ILX RESORTS
INCORPORATED
STOCK BONUS
PLAN
1.
Purpose . The purpose of this Stock Bonus Plan
(“Plan”) is to advance the interests of ILX Resorts
Incorporated (the “Company”) and its shareholders, by
encouraging and enabling selected officers, directors, consultants
and key employees upon whose judgment, initiative and effort the
Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the
Company by ownership of its stock, to keep personnel of experience
and ability in the employ of the Company and to compensate them for
their contributions to the growth and profits of the Company and
thereby induce them to continue to make such contributions in the
future.
2.
Definitions
.
A.
“Board” shall mean the board of directors of the
Company.
B.
“Committee” means the Compensation Committee of
the Board.
C.
“Plan” shall
mean this Stock Bonus Plan.
D.
“Bonus
Share” shall mean the shares of common stock of the Company
reserved pursuant to Section 4 hereof and any such shares issued to
a Recipient pursuant to this Plan.
E.
“Recipient”
shall mean any individual rendering services for the Company to
whom shares are granted pursuant to this Plan.
3.
Administration of Plan . The Plan shall be
administered by the Compensation Committee which shall consist of
two or more independent directors (the “Committee”).
The Committee shall report all action taken by it to the Board. The
Committee shall have full and final authority in its discretion,
subject to the provisions of the Plan, to determine the individuals
to whom and the time or times at which Bonus Shares shall be
granted and the number of Bonus Shares; to construe and interpret
the Plan; and to make all other determinations and take all other
actions deemed necessary or advisable for the proper administration
of the Plan. All such actions and determinations shall be
conclusively binding for all purposes and upon all
persons.
4. Bonus
Share Reserve . There shall be established a Bonus Share
Reserve to which shall be credited 600,000 shares of the
Company’s common stock, 250,000 of which shall be authorized
and unissued shares of the Company's common stock or treasury
stock, and 350,000 of which shall be purchased by the Company on
the open market or from affiliates of the Company, including from
Martori Enterprises Incorporated, an entity controlled by Joseph P.
Martori, Chairman of the Board and Chief Executive Officer of the
Company. All purchases by the Company on the open market or
from affiliates shall be approved by a majority of the Company's
independent directors. The price of shares acquired from affiliates
shall be determined by a majority of the Company's independent
directors, but may not exceed the fair market value of such shares
at the time of purchase, and, if such shares are then listed on the
American Stock Exchange or other recognized exchange or Nasdaq, the
fair market value of such shares shall be the average of the mean
between the opening and closing price as reported by such exchange
or Nasdaq for each trading day over the 30 day period ending on the
date of such purchase (“Agreement Date”).
Pursuant to Section 16 under the Exchange Act of 1934, the
affiliate may not acquire shares of the Company's common stock,
except pursuant to a transaction exempt from Section 16(b), within
the six-month period preceding or following the Agreement Date.
Any Bonus Shares forfeited by Recipients are credited back to
the Bonus Share Reserve.
In the event that the
shares of common stock of the Company should, as a result of a
stock split or stock dividend or combination of shares or any other
change, or exchange for other securities by reclassification,
reorganization, merger, consolidation, recapitalization or
otherwise, be increased or decreased or changed into or exchanged
for, a different number or kind of shares of stock or other
securities of the Company or of another corporation, the number of
shares then remaining in the Bonus Share Reserve shall be
appropriately adjusted to reflect such action. Upon the grant of
shares hereunder, the Bonus Share Reserve shall be reduced by the
number of shares so granted.
5.
Eligibility, and Granting and Vesting of Bonus Shares
. Bonus Shares may be granted under the Plan to the Company’s
(or the Company’s subsidiaries) employees, directors and
officers, and consultants or advisors to the Company (or its
subsidiaries), provided however that bona fide services shall be
rendered by such consultants or advisors and such services must not
be in connection with the offer or sale of securities in a
capital-raising transaction.
The term
“employee” includes former employees as well as
executors, administrators or beneficiaries of the estate of
deceased employees, guardians or members of a committee for
incompetent former employees, or similar persons duly authorized by
law to administer the estate or assets of former
employees.
The Committee, in its
sole discretion, is empowered to grant to an eligible Participant a
number of Bonus Shares as it shall determine from time to time.
Each grant of these Bonus Shares shall become vested according to a
schedule to be established by the Committee directors at the time
of the grant, which schedule may provide for immediate vesting. For
purposes of this plan, vesting shall mean the period during which
the recipient must remain an employee or provide services for the
Company. At such time as the employment of the Recipient ceases,
any shares not fully vested shall be forfeited by the Recipient and
shall
