2006 Omnibus Stock and Incentive Plan

 

 

 

 

Section 1.	Purpose	1
Section 2.	Definitions	1
Section 3.	Administration	3
(a)	Power and Authority of the Committee	3
(b)	Power and Authority of the Board	4
Section 4.	Shares Available for Awards	4
(a)	Shares Available	4
(b)	Accounting for Awards	5
(c)	Adjustments	5
(d)	Merger, Consolidation, Dissolution, or Liquidation	5
Section 5.	Eligibility	6
Section 6.	Awards	6
(a)	Options	6
(b)	Stock Appreciation Rights	7
(c)	Performance Awards	8
(d)	Dividend Equivalents	8
(e)	Other Stock Grants	8
(f)	General	9
Section 7.	Amendment and Termination; Adjustments	10
(a)	Amendments to the Plan	10
(b)	Amendments to Awards	11
(c)	Correction of Defects, Omissions and Inconsistencies	11
Section 8.	Income Tax Withholding	11
Section 9.	General Provisions	11
(a)	No Rights to Awards	11
(b)	Award Agreements	11
(c)	Plan Provisions Control	12
(d)	No Rights of Shareholders	12
(e)	No Limit on Other Compensation Arrangements	12
(f)	No Right to Employment	12
(g)	Governing Law	12
(h)	Jurisdiction; Service of Process	12
(i)	Severability	12
(j)	No Trust or Fund Created	12
(k)	No Fractional Shares	13

 

 

(l)	Headings	13
Section 10.	Effective Date of the Plan	13
Section 11.	Term of the Plan	13

 

 

 

1.

Purpose

 

The proper execution of the duties and responsibilities of the employees, officers, consultants, advisors and directors of UpSnap, Inc. (the “Corporation”), a Nevada corporation, is a vital factor in the continued growth and success of the Corporation. Toward this end, it is necessary to attract and retain employees, officers, consultants, advisors and directors capable of effectively assuring the future success of the Corporation and to provide incentive compensation opportunities that are competitive with other similar businesses. It will benefit the Corporation, therefore, to bind the interests of these persons more closely to its own interests by offering them an attractive opportunity to acquire a proprietary interest in the Corporation and thereby provide them with the added incentive to remain in the service of the Corporation, to increase the prosperity, growth, and earnings of the Corporation and to enhance long-term shareholder return. This omnibus stock and incentive plan is intended to serve these purposes.

 

2.	Definitions

 

As used in the Plan, the following terms shall have the meanings set forth below:

 

(a)   “Affiliate” shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Corporation or (ii) any entity in which the Corporation has a significant equity interest, in each case as determined by the Committee.

 

(b)   “Award” shall mean the award of an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent or Other Stock Grant under the Plan.

 

(c)   “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the Plan. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.

 

(d)   “Board” shall mean the Board of Directors of the Corporation.

 

(e)   “Code” shall mean the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

 

(f)   “Committee” shall mean a committee designated by the Board to administer the Plan. The Committee shall be comprised of at least two Directors and each member of the Committee shall be a “Non-Employee Director” as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3 and Section 162(m) of the Code.

 

(g)   “Director” shall mean a member of the Board, including any Non-Employee Director.

 

 

(h)   “Dividend Equivalent” shall mean any right granted under Section 6(e) of the Plan.

 

(i)    “Employee Director” shall mean any Director who is also an employee of the Corporation or an Affiliate.

 

(j)    “Eligible Person” shall mean any employee, officer, consultant, advisor or director providing services to the Corporation or any Affiliate who the Committee determines to be an Eligible Person. An Eligible Person must be a natural person.

 

(k)   “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(l)    “Fair Market Value” shall mean, unless otherwise determined by the Committee, a value on any relevant date that is determined in accordance with the following provisions:

 

(i)

If the Common Stock is traded or listed on the OTC BB, the Fair Market Value shall be the average of the closing bid and ask prices of a Share on that day as reported by the OTC BB or any comparable system.

 

(ii)

If the Common Stock is at the time listed on any other stock exchange, then the Fair Market Value shall be the closing selling price of a Share on the date in question on the stock exchange determined by the Committee to be the primary market for the Shares, as such price is officially quoted on such exchange and published on Yahoo! Finance, the internet site.

 

(iii)

If the Common Stock is not traded or included in the OTC BB, a security exchange, or any comparable system, the Fair Market Value shall be the average of the closing bid and ask prices on that day as furnished by any member of the National Association of Securities Dealers, Inc. selected from time to time by the Corporation for that purpose.

 

(iv)

If the date in question is not a trading day, or if the stock did not trade on such a day, then the Fair Market Value shall be determined based on prices for the trading day prior to the date in question.

 

(m)   “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to qualify as an “incentive stock option” in accordance with the terms of Section 422 of the code or any successor provision.

 

(n)   “Non-Employee Director” shall mean any Director who is not also an employee of the Corporation or an Affiliate within the meaning of Rule 16b-3 and is an “outside director” within the meaning of Section 162(m) of the Code.

 

(o)   “Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to satisfy the requirements of Section 422 of the Code.

 

(p)   “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

 

 

(q)   “Other Stock Grant” shall mean any right granted under Section 6(f) of the Plan.

 

(r)   “Participant” shall mean an Eligible Person granted an Award under the Plan.

 

(s)   “Performance Award” shall mean any right granted under Section 6(d) of the Plan.

 

(t)   “Performance Goal” shall mean performance goals, either individually, alternatively or in any combination, applied on a corporate, affiliate, or business unit basis established for use in the Plan to the extent required by Section 162(m) and conditioned solely on the achievement of one or more objective performance goals. Such performance goals shall be established by the Corporation’s Management and approved by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m).

 

(u)   “Person” shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.

 

(v)   “Plan” shall mean the UpSNAP, Inc. 2006 Omnibus Stock and Incentive Plan, as amended from time to time, the provisions of which are set forth herein.

 

(w)   “Restricted Stock” shall mean any Shares granted under Section 6(c) of the Plan.

 

(x)   “Restricted Stock Unit” shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Shares share (or a cash payment equal to the Fair Market Value of a share) at some future date.

 

(y)   “Rule 16b-3” shall mean, pursuant to the Code of Federal Regulations § 240.16b-3, Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, or any successor rule or regulation.

 

(z)   “Section 162(m)” shall mean Section 162(m) of the Code and the applicable Treasury Regulations promulgated thereunder.

 

(aa)   “Share” or “Common Stock” shall mean a share or shares of the Corporation’s common stock, $ 0.001 par value per share or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan.

 

(bb)   “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.

 

3.	Administration

 

(a)   Power and Authority of the Committee. The Plan shall be administered by the Committee within the conditions of Rule 16b-3. Subject to the express provisions of the Plan and to applicable law, the Committee shall have full power and authority to:

 

(i)

designate Participants;

 

 

(ii)

determine the type or types of Awards to be granted to each Participant under the Plan;

 

(iii)

determine the amount of Shares to be covered by (or the method by which payments or other rights are to be determined in connection with) each Award;

 

(iv)

determine the terms and conditions of any Award or Award Agreement;

 

(v)

amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of any Option or waive any restrictions relating to any Award;

 

(vi)

determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended;

 

(vii)

determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or the Committee;

 

(viii)

interpret and administer the Plan and any instrument or agreement, including any Award Agreement, relating to the Plan;

 

(ix)

establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and

 

(x)

make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

 

Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Eligible Person and any holder or beneficiary of any Award.

 

(b)   Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, exercise the powers and duties of the Committee under the Plan without any further action of the Committee. The Committee may delegate its responsibilities to others, including the Board, under such conditions and limitations as it may determine, except that the Committee may not delegate its authority with regard to the making of grants to Section 16(b) Employee Directors. However, if the grant to an Employee Director would not be exempt under 16b-3 if made by the Committee, such grant may be made by the Board. On the other hand, if the grant of an option is intended to be exempt

 

 

from 162(m), it must be made by a committee composed exclusively of Non-Employee Directors.

 

4.	Shares Available for Awards

 

(a)   Shares Available. The Shares issuable under the Plan shall be made available either from authorized but unissued Shares or from Shares reacquired by the Company on the open market. Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under the Plan shall not exceed four million (4,000,000) Shares.

 

(b)   Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. If an Award terminates or is forfeited or cancelled without the issuance of any Shares, or if any Shares covered by an Award or to which an Award relates are not issued for any other reason, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such termination, forfeiture, cancellation or other event, shall again be available for granting Awards under the Plan. If Shares of Restricted Stock are forfeited or otherwise reacquired by the Corporation prior to vesting, whether or not dividends have been paid on such Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award of Restricted Stock, to the extent of any such forfeiture or reacquisition by the Corporation, shall again be available for granting Awards under the Plan. Shares that are withheld in full or partial payment to the Corporation of the purchase or exercise price relating to an Award or in connection with the satisfaction of tax obligations relating to an Award other than a Stock Option shall again be available for granting Awards under the Plan.

 

(c)   Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Corporation, issuance of warrants or other rights to purchase Shares or other securities of the Corporation or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the aggregate number and/or type of Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards, (iii) the purchase price or exercise price, so long as the option price per share is never less than the Fair Market Value per share, with respect to any Award within the limitations contained in Section 4(d) of the Plan.

 

(d)   Merger, Consolidation, Dissolution, or Liquidation. Upon, (i) the merger or consolidation of the Corporation with or into another corporation (pursuant to which the stockholders of the Corporation immediately prior to such merger or consolidation will not, as of the date of such merger or consolidation, own a beneficial interest in shares of voting securities

 

 

of the corporation surviving such merger or consolidation having at least a majority of the combined voting power of such corporation’s then outstanding securities), if the agreement of merger or consolidation does not provide for (1) the continuance of the Options, Stock Appreciation Rights and shares of Restricted Stock granted hereunder, (2) the substitution of new options, stock appreciation rights or shares of restricted stock for Options, Stock Appreciation Rights and shares of Restricted Stock granted hereunder, or (3) the assumption of such Options, Stock Appreciation Rights and shares of Restricted Stock by the surviving corporation, or (ii) the dissolution, liquidation, or sale of substantially all the assets of the Corporation, then, unless the terms of the Award of such rights otherwise provides, the holder of any such Option or Stock Appreciation Right may only exercise such Option or Stock Appreciation Right to the extent that it has vested and all such Options and Stock Appreciation Rights which have not yet vested as of the effective time of such merger, consolidation, dissolution, liquidation or sale of assets shall be forfeited. All such Options and Stock Appreciation Rights which have vested, but are not so exercised shall be forfeited as of the effective time of such merger, consolidation, dissolution, liquidation or sale of assets.

 

5.	Eligibility

 

Any Eligible Person shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Corporation or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, a Stock Option may only be granted to full-time or part-time employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the Corporation within the meaning of Section 424(f) of the Code or any successor provision.

 

6.

Awards

 

(a)   Options. The Committee is hereby authorized to grant Options to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:

 

(i)

Exercise Price. The purchase price per share purchasable under an Option shall be determined by the Committee; provided, however, that such purchase price shall not be less than 100% of the Fair Market Value of a share on the date of grant of such Option; provided, however, that the Committee may designate a per share exercise price below Fair Market Value on the date of grant (A) to the extent necessary or appropriate, as determined by the Committee, to satisfy applicable legal or regulatory requirements of a foreign jurisdiction or (B) if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Corporation or an Affiliate.

 

 

(ii)

Option Term. The term of each Option shall be fixed by the Committee at the time of grant, shall be no longer than 10 years from the date of grant.

 

(iii)

Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.

 

(b)   Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Persons subject to the terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one share on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as determined by the Committee, which grant price shall not be less than 100% of the Fair Market Value of one share on the date of grant of the Stock Appreciation Right; provided, however, that the Committee may designate a per share grant price below Fair Market Value on the date of grant (A) to the extent necessary or appropriate, as determined by the Committee, to satisfy applicable legal or regulatory requirements of a foreign jurisdiction or (B) if the Stock Appreciation Right is granted in substitution for a stock appreciation right previously granted by an entity that is acquired by or merged with the Corporation or an Affiliate. Subject to the terms of the Plan, the grant price, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions (including conditions or restrictions on the exercise thereof) of any Stock Appreciation Right shall be as determined by the Committee.

 

(c)   Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Restricted Stock and Restricted Stock Units to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:

 

(i)

Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate. The minimum vesting period of such Awards shall be three years from the date of grant, unless the Award is conditioned on performance of the Corporation or an Affiliate or on personal performance (other than continued service with the Corporation or an Affiliate), in which case the Award may vest over a period as determined by the Committee. Notwithstanding the foregoing, the Committee may permit acceleration of vesting of such Awards in the event of the Participant’s death, disability or retirement or a change in control of the Corporation.

 

 

(ii)

Issuance and Delivery of Shares. Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Corporation. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the restrictions applicable to such Restricted Stock. Shares representing Restricted Stock that is no longer subject to restrictions shall be delivered to the Participant promptly after the applicable restrictions lapse or are waived. In the case of Restricted Stock Units, no shares shall be issued at the time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock Units.

 

(iii)

Forfeiture. Except as otherwise determined by the Committee, upon a Participant’s termination of employment or resignation or removal as a Director (in either case, as determined under criteria established by the Committee) during the applicable restriction period, all shares of Restricted Stock and Restricted Stock Units held by the Participant at such time subject to restriction shall be forfeited and reacquired by the Corporation; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Corporation, waive in whole or in part any or all remaining restrictions with respect to shares of Restricted Stock or Restricted Stock Units.

 

(d)   Performance Awards. The Committee is hereby authorized to grant to Eligible Persons Performance Awards which are intended to be “qualified performance-based compensation” within the meaning of Section 162(m). A Performance Award granted under the Plan may be payable in cash or in Shares (including, without limitation, Restricted Stock). Performance Awards shall, to the extent required by Section 162(m), be conditioned solely on the achievement of one or more objective Performance Goals, and such Performance Goals shall be established by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m). Subject to the terms of the Plan and any applicable Award Agreement, the Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any other terms and conditions of any Performance Award shall be determined by the Committee. The Committee shall also certify in writing that such Performance Goals have been met prior to payment of the Performance Awards to the extent required by Section 162(m).

 

(e)   Dividend Equivalents. The Committee is hereby authorized to grant Dividend Equivalents to Eligible Persons under which the Participant shall be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of the Committee) equivalent to the amount of cash dividends paid by the Corporation to holders of Shares with respect to a number of shares determined by the Committee. Subject to the terms

 

 

of the Plan, such Dividend Equivalents may have such terms and conditions as the Committee shall determine.

 

(f)   Other Stock Grants. The Committee is hereby authorized, subject to the terms of the Plan, to grant to Eligible Persons Shares without restrictions thereon as are deemed by the Committee to be consistent with the purpose of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, such Other Stock Grant may have such terms and conditions as the Committee shall determine.

 

(g)   General.

 

(i)

Consideration for Awards. Awards may be granted for no cash consideration or for any cash or other consideration as determined by the Committee or required by applicable law.

 

(ii)

Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any plan of the Corporation or any Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any such other plan of the Corporation or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 

(iii)

Forms of Payment under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Corporation or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.

 

(iv)

Limits on Transfer of Awards. Except as otherwise provided by the Committee or the terms of this Plan, no Award and no right under any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution. The Committee may establish procedures as it deems appropriate for a Participant to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of the Participant and receive any property distributable with respect to any Award in the event of the Participant’s death. The Committee, in its discretion and subject to such additional terms and conditions as it determines, may permit a Participant to transfer a Non-Qualified Stock

 

 

(v)

Term of Awards. The term of each Award shall be for a period not longer than 10 years from the date of grant.

 

(vi)

Restrictions; Securities Exchange Listing. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Committee may direct appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect such restrictions.

 

If the Shares or other securities are traded on a securities exchange, the Corporation shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been and continue to be admitted for trading on such securities exchange.

 

(vii)

Prohibition on Repricing. Except as provided in Section 4(c) of the Plan, no Option or Stock Appreciation Right may be amended to reduce its initial exercise or grant price and no Option or Stock Appreciation Right shall be canceled and replaced with Options or Stock Appreciation Rights having a lower exercise or grant price, without the approval of the shareholders of the Corporation.

 

7.	Amendment and Termination; Adjustments

 

(a)   Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan at any time, without approval of the shareholders of the Corporation, provided that no such amendment, alteration, suspension, discontinuation or termination shall be made absent such approval that:

 

 

(i)

violates the rules or regulations of any other securities exchange applicable to the Corporation;

 

(ii)

increases the number of shares authorized under the Plan as specified in Section 4(a) of the Plan, except to maintain such level as approved under Section 4(c);

 

(iii)

increases the number of shares subject to the limitations contained in Section 4(d) of the Plan;

 

(iv)

permits the award of Options or Stock Appreciation Rights at a price less than 100% of the Fair Market Value of a share on the date of grant of such Option or Stock Appreciation Right, as prohibited by Sections 6(a)(i) and 6(b)(ii) of the Plan or the repricing of Options or Stock Appreciation Rights, as prohibited by Section 6(g)(vii) of the Plan; or

 

(v)

expands the classes or categories of Eligible Persons to receive Awards under the Plan.

 

(b)   Amendments to Awards. The Committee may waive any conditions of or rights of the Corporation under any outstanding Award, prospectively or retroactively. Except as otherwise provided herein or in an Award Agreement, the Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, if such action would adversely affect the rights of the holder of such Award, without the consent of the Participant or holder or beneficiary thereof.

 

(c)   Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Plan.

 

8.	Income Tax Withholding

 

In order to comply with all applicable federal, state, local or foreign income tax laws or regulations, the Corporation may take such action as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of applicable taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Corporation withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes or (ii) delivering to the Corporation Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes.

 

 

9.	General Provisions

 

(a)   No Rights to Awards. No Eligible Person or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.

 

(b)   Award Agreements. No Participant will have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Corporation and, if requested by the Corporation, signed by the Participant.

 

(c)   Plan Provisions Control. In the event that any provision of an Award Agreement conflicts with or is inconsistent in any respect with the terms of the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.

 

(d)   No Rights of Shareholders. Except with respect to shares of Restricted Stock as to which the Participant has been granted the right to vote, neither a Participant nor the Participant’s legal representative shall be, or have any of the rights and privileges of, a shareholder of the Corporation with respect to any Shares issuable to such Participant upon the exercise or payment of any Award, in whole or in part, unless and until such Shares have been issued.

 

(e)   No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Corporation or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

 

(f)   No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained as an employee of the Corporation or any Affiliate, or a Director to be retained as a Director, nor will it affect in any way the right of the Corporation or an Affiliate to terminate a Participant’s employment at any time, with or without cause. In addition, the Corporation or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement.

 

(g)   Governing Law. The validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of North Carolina.

 

(h)   Jurisdiction; Service of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Plan may be brought in the courts of the State of North Carolina, County of Mecklenburg, or, if it has or can acquire jurisdiction, in the United States District Court for the State of North Carolina, Western District. Each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

 

 

(i)   Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.

 

(j)   No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation or any Affiliate and an Eligible Person or any other Person. To the extent that any Person acquires a right to receive payments from the Corporation or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Corporation or any Affiliate.

 

(k)   No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

 

(l)   Headings. Headings are given to the Sections and subsections of the Plan or any Award Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

10.	Effective Date of the Plan

 

The Plan shall be effective upon its adoption by the Board, provided however that the shareholders of the Corporation approve the Plan within twelve months of its adoption by the Board. All Awards granted prior to such approval shall be subject to such approval. If the stockholders do not so approve the Plan, it shall terminate and all Awards previously issued shall terminate as if they had never been awarded.

 

11.	Term of the Plan

 

Subject to the preceding Section, the Plan shall remain in effect until terminated by the Board. Awards may be granted under the Plan until the Plan terminates or until all Shares available for Awards under the Plan have been purchased or acquired.

 

Adopted by the Board of Directors on October 31, 2006.