EXHIBIT 10.3
CHANCELLOR GROUP, INC.
2001 NO. 2 STOCK AWARD PLAN
1. Purpose of the Plan
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The Chancellor Group, Inc. 2001 No. 2 Stock Award Plan (the
"Plan") is intended to attract, retain, motivate and reward officers, directors,
employees of, and consultants to Chancellor Group, Inc. (the "Company") and
subsidiaries of the Company, who are and will be contributing to the success of
the business of the Company; to provide competitive incentive compensation
opportunities; and to further opportunities for stock ownership by such
employees and consultants in order to increase their proprietary interest in the
Company. It is the intention of the Company that the Plan comply with the
definition of an "employee benefit plan" contained in Rule 405 under the
Securities Act of 1933, as amended, (the "Act"), and that awards be made only to
"employees" as defined in Rule 405. Accordingly, the Company may from time to
time, grant to selected employees and consultants ("participants") awards
("awards") of shares of common stock of the Company, $.001 par value ("Shares"),
subject to the terms and conditions hereinafter provided.
2. Administration of the Plan
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This Plan shall be administered by the Board of Directors of
the Company (the "Board"). The Board is authorized to interpret the Plan and may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem appropriate, including rules and regulations to comply with the
requirements of Rule 16(b)(3) under the Securities Exchange Act of 1934. No
Director shall be eligible to vote or decide upon awards to such Director under
the Plan. Decisions of the Board in connection with the administration of the
Plan shall be final, conclusive, and binding upon all parties, including the
Company, shareholders, employees and consultants.
Subject to the terms, provisions, and conditions of this Plan
as set forth herein, the Board shall have sole discretion and authority:
(a) to select the employees and consultants to be awarded
Shares (it being understood that more than one award
may be granted to the same employee or consultant);
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(b) to determine the number of Shares to be awarded to
each recipient;
(c) to determine the time or times when the awards may
be granted;
(d) to prescribe the form of stock legend for the
certificates of Shares or other instruments, if any,
evidencing any awards, granted under this Plan, and
(e) to cause Shares to be registered on Form S-8 under
the Act either prior or subsequent to the making of
an award.
3. Shares Subject to the Plan
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The aggregate number of Shares which may be awarded under the
Plan shall not exceed 750,000 Shares of stock of the Company. Shares to be
awarded under the Plan shall be made available, at the discretion of the Board,
either from the authorized but unissued shares of the Company or from shares of
common stock reacquired by the Company, including shares purchased in the open
market.
4. Eligibility
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Shares shall be awarded only to employees (the term
"employees" shall include officers as well as other key employees of the
Company, and shall include directors who are also employees of the Company) of
and consultants to the Company it being the intention of the Company that awards
shall be made only to persons who satisfy the definition of "employee" contained
in Rule 405 under the Act.
5. Awards and Certificates
-----------------------
Each recipient shall be issued a certificate in respect of
Shares awarded under the Plan. Such certificate shall be registered in the name
of the participant, and shall bear an appropriate restrictive legend on its
face, unless such Shares have been registered under the Act. The Company may
register on Form S- 8 under the Act, on behalf of the recipients, Shares issued
or to be issued pursuant to the Plan.
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6. Termination and Amendment
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The Board may amend, suspend, or terminate the Plan at any
time provided that no such modification shall impair the rights of any recipient
under any award.
7. Miscellaneous
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(a) Nothing in the Plan shall require the Company to
issue or transfer any Shares pursuant to an award if
such issuance or transfer would, in the opinion of
the Board, constitute or result in a violation of any
applicable statute or regulation of any jurisdiction
relating to the disposition of securities.
(b) Notwithstanding any other provision of the Plan,
the Board may at any time make or provide for such
adjustment to the Plan, to the number of Shares
available thereunder, or to any awards of Shares as
it shall deem appropriate, to prevent dilution or
enlargement of rights, including adjustments in the
event of changes in the number of outstanding
Shares by reason of stock dividends or
distributions, stock splits or other combinations
or subdivisions of stock, recapitalization,
issuances by reclassification, mergers,
consolidations, combinations or exchanges of
shares, separations, reorganizations, liquidations,
or other similar corporate changes. Anu such
determination by the Board shall be conclusive.
(c) No employee, consultant or other person shall have
any claim or right to be granted Shares under the
Plan, and neither the Plan nor any action taken
thereunder shall be construed as giving any
participant, recipient, employee, consultant or other
person any right to be retained in the employ of or
by the Company.
(d) Income realized as a result of an award of Shares
shall not be included in the recipient's earnings for
the purpose of any benefit plan in which the
recipient may be enrolled or for which the recipient
may become eligible unless otherwise specifically
provided for in such plan.
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(e) If and when a recipient is required to pay the
Company an amount required to be withheld under any
federal, state or local income tax laws in
connection with an award under the Plan, the Board
may, in its sole discretion and subject to such
rules as it may adopt, permit the participant to
satisfy the obligation, in whole or in part, be
electing to have the Company withhold Shares having
a fair market value equal to the amount required to
be withheld. The election to have Shares withheld
must be made on or before the date the amount of
tax to be withheld is determined.
8. Effective Date and Term of the Plan
-----------------------------------
The effective date of the Plan shall be August 6, 2001 and the
Plan shall remain in full force until December 31, 2003 or until all Shares have
been awarded, whichever first occurs.
Chancellor\2001No.2StkAwdPlan
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