EXHIBIT 10.7
WESTERN EXPRESS HOLDINGS, INC.
2005 OMNIBUS INCENTIVE PLAN
ARTICLE I
PURPOSE AND EFFECTIVE DATE
Section 1.1. Purpose. The purpose of the Plan is to provide annual
incentives to certain Employees, Directors, and Consultants of the Company in a
manner designed to reinforce the Company's performance goals; to link a
significant portion of Participants' compensation to the achievement of such
goals; and to continue to attract, motivate, and retain key personnel on a
competitive basis.
Section 1.2. Effective Date. The Plan was adopted by the Board of Directors
effective ________, 2005.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
Section 2.1. Certain Defined Terms. As used in this Plan, unless the
context otherwise requires, the following terms shall have the following
meanings:
(a) "Award" means any form of stock option, stock appreciation right,
Stock Award, Restricted Stock Unit Award, performance unit, Performance Award,
or other incentive award granted under the Plan, whether singly, in combination,
or in tandem, to a Participant by the Committee pursuant to such terms,
conditions, restrictions, and/or limitations, if any, as the Committee may
establish by the Award Notice or otherwise.
(b) "Award Notice" means the document establishing the terms,
conditions, restrictions, and/or limitations of an Award in addition to those
established by this Plan and by the Committee's exercise of its administrative
powers. The Committee will establish the form of the document in the exercise of
its sole and absolute discretion.
(c) "Board" means the Board of Directors of the Company.
(d) "CEO" means the Chief Executive Officer of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, including the regulations thereunder and any successor provisions
and the regulations thereto.
(f) "Committee" means (i) prior to the IPO Date, the Board, and (ii)
from and after the IPO Date, the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan;
provided that, from and after the IPO
Date, the Committee shall consist of two or more Directors, all of whom are both
a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange
Act and an "outside director" within the meaning of the definition of such term
as contained in Proposed Treasury Regulation Section 1.162-27(e)(3), or any
successor definition adopted under Section 162(m) of the Code.
(g) "Common Stock" means the Common Stock, par value $0.001 per share,
of the Company.
(h) "Company" means Western Express Holdings, Inc., a Nevada
corporation, and its Subsidiaries.
(i) "Consultants" means the consultants, advisors, and independent
contractors retained by the Company.
(j) "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(k) "Director" means a non-Employee member of the Board.
(l) "Effective Date" means the date an Award is determined to be
effective by the Committee upon its grant of such Award, which date shall be set
forth in the applicable Award Notice.
(m) "Employee" means any person employed by the Company on a full or
part-time basis.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including the rules thereunder and any successor
provisions and the rules thereto.
(o) "Fair Market Value" means the closing price of the Common Stock on
the principal national securities exchange on which the Common Stock is then
listed or admitted to trading, and the closing price shall be the last reported
sale price, regular way, on such date (or, if no sale takes place on such date,
the last reported sale price, regular way, on the next preceding date on which
such sale took place), as reported by such exchange. If the Common Stock is not
then so listed or admitted to trading on a national securities exchange, then
Fair Market Value shall be the closing price (the last reported sale price
regular way) of the Common Stock in the over-the-counter market as reported by
the National Association of Securities Dealers Automated Quotation System
("NASDAQ"), if the closing price of the Common Stock is then reported by NASDAQ.
If the Common Stock closing price is not then reported by NASDAQ, then Fair
Market Value shall be the mean between the representative closing bid and
closing asked prices of the Common Stock in the over-the-counter market as
reported by NASDAQ. If the Common Stock bid and asked prices are not then
reported by NASDAQ, then Fair Market Value shall be the quote furnished by any
member of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose. If no member of the
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National Association of Securities Dealers, Inc. then furnishes quotes with
respect to the Common Stock, then Fair Market Value shall be the value
determined by the Committee in good faith.
(p) "IPO Date" means the date upon which the Common Stock first trades
on the Nasdaq National Market following the initial public offering of shares of
Common Stock pursuant to an effective registration statement filed under the
Securities Act.
(q) "Negative Discretion" means the discretion authorized by the Plan
to be applied by the Committee in determining the size of a Performance Award
for a Performance Period if, in the Committee's sole judgment, such application
is appropriate. Negative Discretion may only be used by the Committee to
eliminate or reduce the size of a Performance Award. In no event shall any
discretionary authority granted to the Committee by the Plan, including, but not
limited to Negative Discretion, be used to: (a) grant Performance Awards for a
Performance Period if the Performance Goals for such Performance Period have not
been attained under the applicable Performance Formula; or (b) increase a
Performance Award above the maximum amount payable under Section 6.3 of the
Plan.
(r) "Participant" means either an Employee, Director, or Consultant to
whom an Award has been granted under the Plan.
(s) "Performance Awards" means the Stock Awards and performance units
granted pursuant to Article VII. Performance Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(t) "Performance Criteria" means the one or more criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
a Performance Period. The Performance Criteria that will be used to establish
such Performance Goal(s) shall be expressed in terms of the attainment of
specified levels of one or any variation or combination of the following:
revenues (including, without limitation, measures such as revenue per mile
(loaded or total) or revenue per tractor), net revenues, fuel surcharges,
accounts receivable collection or days sales outstanding, cost reductions and
savings (or limits on cost increases), safety and claims (including, without
limitation, measures such as accidents per million miles and number of
significant accidents), operating income, operating ratio, income before taxes,
net income, earnings before interest and taxes (EBIT), earnings before interest,
taxes, depreciation, and amortization (EBITDA), adjusted net income, earnings
per share, adjusted earnings per share, stock price, working capital measures,
return on assets, return on revenues, debt-to-equity or debt-to-capitalization
(in each case with or without lease adjustment), productivity and efficiency
measures (including, without limitation, measures such as driver turnover,
trailer to tractor ratio, and tractor to non-driver ratio), cash position,
return on shareholders' equity, return on invested capital, cash flow measures
(including, without limitation, free cash flow), market share, shareholder
return, economic value added, or completion of acquisitions (either with or
without specified size). In addition, the Committee may establish, as additional
Performance Criteria, the attainment by a Participant of one or more personal
objectives and/or goals that the Committee deems appropriate, including but not
limited to implementation of Company policies, negotiation of significant
corporate transactions, development of long-term business goals or strategic
plans
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for the Company, or the exercise of specific areas of managerial responsibility.
Each of the Performance Criteria may be expressed on an absolute and/or relative
basis with respect to one or more peer group companies or indices, and may
include comparisons with past performance of the Company (including one or more
divisions thereof, if any) and/or the current or past performance of other
companies.
(u) "Performance Formula" means, for a Performance Period, the one or
more objective formulas (expressed as a percentage or otherwise) applied against
the relevant Performance Goal(s) to determine, with regard to the Award of a
particular Participant, whether all, some portion but less than all, or none of
the Award has been earned for the Performance Period.
(v) "Performance Goals" means, for a Performance Period, the one or
more goals established by the Committee for the Performance Period based upon
the Performance Criteria. Any Performance Goal shall be established in a manner
such that a third party having knowledge of the relevant performance results
could calculate the amount to be paid to the Participant. For any Performance
Period, the Committee is authorized at any time during the initial time period
permitted by Section 162(m) of the Code, or at any time thereafter, in its sole
and absolute discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period in order to prevent the dilution or enlargement
of the rights of Participants (i) in the event of, or in anticipation of, any
unusual or extraordinary corporate item, transaction, event, or development;
(ii) in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions; and (iii) in view of the
Committee's assessment of the business strategy of the Company, performance of
comparable organizations, economic and business conditions, and any other
circumstances deemed relevant.
(w) "Performance Period" means the one or more periods of time, which
may be of varying and overlapping durations, as the Committee may select, over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant's right to and the payment of a Performance
Award.
(x) "Plan" means this 2005 Omnibus Incentive Plan, as amended from
time to time.
(y) "Restricted Stock Unit Award" means an Award granted pursuant to
Article XI in the form of a right to receive shares of Common Stock on a future
date.
(z) "Securities Act" means the Securities Act of 1933, as amended from
time to time, including the rules thereunder and any successor provisions and
the rules thereto.
(aa) "Stock Award" means an award granted pursuant to Article X in the
form of shares of Common Stock, restricted shares of Common Stock, and/or units
of Common Stock.
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(bb) "Subsidiary" means a corporation or other business entity in
which the Company directly or indirectly has an ownership interest of twenty
percent (20%) or more, except that with respect to incentive stock options,
"Subsidiary" shall mean "subsidiary corporation" as defined in Section 424(f) of
the Code.
Section 2.2. Other Defined Terms. Unless the context otherwise requires,
all other capitalized terms shall have the meanings set for in the other
Articles and Sections of this Plan.
Section 2.3. Construction. In any necessary construction of a provision of
this Plan, the masculine gender may include the feminine, and the singular may
include the plural, and vice versa.
ARTICLE III
ELIGIBILITY
Section 3.1. In General. Subject to Section 3.2 and Article IV, all
Employees, Directors, and Consultants are eligible to participate in the Plan.
The Committee may select, from time to time, Participants from those Employees,
Directors, and Consultants.
Section 3.2. Incentive Stock Options. Only Employees shall be eligible to
receive "incentive stock options" (within the meaning of Section 422 of the
Code).
ARTICLE IV
PLAN ADMINISTRATION
Section 4.1. Responsibility. The Committee shall have total and exclusive
responsibility to control, operate, manage, and administer the Plan in
accordance with its terms.
Section 4.2. Authority of the Committee. The Committee shall have all the
authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to the Plan. Without limiting the generality of
the preceding sentence, the Committee shall have the exclusive right to:
(a) determine eligibility for participation in the Plan;
(b) select the Participants and determine the type of Awards to be
made to Participants, the number of shares subject to Awards and the terms,
conditions, restrictions, and limitations of the Awards, including, but not by
way of limitation, restrictions on the transferability of Awards and conditions
with respect to continued employment, performance criteria, confidentiality, and
non-competition;
(c) interpret the Plan;
(d) construe any ambiguous provision, correct any default, supply any
omission, and reconcile any inconsistency of the Plan;
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(e) issue administrative guidelines as an aid to administer the Plan
and make changes in such guidelines as it from time to time deems proper;
(f) make regulations for carrying out the Plan and make changes in
such regulations as it from time to time deems proper;
(g) to the extent permitted under the Plan, grant waivers of Plan
terms, conditions, restrictions, and limitations;
(h) promulgate rules and regulations regarding treatment of Awards of
a Participant under the Plan in the event of such Participant's death,
disability, retirement, termination from the Company, or breach of agreement by
the Participant, or in the event of a change of control of the Company;
(i) accelerate the vesting, exercise, or payment of an Award or the
Performance Period of an Award when such action or actions would be in the best
interest of the Company;
(j) establish such other types of Awards, besides those specifically
enumerated in Article V hereof, which the Committee determines are consistent
with the Plan's purpose;
(k) subject to Section 4.3, grant Awards in replacement of Awards
previously granted under this Plan or any other executive compensation plan of
the Company;
(l) establish and administer the Performance Goals and certify
whether, and to what extent, they have been attained;
(m) determine the terms and provisions of any agreements entered into
hereunder;
(n) take any and all other action it deems necessary or advisable for
the proper operation or administration of the Plan; and
(o) make all other determinations it deems necessary or advisable for
the administration of the Plan, including factual determinations.
The decisions of the Committee and its actions with respect to the Plan shall be
final, binding, and conclusive upon all persons having or claiming to have any
right or interest in or under the Plan.
Section 4.3. Option Repricing. Except for adjustments pursuant to Section
6.2, the Committee shall not reprice any stock options and/or stock appreciation
rights unless such action is approved by the Company's stockholders. For
purposes of the Plan, the term "reprice" shall mean the reduction, directly or
indirectly, in the per-share exercise price of an outstanding stock
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option(s) and/or stock appreciation right(s) issued under the Plan by amendment,
cancellation, or substitution.
Section 4.4. Section 162(m) of the Code. With regard to Awards issued to
Covered Employees that are intended to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code, the Plan shall, for
all purposes, be interpreted and construed with respect to such Awards in the
manner that would result in such interpretation or construction satisfying the
exemptions available under Section 162(m) of the Code.
Section 4.5. Action by the Committee. Except as otherwise provided by
Section 4.6, the Committee may act only by a majority of its members. Any
determination of the Committee may be made, without a meeting, by a writing or
writings signed by all of the members of the Committee.
Section 4.6. Allocation and Delegation of Authority. The Committee may
allocate all or any portion of its responsibilities and powers under the Plan to
any one or more of its members, the CEO, or other senior members of management
as the Committee deems appropriate, and may delegate all or any part of its
responsibilities and powers to any such person or persons; provided, that any
such allocation or delegation be in writing; provided, further, that from and
after the IPO Date, only the Committee, or other committee consisting of two or
more Directors, all of whom are both "Non-Employee Directors" within the meaning
of Rule 16b-3 under the Exchange Act and "outside directors" within the meaning
of the definition of such term as contained in Proposed Treasury Regulation
Section 1.162-27(e)(3), or any successor definition adopted under Section 162(m)
of the Code, may select and grant Awards to Participants who are subject to
Section 16 of the Exchange Act or are Covered Employees. The Committee may
revoke any such allocation or delegation at any time for any reason with or
without prior notice.
ARTICLE V
FORM OF AWARDS
Section 5.1. In General. Awards may, at the Committee's sole discretion, be
paid in the form of Performance Awards pursuant to Article VII, stock options
pursuant to Article VIII, stock appreciation rights pursuant to Article IX,
Stock Awards pursuant to Article X, Restricted Stock Unit Awards pursuant to
Article XI, performance units pursuant to Article XII, any form established by
the Committee pursuant to Section 4.2(j), or a combination thereof. Each Award
shall be subject to the terms, conditions, restrictions, and limitations of the
Plan and the Award Notice for such Award. Awards under a particular Article of
the Plan need not be uniform and Awards under two or more Articles may be
combined into a single Award Notice. Any combination of Awards may be granted at
one time and on more than one occasion to the same Participant.
Section 5.2. Foreign Jurisdictions.
(a) Special Terms. In order to facilitate the making of any Award to
Participants who are employed or retained by the Company outside the United
States as
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Employees, Directors, or Consultants (or who are foreign nationals temporarily
within the United States), the Committee may provide for such modifications and
additional terms and conditions ("Special Terms") in Awards as the Committee may
consider necessary or appropriate to accommodate differences in local law,
policy, or custom or to facilitate administration of the Plan. The Special Terms
may provide that the grant of an Award is subject to (i) applicable governmental
or regulatory approval or other compliance with local legal requirements and/or
(ii) the execution by the Participant of a written instrument in the form
specified by the Committee, and that in the event such conditions are not
satisfied, the grant shall be void. The Special Terms may also provide that an
Award shall become exercisable or redeemable, as the case may be, if an
Employee's employment or Director or Consultant's relationship with the Company
ends as a result of workforce reduction, realignment, or similar measure and the
Committee may designate a person or persons to make such determination for a
location. The Committee may adopt or approve sub-plans, appendices or
supplements to, or amendments, restatements, or alternative versions of, the
Plan as it may consider necessary or appropriate for purposes of implementing
any Special Terms, without thereby affecting the terms of the Plan as in effect
for any other purpose; provided, however, no such sub-plans, appendices or
supplements to, or amendments, restatements, or alternative versions of, the
Plan shall: (x) increase the limitations contained in Section 6.3; (y) increase
the number of available shares under Section 6.1; or (z) cause the Plan to cease
to satisfy any conditions of Rule 16b-3 under the Exchange Act.
(b) Currency Effects. Unless otherwise specifically determined by the
Committee, all Awards and payments pursuant to such Awards shall be determined
in United States currency. The Committee shall determine, in its discretion,
whether and to the extent any payments made pursuant to an Award shall be made
in local currency, as opposed to United States dollars. In the event payments
are made in local currency, the Committee may determine, in its discretion and
without liability to any Participant, the method and rate of converting the
payment into local currency.
ARTICLE VI
SHARES SUBJECT TO PLAN
Section 6.1. Available Shares. The maximum aggregate number of shares of
Common Stock which shall be available for the grant of Awards under the Plan
(including incentive stock options) during its term shall not exceed 1,200,000
(the "Share Reserve"); provided, however, that no more than 600,000 shares of
such maximum number of shares of Common Stock may be used for Awards other than
stock options or stock appreciation rights. The Share Reserve shall be subject
to adjustment as provided in Section 6.2. Any shares of Common Stock related to
Awards that terminate by expiration, forfeiture, cancellation, or otherwise
without the issuance of such shares, are settled in cash in lieu of Common
Stock, or are exchanged with the Committee's permission for Awards not involving
Common Stock shall be available again for grant under the Plan. Moreover, if the
exercise price of any Award granted under the Plan or the tax withholding
requirements with respect to any Award granted under the Plan are satisfied by
tendering shares of Common Stock to the Company (by either actual delivery or by
attestation), only the number of shares of Common Stock issued net of the shares
of Common Stock tendered will be deemed delivered for purposes of determining
the Share Reserve available for delivery
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under the Plan. The shares of Common Stock available for issuance under the Plan
may be authorized and unissued shares or treasury shares, including shares
purchased in open market or private transactions. For the purpose of computing
the total number of shares of Common Stock granted under the Plan, where one or
more types of Awards, both of which are payable in shares of Common Stock, are
granted in tandem with each other such that the exercise of one type of Award
with respect to a number of shares cancels an equal number of shares of the
other, the number of shares granted under both Awards shall be deemed to be
equivalent to the number of shares under one of the Awards.
Section 6.2. Adjustment Upon Certain Events. In the event that there is,
with respect to the Company, a stock dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination, combination, or
transaction or exchange of Common Stock or other corporate exchange, or any
distribution to stockholders of Common Stock or other property or securities
(other than regular cash dividends), or any transaction similar to the foregoing
or other transaction that results in a change to the Company's capital
structure, then the Committee shall make substitutions and/or adjustments to the
maximum number of shares available for issuance under the Plan, the maximum
Award payable under Section 6.3, the number of shares to be issued pursuant
outstanding Awards, the option prices, exercise prices or purchase prices of
outstanding Awards and/or any other affected terms of an Award or the Plan as
the Committee, in its sole discretion and without liability to any person, deems
equitable or appropriate. Unless the Committee determines otherwise, in no event
shall an Award to any Participant that is intended to qualify as
"performance-based compensation" for purposes of Section 162(m) of the Code be
adjusted pursuant to this Section 6.2 to the extent such adjustment would cause
such Award to fail to qualify as "performance-based compensation" under Section
162(m) of the Code.
Section 6.3. Maximum Award Payable. Subject to Section 6.2, and
notwithstanding any provision contained in the Plan to the contrary, the maximum
Award payable (or granted, if applicable) to any one Participant under the Plan
for a calendar year is 200,000 shares of Common Stock or, in the event the Award
is paid in cash, $2,000,000.
ARTICLE VII
PERFORMANCE AWARDS
Section 7.1. Purpose. For purposes of Performance Awards issued to
Employees, Directors, and Consultants which are intended to qualify as
"performance-based compensation" for purposes of Section 162(m) of the Code, the
provisions of this Article VII shall apply in addition to and, where necessary,
in lieu of the provisions of Article X, Article XI, and Article XII. The purpose
of this Article is to provide the Committee the ability to qualify the Stock
Awards authorized under Article X, the Restricted Stock Unit Awards authorized
under Article XI, and the performance units under Article XII as
"performance-based compensation" under Section 162(m) of the Code. The
provisions of this Article VII shall control over any contrary provision
contained in Article X, Article XI, or Article XII.
Section 7.2. Eligibility. For each Performance Period, the Committee will,
in its sole discretion, designate within the initial period allowed under
Section 162(m) of the Code which
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Employees, Directors, and Consultants will be Participants for such period.
However, designation of an Employee, Director, or Consultant as a Participant
for a Performance Period shall not in any manner entitle the Participant to
receive an Award for the period. The determination as to whether or not such
Participant becomes entitled to an Award for such Performance Period shall be
decided solely in accordance with the provisions of this Article VII. Moreover,
designation of an Employee, Director, or Consultant as a Participant for a
particular Performance Period shall not require designation of such Employee,
Director, or Consultant as a Participant in any subsequent Performance Period,
and designation of one Employee, Director, or Consultant as a Participant shall
not require designation of any other Employee, Director, or Consultant as a
Participant in such period or in any other period.
Section 7.3. Discretion of Committee with Respect to Performance Awards.
The Committee shall have the authority to determine which Covered Employees or
other Employees, Directors, or Consultants shall be Participants of a
Performance Award. With regard to a particular Performance Period, the Committee
shall have full discretion to select the length of such Performance Period, the
type(s) of Performance Awards to be issued, the Performance Criteria that will
be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goal(s), whether the Performance Goal(s) is (are) to apply to the
Company or any one or more subunits thereof and the Performance Formula. For
each Performance Period, with regard to the Performance Awards to be issued for
such period, the Committee will, within the initial period allowed under Section
162(m) of the Code, exercise its discretion with respect to each of the matters
enumerated in the immediately preceding sentence of this Section 7.3 and record
the same in writing.
Section 7.4. Payment of Performance Awards.
(a) Condition to Receipt of Performance Award. Unless otherwise
provided in the relevant Award Notice, a Participant must be employed by the
Company on the last day of a Performance Period to be eligible for a Performance
Award for such Performance Period.
(b) Limitation. A Participant shall be eligible to receive a
Performance Award for a Performance Period only to the extent that: (1) the
Performance Goals for such period are achieved; and (2) and the Performance
Formula as applied against such Performance Goals determines that all or some
portion of such Participant's Performance Award has been earned for the
Performance Period.
(c) Certification. Following the completion of a Performance Period,
the Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Period have been achieved and,
if so, to also calculate and certify in writing the amount of the Performance
Awards earned for the period based upon the Performance Formula. The Committee
shall then determine the actual size of each Participant's Performance Award for
the Performance Period and, in so doing, shall apply Negative Discretion, if and
when it deems appropriate.
(d) Negative Discretion. In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the
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amount of the Performance Award earned under the Performance Formula for the
Performance Period through the use of Negative Discretion, if in its sole
judgment, such reduction or elimination is appropriate.
(e) Timing of Award Payments. The Awards granted for a Performance
Period shall be paid to Participants as soon as administratively practicable
following completion of the certifications required by Section 7.4(c).
ARTICLE VIII
STOCK OPTIONS
Section 8.1. In General. Awards may be granted in the form of stock
options. These stock options may be incentive stock options within the meaning
of Section 422 of the Code or non-qualified stock options (i.e., stock options
which are not incentive stock options), or a combination of both. All Awards
under the Plan issued to Covered Employees in the form of non-qualified stock
options shall qualify as "performance-based compensation" under Section 162(m)
of the Code.
Section 8.2. Terms and Conditions of Stock Options. An option shall be
exercisable in accordance with such terms and conditions and at such times and
during such periods as may be determined by the Committee. The price at which
Common Stock may be purchased upon exercise of a stock option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock, as
determined by the Committee, on the Effective Date of the option's grant. In
addition, the term of a stock option may not exceed ten (10) years.
Section 8.3. Restrictions Relating to Incentive Stock Options. Stock
options issued in the form of incentive stock options shall, in addition to
being subject to the terms and conditions of Section 8.2, comply with Section
422 of the Code. Accordingly, the aggregate Fair Market Value (determined at the
time the option was granted) of the Common Stock with respect to which incentive
stock options are exercisable for the first time by a Participant during any
calendar year (under this Plan or any other plan of the Company) shall not
exceed $100,000 (or such other limit as may be required by Section 422 of the
Code).
Section 8.4. Exercise. Upon exercise, the option price of a stock option
may be paid in cash, or, to the extent permitted by the Committee, by tendering,
by either actual delivery of shares or by attestation, shares of Common Stock, a
combination of the foregoing, or such other consideration as the Committee may
deem appropriate. The Committee shall establish appropriate methods for
accepting Common Stock, whether restricted or unrestricted, and may impose such
conditions as it deems appropriate on the use of such Common Stock to exercise a
stock option. Stock options awarded under the Plan may also be exercised by way
of a broker-assisted stock option exercise program, if any, provided such
program is available at the time of the option's exercise. Notwithstanding the
foregoing or the provision of any Award Notice, a Participant may not pay the
exercise price of a stock option using shares of Common Stock if, in the opinion
of counsel to the Company, (i) the Participant is, or within the six months
preceding such exercise was, subject to reporting under Section 16(a) of the
Exchange Act, (ii) there is a substantial likelihood that the use of such form
of payment or the timing of such form of
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payment would subject the Participant to a substantial risk of liability under
Section 16 of the Exchange Act, or (iii) there is a substantial likelihood that
the use of such form of payment would result in accounting treatment to the
Company under generally accepted accounting principles that the Committee
reasonably determines is adverse to the Company.
ARTICLE IX
STOCK APPRECIATION RIGHTS
Section 9.1. In General. Awards may be granted in the form of stock
appreciation rights ("SARs"). SARs entitle the Participant to receive a payment
equal to the appreciation in a stated number of shares of Common Stock from the
exercise price to the Fair Market Value of the Common Stock on the date of
exercise. The "exercise price" for a particular SAR shall be defined in the
Award Notice for that SAR. A SAR may be granted in tandem with all or a portion
of a related stock option under the Plan ("Tandem SARs"), or may be granted
separately ("Freestanding SARs"). A Tandem SAR may be granted either at the time
of the grant of the related stock option or at any time thereafter during the
term of the stock option. All Awards under the Plan issued to Covered Employees
in the form of a SAR shall qualify as "performance-based compensation" under
Section 162(m) of the Code.
Section 9.2. Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related stock option
is exercisable, and the "exercise price" of such a SAR (the base from which the
value of the SAR is measured at its exercise) shall be the option price under
the related stock option. However, at no time shall a Tandem SAR be issued if
the option price of its related stock option is less than the Fair Market Value
of the Common Stock, as determined by the Committee, on the Effective Date of
the Tandem SAR's grant. If a related stock option is exercised as to some or all
of the shares covered by the Award, the related Tandem SAR, if any, shall be
canceled automatically to the extent of the number of shares covered by the
stock option exercise. Upon exercise of a Tandem SAR as to some or all of the
shares covered by the Award, the related stock option shall be canceled
automatically to the extent of the number of shares covered by such exercise.
Moreover, all Tandem SARs shall expire not later than ten (10) years from the
Effective Date of the SAR's grant.
Section 9.3. Terms and Conditions of Freestanding SARs. Freestanding SARs
shall be exercisable or automatically mature in accordance with such terms and
conditions and at such times and during such periods as may be determined by the
Committee. The exercise price of a Freestanding SAR shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the
Effective Date of the Freestanding SAR's grant. Moreover, all Freestanding SARs
shall expire not later than ten (10) years from the Effective Date of the
Freestanding SAR's grant.
Section 9.4. Deemed Exercise. The Committee may provide that a SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of such SAR if at such time the SAR by its terms remains exercisable and, if so
exercised, would result in a payment to the holder of such SAR.
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Section 9.5. Payment. Unless otherwise provided in an Award Notice, an SAR
may be paid in cash, Common Stock or any combination thereof, as determined by
the Committee, in its sole and absolute discretion, at the time that the SAR is
exercised.
ARTICLE X
STOCK AWARDS
Section 10.1. Grants. Awards may be granted in the form of Stock Awards.
Stock Awards shall be awarded in such numbers and at such times during the term
of the Plan as the Committee shall determine.
Section 10.2. Performance Criteria. For Stock Awards conditioned,
restricted, and/or limited based on Performance Goals, the length of the
Performance Period, the Performance Goals to be achieved during the Performance
Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee in the
exercise of its absolute discretion. Performance Goals may be revised by the
Committee, at such times as it deems appropriate during the Performance Period,
in order to take into consideration any unforeseen events or changes in
circumstances.
Section 10.3. Rights as Stockholders. During the period in which any
restricted shares of Common Stock are subject to any restrictions, the Committee
may, in its sole discretion, deny a Participant to whom such restricted shares
have been awarded all or any of the rights of a stockholder with respect to such
shares, including, but not by way of limitation, limiting the right to vote such
shares or the right to receive dividends on such shares.
Section 10.4. Evidence of Award. Any Stock Award granted under the Plan may
be evidenced in such manner as the Committee deems appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates, with such restrictive legends and/or stop transfer instructions
as the Committee deems appropriate.
ARTICLE XI
RESTRICTED STOCK UNIT AWARDS
Section 11.1. Grants. Awards may be granted in the form of Restricted Stock
Unit Awards. Restricted Stock Unit Awards shall be awarded in such numbers and
at such times during the term of the Plan as the Committee shall determine.
Section 11.2. Rights as Stockholders. Until the shares of Common Stock to
be received upon the vesting of such Restricted Stock Unit Award are actually
received by a Participant, the Participant shall have no rights as a stockholder
with respect to such shares.
Section 11.3. Evidence of Award. A Restricted Stock Unit Award granted
under the Plan may be recorded on the books and records of the Company in such
manner as the Committee deems appropriate.
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ARTICLE XII
PERFORMANCE UNITS
Section 12.1. Grants. Awards may be granted in the form of performance
units. Performance units, as that term is used in this Plan, shall refer to
units valued by reference to designated criteria established by the Committee,
other than Common Stock.
Section 12.2. Performance Criteria. Performance units shall be contingent
on the attainment during a Performance Period of certain Performance Goals. The
length of the Performance Period, the Performance Goals to be achieved during
the Performance Period, and the measure of whether and to what degree such
Performance Goals have been attained shall be conclusively determined by the
Committee in the exercise of its absolute discretion. Performance Goals may be
revised by the Committee, at such times as it deems appropriate during the
Performance Period, in order to take into consideration any unforeseen events or
changes in circumstances.
ARTICLE XIII
PAYMENT OF AWARDS
Section 13.1. Payment. Absent a Plan or Award Notice provision to the
contrary, payment of Awards may, at the discretion of the Committee, be made in
cash, Common Stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine. In addition, payment of Awards may
include such terms, conditions, restrictions, and/or limitations, if any, as the
Committee deems appropriate, including, in the case of Awards paid in the form
of Common Stock, restrictions on transfer and forfeiture provisions; provided,
however, such terms, conditions, restrictions, and/or limitations are not
inconsistent with the Plan.
Section 13.2. Withholding Taxes. The Company shall be entitled to deduct
from any payment under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment or may require the Participant to pay to
it such tax prior to and as a condition of the making of such payment. In
accordance with any applicable administrative guidelines it establishes, the
Committee may allow a Participant to pay the amount of taxes required by law to
be withheld from an Award by withholding from any payment of Common Stock due as
a result of such Award, or by permitting the Participant to deliver to the
Company, shares of Common Stock having a Fair Market Value equal to the minimum
amount of such required withholding taxes. Notwithstanding the foregoing or the
provision of any Award Notice, a Participant may not pay the amount of taxes
required by law to be withheld using shares of Common Stock if, in the opinion
of counsel to the Company, (i) there is a substantial likelihood that the use of
such form of payment or the timing of such form of payment would subject the
Participant to a substantial risk of liability under Section 16 of the Exchange
Act, or (ii) there is a substantial likelihood that the use of such form of
payment would result in adverse accounting treatment to the Company under
generally accepted accounting principles.
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ARTICLE XIV
DIVIDEND AND DIVIDEND EQUIVALENTS
If an Award is granted in the form of a Stock Award or stock option, or in
the form of any other stock-based grant, the Committee may choose, at the time
of the grant of the Award or any time thereafter up to the time of the Award's
payment, to include as part of such Award an entitlement to receive dividends or
dividend equivalents, subject to such terms, conditions, restrictions, and/or
limitations, if any, as the Committee may establish. Dividends and dividend
equivalents shall be paid in such form and manner (i.e., lump sum or
installments), and at such time(s) as the Committee shall determine. All
dividends or dividend equivalents which are not paid currently may, at the
Committee's discretion, accrue interest, be reinvested into additional shares of
Common Stock or, in the case of dividends or dividend equivalents credited in
connection with Stock Awards, be credited as additional Stock Awards and paid to
the Participant if and when, and to the extent that, payment is made pursuant to
such Award.
ARTICLE XV
DEFERRAL OF AWARDS
At the discretion of the Committee, payment of any Award, salary, bonus
compensation, Company Board compensation, dividend or dividend equivalent, or
any portion thereof, may be deferred by a Participant until such time as the
Committee may establish. All such deferrals shall be accomplished by the
delivery of a written, irrevocable election by the Participant prior to the time
established by the Committee for such purpose, on a form provided by the
Company. Further, all deferrals shall be made in accordance with administrative
guidelines established by the Committee to ensure that such deferrals comply
with all applicable requirements of the Code. Deferred payments shall be paid in
a lump sum or installments, as determined by the Committee. Deferred Awards may
also be credited with interest, at such rates to be determined by the Committee,
or invested by the Company, and, with respect to those deferred Awards
denominated in the form of Common Stock, credited with dividends or dividend
equivalents.
ARTICLE XVI
MISCELLANEOUS
Section 16.1. Nonassignability. Except as otherwise provided in an Award
Notice, no Awards or any other payment under the Plan shall be subject in any
manner to alienation, anticipation, sale, transfer (except by will or the laws
of descent and distribution), assignment, or pledge, nor shall any Award be
payable to or exercisable by anyone other than the Participant to whom it was
granted.
Section 16.2. Regulatory Approvals and Listings. Notwithstanding anything
contained in this Plan to the contrary, the Company shall have no obligation to
issue or deliver certificates of Common Stock evidencing Stock Awards or any
other Award resulting in the payment of Common Stock prior to (a) the obtaining
of any approval from any governmental agency which the Company shall, in its
sole discretion, determine to be necessary or advisable, (b) the admission of
such shares to listing on the stock exchange or quotation system on which the
Common Stock may be listed, and (c) the completion of any registration or other
qualification of
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said shares under any state or federal law or ruling of any governmental body
which the Company shall, in its sole discretion, determine to be necessary or
advisable.
Section 16.3. No Right to Continued Employment or Grants. Participation in
the Plan shall not give any Participant the right to remain in the employ or
other service of the Company. The Company reserves the right to terminate the
employment or other service of a Participant at any time. Further, the adoption
of this Plan shall not be deemed to give any Employee, Director, or any other
individual any right to be selected as a Participant or to be granted an Award.
In addition, no Employee, Director, or any other individual having been selected
for an Award, shall have at any time the right to receive any additional Awards.
Section 16.4. Amendment/ Termination. The Committee may suspend or
terminate the Plan at any time for any reason with or without prior notice. In
addition, the Committee may, from time to time for any reason and with or
without prior notice, amend the Plan in any manner, but may not without
stockholder approval adopt any amendment which would require the vote of the
stockholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities, or other applicable laws or regulations,
including, but not limited to, the listing requirements of the stock exchanges
or quotation systems on which the securities of the Company are listed.
Notwithstanding the foregoing, without the consent of a Participant (except as
otherwise provided in Section 6.2), no amendment may materially and adversely
affect any of the rights of such Participant under any Award theretofore granted
to such Participant under the Plan.
Section 16.5. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Nevada, except as superseded by
applicable federal law, without giving effect to its conflicts of law
provisions.
Section 16.6. No Right, Title, or Interest in Company Assets. No
Participant shall have any rights as a stockholder as a result of participation
in the Plan until the date of issuance of a stock certificate in his or her
name, and, in the case of restricted shares of Common Stock, such rights are
granted to the Participant under the Plan. To the extent any person acquires a
right to receive payments from the Company under the Plan, such rights shall be
no greater than the rights of an unsecured creditor of the Company and the
Participant shall not have any rights in or against any specific assets of the
Company. All of the Awards granted under the Plan shall be unfunded.
Section 16.7. No Guarantee of Tax Consequences. No person connected with
the Plan in any capacity, including, but not limited to, the Company and its
directors, officers, agents, and employees, makes any representation,
commitment, or guaranty that any tax treatment, including, but not limited to,
federal, state, and local income, estate, and gift tax treatment, will be
applicable with respect to the tax treatment of any Award, any amounts deferred
under the Plan, or paid to or for the benefit of a Participant under the Plan,
or that such tax treatment will apply to or be available to a Participant on
account of participation in the Plan.
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