,000,000) shares of Common Stock.  Shares shall be deemed to have been issued under the Plan solely to the extent actually issued and delivered pursuant to an Award.  Shares subject to Awards granted under the Plan that are cancelled, expire or are forfeited shall be available for re-grant under the Plan.  If a Participant pays the exercise or purchase price of an Award granted under the Plan through the tender or withholding of shares, or if shares are tendered or withheld to satisfy any Company withholding obligations, the number of shares so tendered or withheld shall become available for re-issuance thereafter under the Plan.

4.2  

Unused Stock .  Shares will be deemed to have been issued under the Plan only (a) to the extent actually issued and delivered pursuant to an Award, or (b) to the extent an Award is settled in cash.  If any outstanding Award under the Plan expires or for any other reason ceases to be exercisable, is forfeited or repurchased by the Company, in whole or in part (other than upon exercise of an Award), the shares that were subject to such Award (and as to which the Award had not been exercised) shall continue to be available under the Plan or revert to the Plan to again be available for issuance under the Plan.

4.3  

Retention of Rights .  The existence of this Plan and any Award granted pursuant to the Plan shall not affect the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other change in the Company’s capital structure or its business, or a merger or consolidation of the Company, or any issue of bonds, debentures, or preferred or preference stock ranking before or affecting the Common Stock, or the dissolution of the Company or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether similar or not.  

5.1  

Eligibility for Award . .  Awards may be granted only to persons who, at the time of grant, are Employees, Consultants or Directors.  Consultants and Directors shall be eligible to receive any Award other than Incentive Stock Options.

5.2  

Grant of Awards . .  The Administrator may from time to time in its discretion grant Awards to one or more Employees, Consultants or Directors determined by it to be eligible for participation in the Plan in accordance with the provisions of this article.  No Award shall be enforceable under the Plan until the Participant provides the Company with a signed Award Agreement in the form specified by the Administrator with respect to the Award to that Participant.

5.3  

Terms of Awards . .  Each Award will be evidenced by an Award Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Administrator from time to time will approve.  The terms of any Award need not be identical to the terms of any other Award to the same or other Participants.  An Award may be granted on more t