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Exhibit 10.5
2005 EMPLOYEE STOCK INCENTIVE PLAN
OF
MESA AIR GROUP, INC.
SECTION 1. PURPOSE OF PLAN
The purpose of
this 2005 Employee Stock Incentive Plan (this "Plan") of
Mesa Air Group, Inc., a Nevada corporation
(the "Company"), is to enable the
Company and any subsidiary corporation (as
the term is defined in Code Section
424(f), hereinafter each a "Subsidiary" or
the plural "Subsidiaries") to
attract, retain and motivate their officers
and other key employees, and to
further align the interests of such persons
with those of the stockholders of
the Company by providing for or increasing
the proprietary interest of such
persons in the Company.
SECTION 2. ADMINISTRATION OF PLAN
2.1 Composition
of Committee. This Plan shall be administered by the
Compensation Committee of the Board of
Directors (the "Committee"), as appointed
from time to time by the Board of
Directors. The Board of Directors shall fill
vacancies on, and from time to time may
remove or add members to, the Committee.
The Committee shall act pursuant to a
majority vote or unanimous written
consent. The Board of Directors, in its
sole discretion, may exercise any
authority of the Committee under this Plan
in lieu of the Committee's exercise
thereof. Notwithstanding the foregoing,
with respect to any Award that is not
intended to satisfy the conditions of Rule
16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange
Act") or Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended
(the "Code"), the Committee may
appoint one or more separate committees
(any such committee, a "Subcommittee")
composed of one or more directors of the
Company (who may but need not be
members of the Committee) and may delegate
to any such Subcommittee(s) the
authority to grant Awards, as defined in
Section 5.1 hereof, under the Plan to
Eligible Persons, to determine all terms of
such Awards, and/or to administer
the Plan or any aspect of it. Any action by
any such Subcommittee within the
scope of such delegation shall be deemed
for all purposes to have been taken by
the Committee. The Committee may designate
the Secretary of the Company or other
Company employees to assist the Committee
in the administration of the Plan, and
may grant authority to such persons to
execute agreements or other documents
evidencing Awards made under this Plan or
other documents entered into under
this Plan on behalf of the Committee or the
Company.
2.2 Powers of
the Committee. Subject to the express provisions of this
Plan, the Committee shall be authorized and
empowered to do all things necessary
or desirable, in its sole discretion, in
connection with the administration of
this Plan, including, without limitation,
the following:
(a) to prescribe, amend and rescind rules and regulations relating
to
this Plan and to
define terms not otherwise defined herein; provided that,
unless the
Committee shall specify otherwise, for purposes of this Plan
(i)
the term "fair
market value" shall mean, as of any date, the closing price
for a Share (as
defined in Section 3.1) reported for the last trading day
prior to such
date by the Nasdaq Stock Market (or such other stock exchange
or quotation
system on which Shares are then listed or quoted) or, if no
Shares are
traded on the Nasdaq Stock Market (or such other stock exchange
or quotation
system) on the date in question, then for the next preceding
date for which
Shares traded on the Nasdaq Stock Market (or such other
stock exchange
or quotation system); and (ii) the term "Company" shall mean
the Company and
its Subsidiaries, unless the context otherwise requires;
(b) to determine which persons are Eligible Persons (as defined
in
Section 4), to
which of such Eligible Persons, if any, Awards shall be
granted
hereunder and the timing of any such Awards, and to grant
Awards;
(c) to grant Awards to Eligible Persons and determine the terms
and
conditions
thereof, including the number of Shares subject to Awards and
the exercise or
purchase price of such Shares and the circumstances under
which Awards
become exercisable or vested or are forfeited or expire, which
terms may but
need not be conditioned upon the passage of time, continued
employment, the
satisfaction of performance criteria, the occurrence of
certain events
(including events which the Board or the Committee determine
constitute a
change of control), whether such Award complies with Code
Section 409A and
Notice 2005-1 or other factors;
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(d) to establish, verify the extent of satisfaction of, adjust,
reduce
or waive any
performance goals or other conditions applicable to the grant,
issuance,
exercisability, vesting and/or ability to retain any Award;
(e) to prescribe and amend the terms of the agreements or other
documents
evidencing Awards made under this Plan (which need not be
identical);
(f) to determine whether, and the extent to which, adjustments
are
required
pursuant to Section 10;
(g) to interpret and construe this Plan, any rules and
regulations
under this Plan
and the terms and conditions of any Award granted
hereunder, and
to make exceptions to any such provisions in good faith and
for the benefit
of the Company; and
(h) to make all other determinations deemed necessary or advisable
for
the
administration of this Plan.
2.3
Determinations of the Committee. All decisions, determinations
and
interpretations by the Committee regarding
this Plan shall be final and binding
on all Eligible Persons and Participants.
The Committee shall consider such
factors as it deems relevant to making such
decisions, determinations and
interpretations including, without
limitation, the recommendations or advice of
any director, officer or employee of the
Company and such attorneys, consultants
and accountants as it may select.
SECTION 3. STOCK SUBJECT TO PLAN
3.1 Aggregate
Limits. The aggregate number of shares of the Company's
Common Stock, no par value ("Shares"),
issued pursuant to all Awards granted
under this Plan shall not exceed 1,500,000;
plus, the number of shares equal to
the number of shares subject to awards
granted under the Company's 1996 Stock
Option Plan but ultimately which are not
issued under such plan as a result of
the cancellation, expiration or forfeiture
of such awards (such Shares being
known as the "1996 Plan Shares"). The
aggregate number of Shares available for
issuance under this Plan and the number of
Shares subject to outstanding Options
or other Awards shall be subject to
adjustment as provided in Section 10. The
Shares issued pursuant to this Plan may be
Shares that either were reacquired by
the Company, including Shares purchased in
the open market, or authorized but
unissued Shares.
3.2 Additional
Limits. The aggregate number of Shares subject to Options
granted under this Plan during any calendar
year to any one Eligible Person
shall not exceed 150,000 (taking into
account the number of shares associated
with an Option granted and then cancelled
during such calendar year). The
aggregate number of Shares issued or
issuable under all Awards granted under
this Plan, other than Options, during any
calendar year to any one Eligible
Person shall not exceed 50,000 (taking into
account the number of shares
associated with the Awards other than
Options granted and then cancelled during
such calendar year). The foregoing
limitations of this Section 3.2 shall not
apply to the extent that they are no longer
required in order for compensation
in connection with grants of Awards under
this Plan to be treated as
"performance-based compensation" under Code
Section 162(m) and, if no longer
required, a change in such limitation shall
not be subject to stockholder
approval as required under Section 13
hereof. The aggregate number of Shares
that may be issued pursuant to the exercise
of ISOs granted under this Plan
shall not exceed 1,500,000 (provided that
such Shares shall not include the 1996
Plan Shares), which number shall be
calculated and adjusted pursuant to Section
3.3 and Section 10 only to the extent that
such calculation or adjustment will
not affect the status of any Option
intended to qualify as an ISO under Code
Section 422, or whether this Plan meets the
requirements under Code Section
422(b)(1). For the avoidance of all doubt,
the 1996 Plan Shares may not be
issued pursuant to the exercise of ISOs
granted under the Plan.
3.3 Issuance of
Shares. For purposes of Section 3.1, the aggregate number
of Shares issued under this Plan at any
time shall equal only the number of
Shares actually issued upon exercise or
settlement of an Award and shall not
include Shares subject to Awards that have
been canceled, expired or forfeited
or Shares subject to Awards that have been
delivered (either actually or
constructively by attestation) to or
retained by the Company in payment or
satisfaction of the purchase price or
exercise price of an Award.
SECTION 4. PERSONS ELIGIBLE UNDER PLAN
Any person who
is an employee or prospective employee of the Company or any
of its Subsidiaries shall be
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eligible to be considered for the grant of
Awards hereunder; provided that the
Award to such prospective employee is
conditioned on the prospective employee's
commencement of employment (an "Eligible
Person"). The status of the chairman of
the Board of Directors as an "employee"
shall be determined by the Committee.
SECTION 5. PLAN AWARDS
5.1 Award Types.
The Committee, on behalf of the Company, is authorized
under this Plan to enter into certain types
of arrangements with Eligible
Persons and to confer certain benefits on
them. The following arrangements or
benefits are authorized under this Plan if
their terms and conditions are not
inconsistent with the provisions of this
Plan: Options, Performance Shares and
Restricted Stock. Such arrangements and
benefits are sometimes referred to
herein as "Awards." The authorized types of
arrangements and benefits for which
Awards may be granted are defined as
follows:
(a) Options: An Option is a right granted under Section 6 to
purchase
a number of
Shares at such exercise price, at such times, and on such other
terms and
conditions as are specified in the agreement or terms and
conditions or
other document evidencing the Award (the "Option Document").
Options intended
to qualify as Incentive Stock Options ("ISOs") pursuant to
Code Section 422
and Options not intended to qualify as ISOs ("Nonqualified
Options") may be
granted under Section 6.
(b) Performance Shares. Performance Shares is an award made
under
Section 8, to
receive a number of Shares, the payment of which is
contingent upon
achieving certain Committee established performance
standards
derived from the Qualifying Performance Criteria described in
Section 9.2
hereof. Once the conditions for the Performance Shares are met,
the Performance
Shares shall be payable either in cash or Shares (or both)
by reference to
the fair market value of the Shares enumerated in the
Performance
Shares at such time as determined by the Committee in the
Award.
(c) Restricted Stock: A Restricted Stock is an award or issuance
of
Shares under
Section 7, subject to certain restrictions and the risk of
forfeiture and
terms as are expressed in the agreement or other document
evidencing the
Award.
5.2 Grants of
Awards. An Award may consist of one such arrangement or
benefit or two or more of them in tandem,
and the terms as established by the
Committee for all Awards granted hereunder
may include performance standards
derived from the Qualifying Performance
Criteria, and the receipt of any Award
may be contingent on performance standards
derived from the Qualifying
Performance Criteria.
SECTION 6. OPTIONS
The Committee may
grant an Option or provide for the grant of an Option,
either from time to time in the discretion
of the Committee or automatically
upon the occurrence of specified events,
including, without limitation, the
achievement of performance goals, the
satisfaction of an event or condition
within the control of the recipient of the
Award or within the control of
others.
6.1 Option
Document. Each Option Document shall contain provisions
regarding (a) the number of Shares that may
be issued upon exercise of the
Option, (b) the purchase price of the
Shares and the means of payment for the
Shares, (c) the term of the Option, (d)
such terms and conditions on the vesting
and/or exercisability of an Option as may
be determined from time to time by the
Committee, (e) restrictions on the transfer
of the Option and forfeiture
provisions and (f) such further terms and
conditions, in each case not
inconsistent with this Plan as may be
determined from time to time by the
Committee. Option Documents evidencing ISOs
shall contain such terms and
conditions as may be necessary to qualify,
to the extent determined desirable by
the Committee, with the applicable
provisions of Section 422 of the Code.
6.2 Option
Price. The purchase price per share of the Shares subject to
each Option granted under this Plan shall
equal or exceed 100% of the fair
market value of a Share on the date the
Option is granted.
6.3 Option Term.
The "Term" of each Option granted under this Plan,
including any ISOs, shall be 10 years from
the date of its grant, unless the
Committee provides for a lesser term.
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6.4 Option
Vesting. Options granted under this Plan shall be exercisable
at
such time and in such installments during
the period prior to the expiration of
the Option's Term as determined by the
Committee. The Committee shall have the
right to make the timing of the ability to
exercise any Option granted under
this Plan subject to continued employment,
the passage of time and/or such
performance requirements as deemed
appropriate by the Committee.
6.5 Termination
of Employment other than as a Result of Death or
Disability. An ISO of any Participant who
shall cease to be an Employee other
than as a result of his death or disability
shall be exercisable only to the
extent exercisable on the date of
termination of employment (i.e., to the extent
vested) and must be exercised on or before
the option expiration date specified
in the Option Agreement but is no event
later than the date that is three (3)
months following the date of termination of
employment. To the extent any ISO is
not exercisable on the date of termination
of employment (i.e., to the extent
not vested) such ISO shall terminate on the
date of termination of employment.
To the extent any ISO is not exercised
within the time period provided, such ISO
shall terminate as of the date of
expiration of such time period. Nothing in the
Plan shall be construed as imposing any
obligation on the Company to continue
the employment of any Participant or shall
interfere or restrict in any way the
rights of the Company to discharge any
Employee at any time for any reason
whatsoever, with or without cause.
6.6 Payment of
Exercise Price. The exercise price of an Option shall be
paid in the form of one of more of the
following, as the Committee shall
specify, either through the terms of the
Option Document or at the time of
exercise of an Option: (a) cash or
certified or cashiers' check, (b) shares of
capital stock of the Company that have been
held by the Participant for such
period of time as the Committee may
specify, (c) other property deemed
acceptable by the Committee, (d) a
reduction in the number of Shares or other
property otherwise issuable pursuant to
such Option, (e) payment under an
arrangement with a broker selected or
approved by the Company where payment is
made pursuant to an irrevocable commitment
by the broker to deliver to the
Company proceeds from the sale of the
Shares issuable upon exercise of the
Option, or (f) any combination of (a)
through (d).
6.7 No Option
Repricing. Without the approval of stockholders, the Company
shall not reprice any Options. For purposes
of this Plan, the term "reprice"
shall mean lowering the exercise price of
previously awarded Options within the
meaning of Item 402(i) under Securities and
Exchange Commission Regulation S-K
(including canceling previously awarded
Options and regranting them with a lower
exercise price).
SECTION 7. RESTRICTED STOCK AWARDS
The Committee is
authorized to make Awards of Restricted Stock to
Participants in such amounts and subject to
such terms and conditions as may be
determined by the Committee. All Awards of
Restricted Stock shall be evidenced
by a Restricted Stock Award Agreement.
7.1 Issuance and
Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other
restrictions as the Committee may
impose (including, without limitation,
limitations on the right to vote
Restricted Stock or the right to receive
dividends on the Restricted Stock).
These restrictions may lapse separately or
in combination of such times, under
such circumstances, in such installments,
upon the satisfaction of continued
employment, standards derived from the
Qualifying Performance Criteria, lapse of
time, certain acceleration events like
death or disability or otherwise, as the
Committee determines at the time of the
grant of the Award or thereafter.
7.2 Forfeiture.
Except as otherwise determined by the Committee at the time
of the grant of the Award or thereafter,
upon termination of employment during
the applicable restriction period or upon
failure to satisfy a standard derived
from the Qualifying Performance Criteria
during the applicable restriction
period, Restricted Stock that is at that
time subject to restrictions shall be
forfeited and re-acquired b
