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Exhibit
10.7
AULTRA GOLD, INC.
2008 INCENTIVE STOCK OPTION PLAN
1. Purposes of
the Plan.
The
purposes of this Plan are to (i) attract and retain the best
available personnel for positions of responsibility within
Aultra Gold, Inc. (the “Company”), (ii) provide
additional incentives to Employees of the Company, (iii)
provide Directors, Consultants and Advisors of the Company
with an opportunity to acquire a proprietary interest in the
Company to encourage their continued provision of services to
the Company, and to provide such persons with incentives and
rewards for superior performance more directly linked to the
profitability of the Company's business and increases in
shareholder value, and (iv) generally to promote the success
of the Company's business and the interests of the Company and
all of its stockholders, through the grant of options to
purchase shares of the Company's Common Stock and other
incentives.
Incentive
benefits granted hereunder may be either Incentive Stock
Options, Non-qualified Stock Options, stock awards, Restricted
Shares or cash awards, as such terms are hereinafter defined.
The types of options or other incentives granted shall be
reflected in the terms of written agreements.
2. Definitions.
As
used herein, the following definitions shall
apply:
2.1 “ Board
” shall mean
the Board of Directors of Aultra Gold, Inc.
2.2 “Change
of
Control” means a change in ownership or
control of the Company effected through either of the following
transactions:
(a) the direct or indirect
acquisition by any person or related group of persons (other than
by the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the
Company's shareholders, or other transaction, in each case which
the Board does not recommend such shareholders to accept;
or
(c) a
Corporate Transaction as defined below.
2.3 “ Code
” shall mean
the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated
thereunder.
2.4 “ Committee
” shall mean
the Committee constituting the Board in accordance with Section 4.1
of the Plan, if one is appointed.
2.5 “ Common
Stock ”
or “ Common
Shares ” shall mean (i) shares of
the Common Stock, no par value, of the Company described in the
Company's Articles of Incorporation, as amended, and (ii) any
security into which Common Shares may be converted by reason of any
transaction or event of the type referred to in Section 12 of this
Plan.
2.6 “ Company
” shall mean
Aultra Gold, Inc., a Nevada corporation, and shall include any
parent or subsidiary corporation of the Company as defined in
Sections 424(e) and (f), respectively, of the
Code.
2.7 “ Consultants
” and
“ Advisors
” shall
include any third party retained or engaged by the Company to
provide service to the Company, including any employee of such
third party providing such services.
2.8 “ Corporate
Transaction ” means any of the
following shareholder-approved transactions to which the Company is
a party:
(a) a
merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is
to change the state in which the Company is
incorporated;
(b) the sale, transfer or other
disposition of all or substantially all of the assets of the
Company in complete liquidation or dissolution of the Company;
or
(c) any reverse merger in which the
Company is the surviving entity but in which securities possessing
more than 50% of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately
prior to such merger.
2.10 “ Deferral
Period ” means the period of time
during which Deferred Shares are subject to deferral limitations
under Section 9.3 of this Plan.
2.11 “ Deferred
Shares ” means an award pursuant
to Section 9 of this Plan of the right to receive Common Shares at
the end of a specified Deferral Period.
2.12 “ Director
” shall mean a
member of the Board.
2.13 “ Effective
Date ”
shall have the meaning ascribed thereto in Section
6.
2.14 “ Employee
” shall mean
any person, including officers and directors, employed by the
Company. The payment of a director's fee by the Company shall not
be sufficient to constitute “employment” by the
Company.
2.15 “ Exchange
Act ”
shall mean the Securities Exchange Act of 1934, as
amended.
2.16 “ Fair Market
Value ”
shall mean, with respect to the date a given Option is granted or
exercised, the value of the Common Stock determined by the Board in
such manner as it may deem equitable for Plan purposes but, in the
case of an Incentive Stock Option, no less than is required by
applicable laws or regulations; provided,
however, that
where there is a public market for the Common Stock, the fair
Market Value per share shall be the average of the bid and asked
prices of the Common Stock on the Date of Grant, as reported in
the Wall
Street Journal (or, if not so reported, as
otherwise reported by the National Association of Securities
Dealers Automated Quotation System - Small Cap or National Markets
or the National Association of Security Dealers Over the Counter
Bulletin Board).
2.17 “ Incentive
Agreement ” shall mean the written
agreement between the Company and the Participant relating to
Incentive Stock Options, Non-qualified Stock Options, stock awards,
Restricted Shares and cash awards granted under the Plan, and shall
include an Incentive Stock Option Agreement, Non-qualified Stock
Option Agreement or other form of Agreement which may be approved
by the Board.
2.18 “ Incentive
Award ”
shall mean the award of one or more Incentives.
2.19 “ Incentive
Stock Option ” shall mean an Option
which is intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code, or any successor provision
thereto.
2.21 “ Management
Objectives ” means the achievement of
performance objectives established pursuant to this Plan for
Participants who have received grants of Performance Shares of
Performance Units or, when so determined by the Board of the
Committee, Restricted Shares.
2.22 “ Non-qualified
Stock Option ” means an Option that is
not intended to qualify as a Tax-Qualified
Option.
2.23 “ Option
Price ”
means the purchase price payable upon the exercise of an
Option.
2.24 “ Option
” means the
right to purchase Common Shares from the Company upon the exercise
of a Non-qualified Stock Option or a Tax-Qualified Option granted
pursuant to Section 7 of this Plan.
2.25 “ Optioned
Stock ”
shall mean the Common Stock subject to an
Option.
2.26 “ Option
Term ”
shall have the meaning ascribed to it in Section
7.3.
2.27 “ Optionee
” shall mean
an Employee, Director, Consultant or Advisor of the Company who has
been granted one or more Options.
2.28 “ Parent
” shall mean a
“parent corporation”, whether now or hereafter
existing, as defined in Section 424(e) of the
Code.
2.29 “ Participant
” means a
person who is selected by the Board or a Committee to receive
benefits under this Plan and (i) is at that time an officer,
including without limitation an officer who may also be a member of
the Board, director, or other employee of, or a Consultant or
Advisor, to the Company, or (ii) has agreed to commence serving in
any such capacity.
2.30 “ Performance
Period ” means, in respect of a
Performance Share or Performance Unit, a period of time established
pursuant to Section 10 of this Plan within which the Management
objectives relating thereto are to be achieved.
2.31 “ Performance
Share ”
means a bookkeeping entry that records the equivalent of one Common
Share awarded pursuant to Section 10 of this
Plan.
2.32 “ Performance
Unit ”
means a bookkeeping entry that records a unit equivalent to $1.00
awarded pursuant to Section 10 of this Plan.
2.34 “ Restricted
Shares ” means Common Shares
granted or sold pursuant to section 8 of this Plan as to which
neither the substantial risk of forfeiture nor the restrictions on
transfer referred to in Section 8.9 hereof has
expired.
2.35 “ Rule
16b-3 ”
means Rule 16b-3, as promulgated and amended from time to time by
the Securities and Exchange Commission under the Exchange Act, or
any successor rule to the same effect.
2.36 “ Share
” shall mean a
share of the Common Stock, as adjusted in accordance with Section
11 of the Plan.
2.37 “ Subsidiary
” shall mean a
“subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the
Code.
2.38 “ Tax
Date ”
shall mean the date an Optionee is required to pay the Company an
amount with respect to tax withholding obligations in connection
with the exercise of an option.
2.39 “ Tax-Qualified
Option ” means an Option that is
intended to qualify under particular provisions of the Code,
including without limitation an Incentive Stock
Option.
2.40 “ Termination
Date ”
shall have the meaning ascribed thereto in Section
6.
2.41 “Vesting
Rights” vesting of the options granted
by the Company occurs at the discretion of the Board and unless
otherwise stated will be come fully vested at the end of thirty-six
months as follows: 10% at the end of six months, an
additional 10% at the end of twelve months, an additional 15% at
the end of eighteen months, an additional 15% at the end of twenty
four months, an additional 25% at the end of thirty months and
finally an additional 25% at the end of thirty-six months in the
absence of a specific Board Resolution, and the stock options
granted under the stock option plan are generally non transferable
other than to a legal or beneficial holder of the options upon the
option holder’s death. The rights to vested but unexercised
options cease to be effective: (1) 18 months after death of the
stock options holder; (2) 6 months after Change of Control of the
Company; 12 months after loss of office due to health related
incapacity or redundancy; or (5) 12 months after the retirement of
the options holder from a position with any subsidiary of the
Company.
3. Common Stock
Subject to the Plan.
Subject
to the provisions of Section 11 of the Plan, the maximum
aggregate number of shares which may be optioned and sold or
otherwise awarded under the Plan is Ten Million (10,000,000 )
Common Shares. Any Common Shares available for grants and
awards at the end of any calendar year shall be carried over
and shall be available for grants and awards in the subsequent
calendar year. For the purposes of this Section
3:
3.2 Common Shares covered by any
award granted under this Plan shall be deemed to have been issued
or transferred, and shall cease to be available for future issuance
or transfer in respect of any other award granted hereunder, at the
earlier of the time when they are actually issued or transferred or
the time when dividends or dividend equivalents are paid
thereon; provided,
however, that
Restricted Shares shall be deemed to have been issued or
transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when
dividends are paid thereon.
3.3 Performance Units that are
granted under this Plan and are paid in Common Shares or are not
earned by the Participant at the end of the Performance Period
shall be available for future grants of Performance Units
hereunder.
4. Administration
of the Plan.
4.1 Procedure.
(a) The Board shall administer the
Plan; provided, however, that the Board may appoint a Committee
consisting solely of two (2) or more “Non-Employee
Directors” to administer the Plan on behalf of the Board, in
accordance with Rule 16b-3.
(b) Once appointed, the Committee
shall continue to serve until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without
cause), appoint new members in substitution therefor, and fill
vacancies however caused; provided,
however,
that at no time may
any person serve on the Committee if that person's membership would
cause the committee not to satisfy the requirements of Rule
16b-3.
(c) A
majority of the Committee shall constitute a quorum, and the acts
of the members of the Committee who are present at any meeting
thereof at which a quorum is present, or acts unanimously approved
by the members of the Committee in writing, shall be the acts of
the Committee.
(d)
Any reference herein to the Board shall, where appropriate,
encompass a Committee appointed to administer the Plan in
accordance with this Section 4.
4.2 Power of the
Board or the Committee
(a) Subject to the provisions of the
Plan, the Board shall have the authority, in its discretion: (i) to
grant Options or Incentive Awards to Participants; (ii) to
determine, upon review of relevant information and in accordance
with Section 2.16 of the Plan, the Fair Market Value of the Common
stock; (iii) to determine the exercise price per share of Options
to be granted, which exercise price shall be determined in
accordance with Section 7.14 of the Plan, and the Vesting Rights
pertaining to the Options so granted; (iv) to determine the number
of Common Shares to be represented by each Option or Incentive
Award; (v) to determine the Participants to whom, and the time or
times at which, Options and Incentive Awards shall be granted; (vi)
to interpret the Plan; (vii) to prescribe, amend and rescind rules
and regulations relating to the Plan; (viii) to determine the terms
and provisions of each Option and Incentive Award granted (which
need not be identical) and, with the consent of the grantee
thereof, modify or amend such Option or Incentive Award; (ix) to
accelerate or defer (with the consent of the grantee) the exercise
date of any Option or Incentive Award; (x) to authorize any person
to execute on behalf of the Company any instrument required to
effectuate the grant of an Option or Incentive Award previously
granted by the Board; (xi) to accept or reject the election made by
a grantee pursuant to Section 7.5 of the Plan; and (xii) to make
all other determinations deemed necessary or advisable for the
administration of the Plan.
4.3 Effect of
Board or Committee Decisions. All decisions and determinations
and the interpretation and construction by the Board or a Committee
of any provision of this Plan or any agreement, notification or
document evidencing the grant of Options, Restricted Shares,
Deferred Shares, Performance Shares or Performance Units, and any
determination by the Board or a Committee pursuant to any provision
of this plan or any such agreement, notification or document, shall
be final, binding and conclusive with respect to all grantees and
any other holders of any Option or Incentive Award granted under
the Plan. No member of the Board or a Committee shall be liable for
any such action taken or determination made in good
faith.
5. Eligibility.
Consistent
with the Plan's purposes, Options and Incentive Awards may be
granted only to such Directors, Officers, Employees,
Consultants and Advisors of the Company as determined by the
Board or a Committee. Subject to the terms of the Plan, an
Employee, Officer, Director, Consultant or advisor who has
been granted an Option or Incentive Award may, if he is
otherwise eligible, be granted an additional Option or
Incentive Award. Incentive Stock Options may be granted only
to those Participants who meet the requirements applicable
under Section 422 of the Code.
6. Board
Approval; Effective Date; Termination Date.
The
Plan shall take effect on May 6, 2008 (the
“Effective Date”), the date on which the Board
approved the Plan. The Plan shall terminate on May 6, 2018
(the “Termination Date”); accordingly, no Option
may be granted after the Termination Date or have an Option
Term that extends beyond the Termination Date.
7. Stock
Options.
The
Board or the Committee may from time to time authorize grants
to Participants of Options to purchase Common Shares upon such
terms and conditions as the Board or the Committee may
determine in accordance with the following
provisions:
7.1 Options to be
Granted; Terms.
(a) Options granted pursuant to this
Section 7 may be Non-qualified Stock Options or Tax-Qualified
Options or combinations thereof. The Board or the Committee shall
determine the specific terms of Options.
(b) Each grant shall specify the
period or periods of continuous employment, or continuous
engagement of the consulting or advisory services, of the Optionee
by the Company or any Subsidiary that are necessary before the
Options or installments thereof shall become
exercisable.
(c) Any grant of a Non-qualified
Stock Option may provide for the payment to the Optionee of
dividend equivalent thereon in cash or Common Shares on a current,
deferred or contingent basis, or the Board or the Committee may
provide that any dividend equivalents shall be credited against the
Option Price.
7.2 Number of
Shares Subject to Options. Each grant shall specify the
number of Common Shares to which it pertains. Successive grants may
be made to the same Optionee regardless of whether any Options
previously granted to the Optionee remain
unexercised.
7.3 Term of
Option; Earlier Termination. Subject to the further
provisions of this Section 7, unless otherwise provided in the
Incentive Agreement, the term (the “Option Term”) of
each Option shall be ten (10) years from the Date of Grant. In no
case shall the term of any Option go beyond the Effective Date.
Notwithstanding the above, in the case of an Incentive Stock Option
granted to a Participant who, at the time the Incentive Stock
Option is granted, owns ten percent (10%) or more of the Common
Stock as such amount is calculated under Section 422(b)(6) of the
Code (“Ten Percent Stockholder”), the term of the
Incentive Stock Option shall be five (5) years from the Date of
Grant thereof or such shorter time as may be provided in the
Incentive Agreement.
(a) Each grant shall specify an
Option Price per Common Share for the Common Share to be issued
pursuant to exercise of an Option, which shall be determined by the
Board or the Committee, but in the case of an Incentive Stock
Option shall be no less than one hundred percent (100%) of the Fair
Market Value per share on the Date of Grant, and in the case of a
Non-qualified Stock Option shall be no less than seventy-five
percent (75%) of the Fair Market Value per share on the Date of
Grant. Notwithstanding the foregoing, in the case of an Incentive
Stock Option granted to a Participant who, at the time of the grant
of such Incentive Stock Option, is a Ten Percent Stockholder, the
per share exercise price shall be no less than one hundred ten
percent (110%) of the Fair Market Value per share on the Date of
Grant.
(b) With respect to Incentive Stock
Options, the aggregate Fair Market Value (determined as of the
respective Date or Dates of Grant) of the Common Shares for which
one or more options granted to any Optionee under this Plan may for
the first time become exercisable as Incentive Stock Options under
the federal tax laws during any one calendar year (under all
employee benefit plans of the Company) shall not exceed $100,000.
To the extent that the Optionee holds two or more such options
which become exercisable for the first time in the same calendar
year, the foregoing limitation on the exercisability of such
options as Incentive Stock Options under the deferral tax laws
shall be applied on the basis of the order in which such options
are granted. Should the number of Common Shares for which any
Incentive Stock Option first becomes exercisable in any calendar
year exceed the applicable $100,000 limitation, then that Option
may nevertheless be exercised in such calendar year for the excess
number of Shares as a Non-qualified Stock Option under the federal
tax laws.
7.5 Payment for
Shares. The
price of an exercised Option and any taxes attributable to the
delivery of Common Stock under the Plan, or portion thereof, shall
be paid as follows:
(a) Each grant shall specify the
form of consideration to be paid in satisfaction of the Option
Price and the manner of payment of such consideration, which may
include (i) cash in the form of United States currency or check or
other cash equivalent acceptable to the Company, (ii)
nonforfeitable, unrestricted Common Shares, which are already owned
by the Optionee and have a value at the time of exercise that is
equal to the Option Price, (iii) any other legal consideration that
the Board or the Committee may deem appropriate, including without
limitation any form of consideration authorized pursuant to this
Section 7 on such basis as the Board or the Committee may determine
in accordance with this Plan, and (iv) any combination of the
foregoing. The Board (or Committee) in its sole discretion may
permit a so-called “cashless exercise” of the
Options.
In
the event of a cashless exercise of the Option the Company
shall issue the Option holder the number of Shares determined
as follows:
where:
X
= the number of Shares to be issued to the
Optionholder.
Y
= the number of Shares with respect to which the Option is
being exercised.
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A
= the average of the closing sale prices of the Common Stock
for the five (5) Trading Days immediately prior to (but not
including) the Date of Exercise.
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B
= the Exercise Price.
(b) Any grant of a Non-qualified
Stock Option may provide that payment of the Option Price may also
be made in whole or in part in the form of Restricted Shares or
other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Board
or the Committee on or after the Date of Grant, whenever any Option
Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 7.5, the Common Shares
received by the Optionee upon the exercise of the Non-qualified
Stock Option
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