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CONFEDERATE
MOTORS, INC.
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2008
INCENTIVE PLAN
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SECTION
1. PURPOSE
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The
purpose of the Confederate Motors, Inc. 2008 Incentive Plan is to
attract, retain and motivate employees, officers, directors,
consultants, agents, advisors and independent contractors of the
Company and its Related Companies by providing them the opportunity
to acquire a proprietary interest in the Company and to align their
interests and efforts to the long-term interests of the
Company’s stockholders.
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Certain
capitalized terms used in the Plan have the meanings set forth in
Appendix A.
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SECTION
3. ADMINISTRATION
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3.1Administration of the Plan
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The
Plan shall be administered by the Board or the Compensation
Committee. The Compensation Committee shall be
composed of two or more directors, each of whom is a
“non-employee director” within the meaning of Rule
16b-3(b)(3) promulgated under the Exchange Act, or any successor
definition adopted by the Securities and Exchange
Commission. As used in this Plan, the term
“Compensation Committee” shall be construed as if
followed by the words “(if any)”; and nothing in this
Plan requires the Board to have a Compensation
Committee.
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Notwithstanding
the foregoing, the Board may delegate responsibility for
administering the Plan with respect to designated classes of
Eligible Persons to different committees consisting of one or more
members of the Board, subject to such limitations as the Board
deems appropriate, except with respect to Awards to any
Participants who are then subject to Section 16 of the
Exchange Act. Members of any committee shall serve for
such term as the Board may determine, subject to removal by the
Board at any time. To the extent consistent with
applicable law, the Board or the Compensation Committee may
authorize one or more officers of the Company to grant Awards to
designated classes of Eligible Persons, within limits specifically
prescribed by the Board or the Compensation Committee; provided,
however, that no such officer shall have or obtain authority to
grant Awards to himself or herself or to any person then subject to
Section 16 of the Exchange Act. All references in the
Plan to the “Committee” shall be, as applicable, to the
Board, the Compensation Committee or any other committee or any
officer to whom the Board or the Compensation Committee has
delegated authority to administer the Plan.
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3.3 Administration and Interpretation by Committee
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(a) Except
for the terms and conditions explicitly set forth in the Plan and
to the extent permitted by applicable law, the Committee shall have
full power and exclusive authority, subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may
from time to time be adopted by the Board or a Committee composed
of members of the Board, to (i) select the Eligible Persons to
whom Awards may from time to time be granted under the Plan;
(ii) determine the type or types of Award to be granted to
each Participant under the Plan; (iii) determine the number of
shares of Common Stock to be covered by each Award granted under
the Plan; (iv) determine the terms and conditions of any Award
granted under the Plan; (v) approve the forms of notice or
agreement for use under the Plan; (vi) determine whether, to
what extent and under what circumstances Awards may be settled in
cash, shares of Common Stock or other property or canceled or
suspended; (vii) determine whether, to what extent and under
what circumstances cash, shares of Common Stock, other property and
other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the Participant;
(viii) interpret and administer the Plan and any instrument
evidencing an Award, notice or agreement executed or entered into
under the Plan; (ix) establish such rules and regulations as
it shall deem appropriate for the proper administration of the
Plan; (x) delegate ministerial duties to such of the
Company’s employees as it so determines; and (xi) make
any other determination and take any other action that the
Committee deems necessary or desirable for administration of the
Plan.
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(b)
The Committee shall have the right, without
stockholder approval, to cancel or amend outstanding Options or
SARs for the purpose of repricing, replacing or regranting such
Options or SARs with Options or SARs that have a purchase or grant
price that is less than the purchase or grant price for the
original Options or SARs except in connection with adjustments
provided in Section 15.
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(c) The
effect on the vesting of an Award of a Company-approved leave of
absence or a Participant’s working less than full-time shall
be determined by the Company’s chief human resources officer
or other person performing that function or, with respect to
directors or executive officers, by the Committee, whose
determination shall be final.
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(d) Decisions
of the Committee shall be final, conclusive and binding on all
persons, including the Company, any Participant, any stockholder
and any Eligible Person. A majority of the members of
the Committee may determine its actions.
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SECTION
4. SHARES SUBJECT TO THE PLAN
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4.1 Authorized Number of Shares
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Subject
to adjustment from time to time as provided in Section 15.1, a
maximum of One Million One Hundred and Five Thousand (1,105,000)
shares of Common Stock shall be available for issuance under the
Plan. Shares issued under the Plan shall be drawn from
authorized and unissued shares or shares now held or subsequently
acquired by the Company as treasury shares.
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(a) Shares
of Common Stock covered by an Award shall not be counted as used
unless and until they are actually issued and delivered to a
Participant. If any Award lapses, expires, terminates or
is canceled prior to the issuance of shares thereunder or if shares
of Common Stock are issued under the Plan to a Participant and
thereafter are forfeited to or otherwise reacquired by the Company,
the shares subject to such Awards and the forfeited or reacquired
shares shall again be available for issuance under the
Plan. Any shares of Common Stock (i) tendered by a
Participant or retained by the Company as full or partial payment
to the Company for the purchase price of an Award or to satisfy tax
withholding obligations in connection with an Award, or
(ii) covered by an Award that is settled in cash, or in a
manner such that some or all of the shares of Common Stock covered
by the Award are not issued, shall be available for Awards under
the Plan. The number of shares of Common Stock available
for issuance under the Plan shall not be reduced to reflect any
dividends or dividend equivalents that are reinvested into
additional shares of Common Stock or credited as additional shares
of Common Stock subject or paid with respect to an
Award.
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(b) The
Committee shall also, without limitation, have the authority to
grant Awards as an alternative to or as the form of payment for
grants or rights earned or due under other compensation plans or
arrangements of the Company.
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(c) Notwithstanding
anything in the Plan to the contrary, the Committee may grant
Substitute Awards under the Plan. Substitute Awards
shall not reduce the number of shares authorized for issuance under
the Plan. In the event that an Acquired Entity has
shares available for awards or grants under one or more preexisting
plans not adopted in contemplation of such acquisition or
combination, then, to the extent determined by the Committee, the
shares available for grant pursuant to the terms of such
preexisting plan (as adjusted, to the extent appropriate, using the
exchange ratio or other adjustment or valuation ratio or formula
used in such acquisition or combination to determine the
consideration payable to holders of common stock of the entities
that are parties to such acquisition or combination) may be used
for Awards under the Plan and shall not reduce the number of shares
of Common Stock authorized for issuance under the Plan; provided,
however, that Awards using such available shares shall not be made
after the date awards or grants could have been made under the
terms of such preexisting plans, absent the acquisition or
combination, and shall only be made to individuals who were not
employees or directors of the Company or a Related Company prior to
such acquisition or combination. In the event that a
written agreement between the Company and an Acquired Entity
pursuant to which a merger or consolidation is
completed is approved by the Board and that agreement sets forth
the terms and conditions of the substitution for or assumption of
outstanding awards of the Acquired Entity, those terms and
conditions shall be deemed to be the action of the Committee
without any further action by the Committee, except as may be
required for compliance with Rule 16b-3 under the Exchange
Act, and the persons holding such awards shall be deemed to be
Participants.
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(d) Notwithstanding
the other provisions in this Section 4.2, the maximum number
of shares that may be issued upon the exercise of Incentive Stock
Options shall equal the aggregate share number stated in
Section 4.1, subject to adjustment as provided in
Section 15.1.
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An
Award may be granted to any employee, officer or director of the
Company or a Related Company whom the Committee from time to time
selects. An Award may also be granted to any consultant,
agent, advisor or independent contractor for bona fide services
rendered to the Company or any Related Company that (a) are
not in connection with the offer and sale of the Company’s
securities in a capital-raising transaction and (b) do not
directly or indirectly promote or maintain a market for the
Company’s securities.
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6.1 Form, Grant and Settlement of Awards
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The
Committee shall have the authority, in its sole discretion, to
determine the type or types of Awards to be granted under the
Plan. Such Awards may be granted either alone or in
addition to or in tandem with any other type of
Award. Any Award settlement may be subject to such
conditions, restrictions and contingencies as the Committee shall
determine.
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Awards
granted under the Plan shall be evidenced by a written, including
an electronic, notice or agreement that shall contain such terms,
conditions, limitations and restrictions as the Committee shall
deem advisable and that are not inconsistent with the
Plan.
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The
Committee may permit or require a Participant to defer receipt of
the payment of any Award if and to the extent set forth in the
instrument evidencing the Award at the time of grant. If
any such deferral election is permitted or required, the Committee,
in its sole discretion, shall establish rules and procedures for
such payment deferrals, which may include the grant of additional
Awards or provisions for the payment or crediting of interest or
dividend equivalents, including converting such credits to deferred
stock unit equivalents; provided, however, that the terms of any
deferrals under this Section 6.3 shall comply with all applicable
law, rules and regulations, including, without limitation, Section
409A of the Code.
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6.4 Dividends and Distributions
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Participants
may, if and to the extent the Committee so determines and sets
forth in the instrument evidencing the Award at the time of grant,
be credited with dividends paid with respect to shares of Common
Stock underlying an Award in a manner determined by the Committee
in its sole discretion. The Committee may apply any
restrictions to the dividends or dividend equivalents that the
Committee deems appropriate. The Committee, in its sole
discretion, may determine the form of payment of dividends or
dividend equivalents, including cash, shares of Common Stock,
Restricted Stock or Stock Units.
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The
Committee may grant Options designated as Incentive Stock Options
or Nonqualified Stock Options.
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The
exercise price for shares purchased under an Option shall be at
least 100% of the Fair Market Value on the Grant Date (and shall
not be less than the minimum exercise price required by Section 422
of the Code with respect to Incentive Stock Options), except in the
case of Substitute Awards.
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Subject
to earlier termination in accordance with the terms of the Plan and
the instrument evidencing the Option, the maximum term of a
Nonqualified Stock Option shall be ten years from the Grant
Date.
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The
Committee shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in
which, the Option shall vest and become exercisable, any of which
provisions may be waived or modified by the Committee at any
time.
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To the
extent an Option has vested and become exercisable, the Option may
be exercised in whole or from time to time in part by delivery to
or as directed or approved by the Company of a properly executed
stock option exercise agreement or notice, in a form and in
accordance with procedures established by the Committee, setting
forth the number of shares with respect to which the Option is
being exercised, the restrictions imposed on the shares purchased
under such exercise agreement, if any, and such representations and
agreements as may be required by the Committee, accompanied by
payment in full as described in Sections 7.5 and
13. An Option may be exercised only for whole shares and
may not be exercised for less than a reasonable number of shares at
any one time, as determined by the Committee.
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7.5Payment of Exercise Price
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The
exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the
product of the Option exercise price and the number of shares
purchased. Such consideration must be paid before the
Company will issue the shares being purchased and must be in a form
or a combination of forms acceptable to the Committee for that
purchase, which forms may include:
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(b) check
or wire transfer;
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(c) having
the Company withhold shares of Common Stock that would otherwise be
issued on exercise of the Option that have an aggregate Fair Market
Value equal to the aggregate exercise price of the shares being
purchased under the Option;
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(d) tendering
(either actually or, so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, by
attestation) shares of Common Stock owned by the Participant that
have an aggregate Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option;
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(e) so
long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, and to the extent permitted by law,
delivery of a properly executed exercise notice, together with
irrevocable instructions to a brokerage firm designated or approved
by the Company to deliver promptly to the Company the aggregate
amount of proceeds to pay the Option exercise price and
any withholding tax obligations that may arise in connection with
the exercise, all in accordance with the regulations of the Federal
Reserve Board; or
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(f) such
other consideration as the Committee may permit.
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7.6Effect of Termination of Service
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The
Committee shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, after a
Termination of Service, any of which provisions may be waived or
modified by the Committee at any time. If not so
established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and
conditions, which may be waived or modified by the Committee at any
time:
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(a) Any
portion of an Option that is not vested and exercisable on the date
of a Participant’s Termination of Service shall expire on
such date.
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(b) Any
portion of an Option that is vested and exercisable on the date of
a Participant’s Termination of Service shall expire on the
earliest to occur of:
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(i) if
the Participant’s Termination of Service occurs for reasons
other than Cause, Retirement, Disability or death, the date that is
three months after such Termination of Service;
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(ii) if
the Participant’s Termination of Service occurs by reason of
Retirement, Disability or death, the one-year anniversary of such
Termination of Service; and
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(iii) the
Option Expiration Date.
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Notwithstanding
the foregoing, if a Participant dies after his or her Termination
of Service but while an Option is otherwise exercisable, the
portion of the Option that is vested and exercisable on the date of
such Termination of Service shall expire upon the earlier to occur
of (y) the Option Expiration Date and (z) the one-year
anniversary of the date of death, unless the Committee determines
otherwise.
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Also
notwithstanding the foregoing, in case a Participant’s
Termination of Service occurs for Cause, all Options granted to the
Participant shall automatically expire upon first notification to
the Participant of such termination, unless the Committee
determines otherwise. If a Participant’s
employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be
terminated for Cause, all the Participant’s rights under any
Option shall likewise be suspended during the period of
investigation. If any facts that would constitute
termination for Cause are discovered after a Participant’s
Termination of Service, any Option then held by the Participant may
be immediately terminated by the Committee, in its sole
discretion.
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(c) If
the exercise of the Option following a Participant’s
Termination of Service, but while the Option is otherwise
exercisable, would be prohibited solely because the issuance of
Common Stock would violate either the registration requirements
under the Securities Act or the Company’s insider trading
policy, then the Option shall remain exercisable until the earlier
of (i) the Option Expiration Date and (ii)
the expiration of a period of three months (or such
longer period of time as determined by the Committee in its sole
discretion) after the Participant’s Termination of Service
during which the exercise of the Option would not be in violation
of such Securities Act or insider trading policy
requirements.
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SECTION
8. INCENTIVE STOCK OPTION LIMITATIONS
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Notwithstanding
any other provisions of the Plan, the terms and conditions of any
Incentive Stock Options shall in addition comply in all respects
with Section 422 of the Code, or any successor provision, and
any applicable regulations thereunder, including, to the extent
required thereunder, the following:
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To the
extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which a Participant’s
Incentive Stock Options become exercisable for the first time
during any calendar year (under the Plan and all other stock option
plans of the Company and its parent and subsidiary corporations)
exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the
Participant holds two or more such Options that become exercisable
for the first time in the same calendar year, such limitation shall
be applied on the basis of the order in which such Options are
granted.
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Individuals
who are not employees of the Company or one of its parent or
subsidiary corporations may not be granted Incentive Stock
Options.
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The
exercise price of an Incentive Stock Option shall be at least 100%
of the Fair Market Value of the Common Stock on the Grant Date, and
in the case of an Incentive Stock Option granted to a Participant
who owns more than 10% of the total combined voting power of all
classes of the stock of the Company or of its parent or subsidiary
corporations (a “Ten Percent Stockholder” ),
shall not be less than 110% of the Fair Market Value of the Common
Stock on the Grant Date. The determination of more than
10% ownership shall be made in accordance with Section 422 of
the Code.
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Subject
to earlier termination in accordance with the terms of the Plan and
the instrument evidencing the Option, the maximum term of an
Incentive Stock Option shall not exceed ten years, and in the case
of an Incentive Stock Option granted to a Ten Percent Stockholder,
shall not exceed five years.
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An
Option designated as an Incentive Stock Option shall cease to
qualify for favorable tax treatment as an Incentive Stock Option to
the extent it is exercised (if permitted by the terms of the
Option) (a) more than three months after the date of a
Participant’s Termination of Service if termination was for
reasons other than death or disability, (b) more than one year
after the date of a Participant’s Termination of Service if
termination was by reason of disability, or (c) after the
Participant has been on leave of absence for more than
90 days, unless the Participant’s reemployment rights
are guaranteed by statute or contract.
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8.6T axation of Incentive Stock Options
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In
order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must
hold the shares acquired upon the exercise of an Incentive Stock
Option for two years after the Grant Date and one year after the
date of exercise.
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A
Participant may be subject to the alternative minimum tax at the
time of exercise of an Incentive Stock Option. The
Participant shall give the Company prompt notice of any disposition
of shares acquired on the exercise of an Incentive Stock Option
prior to the expiration of such holding periods.
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For
the purposes of this Section 8 “disability,”
“parent corporation” and “subsidiary
corporation” shall have the meanings attributed to those
terms for purposes of Section 422 of the Code.
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SECTION
9. STOCK APPRECIATION RIGHTS
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9.1Grant of Stock Appreciation Rights
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The
Committee may grant Stock Appreciation Rights to Participants at
any time on such terms and conditions as the Committee shall
determine in its sole discretion. An SAR may be granted
in tandem with an Option or alone
(“freestanding”). The grant price of a
tandem SAR shall be equal to the exercise price of the related
Option. The grant price of a freestanding SAR shall be
established in accordance with procedures for Options set forth in
Section 7.2. An SAR may be exercised upon such
terms and conditions and for the term as the Committee determines
in its sole discretion; provided, however, that, subject to earlier
termination in accordance with the terms of the Plan and the
instrument evidencing the SAR, the maximum term of a freestanding
SAR shall be ten years, and in the case of a tandem SAR, (a) the
term shall not exceed the term of the related Option and (b) the
tandem SAR may be exercised for all or part of the shares subject
to the related Option upon the surrender of the right to exercise
the equivalent portion of the related Option, except that the
tandem SAR may be exercised only with respect to the shares for
which its related Option is then exercisable.
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Upon
the exercise of an SAR, a Participant shall be entitled to receive
payment in an amount determined by
multiplying: (a) the difference between the Fair
Market Value of the Common Stock on the date of exercise over the
grant price of the SAR by (b) the number of shares with respect to
which the SAR is exercised. At the discretion of the
Committee as set forth in the instrument evidencing the Award, the
payment upon exercise of an SAR may be in cash, in shares, in some
combination thereof or in any other manner approved by the
Committee in its sole discretion.
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9.3Waiver of Restrictions
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Subject
to Section 18.5, the Committee, in its sole discretion, may waive
any other terms, conditions or restrictions on any SAR under such
circumstances and subject to such terms and conditions as the
Committee shall deem appropriate.
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SECTION
10. STOCK AWARDS, RESTRICTED STOCK AND STOCK
UNITS
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10.1Grant of Stock Awards, Restricted Stock and Stock
Units
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The
Committee may grant Stock Awards, Restricted Stock and Stock Units
on such terms and conditions and subject to such repurchase or
forfeiture restrictions, if any, which may be based on continuous
service with the Company or a Related Company or the achievement of
any performance goals, as the Committee shall determine in its sole
discretion, which terms, conditions and restrictions shall be set
forth in the instrument evidencing the Award.
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10.2Vesting of Restricted Stock and Stock Units
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Upon
the satisfaction of any terms, conditions and restrictions
prescribed with respect to Restricted Stock or Stock Units, or upon
a Participant’s release from any terms, conditions and
restrictions of Restricted Stock or Stock Units, as determined by
the Committee, and subject to the provisions of Section 13, (a) the
shares of Restricted Stock covered by each Award of Restricted
Stock shall become freely transferable by the Participant, and (b)
Stock Units shall be paid in shares of Common Stock or, if set
forth in the instrument evidencing the Awards, in cash or a
combination of cash and shares of Common Stock. Any
fractional shares subject to such Awards shall be paid to the
Participant in cash.
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10.3Waiver of Restrictions
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Subject
to Section 18.5, the Committee, in its sole discretion, may waive
the repurchase or forfeiture period and any other terms, conditions
or restrictions on any Restricted Stock or Stock Unit under such
circumstances and subject to such terms and conditions as the
Committee shall deem appropriate.
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SECTION
11. PERFORMANCE AWARDS
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The
Committee may grant Awards of Performance Shares, designate the
Participants to whom Performance Shares are to be awarded and
determine the number of Performance Shares and the terms and
conditions of each such Award. Performance Shares shall
consist of a unit valued by reference to a designated number of
shares of Common Stock, the value of which may be paid to the
Participant by delivery of shares of Common Stock or, if set forth
in the instrument evidencing the Award, of such property as the
Committee shall determine, including, without limitation, cash,
shares of Common Stock, other property, or any combination thereof,
upon the attainment of performance goals, as established by the
Committee, and other terms and conditions specified by the
Committee. Subject to Section 18.5, the amount to be
paid under an Award of Performance Shares may be adjusted on the
basis of such further consideration as the Committee shall
determine in its sole discretion.
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The
Committee may grant Awards of Performance Units, designate the
Participants to whom Performance Units are to be awarded and
determine the number of Performance Units and the terms and
conditions of each such Award. Performance Units shall
consist of a unit valued by reference to a designated amount of
property other than shares of Common Stock, which value may be paid
to the Participant by delivery of such property as the Committee
shall determine, including, without limitation, cash, shares of
Common Stock, other property, or any combination thereof, upon the
attainment of performance goals, as established by the Committee,
and other terms and conditions specified by the
Committee. Subject to Section 18.5, the amount to be
paid under an Award of Performance Units may be adjusted on the
basis of such further consideration as the Committee shall
determine in its sole discretion.
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SECTION
12. OTHER STOCK OR CASH-BASED AWARDS
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Subject
to the terms of the Plan and such other terms and conditions as the
Committ
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