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Secuirities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August, 2007
Commission File Number 1-33208
SOLARFUN POWER HOLDINGS CO., LTD
666 Linyang Road
Qidong, Jiangsu Province 226200
People's Republic of China
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F |X| Form 40-F |_|
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1).)
Yes |_| No |X|
(Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7).)
Yes |_| No |X|
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes |_| No |X|
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
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1. Notice of and Proxy Statement for Solarfun Power Holdings Co., Ltd.
Annual General Meeting to be held August 22, 2007.
2. Solarfun Power Holdings Co., Ltd. Proxy Card.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOLARFUN POWER HOLDINGS CO., LTD
By: /s/ Mr. Yonghua Lu
-----------------------------------
Name: Mr. Yonghua Lu
Title: Chairman and CEO
Date: August 20, 2007
SOLARFUN POWER HOLDINGS CO., LTD.
666 Linyang Road, Qidong
Jiangsu Province, 226200
People's Republic of China
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on August 22, 2007
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NOTICE IS HEREBY GIVEN that the annual general meeting of shareholders (the
"AGM") of Solarfun Power Holdings Co., Ltd., a Cayman Islands company (the
"Company") will be held at 9:00 am Shanghai time, on August 22, 2007 at Westin
Hotel, Bund Center, 88 Henan Central Road, Shanghai, China 20002 for the
following purposes:
1. To ratify the appointment of Mr. Yonghua Lu, Mr. Hanfei Wang, Ms. Xihong
Deng, Mr. Sven Michael Hansen, Mr. Terry McCarthy, Mr. Ernst A. Butler and
Mr. Thomas J. Toy as directors of the Company and to continue to hold
office for a three-year term beginning with their original contract date or
until his or her successor is elected and qualified. The biographies of
these directors are included in Exhibit A.
2. To ratify the election as director, Mr. Gu, to hold office for a three-year
term starting from June 28, 2007 or until his successor is elected and
qualified. Mr. Gu's biography is included in Exhibit A.
3. To approve the adoption of a new equity incentive plan of the Company (the
"2007 Equity Incentive Plan"). A summary of the 2007 Equity Incentive Plan
is attached as Exhibit B to this notice. A full copy of the plan is
available upon request.
4. To approve the appointment of Ernst & Young Hua Ming as independent auditor
of the Company for the year ending December 31, 2007.
5. To consider and act upon such other business as may properly come before
the AGM or any adjournment thereof.
Only holders of record of ordinary shares or American depositary shares
representing those ordinary shares at the close of business on July 11, 2007
will be entitled to vote at the AGM. However, a member entitled to attend and
vote is entitled to appoint a proxy to attend and, on a poll, vote instead of
him and that proxy need not be a member of the Company. Whether or not you
expect to attend the AGM in person, please mark, date, sign and return the
enclosed proxy card as promptly as possible in the postage-prepaid envelope
provided to ensure your representation and the presence of a quorum at the AGM.
Sending in your proxy will not prevent you from voting in person at the AGM.
By order of the Board of Directors,
Yonghua Lu
Chairman of the Board of Directors
Dated: July 26, 2007
1
EXHIBIT A
Mr. Yonghua Lu, 42. is our founder, chairman of our board of directors and chief
executive officer. He also has been chairman of Linyang Electronics since 1997
and was general manager of that company from 1997 to August 2006. Linyang
Electronics had been the parent company of Linyang China until June 2, 2006. Mr.
Lu was general manager of Qidong Changtong Computer Group Company, and deputy
manager of Qidong Computer Factory, from 1988 to 1996. From 1983 to 1988, he was
deputy manager of the Lining Cloth Factory of Qidong "Wu Qi" Farm and manager of
the Cashmere Factory of Qidong "Wu Qi" Farm. Mr. Lu has over 20 years of
experience in enterprise management. He has received many awards and honors for
his entrepreneurship, including being named one of Jiangsu Province's Top Ten
Outstanding Young Entrepreneurs and Fifth-term National Township Entrepreneur.
Mr. Lu has attended a 15-month training course for Applied Social Studies at
Soochow University Graduate School of Humanities, and a 20-month executive MBA
course at Renmin University in China.
Mr. Hanfei Wang, 43. is our director and chief operating officer. He joined our
company in 2005. Mr. Wang was chief operating officer of Hongdou Group Chituma
Motorcycle Co. from 2004 to 2005. He was manufacturing manager, marketing
manager, management representative and deputy production general manager of
Suntech Power Holdings Co., Ltd., a company currently listed on the New York
Stock Exchange, from 2001 to 2004. From 1995 to 2001, Mr. Wang was production
and materials senior supervisor of Wuxi Nemic-Lambda Electronics Co., Ltd., a
PRC subsidiary of Densei-Lambda K.K., a Japanese publicly listed company,
responsible for production and quality management. Mr. Wang received his
bachelor's degree in physics from Soochow University in China. He has also
attended an executive MBA course in Fudan University in China.
Ms. Xihong Deng, 42. has served as our director since June 2006 and, under the
management consulting service agreement we entered into with Hony Capital II,
L.P., she has also served as our executive vice president in charge of
international business development since November 2006, and is expected to
continue to hold that position until the earlier of the end of 2007 or the
appointment of a suitable replacement. Ms. Deng has been managing director of
Hony Capital II, GP Limited, the general partner of Hony Capital II, L.P., since
2004. Prior to that, she was director and chief executive officer of Molecular
Nanosystems, Inc., a nanotechnology company in California from 2002 to 2004.
From 1992 to 2002, Ms. Deng was vice president at J.P. Morgan in the United
States and worked in various departments, including investment banking, equity
capital markets and private equity. From 1989 to 1992, she was engaged in fixed
income research in Citigroup in the United States. Ms. Deng holds a bachelor's
degree and a master's degree from Tsinghua University in China, and a master's
degree from the State University of New York at Stony Brook.
2
Dr. Sven Michael Hansen,42. has served as our director since August 2006. Dr.
Hansen currently serves as the chief investment officer of Good Energies Inc. He
also serves as the chairman of Concentrix Solar GmbH, a German company that
focuses on the development of solar power plants, and as a director of Trina
Solar Limited, a Chinese solar products manufacturer, and InErgies Capital Inc.,
a Swiss company that advises on energy sector investments. He is a member of the
advisory board of the Sustainable Energy Finance Initiative of the United
Nations. From 2001 to 2003, he was a managing partner of Black Emerald Group in
Switzerland. Dr. Hansen served as group finance director and also a member of
the executive board of Intels Group from 1999 to 2001. From 1996 to 1998, he
worked in New York and London as a vice president and an executive director in
the Structure Finance business of UBS. Dr. Hansen received his bachelor's degree
from the University of Basle, and MBA and Ph.D. degrees from the University of
St. Gallen.
Mr. Terry McCarthy, 63. has served as our independent director since November
2006. From 1985 to 2006, Mr. McCarthy worked for Deloitte & Touche LLP in San
Jose, California in various roles as a managing partner, tax partner-in-charge
and client services partner. From 1993 to 1995, he managed a national
reengineering program and software development project for Deloitte and
participated in the acquisition and development of Deloitte's tax software
company. Beginning in 1999, he worked extensively with companies entering the
China market and, from 2003 to 2006, he was deputy managing partner of the
Deloitte US Chinese Services Group. In 1976, Mr. McCarthy co-founded Hayes,
Perisho & McCarthy, Inc., a CPA firm in Silicon Valley in California, where he
was an audit partner and president when the firm was sold to Touche Ross in
1985. From 1972 to 1976, he held several audit positions at Hurdman & Cranstoun,
CPAs, including senior audit manager working with SEC and privately held
clients. He received a bachelor's degree from Pennsylvania State University, an
MBA from the University of Southern California and a master's degree in Taxation
from Golden Gate University.
Mr. Ernst A. Butler, 62. has served as our independent director since November
2006. Mr. Butler has been an independent board member/consultant and owner of
E.A. Butler Management in Zurich since 2005. His other current positions include
board member of Bank Frey & Co. AG, Zurich, chairman of the board of Alegra
Capital Ltd., Zurich, board member of PHI Investment, Zurich, consultant to the
owner of a group of PRC companies, and advisor to the executive board of
Partners Group in Zug, Switzerland, the largest independent Asset Manager of
Alternative Investments in Europe. From 1999 to 2005, he was a partner of
Partners Group in Zug, responsible for markets in Switzerland, Italy and France.
Mr. Butler spent over 25 years with Credit Suisse and Credit Suisse First
Boston, with his last assignment being managing director and co-head of the
Corporate and Investment Banking Division in Switzerland. He received a
bachelor's degree from the School of Economics and Business Administration in
Zurich in 1973, and attended post-graduate programs at the University of
Massachusetts in the United States, The European Institute of Business
Administration in Paris, and Massachusetts Institute of Technology.
Mr. Thomas J. Toy, 52. has served as our independent director since November
2006. His other current positions include director, chairman of the board, and
member of audit committee, compensation committee and nominating and corporate
governance committee of UTStarcom Inc. (NASDAQ: UT SI), director, chairperson of
corporate governance and nominating committee and member of audit committee of
White Electronic Designs Corp. (NASDAQ: WEDC) and director of several privately
held companies. Mr. Toy has also been co-founder and managing director of PacRim
Venture Partners, a venture capital firm based in Menlo Park, California, since
1999, and he is a partner with SmartForest Ventures, a venture capital firm
based in Portland, Oregon. From 1987 to 1999, he was partner and managing
director of Technology Funding, a venture capital firm based in San Mateo,
California. From 1979 to 1987, Mr. Toy held several positions at Bank of America
National Trust and Savings Association, including vice president. He received
his bachelor's and master's degrees from Northwestern University in the United
States.
3
Mr. Yin Shang Gu, 69. He started his career from Electricity Administration
Bureau of Eastern China. He worked there for 36 years till he retired. Before he
retired in 1999, Mr. Gu was Deputy Director of Eastern China Electricity
Administration Bureau and Director of Shanghai Electricity Administration
Bureau.
Mr. Gu's experience, expertise and social relationship will benefit greatly the
companies ability to tap China 's PV market, enhancing the company's influence
in the industry, obtaining more business opportunity and experts.
4
EXHIBIT B
2007 Equity Incentive Plan
We are seeking stockholder approval of the 2007 Equity Incentive Plan. The Board
believes that long-term incentive compensation programs align the interests of
management, employees and the stockholders to create long-term stockholder
value. The Board believes that plans such as the 2007 Equity Incentive Plan
increase the Company's ability to achieve this objective, especially, in the
case of the 2007 Equity Incentive Plan, by allowing for several different forms
of long-term incentive awards, which the Board believes will help the Company to
recruit, reward, motivate and retain talented personnel.
The Board believes strongly that the approval of the 2007 Equity Incentive Plan
is essential to the Company's continued success. In particular, the Company
believes that its employees are its most valuable assets and that the awards
permitted under the 2007 Equity Incentive Plan are vital to the Company's
ability to attract and retain outstanding and highly skilled individuals in the
extremely competitive labor markets in which it competes. Such awards also are
crucial to the Company's ability to motivate employees to achieve the Company's
goals.
Our 2007 Equity Incentive Plan provides for the grant of ISOs to our employees,
and any parent and subsidiary corporations' employees, and for the grant of
NSOs, restricted stock, restricted stock units, stock appreciation rights,
performance units and performance stock to our employees, directors and
consultants and our parent and subsidiary corporations' employees and
consultants.
Share Reserve. The maximum aggregate number of our ordinary shares that may
be issued under the 2007 Equity Incentive Plan is 10,799,685. In addition, our
2007 Equity Incentive Plan provides for annual increases in the number of shares
available for issuance thereunder on the first day of each fiscal year,
beginning with our 2008 fiscal year, equal to:
o 2% of our outstanding ordinary shares on the last day of the
immediately preceding fiscal year;
o such lesser amount as our board of directors may determine.
Administration. Different committees with respect to different groups of
service providers, comprised of members of our Board or other individuals
appointed by the Board, may administer our 2007 Equity Incentive Plan. In the
case of options intended to qualify as "performance based compensation" within
the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended,
the committee will consist of two or more "outside directors" within the meaning
of Section 162(m). The administrator has the power to determine the terms of the
awards, including the exercise price, the number of shares subject to each such
award, the exercisability of the awards and the form of consideration payable
upon exercise. The administrator also has the authority to institute an exchange
program whereby the exercise prices of outstanding awards may be reduced,
outstanding awards may be surrendered in exchange for awards with a lower
exercise price, or outstanding awards may be transferred to a third party.
5
Options. The exercise price of options granted under our 2007 Equity
Incentive Plan must at least be equal to the fair market value of our ordinary
shares on the date of grant. The term of an ISO may not exceed ten years, except
that with respect to any participant who owns 10% of the voting power of all
classes of our outstanding shares as of the grant date, the term must not exceed
five years and the exercise price must equal at least 110% of the fair market
value on the grant date. The administrator determines the term of all other
options. After termination of an employee, director or consultant, he or she may
exercise his or her option for the period of time stated in the option
agreement. Generally, if termination is due to death or disability, the option
will remain exercisable for twelve months. In all other cases, the option will
generally remain exercisable for three months. However, an option generally may
not be exercised later than the expiration of its term.
Restricted Stock. Restricted Stock may be granted under our 2007 Equity
Incentive Plan. Restricted Stock awards are ordinary shares that vest in
accordance with terms and conditions established by the administrator and set
forth in an award agreement. The administrator will determine the number of
shares of restricted stock granted to any employee. The administrator may impose
whatever conditions to vesting it determines to be appropriate. Restricted
shares that do not vest are subject to our right of repurchase or forfeiture.
Stock Appreciation Rights. Stock appreciation rights may be granted under
our 2007 Equity Incentive Plan. Stock appreciation rights allow the recipient to
receive the appreciation in the fair market value of our ordinary stock between
the exercise date and the date of grant. The exercise price of stock
appreciation rights granted under our 2007 Equity Incentive Plan must at least
be equal to the fair market value of our ordinary stock on the date of grant.
The administrator determines the terms of stock appreciation rights, including
when such rights become exercisable and whether to pay the increased
appreciation in cash or with our ordinary shares, or a combination thereof.
Stock appreciation rights expire under the same rules that apply to options.
Performance Units and Performance Shares. Performance units and performance
shares may be granted under our 2007 Equity Incentive Plan. Performance units
and performance shares are awards that will result in a payment to a participant
only if performance goals established by the administrator are achieved or the
awards otherwise vest. The administrator will establish organizational or
individual performance goals in its discretion, which, depending on the extent
to which they are met, will determine the number and/or the value of performance
units and performance shares to be paid out to participants. Performance units
will have an initial dollar value established by the administrator prior to the
grant date. Performance shares will have an initial value equal to the fair
market value of our ordinary shares on the grant date. Payment for performance
units and performance shares may be made in cash or in our ordinary shares with
equivalent value, or in some combination, as determined by the administrator.
Restricted Stock Units. Restricted stock units may be granted under our
2007 Equity Incentive Plan. Restricted stock units are similar to awards of
restricted stock, but are not settled unless the award vests. Restricted stock
units may consist of restricted stock, performance share or performance unit
awards, and the administrator may set forth restrictions based on the
achievement of specific performance goals. The awards may be settled in stock,
cash, or a combination of both, as the administrator may determine. The
administrator determines the terms and conditions of restricted stock units
including the vesting criteria and the form and timing of payment.
6
Transferability. Unless the administrator provides otherwise, our 2007
Equity Incentive Plan does not allow for the transfer of awards other than by
will or the laws of descent and distribution and only the recipient of an award
may exercise an award during his or her lifetime.
Change in Control Transactions. Our 2007 Equity Incentive Plan provides that
in the event of our change in control, as defined in the 2007 Equity Incentive
Plan, each outstanding award will be treated as the administrator determines,
including that the successor corporation or its parent or subsidiary will assume
or substitute an equivalent award for each outstanding award. The administrator
is not required to treat all awards similarly, provided that the per share
consideration offered to each award holder shall have an equivalent value to
that offered to holders of common stock. If there is no assumption or
substitution of outstanding awards, the awards will fully vest, all restrictions
will lapse, and the awards will become fully exercisable. The administrator will
provide notice to the recipient that he or she has the right to exercise the
option and stock appreciation right as to all of the ordinary shares subject to
the award, all restrictions on restricted stock will lapse, and all performance
goals or other vesting requirements for performance stock and units will be
deemed achieved at target levels, and all other terms and conditions met. The
option or stock appreciation right will terminate upon the expiration of the
period of time the administrator provides in the notice.
Amendment and Termination. Our 2007 Equity Incentive Plan will automatically
terminate in 2017, unless we terminate it sooner. Our board of directors has the
authority to amend, alter, suspend or terminate the 2007 Equity Incentive Plan
provided such action does not impair the rights of any participant with respect
to any outstanding awards.
7
SOLARFUN POWER HOLDINGS CO., LTD.
2007 EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are:
o to attract and retain the best available personnel for positions of
substantial responsibility,
o to provide additional incentive to Employees, Directors and Consultants,
and
o to promote the success of the Company's business.
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Stock Appreciation Rights, Restricted Stock Units,
Performance Units, Performance Shares, and Other Stock Based Awards.
2. Definitions. As used herein, the following definitions will apply:
(a) "Administrator" means the Board or any of its Committees as will
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of equity-based awards or equity compensation plans under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign country or jurisdiction where Awards are,
or will be, granted under the Plan.
(c) "Award" means, individually or collectively, a grant under the
Plan of Options, SARs, Restricted Stock, Restricted Stock Units, Performance
Units, Performance Shares or Other Stock Based Awards.
(d) "Award Agreement" means the written or electronic agreement
setting forth the terms and provisions applicable to each Award granted under
the Plan. The Award Agreement is subject to the terms and conditions of the
Plan.
(e) "Awarded Stock" means the Common Stock subject to an Award.
(f) "Board" means the Board of Directors of the Company.
(g) "Change in Control" means the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company's then outstanding voting securities;
(ii) The consummation of the sale or disposition by the Company of
all or substantially all of the Company's assets;
(iii) A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" means directors who either (A) are
Directors as of the effective date of the Plan, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(iv) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at least
fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.
(h) "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code herein will be a reference to any successor
or amended section of the Code.
(i) "Committee" means a committee of Directors or other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4
of the Plan
(j) "Common Stock" means the Common Stock of the Company, or in the
case of Performance Units, Restricted Stock Units, and certain Other Stock Based
Awards, the cash equivalent thereof, as applicable.
(k) "Company" means Jiangsu Linyang Solarfun Co., Ltd., a limited
liability company incorporated under the laws of the Cayman Islands, or any
successor thereto.
(l) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(m) "Director" means a member of the Board.
(n) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code, 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.
(o) "Dividend Equivalent" means a credit, made at the discretion of
the Administrator, to the account of a Participant in an amount equal to the
value of dividends paid on one Share for each Share represented by an Award held
by such Participant.
2
(p) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company will be
sufficient to constitute "employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(r) "Exchange Program" means a program under which (i) outstanding
Awards are surrendered or cancelled in exchange for Awards of the same type
(which may have lower exercise prices and different terms), Awards of a
different type, and/or cash, and/or (ii) the exercise price of an outstanding
Award is reduced. The terms and conditions of any Exchange Program will be
determined by the Administrator in its sole discretion.
(s) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value will be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the day
of determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock will be the mean between the high bid and low asked
prices for the Common Stock for the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value will be determined in good faith by the
Administrator.
Notwithstanding the preceding, for federal, state, and local income tax
reporting purposes and for such other purposes as the Administrator deems
appropriate, the Fair Market Value shall be determined by the Administrator in
accordance with uniform and nondiscriminatory standards adopted by it from time
to time.
(t) "Fiscal Year" means the fiscal year of the Company.
(u) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(v) "Nonstatutory Stock Option" means an Option that by its terms does
not qualify or is not intended to qualify as an Incentive Stock Option.
3
(w) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(x) "Option" means a stock option granted pursuant to the Plan.
(y) "Other Stock Based Awards" means any other awards not specifically
described in the Plan that are valued in whole or in part by reference to, or
are otherwise based on, Shares and are created by the Administrator pursuant to
Section 12.
(z) "Outside Director" means a Director who is not an Employee.
(aa) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(bb) "Participant" means the holder of an outstanding Award granted
under the Plan.
(cc) "Performance Share" means an Award granted to a Service Provider
pursuant to Section 10 of the Plan.
(dd) "Performance Unit" means an Award granted to a Service Provider
pursuant to Section 10 of the Plan.
(ee) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of forfeiture. Such
restrictions may be based on the passage of time, the achievement of target
levels of performance, or the occurrence of other events as determined by the
Administrator.
(ff) "Plan" means this 2007 Equity Incentive Plan.
(gg) "Restricted Stock" means Shares issued pursuant to a Restricted
Stock award under Section 8 or issued pursuant to the early exercise of an
option.
(hh) "Restricted Stock Unit" means an Award that the Administrator
permits to be paid in installments or on a deferred basis pursuant to Sections 4
and 11 of the Plan.
(ii) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 1 6b-3, as in effect when discretion is being exercised with
respect to the Plan.
(jj) "Section 16(b)" means Section 16(b) of the Exchange Act.
(kk) "Service Provider" means an Employee, Director or Consultant.
(ll) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.
4
(mm) "Stock Appreciation Right" or "SAR" means an Award that pursuant
to Section 9 of the Plan is designated as a SAR.
(nn) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. Subject to the provisions of Section 15
of the Plan, the maximum aggregate number of Shares that may be issued under the
Plan is 10,799,685 plus an annual increase of on the first day of each Fiscal
Year, beginning in 2007, equal to 2% of the outstanding Shares on the first day
of the Fiscal Year; or such lesser amount of Shares as determined by the Board.
The Shares may be authorized, but unis sued, or reacquired Common Stock. Shares
shall not be deemed to have been issued pursuant to the Plan with respect to any
portion of an Award that is settled in cash. Upon payment in Shares pursuant to
the exercise of an Award, the number of Shares available for issuance under the
Plan shall be reduced only by the number of Shares actually issued in such
payment. If a Participant pays the exercise price (or purchase price, if
applicable) of an Award through the tender of Shares, or if Shares are tendered
or withheld to satisfy any Company withholding obligations, the number of Shares
so tendered or withheld shall again be available for issuance pursuant to future
Awards under the Plan.
(b) Lapsed Awards. If any outstanding Award expires or is terminated
or canceled without having been exercised or settled in full, or if Shares
acquired pursuant to an Award subject to forfeiture or repurchase are forfeited
or repurchased by the Company, the Shares allocable to the terminated portion of
such Award or such forfeited or repurchased Shares shall again be available for
grant under the Plan.
(c) Share Reserve. The Company, during the term of the Plan, shall at
all times reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with
respect to different groups of Service Providers may administer the Plan.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable and necessary to qualify Awards granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan will be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
will be structured to satisfy the requirements for exemption under Rule 1 6b-3.
5
(iv) Other Administration. Other than as provided above, the Plan
will be administered by (A) the Board or (B) a Committee, which committee will
be constituted to satisfy Applicable Laws.
(v) Delegation of Authority for Day-to-Day
Administration. Except to the extent
prohibited by Applicable Law, the Administrator may delegate to one or more
individuals the day-to-day administration of the Plan and any of the functions
assigned to it in this Plan. Such delegation may be revoked at any time.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator will have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted
hereunder;
(iii) to determine the number of Shares to be covered by each
Award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Awards may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture or repurchase restrictions, and any
restriction or limitation regarding any Award or the Shares relating thereto,
based in each case on such factors as the Administrator, in its sole discretion,
will determine;
(vi) to reduce the exercise price of any Award to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Award shall have declined since the date the Award was granted;
(vii) to institute an Exchange Program;
(viii) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws and/or
qualifying for preferred tax treatment under applicable foreign tax laws;
(x) to modify or amend each Award (subject to Section 18(c) of the
Plan), including (A) the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the
Plan and (B) accelerate the satisfaction of any vesting criteria or waiver of
forfeiture or repurchase restrictions;
6
(xi) to allow Participants to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares or cash to be issued
upon exercise or vesting of an Award that number of Shares or cash having a Fair
Market Value equal to the minimum amount required to be withheld. The Fair
Market Value of any Shares to be withheld will be determined on the date that
the amount of tax to be withheld is to be determined. All elections by a
Participant to have Shares or cash withheld for this purpose will be made in
such form and under such conditions as the Administrator may deem necessary or
advisable;
(xii) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Award previously granted by
the Administrator,
(xiii) to allow a Participant to defer the receipt of the payment
of cash or the delivery of Shares that would otherwise be due to such
Participant under an Award;
(xiv) to determine whether Awards will be settled in Shares, cash
or in any combination thereof;
(xv) to determine whether Awards will be adjusted for Dividend
Equivalents;
(xvi) to create Other Stock Based Awards for issuance under the
Plan;
(xvii) to establish a program whereby Service Providers designated
by the Administrator can reduce compensation otherwise payable in cash in
exchange for Awards under the Plan;
(xviii) to impose such restrictions, conditions or limitations as
it determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by the Participant of any Shares
issued as a result of or under an Award, including without limitation, (A)
restrictions under an insider trading policy, and (B) restrictions as to the use
of a specified brokerage firm for such resales or other transfers; and
(xix) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations will be final and binding on all
Participants and any other holders of Awards.
5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Stock
Appreciation Rights, Performance Units, Performance Shares, Restricted Stock
Units and Other Stock Based Awards may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.
7
6. Limitations.
(a) ISO $100,000 Rule. Each Option will be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in
which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.
(b) Special Limits for Grants of Options and Stock Appreciation
Rights. Subject to Section 15 of the Plan, the following special limits shall
apply to Shares available for Awards under the Plan:
(i) the maximum number of Shares that may be subject to Options
granted to any Service Provider in any calendar year shall equal to 20,000
Shares, plus any Shares which were available under this Section 6(b)(i) for
Awards to such Service Provider in any prior calendar year but which were not
covered by such Awards; and
(ii) the maximum number of Shares that may be subject to Stock
Appreciation Rights granted to any Service Provider in any calendar year shall
equal to 20,000 Shares, plus any Shares which were available under this Section
6(b)(ii) for Awards to such Service Provider in any prior calendar year but
which were not covered by such Awards.
(c) No Rights as a Service Provider. Neither the Plan nor any Award
shall confer upon a Participant any right with respect to continuing his or her
relationship as a Service Provider, nor shall they interfere in any way with the
right of the Participant or the right of the Company or its Parent or
Subsidiaries to terminate such relationship at any time, with or without cause.
7. Stock Options.
(a) Term of Option. The term of each Option will be stated in the
Award Agreement. In the case of an Incentive Stock Option, the term will be ten
(10) years from the date of grant or such shorter term as may be provided in the
Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a
Participant who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option will be five (5) years from the date of grant or such
shorter term as may be provided in the Award Agreement.
(b) Option Exercise Price and Consideration.
(i) Exercise Price. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following:
8
(1) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price will be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price will
be no less than 100% of the Fair Market Value per Share on the date of grant.
(2) In the case of a Nonstatutory Stock Option, the per Share
exercise price will be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162 (m) of the Code, the per Share
exercise price will be no less than 100% of the Fair Market Value per Share on
the date of grant.
(3) Notwithstanding the foregoing, Incentive Stock Options may
be granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and
in a manner consistent with, Section 424(a) of the Code.
(ii) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator will fix the period within which the Option may be
exercised and will determine any conditions that must be satisfied before the
Option may be exercised. The Administrator, in its sole discretion, may
accelerate the satisfaction of such conditions at any time.
(c) Form of Consideration. The Administrator will determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration, to the extent permitted by Applicable Laws, may consist entirely
of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which meet the conditions established by the
Administrator to avoid adverse accounting consequences (as determined by the
Administrator);
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
9
(vi) a reduction in the amount of any Company liability to the
Participant, including any liability attributable to the Participant's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(d) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder will be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Award Agreement. An Option may not be exercised for a fraction of a
Share.
An Option will be deemed exercised when the Company receives: (x) written or
electronic notice of exercise (in accordance with the Award Agreement) from the
person entitled to exercise the Option, and (y) full payment for the Shares with
respect to which the Option is exercised (including provision for any applicable
tax withholding). Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Award Agreement and
the Plan. Shares issued upon exercise of an Option will be issued in the name of
the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Until the Shares are issued (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 will exist with respect to the Awarded Stock,
notwithstanding the exercise of the Option. The Company will issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 15 of the Plan or
the applicable Award Agreement.
Exercising an Option in any manner will decrease the number of Shares
thereafter available for sale under the Option, by the number of Shares as to
which the Option is exercised.
(ii) Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant's
death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In
the absence of a specified time in the Award Agreement, the Option will remain
exercisable for three (3) months following the Participant's termination. Unless
otherwise provided by the Administrator, if on the date of termination the
Participant is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option will revert to the Plan. If after termination
the Participant does not exercise his or her Option as to all of the vested
Shares within the time specified by the Administrator, the Option will
terminate, and the remaining Shares covered by such Option will revert to the
Plan.
10
(iii) Disability of Participant. If a Participant ceases to be a
Service Provider as a result of the Participant's Disability, the Participant
may exercise his or her Option within such period of time as is specified in the
Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant's termination. Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
revert to the Plan. If after termination the Participant does not exercise his
or her Option as to all of the vested Shares within the time specified by the
Administrator, the Option will terminate, and the remaining Shares covered by
such Option will revert to the Plan.
(iv) Death of Participant. If a Participant dies while a Service
Provider, the Option may be exercised following the Participant's death within
such period of time as is specified in the Award Agreement to the extent that
the Option is vested on the date of death (but in no event may the Option be
exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant's designated beneficiary, provided such
beneficiary has been designated prior to the Participant's death in a form
acceptable to the Administrator. If no such beneficiary has been designated by
the Participant, then such Option may be exercised by the personal
representative of the Participant's estate or by the persons) to whom the Option
is transferred pursuant to the Participant's will or in accordance with the laws
of descent and distribution. In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant's death. Unless otherwise provided by the Administrator, if at
the time of death the Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert
to the Plan. If the Option is not exercised as to all of the vested Shares
within the time specified by the Administrator, the Option will terminate, and
the remaining Shares covered by such Option will revert to the Plan.
8. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Administrator, at any time and from time to time, may grant Shares
of Restricted Stock to Service Providers in such amounts as the Administrator,
in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be
evidenced by an Award Agreement that will specify the Period of Restriction, the
number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. Unless the Administrator
determines otherwise, Shares of Restricted Stock will be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 8, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.
11
(d) Other Restrictions. The Administrator, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.
(e) Removal of Restrictions. Except as otherwise provided in this
Section 8, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan will be released from escrow as soon as practicable after
the last day of the Period of Restriction. The Administrator, in its discretion,
may accelerate the time at which any restrictions will lapse or be removed.
(f) Voting Rights. During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Administrator determines
otherwise.
(g) Dividends and Other Distributions. During the Period of
Restriction, Service Providers holding Shares of Restricted Stock will be
entitled to receive all dividends and other distributions paid with respect to
such Shares unless otherwise provided in the Award Agreement. If any such
dividends or distributions are paid in Shares, the Shares will be subject to the
same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid.
(h) Return of Restricted Stock to Company. On the date set forth in
the Award Agreement, the Restricted Stock for which restrictions have not lapsed
will revert to the Company and again will become available for grant under the
Plan.
9. Stock Appreciation Rights.
(a) Grant of SARs. Subject to the terms and conditions of the Plan, a
SAR may be granted to Service Providers at any time and from time to time as
will be determined by the Administrator, in its sole discretion.
(b) Number of Shares. The Administrator will have complete discretion
to determine the number of SARs granted to any Service Provider.
(c) Exercise Price and Other Terms. The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of SARs granted under the Plan.
(d) Exercise of SARs. SARs will be exercisable on such terms and
conditions as the Administrator, in its sole discretion, will determine. The
Administrator, in its sole discretion, may accelerate exercisability at any
time.
(e) SAR Agreement. Each SAR grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.
(f) Expiration of SARs. An SAR granted under the Plan will expire upon
the date determined by the Administrator, in its sole discretion, and set forth
in the Award Agreement. Notwithstanding the foregoing, the rules of Sections
7(d)(ii), 7(d)(iii) and 7(d)(iv) also will apply to SARs.
12
(g) Payment of SAR Amount. Upon exercise of an SAR, a Participant will
be entitled to receive payment from the Company in an amount determined by
multiplying:
(i) The difference between the Fair Market Value of a Share on the
date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Administrator, the payment upon SAR exercise may be
in cash, in Shares of equivalent value, or in some combination thereof.
10. Performance Units and Performance Shares.
(a) Grant of Performance Units/Shares. Subject to the terms and
conditions of the Plan, Performance Units and Performance Shares may be granted
to Service Providers at any time and from time to time, as will be determined by
the Administrator, in its sole discretion. The Administrator will have complete
discretion in determining the number of Performance Units and Performance Shares
granted to each Participant.
(b) Value of Performance Units/Shares. Each Performance Unit will have
an initial value that is established by the Administrator on or before the date
of grant. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
(c) Performance Objectives and Other Terms. The Administrator will set
performance objectives in its discretion which, depending on the extent to which
they are met, will determine the number or value of Performance Units/Shares
that will be paid out to the Participant. The time period during which the
performance objectives must be met will be called the "Performance Period." Each
Award of Performance Units/Shares will be evidenced by an Award Agreement that
will specify the Performance Period, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. The Administrator may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals (including solely continued service), applicable federal or
state securities laws, or any other basis determined by the Administrator in its
discretion.
(d) Earning of Performance Units/Shares. After the applicable
Performance Period has ended, the holder of Performance Units/Shares will be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance objectives have been achieved.
After the grant of a Performance Unit/Share, the Administrator, in its sole
discretion, may reduce or waive any performance objectives for such Performance
Unit/Share.
(e) Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares will be made after the expiration of the
applicable Performance Period at the time determined by the Administrator. The
Administrator, in its sole discretion, may pay earned Performance Units/Shares
in the form of cash, in Shares (which have an aggregate Fair Market Value equal
to the value of the earned Performance Units/Shares at the close of the
applicable Performance Period) or in a combination of cash and Shares.
13
(f) Cancellation of Performance Units/Shares. On the date set forth in
the Award Agreement, all unearned or unvested Performance Units/Shares will be
forfeited to the Company, and again will be available for grant under the Plan.
11. Restricted Stock Units. Restricted Stock Units shall consist of a
Restricted Stock, Performance Share or Performance Unit Award that the
Administrator, in its sole discretion permits to be paid out in installments or
on a deferred basis, in accordance with rules and procedures established by the
Administrator
12. Other Stock Based Awards. Other Stock Based Awards may be granted
either alone, in addition to, or in tandem with, other Awards granted under the
Plan and/or cash awards made outside of the Plan. The Administrator shall have
authority to determine the Service Providers to whom and the time or times at
which Other Stock Based Awards shall be made, the amount of such Other Stock
Based Awards, and all other conditions of the Other Stock Based Awards including
any dividend and/or voting rights.
13. Leaves of Absence. Unless the Administrator provides otherwise,
vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence and will resume on the date the Participant returns to work on a regular
schedule as determined by the Company; provided, however, that no vesting credit
will be awarded for the time vesting has been suspended during such leave of
absence. A Service Provider will not cease to be an Employee in the case of (i)
any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, or any Subsidiary. For
purposes of Incentive Stock Options, no leave of absence may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by
the Company is not so guaranteed, then three months following the 91st day of
such leave any Incentive Stock Option held by the Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option.
14. Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as
the Administrator deems appropriate.
14
15. Adjustments; Dissolution or Liquidation; Change in Control.
(a) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs such that an adjustment is
determined by the Administrator (in its sole discretion) to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Administrator shall, in
such manner as it may deem equitable, adjust the number and class of Shares
which may be delivered under the Plan, the number, class and price of Shares
subject to outstanding awards, and the numerical limits in Section 3.
Notwithstanding the preceding, the number of Shares subject to any Award always
shall be a whole number.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for a Participant
to have the right to exercise his or her Award, to the extent applicable, until
ten (10) days prior to such transaction as to all of the Awarded Stock covered
thereby, including Shares as to which the Award would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option or forfeiture rights applicable to any Award shall lapse 100%,
and that any Award vesting shall accelerate 100%, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised or vested, an
Award will terminate immediately prior to the consummation of such proposed
action.
(c) Change in Control.
(i) Stock Options and SARs. In the event of a Change in Control,
each outstanding Option and SAR shall be assumed or an equivalent option or SAR
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. Unless determined otherwise by the Administrator, in the
event that the successor corporation refuses to assume or substitute for the
Option or SAR, the Participant shall fully vest in and have the right to
exercise the Option or SAR as to all of the Awarded Stock, including Shares as
to which it would not otherwise be vested or exercisable. If an Option or SAR is
not assumed or substituted in the event of a Change in Control, the
Administrator shall notify the Participant in writing or electronically that the
Option or SAR shall be exercisable, to the extent vested, for a period of up to
fifteen (15) days from the date of such notice, and the Option or SAR shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or SAR shall be considered assumed if, following the
Change in Control, the option or SAR confers the right to purchase or receive,
for each Share of Awarded Stock subject to the Option or SAR immediately prior
to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the Change in Control is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or SAR, for each share of Awarded Stock
subject to the Option or SAR, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything herein to the contrary, an Award that vests, is earned,
or is paid-out upon the satisfaction of one or more performance goals will not
be considered assumed if the Company or its successor modifies any of such
performance goals without the Participant's consent; provided, however, a
modification to such performance goals only to reflect the successor
corporation's post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.
15
(ii) Restricted Stock, Performance Shares, Performance Units,
Restricted Stock Units and Other Stock Based Awards. In the event of a Change in
Control, each outstanding Award of Restricted Stock, Performance Share,
Performance Unit, Other Stock Based Award and Restricted Stock Unit shall be
assumed or an equivalent Restricted Stock, Performance Share, Performance Unit,
Other Stock Based Award and Restricted Stock Unit award substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation.
Unless determined otherwise by the Administrator, in the event that the
successor corporation refuses to assume or substitute for the Award, the
Participant shall fully vest in the Award including as to Shares/Units that
would not otherwise be vested, all applicable restrictions will lapse, and all
performance objectives and other vesting criteria will be deemed achieved at
targeted levels. For the purposes of this paragraph, an Award of Restricted
Stock, Performance Shares, Performance Units, Other Stock Based Awards and
Restricted Stock Units shall be considered assumed if, following the Change in
Control, the award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the Change in Control (and if a
Restricted Stock Unit or Performance Unit, for each Share as determined based on
the then current value of the unit), the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide that
the consideration to be received for each Share (and if a Restricted Stock Unit
or Performance Unit, for each Share as determined based on the then current
value of the unit) be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Change in Control. Notwithstanding anything
herein to the contrary, an Award that vests, is earned, or is paid-out upon the
satisfaction of one or more performance goals will not be considered assumed if
the Company or its successor modifies any of the performance goals without the
Participant's consent; provided, however, a modification to the performance
goals only to reflect the successor corporation's post-Change in Control
corporate structure will not be deemed to invalidate an otherwise valid Award
assumption.
(iii) Outside Director Awards. Notwithstanding any provision of
Section 15(c)(i) or 15(c)(ii) to the contrary, with respect to Awards granted to
an Outside Director that are assumed or substituted for, if on the date of or
following the assumption or substitution the Participant's status as a Director
or a director of the successor corporation, as applicable, is terminated other
than upon a voluntary resignation by the Participant, then the Participant shall
fully vest in and have the right to exercise his or her Options and Stock
Appreciation Rights as to all of the Awarded Stock, including Shares as to which
such Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock and Restricted Stock Units, as applicable, will lapse, and,
with respect to Performance Shares, Performance Units, and Other Stock Based
Awards, all performance goals and other vesting criteria will be deemed achieved
at target levels and all other terms and conditions met.
16
16. Date of Grant. The date of grant of an Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination will be provided to each Participant within a
reasonable time after the date of such grant.
17. Term of Plan. Subject to Section 22 of the Plan, the Plan will become
effective upon its adoption by the Board. It will continue in effect for a term
of ten (10) years unless terminated earlier under Section 18 of the Plan.
18. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Stockholder Approval. The Company will obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension, or termination of the Plan will impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Administrator, which agreement must be in writing and signed by the Participant
and the Company. Termination of the Plan will not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.
19. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws and will be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise or
receipt of an Award, the Company may require the person exercising or receiving
such Award to represent and warrant at the time of any such exercise or receipt
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
20. Severability. Notwithstanding any contrary provision of the Plan
or an Award to the contrary, if any one or more of the provisions (or any part
thereof) of this Plan or the Awards shall be held invalid, illegal, or
unenforceable in any respect, such provision shall be modified so as to make it
valid, legal, and enforceable, and the validity, legality, and enforceability of
the remaining provisions (or any part thereof) of the Plan or Award, as
applicable, shall not in any way be affected or impaired thereby.
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21. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, will relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.
22. Stockholder Approval. The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval will be obtained in the manner and to the
degree required under Applicable Laws.
18
Mark, Sign, Date and Return |X|
the Proxy Card Promptly Votes must be indicated
Using the Enclosed Envelope. (x) in Black or Blue ink.
FOR AGAINST
1. To ratify the appointment of Mr. Yonghua Lu, |_| |_|
Mr. Hanfei Wang, Ms. Xihong Deng, Mr. Sven
Michael Hansen, Mr. Terry McCarthy, Mr. Ernst
A. Butler and Mr. Thomas J. Toy as directors
of the Company and to continue to hold office
for a three-year term beginning with their
original contract date or until his or her
successor is elected and qualified.
2. To elect one director, Mr. Gu, to hold office |_| |_|
for a three-year term starting from June 28,
2007 or until his successor is elected and
qualified.
3. To approve the adoption of a new equity |_| |_|
incentive plan of the Company (the "2007
Equity Incentive Plan").
4. To approve the appointment of Ernst & Young |_| |_|
Hua Ming as independent auditors of the
Company for the year ending December 31,
2007.
To change your address, please mark this box. |_|
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The Voting Instruction must be signed by the person in whose name the relevant
Receipt is registered on the books of the Depositary. In the case of a
Corporation, the Voting Instructionmust be executed by a duly authorized Officer
or Attorney.
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Date Share Owner sign here Co-Owner sign here
SOLARFUN POWER HOLDINGS CO., LTD.
Instructions to The Bank of New York, as Depositary
(Must be received prior to 5:00 PM (New York Time) on August 15, 2007)
The undersigned registered holder of American Depositary Receipts hereby
requests and instructs The Bank of New York, as Depositary, to endeavor, in so
far as practicable, to vote or cause to be voted the amount of shares or other
Deposited Securities represented by such Receipt of Solarfun Power Holdings Co.,
Ltd. registered in the name of the undersigned on the books of the Depositary as
of the close of business July 11, 2007 (US Record Date) at the Annual General
Meeting of Shareholders of Solarfun Power Holdings Co., Ltd. to be held on
August 22, 2007 in Shanghai, China.
NOTE:
1. Please direct the Depositary how it is to vote by placing an X in the
appropriate box opposite the resolution.
2. It is understood that, if this form is not signed and returned, the
Depositary will not vote such items.
To include any comments, please mark this box. |_|
Please complete and date this proxy on the reverse side and return it promptly
in the accompanying envelope.