INCENTIVE OPTION AGREEMENT BETWEEN QIN Wei AND ZHANG Honghai Date: February 5, 2010
Exhibit 99.8
BETWEEN
AND
ZHANG
Honghai
Date:
February 5, 2010
THIS
INCENTIVE OPTION AGREEMENT (this "Agreement") is made on
February 5, 2010 by and between ▇▇▇ ▇▇▇, a New Zealand citizen (the "Grantor") and ZHANG, Honghai
("Grantee").
The Grantor
and the Grantee are collectively referred to as the "Parties" and each of them as a
"Party".
Whereas, the
Grantor owns 10,000 (100%) issued and outstanding shares of Fame Ever Limited
(the “Company”), a
British Virgin Islands company.
Whereas, the
Grantee has contributed to the growth of Fame Ever Limited. The Grantee has
agreed to be, or continuously be, a director, chairman, CEO or other executive
officer of Fame Ever Limitednot less than three years. In consideration of the
Grantee’s contributions to Fame Ever Limitedand as an incentive to the Grantee
to continue his commitment to Fame Ever Limited, the Grantor has agreed to grant
to the Grantee, and the Grantee has agreed to accept from the Grantor, an
incentive option (the “Option”) to purchase certain
number of ordinary shares of Fame Ever Limited (the "Option Shares") as set forth
in Schedule A to this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
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1.
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DEFINITIONS
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1.1.
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Defined Terms :
In this Agreement (including the Recitals and the Schedules), unless the
context otherwise requires, the following words and expressions shall have
the following meanings:
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"Business Day" means a
day (other than Saturdays, Sundays and public holidays) on which banks are
generally open for business in China;
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"China" or "PRC" means the People's
Republic of China;
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"Completion Date" means
the date falling seven (7) Business Days after the service of the Exercise
Notice by the Grantee on the Company;
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"Completion" means the
completion of the sale to and purchase by the Grantee of the Option Shares
under this Agreement;
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"Distributions" means any
cash proceeds arising from or in respect of, or in exchange for, or
accruing to or in consequence of the Option Shares from the Effective Date
to the Completion Date, including without limitation the
Dividends.
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"Dividends" means the
dividends declared by the Company and accrued in respect of the Option
Shares (whether or not such dividends shall have been paid and received by
the Grantee);
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"Effective Date" means
the date of execution of this Agreement;
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"Exercise" means the
exercise by the Grantee or his Nominee(s) of the Option pursuant to the
terms of this Agreement;
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"Exercise Notice" means
the notice substantially in the form set out in Part I of Schedule B;
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"Exercise Price" means
the exercise price to be paid by the Grantee to the Grantor in respect of
the Option Shares issued to such Grantee as set forth opposite his name in
Schedule
A;
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"Nominee" means such person nominated by
a Grantee in the Transfer Notice to be the transferee of the Option or
Option Shares;
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"Option Effective Date"
has the meaning ascribed to it in Clause 2.3;
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"RMB" means the lawful
currency of China;
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"Transfer Notice" means
the notice substantially in the form set out in Part II of Schedule B;
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"US$" or "United States Dollar"
means the lawful currency of the United States of America.
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1.2.1
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Interpretation:
Except to the extent that the context requires
otherwise:
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1.2.1
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words
denoting the singular shall include the plural and vice versa;
words denoting any gender shall include all genders; words denoting
persons shall include firms and corporations and vice
versa;
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1.2.2
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any
reference to a statutory provision shall include such provision and any
regulations made in pursuance thereof as from time to time modified or
re-enacted whether before or after the date of this Agreement and (so far
as liability thereunder may exist or can arise) shall include also any
past statutory provisions or regulations (as from time to time modified or
re-enacted) which such provisions or regulations have directly or
indirectly replaced;
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1.2.3
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the
words "written"
and "in writing"
include any means of visible
reproduction;
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1.2.4
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any
reference to "Clauses", "Recitals" and "Schedules" are to be
construed as references to clauses and recitals of, and schedules to, this
Agreement; and
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1.2.5
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any
reference to a time of day is a reference to China time unless provided
otherwise.
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1.3.
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Headings: The
headings in this Agreement are inserted for convenience only and shall be
ignored in construing this
Agreement.
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2.
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OPTION
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2.1.
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Option: In
consideration of the contributions which Grantee has made to the Company
and his continuing commitment to the Company, the Grantor hereby
irrevocably and unconditionally grants to such Grantee an Option for such
Grantee to acquire from the Grantor, at the Exercise Price, at any time
during the Exercise Period (defined below), to the extent that the Option
has vested, any or all of the Option Shares set forth opposite such
Grantee’s in Schedule
A hereto, free from all claims, liens, charges, pledges, mortgages,
trust, equities and other encumbrances, and with all rights attaching
thereto on the Completion Date.
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2.2.
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Vesting
Schedule: Subject to the terms and conditions hereto, the Option
may be exercised, in whole or in part, in accordance with the following
schedule:
34%
of the Option Shares subject to the Option shall vest and become
exercisable on the sixty-first (61st) day following the end of 2009 fiscal
year, 33% of the Option Shares subject to the Option shall vest and become
exercisable on the sixty-first (61st) day following the end of 2010 fiscal
year and 33% of the Option Shares subject to the Option shall vest and
become exercisable on the sixty-first (61st) day following the end of 2011
fiscal year).
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2.3.
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Exercise
Period: The Option shall vest and become effective and exercisable
at the times commencing on the dates set forth in Section 2.2 (the “Option
Effective Date”) and shall expire five years from the date of the
Option. The Option may be exercised by the Grantee (or his
Nominee on behalf of the Grantee), to the extent that the Option shall
have vested, and only to that extent, at any time prior to five years from
the date of this Option (“Exercise
Period”).
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2.4.
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Nominees: The
Grantee may, at any time during the Exercise Period, at his sole
discretion, nominate one or more person(s) (each a “Nominee”) to be the
transferee(s) of whole or part of the shares subject to his Option, who
shall hold and/or exercise the transferred Option on behalf of the
Grantee.
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2.5.
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Exercise
Notice: The Option may be exercised by the Grantee or his
Nominee(s), in whole or in part, at any time during the Exercise Period,
by serving an Exercise Notice on the
Company.
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2.6.
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Exercise: The
Grantor agrees that he shall, upon receipt of the Exercise Notice,
transfer to the Grantee (or his Nominee(s), as the case may be) any and
all of the Option Shares specified in the Exercise Notice, free from all
claims, liens, charges, pledges, mortgages, trust, equities and other
encumbrances, and with all rights now or hereafter attaching
thereto. The Option shall be exercisable only in compliance
with the laws and regulations of the PRC and the British Virgin Islands,
and such Grantee (or his Nominee(s), as the case may be) shall complete
any and all approval or registration procedures regarding the exercise of
his Option at PRC competent authorities in accordance with applicable PRC
laws and regulations.
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2.7.
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Transfer
Notice: In case that a Grantee transfers any or all of his Option
to one or more Nominee(s) in accordance with Clause 2.4 above, the Grantee
shall serve a Transfer Notice on the
Grantor.
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2.8.
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Transfer to
Nominees: The Grantor agrees that he shall, upon receipt of the
Transfer Notice, take all actions necessary to allow the Nominee(s) to be
entitled to any or all of Option Shares specified in the Transfer
Notice.
Upon
exercise by any Nominee(s) of the transferred Option on behalf of the
Grantee, the Grantee shall serve the Exercise Notice on the Grantor in his
own name for the exercising Nominee(s). Upon receipt of such
Exercise Option, the Grantor shall issue to such Nominee(s) any and all of
the relevant Option Shares in the same manner as specified in Clause
2.6.
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2.9.
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Payment of Exercise
Price: Upon Exercise of the Option in whole or in part, the Grantee
(or his Nominee(s), as the case may be) shall pay the Exercise Price to
the Grantor.
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2.10.
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The Grantor’s
Obligation upon Exercise: The Grantor agrees that upon the Exercise
of any Option by a Grantee (or his Nominee(s)), he shall cause and procure
the number of Option Shares provided in the Exercise Notice to be
transferred to the Grantee (or his Nominee(s)) within seven (7) Business
Days after the date of the Exercise
Notice.
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3.
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INFORMATION,
DISTRIBUTIONS AND ADJUSTMENTS
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3.1.
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Information:
The Grantee shall be entitled to request from the Grantor at any time
before the Completion, a copy of any information received from the Grantor
which may be in the possession of the Grantor and, upon such request, the
Grantor shall provide such information to the
Grantee.
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3.2.
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Distributions:
The Grantor agrees that each Grantee shall be entitled to all the
Distributions in respect of his Option Shares. In the event
that any such Distributions have been received by the Grantor for any
reason, the Grantor shall cause the existing shareholder at the request of
the Grantee to pay an amount equivalent to the Distributions received to
the Grantee.
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3.3.
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Adjustments:
If, prior to the Completion, the Company shall effect any adjustment in
its share capital (such as share split, share dividend, share combination
or other similar acts), then the number of Option Shares and the Exercise
Price shall be adjusted accordingly to take into account such
adjustment.
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4.
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COMPLETION
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4.1.
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Time and Venue:
Completion of the sale and purchase of the Option Shares pursuant to the
Exercise shall take place at such place decided by the Grantee on the
Completion Date and reasonably acceptable to the Grantor. The
parties agree that Hong Kong is a reasonable place for the completion of
the sale.
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4.2.
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Business at
Completion: At Completion of each Exercise, all (but not part only)
of the following shall be
transacted:
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4.2.1
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the
exercising Grantee shall pay the Exercise Price to the Grantor by wire
transfer or such other method as shall be reasonably acceptable to
Grantor;
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4.2.2
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the
Grantor shall, and to the extent that any action on the part of other
shareholders or the directors is required, procure the then existing
shareholders and directors of the Company to, within seven (7) Business
Days after the date of Exercise Notice, deliver to the exercising Grantee
(or his Nominee(s), same below) the following documents and take all
corporate actions necessary to give effect to such
delivery:
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(a)
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a
share certificate or share certificates in respect of the number of the
Option Shares exercised by the
Grantee;
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(b)
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a
certified true copy of the register of members of the Company updated to
show the entry of the Grantee as the holder of the Option Shares so
exercised; and
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(c)
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any
other documents as the Grantee may reasonably believe necessary to give
effect to the transfer of the exercised Option
Shares.
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5.
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CONFIDENTIALITY
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The
transaction contemplated hereunder and any information exchanged between the
Parties pursuant to this Agreement will be held in complete and strict
confidence by the concerned Parties and their respective advisors, and will not
be disclosed to any person except: (i) to the Parties’ respective officers,
directors, employees, agents, representatives, advisors, counsel and consultants
that reasonably require such information and who agree to comply with the
obligation of non-disclosure pursuant to this Agreement; (ii) with the express
prior written consent of the other Party; or (iii) as may be required to comply
with any applicable law, order, regulation or ruling, or an order, request or
direction of a government agency; provided, however, that the foregoing shall
not apply to information that: (1) was known to the receiving Party prior to its
first receipt from the other Party; (2) becomes a matter of public knowledge
without the fault of the receiving Party; or (3) is lawfully received by the
Party from a third person with no restrictions on its further
dissemination.
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6.
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GRANTOR’S
UNDERTAKINGS
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Without
the prior written consent of Grantee, the Grantor shall not and shall procure
the Company not to, (i) issue or create any new shares, equity, registered
capital, ownership interest, or equity-linked securities, or any options or
warrants that are directly convertible into, or exercisable or exchangeable for,
shares, equity, registered capital, ownership interest, or equity-linked
securities of the Company, or other similar equivalent arrangements, (ii) alter
the shareholding structure of the Company (other than as a result of the
transfer of existing shares pursuant to this agreement), (iii) cancel or
otherwise alter the Option Shares, (iv) amend the register of members or the
memorandum and articles of association of the Company, (v) liquidate or wind up
the Company, or (vi) act or omit to act in such a way that would be detrimental
to the interest of the Grantee in the Option Shares. The Grantor
shall disclose to the Grantee true copies of all the financial, legal and
commercial documents of the Company and the resolutions of the shareholders and
the board of directors.
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7.
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MISCELLANEOUS
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7.1.
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Indulgence, Waiver
Etc: No failure on the part of any Party to exercise and no delay
on the part of such Party in exercising any right hereunder will operate
as a release or waiver thereof, nor will any single or partial exercise of
any right under this Agreement preclude any other or further exercise of
it or any other right or remedy.
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7.2.
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Effective Date and
Continuing Effect of Agreement: This Agreement shall take effect
from the Effective Date. All provisions of this Agreement shall
not, so far as they have not been performed at Completion, be in any
respect extinguished or affected by Completion or by any other event or
matter whatsoever and shall continue in full force and effect so far as
they are capable of being performed or observed, except in respect of
those matters then already
performed.
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7.3.
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Successors and
Assigns: This Agreement shall be binding on and shall ensure for
the benefit of each of the Parties' successors and permitted assigns. Any
reference in this Agreement to any of the Parties shall be construed
accordingly.
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7.4.
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Further
Assurance: At any time after the date of this Agreement, each of
the Parties shall, and shall use its best endeavors to procure that any
necessary third party shall, execute such documents and do such acts and
things as any other Party may reasonably require for the purpose of giving
to such other Party the full benefit of all the provisions of this
Agreement.
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7.5.
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Remedies: No
remedy conferred by any of the provisions of this Agreement is intended to
be exclusive of any other remedy which is otherwise available at law, in
equity, by statute or otherwise, and each and every other remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law, in equity, by statute or otherwise.
The election of any one or more of such remedies by any Party shall not
constitute a waiver by such Party of the right to pursue any other
available remedies.
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7.6.
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Severability of
Provisions: If any provision of this Agreement is held to be
illegal, invalid or unenforceable in whole or in part in any jurisdiction,
this Agreement shall, as to such jurisdiction, continue to be valid as to
its other provisions and the remainder of the affected provision; and the
legality, validity and enforceability of such provision in any other
jurisdiction shall be unaffected.
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7.7.
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Governing Law:
This Agreement shall be governed by, and construed in accordance with, the
laws of the British Virgin Islands.
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7.8.
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Dispute
Resolution: In the event of any dispute, claim or difference (the
"Dispute") between
any Parties arising out of or in connection with this Agreement, the
Dispute shall be resolved in accordance with the
following:
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(a)
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Negotiation between Parties;
Mediations. The Parties agree to negotiate in good faith
to resolve any Dispute. If the negotiations do not resolve the
Dispute to the reasonable satisfaction of all parties within thirty (30)
days, subsection (b) below shall
apply.
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(b)
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Arbitration. In
the event the Parties are unable to settle a Dispute in accordance with
subsection (a) above, such Dispute shall be referred to and finally
settled by arbitration at Hong Kong International Arbitration Centre in
accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL
Rules”) in effect, which rules are deemed to be incorporated by
reference into this subsection (b). The arbitration tribunal
shall consist of three arbitrators to be appointed according to the
UNCITRAL Rules. The language of the arbitration shall be
English.
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7.9.
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Counterparts:
This Agreement may be signed in any number of counterparts, all of which
taken together shall constitute one and the same
instrument. Any Party hereto may enter into this Agreement by
signing any such counterpart.
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[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.
The
Grantor
By: /s/ ▇▇▇
▇▇▇
Name:
QIN, Wei
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.
The
Grantee
By: /s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
Name:
ZHANG, Honghai
SCHEDULE
B
Part
I
Form of Exercise
Notice
To: ▇▇▇
▇▇▇(the “Grantor”)
and
Board of Directors of Fame Ever Limited
From:
ZHANG, Honghai (the “Grantee”)
We refer to
the Incentive Option Agreement (the "Option Agreement") dated
February 5, 2010 made between the Grantee and the Grantor. Terms
defined in the Option Agreement shall have the same meanings as used
herein.
We hereby
give you notice that we require you to sell to us / [Nominees' names] in
accordance with the terms and conditions of the Option Agreement, the following
Option Shares at the Exercise Price set out below, subject to the terms and
conditions set out in the Option Agreement. Completion shall take place at
[
] on
[ ]
at the office of Fame Ever Limited in China.
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Grantee
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Option Shares
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Exercise Price
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ZHANG, Honghai
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USD 0.01 per share
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Dated
[ ]
Yours
faithfully
___________________________
Name:
ZHANG, Honghai
[Grantee]
Party
II
Form of Transfer
Notice
To: ▇▇▇
▇▇▇(the “Grantor”)
and
Board of Directors of Fame Ever Limited
From:
ZHANG, Honghai (the “Grantee”)
We refer to
the Incentive Option Agreement (the "Option Agreement") dated
February 5, 2010 made between the Grantee and the Grantor. Terms
defined in the Option Agreement shall have the same meanings as used
herein.
We hereby
give you notice that we will transfer to [Nominees' names] the
following portion of the Option, expressed in terms of the number of Option
Shares represented by the portion of the Option transferred in accordance with
the terms and conditions of the Option Agreement,.
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Grantee
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Nominees
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Option Shares Represented
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ZHANG, Honghai
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Dated
[ ]
Yours
faithfully
___________________________
Name:
ZHANG, Honghai
[Grantee]