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Beijing Med-Pharm Corporation 2007 OMNIBUS EQUITY
COMPENSATION PLAN
BEIJING MED-PHARM CORPORATION 2007 OMNIBUS EQUITY
COMPENSATION PLAN The purpose of
the Beijing Med-Pharm Corporation 2007 Omnibus Equity Compensation
Plan (the "Plan") is to provide (i) employees of Beijing
Med-Pharm Corporation (the "Company") and its subsidiaries,
(ii) certain consultants and advisors who perform services for
the Company or its subsidiaries and (iii) non-employee members
of the Board of Directors of the Company with the opportunity to
receive grants of incentive stock options, nonqualified stock
options, stock appreciation rights, stock awards, stock units and
other stock-based awards. The Company believes that the Plan will
encourage the participants to contribute materially to the growth
of the Company, thereby benefitting the Company’s
stockholders, and will align the economic interests of the
participants with those of the stockholders. The Plan shall be
effective as of the date the Plan is approved by the stockholders
of the Company. The Beijing Med-Pharm
Corporation 2004 Stock Incentive Plan, as amended and restated
effective February 23, 2007 ("2004 Plan") will be merged with
and into this Plan as of the Effective Date, and no additional
grants will be made thereafter under the 2004 Plan. Outstanding
grants under the 2004 Plan will continue in effect according to
their terms as in effect before the Plan merger (subject to such
amendments as the Committee (as defined below) determines,
consistent with the 2004 Plan, as applicable), and the shares with
respect to outstanding grants under the 2004 Plan will be issued or
transferred under this Plan.
Section 1. Definitions
The following terms shall have the
meanings set forth below for purposes of the Plan:
(a)
"Board" shall mean the Board of Directors of the Company.
(b)
"Cause" shall mean, except to the extent specified otherwise by the
Committee, a finding by the Committee that the Grantee (i) has
breached his or her employment or service contract with the
Employer, (ii) has engaged in disloyalty to the Employer,
including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty, (iii) has
disclosed trade secrets or confidential information of the Employer
to persons not entitled to receive such information, (iv) has
breached any written non-competition, non-solicitation or
confidentiality agreement between the Grantee and the Employer or
(v) has engaged in such other behavior detrimental to the
interests of the Employer as the Committee determines.
(c)
"Change of Control" shall be deemed to have occurred if:
(i) Any
"person" (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the voting
power of the then outstanding securities of the Company; provided
that a Change of Control shall not be deemed to occur as a result
of a transaction in which the Company becomes
a subsidiary of another corporation and in which the
stockholders of the Company, immediately prior to the transaction,
will beneficially own, immediately after the transaction, shares
entitling such stockholders to more than 50% of all votes to which
all stockholders of the parent corporation would be entitled in the
election of directors.
(ii) The
consummation of (A) a merger or consolidation of the Company
with another corporation where the stockholders of the Company,
immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation,
shares entitling such stockholders to more than 50% of all votes to
which all stockholders of the surviving corporation would be
entitled in the election of directors, or where the members of the
Board, immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation, constitute a
majority of the board of directors of the surviving corporation,
(B) a sale or other disposition of all or substantially all of
the assets of the Company, or (C) a liquidation or dissolution
of the Company.
(d)
"Code" shall mean the Internal Revenue Code of 1986, as amended.
(e)
"Committee" shall mean the committee, consisting of members of the
Board, designated by the Board to administer the Plan.
(f)
"Company" shall mean Beijing Med-Pharm Corporation and shall
include its successors.
(g)
"Company Stock" shall mean common stock of the Company.
(h)
"Disability" or "Disabled" shall mean a Grantee’s becoming
disabled within the meaning of section 22(e)(3) of the Code, within
the meaning of the Employer’s long-term disability plan
applicable to the Grantee or as otherwise determined by the
Committee.
(i)
"Dividend Equivalent" shall mean an amount determined by
multiplying the number of shares of Company Stock subject to a
Grant by the per-share cash dividend paid by the Company on its
outstanding Company Stock, or the per-share fair market value (as
determined by the Committee) of any dividend paid on its
outstanding Company Stock in consideration other than cash.
(j)
"Effective Date" shall mean the date the stockholders of the
Company approve the Plan.
(k)
"Employee" shall mean an employee of the Company or a subsidiary of
the Company.
(l)
"Employed by, or providing service to, the Employer" shall mean
employment or service as an Employee, Key Advisor or member of the
Board (so that, for purposes of exercising Options and SARs and
satisfying conditions with respect to Stock Awards and Performance
Units, a Grantee shall not be considered to have terminated
employment or service until the Grantee ceases to be an Employee,
Key Advisor and member of the Board).
(m)
"Employer" shall mean the Company and each of its subsidiaries.
(n)
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o)
"Exercise Price" shall mean the purchase price of Company Stock
subject to an Option.
(p)
"Fair Market Value" shall mean:
(i) If
the Company Stock is publicly traded, then the Fair Market Value
per share shall be determined as follows: (A) if the principal
trading market for the Company Stock is a national securities
exchange, the last reported sale price thereof on the relevant date
or (if there were no trades on that date) the latest preceding date
upon which a sale was reported, or (B) if the Company Stock is
not principally traded on any such exchange, the last reported sale
price of a share of Company Stock on the relevant date, as reported
by the OTC Bulletin Board or, if shares are not reported on the OTC
Bulletin Board, as determined by the Committee through any
reasonable valuation method authorized under the Code.
(ii) If
the Company Stock is not publicly traded or, if publicly traded, is
not subject to reported transactions as set forth above, the Fair
Market Value per share shall be as determined by the Committee
through any reasonable valuation method authorized under the Code.
(q)
"Grant" shall mean a grant of Options, SARs, Stock Awards, Stock
Units or Other Stock-Based Awards under the Plan.
(r)
"Grant Instrument" shall mean the agreement that sets forth the
terms of a Grant, including any amendments.
(s)
"Grantee" shall mean an Employee, Key Advisor or Non-Employee
Director who receives a Grant under the Plan.
(t)
"Incentive Stock Option" shall mean an option to purchase Company
Stock that is intended to meet the requirements of section 422 of
the Code.
(u)
"Key Advisor" shall mean a consultant or advisor of an Employer.
(v)
"Non-Employee Director" shall mean a member of the Board who is not
an Employee.
(w)
"Nonqualified Stock Option" shall mean an option to purchase
Company Stock that is not intended to meet the requirements of
section 422 of the Code.
(x)
"Option" shall mean an Incentive Stock Option or Nonqualified Stock
Option granted under the Plan.
(y)
"Other Stock-Based Award" shall mean any Grant based on, measured
by or payable in Company Stock, as described in Section 10.
(z)
"SAR" shall mean a stock appreciation right with respect to a share
of Company Stock.
(aa)
"Stock Award" shall mean an award of Company Stock, with or without
restrictions.
(bb)
"Stock Unit" shall mean a unit that represents a hypothetical share
of Company Stock. Section 2.
Administration
(a)
Committee . The Plan shall be administered and interpreted
by the Board or by a Committee appointed by the Board. The
Committee, if applicable, should consist of two or more persons who
are "outside directors" as defined under section 162(m) of the
Code, and related Treasury regulations, and "non-employee
directors" as defined under Rule 16b-3 under the Exchange Act.
The Board shall approve and administer all grants made to
Non-Employee Directors. The Committee may delegate authority to one
or more subcommittees, as it deems appropriate. To the extent that
the Board or a subcommittee administers the Plan, references in the
Plan to the "Committee" shall be deemed to refer to the Board or
such subcommittee. In the absence of a specific designation by the
Board to the contrary, the Plan shall be administered by the
Committee of the Board or any successor Board committee performing
substantially the same functions.
(b)
Committee Authority . The Committee shall have the sole
authority to (i) determine the individuals to whom grants
shall be made under the Plan, (ii) determine the type, size
and terms of the grants to be made to each such individual,
(iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period,
including the criteria for exercisability and the acceleration of
exercisability, (iv) amend the terms of any previously issued
grant, subject to the provisions of Section 18 below, and
(v) deal with any other matters arising under the Plan.
(c)
Committee Determinations . The Committee shall have full
power and express discretionary authority to administer and
interpret the Plan, to make factual determinations and to adopt or
amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it
deems necessary or advisable, in its sole discretion. The
Committee’s interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons
having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need
not be uniform as to similarly situated individuals.
Section 3. Grants
Awards under the Plan may consist of
grants of Options as described in Section 6, Stock Awards as
described in Section 7, Stock Units as described in
Section 8, SARs as described in Section 9 and Other
Stock-Based Awards as described in Section 10. All Grants
shall be subject to the terms and conditions set forth herein and
to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the
Committee to the individual in the Grant Instrument. All Grants
shall be made conditional upon the Grantee’s acknowledgement,
in writing or by acceptance of the Grant, that all decisions and
determinations of the Committee shall be final and binding on the
Grantee, his or her beneficiaries and any other person having or
claiming an interest under such Grant. Grants under a particular
Section of the Plan need not be uniform as among the Grantees.
Section 4. Shares Subject to
the Plan
(a)
Shares Authorized . Subject to adjustment as described
below, the aggregate number of shares of Company Stock that may be
issued or transferred under the Plan is 4,980,000 shares. The
maximum number of shares authorized for issuance includes all
shares remaining available for issuance under the 2004 Plan as of
the Effective Date and a number of share equal to the number of
shares subject to outstanding grants under the 2004 Plan as of the
Effective Date. Shares issued or transferred under the Plan may be
authorized but unissued shares of Company Stock or reacquired
shares of Company Stock, including shares purchased by the Company
on the open market for purposes of the Plan. If and to the extent
Options or SARs granted under the Plan (including options
outstanding under the 2004 Plan) terminate, expire or are canceled,
forfeited, exchanged or surrendered without having been exercised
or if any Stock Awards (including stock awards outstanding under
the 2004 Stock Plan), Stock Units or Other Stock-Based Awards are
forfeited, terminated or otherwise not paid in full, the shares
subject to such Grants shall again be available for purposes of the
Plan. Shares of Company Stock surrendered in payment of the
Exercise Price of an Option or withheld for purposes of satisfying
the Company’s minimum tax withholding obligations with
respect to Grants under the Plan shall again be available for
issuance or transfer under the Plan.
(b)
Individual Limits . All Grants under the Plan shall be
expressed in shares of Stock. The maximum aggregate number of
shares of Company Stock that shall be subject to Grants made under
the Plan to any individual during any calendar year shall be
1,000,000 shares, subject to adjustment as described below.
(c)
Adjustments . If there is any change in the number or kind
of shares of Company Stock outstanding (i) by reason of a
stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of
any other extraordinary or unusual event affecting the outstanding
Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company
Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or
distribution, the maximum number of shares of Company Stock
available for
issuance under the Plan, the maximum number of shares of Company
Stock for which any individual may receive Grants in any year, the
kind and number of shares covered by outstanding Grants, the kind
and number of shares issued and to be issued under the Plan, and
the price per share or the applicable market value of such Grants
shall be equitably adjusted by the Committee, in such manner as the
Committee deems appropriate, to reflect any increase or decrease in
the number of, or change in the kind or value of, the issued shares
of Company Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under the Plan and
such outstanding Grants; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated. In the
event of a Change in Control of the Company, the provisions of
Section 16 of the Plan shall apply. Any adjustments to outstanding
Grants shall be consistent with section 409A or 422 of the Code, to
the extent applicable. Any adjustments determined by the Committee
shall be final, binding and conclusive.
Section 5. Eligibility for
Participation
(a)
Eligible Persons . All Employees (including, for all
purposes of the Plan, an Employee who is a member of the Board) and
Non-Employee Directors shall be eligible to participate in the
Plan. Key Advisors shall be eligible to participate in the Plan if
the Key Advisors render bona fide services to the Employer, the
services are not in connection with the offer and sale of
securities in a capital-raising transaction and the Key Advisors do
not directly or indirectly promote or maintain a market for the
Company’s securities.
(b)
Selection of Grantees . The Committee shall select the
Employees, Non-Employee Directors and Key Advisors to receive
Grants and shall determine the number of shares of Company Stock
subject to a particular Grant in such manner as the Committee
determines. Section 6.
Options The Committee may grant
Options to an Employee, Non-Employee Director or Key Advisor, upon
such terms as the Committee deems appropriate. The following
provisions are applicable to Options:
(a)
Number of Shares . The Committee shall determine the number
of shares of Company Stock that will be subject to each Grant of
Options to Employees, Non-Employee Directors and Key Advisors.
(b)
Type of Option and Price .
(i) The
Committee may grant Incentive Stock Options or Nonqualified Stock
Options or any combination of the two, all in accordance with the
terms and conditions set forth herein. Incentive Stock Options may
be granted only to employees of the Company or its parent or
subsidiary corporations, as defined in section 424 of the Code.
Nonqualified Stock Options may be granted to Employees, Key
Advisors and Non-Employee Directors.
(ii) The
Exercise Price of Company Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than
the Fair Market Value of a share of Company Stock on the date the
Option is granted; provided, however, that an Incentive Stock
Option may not be granted to an Employee who, at the time of grant,
owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any parent or
subsidiary corporation of the Company, as defined in section 424 of
the Code, unless the Exercise Price per share is not less than 110%
of the Fair Market Value of a share of Company Stock on the date of
grant.
(c)
Option Term . The Committee shall determine the term of each
Option. The term of any Option shall not exceed ten years from the
date of grant. However, an Incentive Stock Option that is granted
to an Employee who, at the time of grant, owns stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company, or any parent or subsidiary corporation of
the Company, as defined in section 424 of the Code, may not have a
term that exceeds five years from the date of grant.
(d)
Exercisability of Options . Options shall become exercisable
in accordance with such terms and conditions, consistent with the
Plan, as may be determined by the Committee and specified in the
Grant Instrument. The Committee may accelerate the exercisability
of any or all outstanding Options at any time for any reason.
(e)
Grants to Non-Exempt Employees . Notwithstanding the
foregoing, Options granted to persons who are non-exempt employees
under the Fair Labor Standards Act of 1938, as amended, may not be
exercisable for at least six months after the date of grant (except
that such Options may become exercisable, as determined by the
Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances
permitted by applicable regulations).
(f)
Termination of Employment, Disability or Death .
(i) Except
as provided below, an Option may only be exercised while the
Grantee is employed by, or providing service to, the Employer as an
Employee, Key Advisor or member of the Board.
(ii) In
the event that a Grantee ceases to be employed by, or provide
service to, the Employer for any reason other than Disability,
death or termination for Cause, any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within
90 days after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such
other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term.
Except as otherwise provided by the Committee, any of the
Grantee’s Options that are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by, or provide
service to, the Employer shall terminate as of such date.
(iii) In
the event the Grantee ceases to be employed by, or provide service
to, the Company on account of a termination for Cause by the
Employer, any
Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by, or provide service to, the
Employer. In addition, notwithstanding any other provisions of this
Section 6, if the Committee determines that the G
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