EXHIBIT 4.1
GLOBAL CONCEPTS, LTD
2005 Equity Incentive Plan
Article 1. Establishment and Purpose
1.1 Establishment of the Plan. Global Concepts, Ltd., a Colorado
corporation (the "Company" or "GCCP"), hereby establishes an incentive
compensation plan (the "Plan"), as set forth in this document.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success and enhance the value of the Company by linking the personal inter
ests of Participants to those of the Company's shareholders, and by providing
Participants with an incentive for outstanding performance. The Plan is
further intended to attract and retain the services of Participants upon
whose judgment, interest, and special efforts the successful operation of
GCCP and its subsidiaries is dependent.
1.3 Effective Date of the Plan. The Plan shall become effective on
January 18, 2005
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
word is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Stock, Nonqualified Stock Options, Incentive Stock Options, Restricted
Stock, or Performance Shares.
(b) "Award Agreement" means an agreement which may be entered into
by each Participant and the Company, setting forth the terms and provisions
applicable to Awards granted to Participants under this Plan.
(c) "Board" or "Board of Directors" means the GCCP Board of Directors.
(d) "Cause" shall mean willful and gross misconduct on the part of an
Eligible Person that is materially and demonstrably detrimental to the
Company or any Subsidiary as determined by the Committee in its sole discretion.
(e) "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than (A) a person who on January 18, 2005 was the beneficial
owner of more than 25% of the outstanding Shares, (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or (C) a corporation owned directly or indirectly by the shareholders of
the Company in substantially the same proportions as their ownership of
stock of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said 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, or (ii)
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and any new Director whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of at
least two-thirds (2/3) of the Directors then still in office who either
were Directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company approve 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) at least fifty-five percent (55%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially
all the Company's assets.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee or committees, as specified in
Article 3, appointed by the Board to administer the Plan with respect to
grants of Awards.
(h) "Consultant" means a natural person under contract with the
Company to provide bona fide services to the Company which are not in
connection with the offer or sale of securities in a capital-raising trans
action and do not directly or indirectly promote or maintain a market for
the Company's securities.
(i) "Director" means any individual who is a member of the GCCP
Board of Directors.
(j) "Disability" shall mean the Participant's inability to perform
the Participant's normal Employment functions due to any medically determi
nable physical or mental disability, which can last or has lasted 12 months
or is expected to result in death.
(k) "Eligible Person" means an Employee, Director or Consultant.
(l) "Employee" means any officer or employee of the Company or of one
of the Company's Subsidiaries. Directors who are not otherwise employed by
the Company shall not be considered Employees under this Plan.
(m) "Employment," with reference to an Employee, means the condition
of being an officer or employee of the Company or one of its Subsidiaries.
"Employment," with reference to a Consultant, means the condition of being a
Consultant. "Employment," with reference to a Director, means the condition
of being a Director. The change in status of an Eligible Person among the
categories of Employee, Director and Consultant shall not be deemed a
termination of Employment.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(o) "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the Committee.
(p) "Fair Market Value" shall mean (i) at such time as there are
closing prices quoted for the Shares, the closing price of Shares on the
relevant date, or (if there were no sales on such date) the next preceding
trading date, all as reported on the principal market for the Shares, or
(ii) at such time as there is a public market quoted without closing prices,
the mean of the closing high bid and low asked on the relevant date, as
reported on the principal market for the Shares, or (iii) at such time as
there is no public market for the Shares, the value determined from time to
time by the Board of Directors.
(q) "Incentive Stock Option" or "ISO" means an option to purchase
Shares from GCCP, granted under this Plan, which is designated as an
Incentive Stock Option and is intended to meet the requirements of Section
422 of the Code.
(r) "Insider" shall mean an Eligible Person who is, on the relevant
date, an officer, director, or ten percent (10%) beneficial owner of the
Company, as those terms are defined under Section 16 of the Exchange Act.
(s) "Nonqualified Stock Option" or "NQSO" means the option to
purchase Shares from GCCP, granted under this Plan, which is not intended
to be an Incentive Stock Option.
(t) "Option" or "Stock Option" shall mean an Incentive Stock Option
or a Nonqualified Stock Option.
(u) "Participant" means a person who holds an outstanding Award
granted under the Plan.
(v) "Performance Share" shall mean an Award granted to an Eligible
Person pursuant to Article 8 herein.
(w) "Plan" means this 2005 Equity Incentive Plan.
(x) "Restricted Stock" means an Award of Stock granted to an Eligible
Person pursuant to Article 7 herein.
(y) "Restriction Period" means the period during which Shares of
Restricted Stock are subject to restrictions or conditions under Article 7.
(z) "Shares" or "Stock" means the shares of common stock of the Company.
(aa) "Subsidiary" shall mean any corporation in which the Company
owns directly, or indirectly through subsidiaries, more than fifty percent
(50%) of the total combined voting power of all classes of Stock, or any
other entity (including, but not limited to, partnerships and joint
ventures) in which the Company owns more than fifty percent (50%) of the
combined equity thereof.
Article 3. Administration
3.1 The Committee. The Plan and all Awards hereunder shall be
administered by one or more Committees of the Board as may be appointed by
the Board for this purpose. The Board may appoint a Committee specifically
responsible for Awards to Insiders (the "Disinterested Committee") where
each Director on such Disinterested Committee is a "Non-Employee Director"
(or any successor designation for determining who may administer plans,
transactions or awards exempt under Section 16(b) of the Exchange Act), as
that term is used in Rule 16b-3 under the Exchange Act, as that rule may be
modified from time to time. If no specific Committee is appointed by the
Board, then the Board in its entirety shall be the Committee. Any Committee
may be replaced by the Board at any time.
3.2 Authority of the Committee. The Committee shall have full power,
except as limited by law and subject to the provisions herein, to select the
recipients of Awards; to determine the size and types of Awards; to determine
the terms and conditions of such Awards in a manner consistent with the
Plan; to construe and interpret the Plan and any agreement or instrument
entered into under the Plan; to establish, amend, or waive rules and regulations
for the Plan's administration; and (subject to the provisions of Article 10
herein) to amend the terms and conditions of any outstanding Award to the
extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of
the Plan.
The Committee shall determine which Awards are made pursuant to Rule
701 under the Securities Act of 1933, as amended.
No Award may be made under the Plan after December 31, 2011.
All determinations and decisions made by the Committee pursuant to the
provisions of the Plan and all related orders or resolutions of the Board
shall be final, conclusive, and binding on all persons, including the
Company, its stockholders, Eligible Persons, Participants, and their estates
and beneficiaries.
Subject to the terms of this Plan, the Committee is authorized, and
shall not be limited in its discretion, to use any of the Performance
Criteria specified herein in its determination of Awards under this Plan.
Article 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section
4.3 herein, the number of Shares available for grant under the Plan shall
not exceed twenty million (20,000,000) Shares. The Shares granted under
this Plan may be either authorized but unissued or reacquired Shares.
Without limiting the discretion of the Committee under this section,
unless otherwise provided by the Committee, the following rules will apply
for purposes of the determination of the number of Shares available for
grant under the Plan or compliance with the foregoing limits:
(a) The grant of Stock, a Stock Option or a Restricted Stock Award
shall reduce the Shares available for grant under the Plan by the number of
Shares subject to such Award. However, to the extent the Participant uses
previously owned Shares to pay the Exercise Price or any taxes, or Shares
are withheld to pay taxes, these Shares shall be available for regrant
under the Plan.
(b) With respect to Performance Shares, the number of Performance
Shares granted under the Plan shall be deducted from the number of Shares
available for grant under the Plan. The number of Performance Shares which
cannot be, or are not, converted into Shares and distributed to the Partici
pant (after any applicable tax withholding) following the end of the Perfor
mance Period shall increase the number of Shares available for regrant
under the Plan by an equal amount.
4.2 Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, Shares subject to such Award
shall be again available for the grant of an Award under the Plan.
4.3 Adjustments in Authorized Plan Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation,
Stock dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, an adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in
the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, and/or the number of outstanding Options, Shares of
Restricted Stock, and Performance Shares constituting outstanding Awards, as
may be determined to be appropriate and equitable by the Committee, in its
sole discretion, to prevent dilution or enlargement of rights.
Article 5. Stock Grant
5.1 Grant of Stock. Subject to the terms and provisions of the Plan, the
Board of Directors, at any time and from time to time, may grant Shares of
Stock to Eligible Persons in such amounts and upon such terms and conditions
as the Board of Directors shall determine.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Eligible Persons at any time and from time
to time, and under such terms and conditions, as shall be determined by the
Committee. The Committee shall have discretion in determining the number of
Shares subject to Options granted to each Eligible Person. The Committee
may grant ISOs, NQSOs, or a combination thereof. ISOs, however, may be
granted only to Employees and only if this Plan is approved by the share
holders of the Company within one year after it is adopted by the Board of
Directors.
6.2 Form of Issuance. Each Option grant may be issued in the form of
an Award Agreement and/or may be recorded on the books and records of the
Company for the account of the Participant. If an Option is not issued in
the form of an Award Agreement, then the Option shall be deemed granted as
determined by the Committee. The terms and conditions of an Option shall be
set forth in the Award Agreement, in the notice of the issuance of the
grant, or in such other documents as the Committee shall determine. Such
terms and conditions shall include the Exercise Price, the duration of the
Option, the number of Shares to which an Option pertains (unless otherwise
provided by the Committee, each Option may be exercised to purchase one
Share), and such other provisions as the Committee shall determine, including,
but not limited to whether the Option is intended to be an ISO or a NQSO.
6.3 Exercise Price.
(a) Unless a greater Exercise Price is determined by the Committee,
the Exercise Price for each ISO awarded under this Plan shall be equal to
one hundred percent (100%) of the Fair Market Value of a Share on the date
the Option is granted. If, however, the Eligible Person owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or of its parent or subsidiary corporations, then the
Exercise Price of an ISO shall be not less than one hundred ten percent (110%)
of the Fair Market Value of a Share on the date the Option is granted.
(b) The Exercise Price of a NQSO shall be determined by the Committee
in its sole discretion.
6.4 Duration of Options. Each Option shall expire at such time as
the Committee shall determine at the time of grant (which duration may be
extended by the Committee); provided, however, that no Option shall be
exercisable later than the tenth (10th) anniversary date of its grant. If,
however, the Eligible Person owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporations, then no Option shall be
exercisable later than the fifth (5th) anniversary date of its grant.
6.5 Vesting of Options. Options shall vest at such times and under
such terms and conditions as determined by the Committee; provided, however,
unless a different vesting period is provided by the Committee at or before
the grant of an Option, the Options will vest on the first anniversary of
the grant.
6.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions
as the Committee shall in each instance approve, which need not be the same
for each grant or for each Participant.
Options shall be exercised by delivery of a written notice (including
e-mail and telecopies) to the Secretary of the Company (or, if so provided
by the Company, to its designated agent), which notice shall be irrevocable,
setting forth the exact number of Shares with respect to which the Option is
being exercised and including with such notice payment of the Exercise
Price. When Options have been transferred, the Company or its designated
agent may require appropriate documentation that the person or persons
exercising the Option, if other than the Participant, has the right to
exercise the Option. No Option may be exercised with respect to a fraction
of a Share.
6.7 Payment. The Exercise Price shall be paid in full at the time of
exercise. No Shares shall be issued or transferred until full payment has
been received therefor.
Payment may be made:
(a) in cash, or
(b) unless otherwise provided by the Committee at any time, and
subject to such additional terms and conditions and/or modifications as the
Committee or the Company may impose from time to time, and further subject
to suspension or termination of this provision by the Committee or Company
at any time, by:
(i) delivery of Shares of Stock owned by the Participant in
partial (if in partial payment, then together with cash) or full payment
(if a fractional Share remains after payment of the Exercise Price in full
by previously owned Shares, then the fractional Share shall be withheld for
taxes); provided, however, as a condition to paying any part of the Exercise
Price in Stock, at the time of exercise of the Option, the Participant
must establish to the satisfaction of the Company that the Stock tendered
to the Company has been held by the Participant for a minimum of six (6)
months preceding the tender; or
(ii) if the Company has designated a stockbroker to act as the Company's
agent to process Option exercises, issuance of an exercise notice together
with instructions to such stockbroker irrevocably instructing the stockbroker:
(A) to immediately sell a sufficient portion of the Shares to pay the
Exercise Price of the Options being exercised and the required tax with-
holding, and (B) to deliver on the settlement date the portion of the
proceeds of the sale equal to the Exercise Price and tax withholding to the
Company. In the event the stockbroker sells any Shares on behalf of a
Participant, the stockbroker shall be acting solely as the agent of the
Participant, and the Company disclaims any responsibility for the actions
of the stockbroker in making any such sales. No Stock shall be issued until
the settlement date and until the proceeds (equal to the Option Price and
tax withholding) are paid to the Company.
If payment is made by the delivery of Shares of Stock, the value of
the Shares delivered shall be equal to the Fair Market Value of the Shares
on the day preceding the date of exercise of the Option.
6.8 Termination of Employment. Unless otherwise provided by the
Committee, the following limitations on exercise of Options shall apply upon
termination of Employment:
(a) Termination by Death or Disability. In the event the Employment
of a Participant shall terminate by reason of death or Disability, all
outstanding Options granted to that Participant shall immediately vest as
of the date of termination of Employment and may be exercised, if at all,
no more than three (3) years from the date of the termination of Employment,
unless the Options, by their terms, expire earlier.
(b) Termination for Cause. If the Employment of a Participant shall
be terminated by the Company for Cause, all outstanding Options held by the
Participant shall immediately be forfeited to the Company and no additional
exercise period shall be allowed, regardless of the vested status of the
Options.
(c) Retirement or Other Termination of Employment. If the Employment
of a Participant shall terminate for any reason other than the reasons
set forth in (a) or (b) above, all outstanding Options which are vested as
of the effective date of termination of Employment may be exercised, if at
all, no more than thirty (30) days from the date of termination of Employment,
unless the Options, by their terms, expire earlier. In the event of the
death of the Participant after termination of Employment, this paragraph
(c) shall still apply and not paragraph (a), above.
(d) Options not Vested at Termination. Except as provided in
paragraph (a) above, all Options held by the Participant which are not
vested on or before the effective date of termination of Employment shall
immediately be forfeited to the Company (and shall once again become
available for grant under the Plan).
(e) Notwithstanding the foregoing, the Committee may, in its sole
discretion, establish different terms and conditions pertaining to the
effect of termination of Employment, but no such modification shall shorten
the terms of Options issued prior to such modification.
6.9 Restrictions on Exercise and Transfer of Options. Unless other
wise provided by the Committee:
(a) During the Participant's lifetime, the Participant's Options
shall be exercisable only by the Participant or by the Participant's
guardian or legal representative. After the death of the Participant, an
Option shall only be exercised by the holder thereof (including, but not
limited to, an executor or administrator of a decedent's estate) or his
guardian or legal representative.
(b) No Option shall be transferable except: (i) in the case of the
Participant, only upon the Participant's death; and (ii) in the case of
any holder after the Participant's death, only by will or by the laws of
descent and distribution.
6.10 Competition. Notwithstanding anything in this Article 6 to the
contrary, in the event the Committee determines, in its sole discretion,
that a Participant is engaging in activity competitive with the Company, any
Subsidiary, or any business in which any of the foregoing have a substantial
interest (the "GCCP Businesses"), the Committee may cancel any Option
granted to such Participant, whether or not vested, in whole or in part.
Such cancellation shall be effective as of the date specified by the Committee.
Competitive activity shall mean any business or activity if a substantially
similar business activity is being carried on by a GCCP Business, including,
but not limited to, representing or providing consulting services to any
person or entity that is engaged in competition with a GCCP Business or that
takes a position adverse to a GCCP Business. However, competitive activity
shall not include, among other things, owning a nonsubstantial interest as a
shareholder in a competing business.
Article 7. Restricted Stock
7.1 Grant of Restricted Stock. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Eligible Persons in such amounts and upon such
terms and conditions as the Committee shall determine. In addition to any
other terms and conditions imposed by the Committee, vesting of Restricted
Stock may be conditioned upon the attainment of Performance Goals based on
Performance Criteria in the same manner as provided in Section 8.3, herein
with respect to Performance Shares.
7.2 Restricted Stock Agreement. The Committee may require, as a
condition to an Award, that a recipient of a Restricted Stock Award enter
into a Restricted Stock Award Agreement, setting forth the terms and conditions
of the Award. In lieu of a Restricted Stock Award Agreement, the Committee
may provide the terms and conditions of an Award in a notice to the Participant
of the Award, on the Stock certificate representing the Restricted Stock, in
the resolution approving the Award, or in such other manner as it deems
appropriate.
7.3 Transferability. Except as otherwise provided in this Article 7,
the Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of
the applicable Restriction Period established by the Committee, if any.
7.4 Other Restrictions. The Committee may impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement
that Participants pay a stipulated purchase price for each Share of Restricted
Stock and/or restrictions under applicable Federal or state securities laws;
and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions.
The Company shall also have the right to retain the certificates
representing Shares of Restricted Stock in the Company's possession until
such time as all conditions and/or restrictions applicable to such Shares
have been satisfied.
7.5 Removal of Restrictions. Except as otherwise provided in this
Article 7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant
after the last day of the Restriction Period and completion of all conditions
to vesting, if any. However, unless otherwise provided by the Committee, the
Committee, in its sole discretion, shall have the right to immediately waive
all or part of the restrictions and conditions with regard to all or part of
the Shares held by any Participant at any time.
7.6 Voting Rights, Dividends and Other Distributions. During the
Restriction Period, Participants holding Shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such Shares. Except as provided in the
following sentence, in the sole discretion of the Committee, other cash
dividends and other distributions paid to Participants with respect to
Shares of Restricted Stock may be subject to the same restrictions and
conditions as the Shares of Restricted Stock with respect to which they were
paid. If any such dividends or distributions are paid in Shares, the Shares
shall be subject to the same restrictions and conditions as the Shares of
Restricted Stock with respect to which they were paid.
7.7 Termination of Employment Due to Death or Disability. In the
event the Employment of a Participant shall terminate by reason of death or
Disability, unless otherwise provided by the Committee prior to or at the
time of the Award, all Restriction Periods and all restrictions imposed on
outstanding Shares of Restricted Stock held by the Participant shall
immediately lapse and the Restricted Stock shall immediately become fully
vested as of the date of termination of Employment.
7.8 Termination of Employment for Other Reasons. If the Employment
of a Participant shall terminate for any reason other than those specifically
set forth in Section 7.7 herein, all Shares of Restricted Stock held
by the Participant which are not vested as of the effective date of termination
of Employment immediately shall be forfeited and returned to the Company.
Article 8. Performance Shares
8.1 Grants of Performance Shares. A Performance Share is equivalent
in value to a Share of Stock. Subject to the terms of the Plan, Performance
Shares may be granted to Eligible Persons at any time and from time to
time, as determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Shares awarded to each
Participant.
8.2 Performance Period. The Performance Period for Performance
Shares is the period over which the Performance Goals are measured. The
Performance Period is set by the Committee for each Award; however, in no
event shall an Award have a Performance Period of less than six months.
8.3 Performance Goals. For each Award of Performance Shares, the
Committee shall establish performance objectives ("Performance Goals") for
the Company, its Subsidiaries, and/or divisions of any of foregoing, based
on the Performance Criteria and other factors set forth below. Performance
Goals shall include payout tables, formulas or other standards to be used in
determining the extent to which the Performance Goals are met, and, if met,
the number of Performance Shares distributed to Participants in accordance
with Section 8.5. All Performance Shares which may not be converted under
the Performance Goals or which are reduced by the Committee under Section
8.5 or which may not be converted for any other reason after the end of the
Performance Period shall be canceled at the time they would otherwise be
distributable. When the Committee desires an Award to qualify under Section
162(m) of the Code, as amended, the Committee shall establish the Perfor
mance Goals for the respective Performance Shares prior to or within 90 days
of the beginning of the service relating to such Performance Goal, and not
later than after 25% of such period of service has elapsed. For all other
Awards, the Performance Goals must be established before the end of the
respective Performance Period.
(a) The Performance Criteria which the Committee is authorized to
use, in its sole discretion, are any of the following criteria or any
combination thereof:
(1) Financial performance of the Company (on a consolidated basis),
of one or more of its Subsidiaries, and/or a division of any of
the foregoing. Such financial performance may be based on net
income and/or Value Added (after-tax cash operating profit less
depreciation and less a capital charge).
(3) Service performance of the Company (on a consolidated basis), of
one or more of its Subsidiaries, and/or of a division of any of
the foregoing. Such service performance may be based upon
measured customer perceptions of service quality.
(4) The Company's Stock price; return on shareholders' equity;
total shareholder return (Stock price appreciation plus divi
dends, assuming the reinvestment of dividends); and/or earnings
per share.
(5) With respect to the Company (on a consolidated basis), to one or
more of its Subsidiaries, and/or to a division of any of the
foregoing: sales, costs, market share of a product or service,
return on net assets, return on assets, return on capital,
profit margin, and/or operating revenues, expenses or earnings.
(6) Completion of a marketing or development project as defined in
the Award Agreement.
(b) Except to the extent otherwise provided by the Committee in full
or in part, if any of the following events occur during a Performance Period
and would directly affect the determination of whether or the extent to
which Performance Goals are met, they shall be disregarded in any such
computation: changes in accounting principles; extraordinary items;
changes in tax laws affecting net income and/or Value Added; natural
disasters, including floods, hurricanes, and earthquakes; and intentionally
inflicted damage to property which directly or indirectly damages the
property of the Company or its Subsidiaries. No such adjustment shall be
made to the extent such adjustment would cause the Performance Shares to
fail to satisfy the performance-based exemption of Section 162(m) of the Code.
8.4 Dividend Equivalents on Performance Shares. Unless reduced or
eliminated by the Committee, a cash payment in an amount equal to the
dividend payable on one Share will be made to each Participant for each
Performance Share which on the record date for the dividend had been awarded
to the Participant and not converted, distributed or canceled.
8.5 Form and Timing of Payment of Performance Shares. As soon as
practicable after the applicable Performance Period has ended and all other
conditions (other than Committee actions) to conversion and distribution of
a Performance Share Award have been satisfied (or, if applicable, at such
other time determined by the Committee at or before the establishment of the
Performance Goals for such Performance Period), the Committee shall determine
whether and the extent to which the Performance Goals were met for the
applicable Performance Shares. If Performance Goals have been met, then the
number of Performance Shares to be converted into Stock and distributed to
the Participants shall be determined in accordance with the Performance
Goals for such Awards, subject to any limits imposed by the Committee.
Conversion of Performance Shares shall occur as soon as reasonably
administratively possible following the determination of the number of
Shares to which the Participant is entitled. At any time prior to the
distribution of the Performance Shares, unless otherwise provided by the
Committee, the Committee shall have the authority to reduce or eliminate the
number of Performance Shares to be converted.
8.6 Termination of Employment Due to Death or Disability. Unless
otherwise provided by the Committee prior to or at the time of an Award, if
the Employment of a Participant shall terminate by reason of death or
Disability, the Participant shall receive a distribution of all outstanding
Performance Shares calculated as if all unfinished Performance Periods had
ended with 100% of the Performance Goals achieved, payable in the year
following the date of termination of Employment.
8.7 Termination of Employment for Other Reasons. If the Employment
of a Participant shall terminate for other than a reason set forth in
Section 8.6 (and other than for Cause), the number of Performance Shares to
be converted and distributed shall be converted and distributed based upon
the achievement of the Performance Goals and in accordance with all other
terms of the Award and the Plan; however, the Participant may receive no
more than a prorated payout of all Performance Shares, based on the portions
of the respective Performance Periods that have been completed.
8.8 Termination of Employment for Cause. In the event that a
Participant's Employment shall be terminated by the Company for Cause, all
Performance Shares shall be forfeited by the Participant to the Company.
8.9 Nontransferability. Performance Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or laws of intestacy.
Article 9. Employee Matters
9.1 Employment Not Guaranteed. Nothing in the Plan shall interfere
with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant's Employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company or one of its
Subsidiaries.
9.2 Participation. No Eligible Person shall have the right to be
selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.
9.3 Claims and Appeals. Any claim under the Plan by a Participant or
anyone claiming through a Participant shall be presented to the Committee.
Any person whose claim under the Plan has been denied may, within sixty (60)
days after receipt of notice of denial, submit to the Committee a written
request for review of the decision denying the claim. The Committee shall
determine conclusively for all parties all questions arising in the
administration of the Plan.
Article 10. Amendment, Modification, and Termination
10.1 Amendment, Modification, and Termination. The Board of Direc
tors alone shall have the right to alter, amend or revoke the Plan or any
part thereof at any time and from time to time, provided, however, that the
Board of Directors may not, without the approval of the holders of a major
ity of the voting Shares, make any alteration or amendment to the Plan which
changes the aggregate number of shares of Common Stock which may be issued
under the Plan, extend the term of the Plan, or change the employees or
class of employees eligible to receive Awards thereunder. The Board may at
any time suspend or terminate the Plan in whole or in part.
10.2 Awards Previously Granted. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of the
Participant holding such Award.
Article 11. Change in Control
Upon the occurrence of a Change in Control:
(a) Any and all Options granted hereunder immediately shall become
vested and exercisable;
(b) Any Restriction Periods and all restrictions imposed on Re
stricted Shares shall lapse and they shall immediately become fully vested;
(c) The 100% Performance Goal for all Performance Shares relating to
incomplete Performance Periods shall be deemed to have been fully achieved
and shall be converted and distributed in accordance with all other terms of
the Award and this Plan; provided, however, notwithstanding anything to the
contrary in this Plan, no outstanding Performance Share may be reduced.
Article 12. Withholding
12.1 Tax Withholding. The Company shall deduct or withhold an amount
sufficient to satisfy Federal, state, and local taxes (including the Partic
ipant's employment tax obligations) required by law to be withheld with
respect to any taxable event arising or as a result of this Plan ("Withhold
ing Taxes").
12.2 Share Withholding. With respect to withholding required upon
the exercise of Options, upon the lapse of restrictions on Restricted Stock,
upon the distribution of Performance Shares in the form of Stock, or upon
any other taxable event hereunder involving the transfer of Stock to a
Participant, the Company shall withhold Stock having a Fair Market Value on
the date the tax is to be determined in an amount equal to the Withholding
Taxes on such Stock. Any fractional Share remaining after the withholding
shall be withheld as additional Federal withholding.
Unless otherwise determined by the Committee, when the method of
payment for the Exercise Price is from the sale by a stockbroker, pursuant
to Section 6.7(b)(ii), herein, of the Stock acquired through the Option
exercise, then the tax withholding shall be satisfied out of the proceeds.
For administrative purposes in determining the amount of taxes due, the sale
price of such Stock shall be deemed to be the Fair Market Value of the Stock.
Prior to the end of any Performance Period a Participant may elect to
have a greater amount of Stock withheld from the distribution of Performance
Shares to pay withholding taxes; provided, however, the Committee may
prohibit or limit any individual election or all such elections at any time.
12.3 Payment In Lieu of Share Withholding. In any situation in which
the Company would be required to withhold Stock pursuant to Sec. 12.2 above,
the Participant may, in lieu of all or part of such withholding, remit to the
Company an amount in cash sufficient to satisfy the federal, state and local
withholding tax requirements or may direct the Company to withhold from
other amounts payable to the Participant, including salary.
Article 13. Successors
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company.
Article 14. Legal Construction
14.1 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
14.2 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
14.3 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision
of the plan or action by the Committee fails to comply with a condition of
Rule 16b-3 or its successors, it shall not apply to the Insiders or
transactions thereby.
14.4 Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Colorado.