Exhibit 10
ROPOSED AMENDED AND
RESTATED
2002 LONG-TERM INCENTIVE
PLAN
(Amended and Restated as of
January 1, 2005)
1. Purpose and Effect of the
Plan . This Long-Term
Incentive Plan (the “Plan”) is intended to promote the
interests of AirTran Holdings, Inc., a Nevada corporation (the
“Company”) and its stockholders by linking the personal
interests of its employees, officers, consultants, independent
contractors and directors to the Company’s shareholders and
by providing such persons with an incentive for outstanding
performance. The Plan is also intended to aid the Company in
competing with other enterprises for the services of new executives
and key employees needed to help insure continued success of the
Company. Accordingly, the Plan permits the grant of incentive
awards from time to time to selected employees and officers,
directors, independent contractors and consultants.
2. Effective Date; Term of
Plan . The Plan
became effective on January 23, 2002, the date it was approved by
the Board. The Plan was approved by the shareholders of the Company
on May 15, 2002. This amendment and restatement of the Plan
(“Amendment and Restatement”) is being adopted by the
Board and submitted for approval by the shareholders of the Company
effective January 1, 2005 in order to comply with the provisions of
Code Section 409A and to make other modifications. The changes made
by this Amendment and Restatement (other than deletion of the
repricing provisions formerly contained in Section 4.C(xiv)) shall
apply only to the portion of any Awards which are earned or vested
after December 31, 2004, except that this Amendment and Restatement
shall also apply to other portions of the Awards to the extent they
become subject to the requirements of Code Sections 409A and
compliance with such change is necessary to satisfy Code Section
409A. In the discretion of the Committee, Awards may be made to
Covered Employees which are intended to constitute qualified
performance-based compensation under Code Section 162(m). The Plan
shall expire on January 23, 2012, unless sooner terminated as
provided in Section 25 hereof.
3. Definition of
Terms . In addition
to words and terms that may be defined elsewhere in the Plan, the
following words and terms as used in the Plan shall have the
following meanings unless the context or use fairly indicates
another or different meaning or intent, which definitions shall be
equally applicable to both the singular and plural forms of such
words and terms.
A. “Award” shall mean
any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share Award or Other Stock-Based Award, or any other
right or interest relating to Stock or cash, granted to a
Participant under the Plan.
B. “Award Agreement”
shall mean any written agreement, contract, notice to Participant
or other instrument or document evidencing an Award.
C. “Board” shall mean
the board of directors of the Company.
D. A “Change of Control”
will be deemed to have occurred with respect to an Award in the
event that, after the grant of such Award, any of the following
events shall have occurred:
|
|
(i)
|
Any Person, or
Persons acting together that would constitute a “group”
(a “Group”), for purposes of Section 13(d) of the
Securities Exchange Act of 1934 as from time to time amended, (the
“Exchange Act”) together with any Affiliates or
Associates of such Affiliates (as defined in Rule 1b-2 promulgated
under the Exchange Act) thereof (other than any employee stock
ownership plan), beneficially owns 30% or more of the total voting
power of all classes of voting stock of the Company;
|
|
|
(ii)
|
Any Person or
Group, together with any Affiliates or Associates thereof, succeeds
in having a sufficient number of its nominees elected to the Board
such that such nominees, when added to any existing director
remaining on the Board after such election who is an Affiliate or
Associate of such Person or Group, will constitute a majority of
the Board;
|
|
|
(iii)
|
There occurs
any transaction, or series of related transactions, and the
beneficial owners of the voting stock of the Company immediately
prior to such transaction (or series) do not, immediately after
such transaction (or series) beneficially own voting stock
representing more than 50% of the voting power of all classes of
voting stock of the Company (or in the case of a transaction (or
series) in which another entity becomes a successor to the Company,
of the successor entity); or,
|
|
|
(iv)
|
The Company
shall cease to own a majority of the capital stock of AirTran
Airways, Inc.
|
E. “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, and
the regulations and official guidance issued thereunder.
F. “Committee” shall
have the meaning set forth in Section 4 hereof.
G. “Common Stock” shall
mean the common stock of the Company, $.001 par value per
share.
H. “Company” shall mean
AirTran Holdings, Inc., a Nevada corporation.
I. “Covered Employee”
shall mean a covered employee as defined in Code Section 162(m)(3),
provided that no employee shall be a Covered Employee until the
deduction limitations of Code Section 162(m) are applicable to the
Company and any reliance period under Code Section 162(m) has
expired.
J. “Disability” shall
mean any permanent and total disability as defined in the
Company’s long-term disability plan; provided that, in the
case of an ISO or if the Company does not then maintain a long-term
disability plan, “Disability” shall mean permanent and
total disability as defined in Code Section 22(e)(3). The date of
any Disability shall be deemed to be the day following the last day
the Participant performed services for the Company.
K. “Effective Date”
shall have the meaning set forth in Section 2 hereof.
L. “Employee” shall mean
any employee of the Company or its Parent or any Subsidiary,
including officers or directors of the Company or its Parent or any
Subsidiary who are employees of the Company or its Parent or any
Subsidiary.
M. “Fair Market Value”
shall mean the fair market value of a share of Common Stock on a
particular date determined as follows. In the event the
Company’s Common Stock is listed upon an established stock
exchange, Fair Market Value shall be deemed to be the closing price
of the Company’s Common Stock on such stock exchange on such
date or, if no sale of the Company’s Common Stock shall have
been made on any stock exchange on that day, the Fair Market Value
shall be determined as such price for the next preceding day upon
which a sale shall have occurred. In the event the Company’s
Common Stock is not listed upon an established exchange, the Fair
Market Value on such date shall be determined by the
Committee.
N. “Incentive Stock
Option” or “ISO” shall mean any Option under this
Plan which is intended to be an incentive stock option under Code
Section 422.
O. “Non-Employee
Directors” shall mean members of the Company’s Board
who (i) are not current employees of the Company, (ii) are not
former employees of the Company currently receiving compensation
for prior services (other than pursuant to a tax qualified
retirement plan), (iii) have not been an officer of the Company and
(iv) do not receive remuneration, directly or indirectly, from the
Company in any capacity other than as a member of the
Board.
P. “Non-Employees” shall
mean any consultant or other independent contractor providing bona
fide services to the Company or a member of the Board who is not an
employee of the Company.
Q. “Non-Qualified Stock
Option” or “NQSO” shall mean any Option granted
under this Plan which is not intended to qualify as an incentive
stock option under Code Section 422.
R. “Option” shall mean a
stock option, whether an ISO or NQSO, granted under Section 7
hereof.
S. “Option Price” shall
mean the purchase price of a Share of Common Stock under an
Option.
T. “Other Stock-Based
Award” shall mean a right, granted to a Participant under
Section 11 hereof, that relates to or is valued by reference to
Stock or other Awards relating to Stock.
U. “Parent” shall mean
any corporation which at the time qualifies as a parent of the
Company under the definition of “parent corporation”
contained in Code Section 424(e).
V. “Participant” shall
mean an Employee or Non-Employee to whom an Award is granted under
the Plan.
2
W. “Performance Share
Award” shall mean a right granted to a Participant under
Section 9 hereof, to receive Stock, the payment of which is
contingent upon achieving certain performance goals established by
the Committee.
X. “Plan” shall mean the
AirTran Holdings, Inc. 2002 Long-Term Incentive Plan, as amended
from time to time.
Y. “Restricted Stock
Award” shall mean Stock granted to a Participant under
Section 10 hereof that is subject to certain restrictions and to
risk of forfeiture.
Z. “SAR” or “Stock
Appreciation Right” shall mean an award as set forth in
Section 8 hereof.
AA. “SEC” shall mean the
Securities and Exchange Commission.
BB. “Shares” shall
represent the shares of Common Stock in the Company that may be
acquired by exercise of Options or other Awards granted
hereunder.
CC. “Stock” shall mean
the Common Stock of the Company and such other securities of the
Company as may be substituted for Stock pursuant to Section 13
hereof.
DD. “Subsidiary” shall
mean any corporation, limited liability company, partnership or
other entity of which a majority of the outstanding voting stock or
voting power is beneficially owned directly or indirectly by the
Company. Notwithstanding the above, with respect to an Incentive
Stock Option, Subsidiary shall have the meaning set forth in Code
Section 424(f).
4.
Administration .
The Plan shall be administered by a Committee (the
“Committee”) consisting of not less than two members
all of whom shall be Non-Employee Directors.
A. The Committee shall be appointed
by the Board from its membership. Until such time as the Committee
is appointed, the Compensation Committee of the Board (if there is
one, otherwise, the entire Board) shall serve as the Committee. The
members of the Committee shall serve at the pleasure of the Board,
which shall have the power, at any time and from time to time, to
remove members from the Committee or to add members thereto.
Vacancies on the Committee, however caused, shall be filled by the
Board.
B. Except as provided in Section 6,
members of the Committee shall not include any person who, during
the one (1) year preceding the date on which such member is first
appointed to the Committee and during the time he serves on the
Committee, has been granted or awarded equity securities or options
therefor under this Plan or any other plan of the Company or any of
its affiliates.
C. The Committee may interpret the
Plan, prescribe, amend and rescind any rules and regulations
necessary or appropriate for the administration of the Plan and
make such other determinations and take such other action as it
deems necessary or desirable for the administration of the Plan and
the protection of the Company except as otherwise reserved to the
Board or the stockholders of the Company. Without limiting the
generality of the foregoing, the Committee, in its discretion, may
treat all or any part of any period during which a Participant is
on military duty or on an approved leave of absence from the
Company as a period of employment of such Participant by the
Company for purposes of accrual of his rights under his Award. In
addition, subject to the terms of the Plan, the Committee shall
have the specific authority to take the following
actions:
|
|
(i)
|
Designate
Participants;
|
|
|
(iii)
|
Determine the
type or types of Awards to be granted to each
Participant;
|
|
|
(iv)
|
Determine the
number of Awards to be granted and the number of shares of Stock to
which an Award shall relate;
|
|
|
(v)
|
Determine the
terms and conditions of any Award granted under the Plan, including
but not limited to the exercise price, grant price or purchase
price, any restrictions or limitations on the Award, any schedule
for lapse or forfeiture restrictions or restrictions on the
exercisability of an award, and accelerations or waivers thereof,
based in each case on such considerations as the Committee in its
sole discretion shall determine;
|
|
|
(vi)
|
Determine
whether, to what extent, and under what circumstances an Award may
be settled in, or the exercise price of an Award may be paid in,
cash, Stock, other Awards or other property, or an Award may be
canceled, forfeited or surrendered;
|
|
|
(vii)
|
Accelerate the
vesting or lapse of restrictions of any outstanding Award, based in
each case on such considerations as the Committee in its sole
discretion determines;
|
3
|
|
(viii)
|
Prescribe the
form of each Award Agreement, which need not be identical for each
Participant;
|
|
|
(ix)
|
Decide all
other matters that must be determined in connection with an
Award;
|
|
|
(x)
|
Require a
minimum holding period between the grant and exercise of any Option
or other Award, determine that the Awards granted to a Participant
may be exercised only in installments and specify such conditions
precedent to the exercise of any Award as the Committee may deem
advisable;
|
|
|
(xi)
|
Establish,
adopt or revise any rules and regulations as it may deem necessary
or advisable to administer the Plan;
|
|
|
(xii)
|
Make all other
decisions and determinations that may be required under the Plan or
as the Committee deems necessary or advisable to administer the
Plan; and
|
|
|
(xiii)
|
Amend the Plan
or, with the consent of any adversely affected Participant, any
Award Agreement.
|
|
|
(xiv)
|
The Company
shall not cancel any Award, and in consideration therefor issue to
the Participant a new Award for any equivalent or lesser number of
Shares, and at a lesser exercise price.
|
Notwithstanding the foregoing, during any period
in which the Compensation Committee of the Board is not serving as
the Committee, the authority of the Committee with respect to the
matters described in clauses (i) through (iv) of this Paragraph 4C
shall be limited to making recommendations to such Compensation
Committee, and the final determinations with respect to such
matters shall be made by the Compensation Committee.
D. No member of the Committee shall
be liable for any action taken or omitted or determination made in
good faith with respect to the Plan or any Award granted under the
Plan.
E. Any interpretation, determination
or other action made or taken by the Committee (or the Compensation
Committee of the Board as described above) with respect to the
Plan, any Awards granted under the Plan, and any Award Agreements
applicable to such Awards shall be final, binding and conclusive on
all parties.
5. Shares Subject to
Plan .
A. Authorized Shares .
Subject to adjustment as provided in Section 13 hereof, the
aggregate number of shares of Stock reserved and available for
Awards or which may be used to provide a basis of measurement for
or to determine the value of an Award (such as with a Stock
Appreciation Right or Performance Share Award) shall be 7,500,000
shares (which amount consists of 5,000,000 shares originally
authorized under the Plan and approved by the Company’s
stockholders on May 15, 2002 plus an additional 2,500,000 shares
approved by the Company’s stockholders on May 17, 2005). No
separate limit shall apply to ISOs or to Awards other than Options.
As a result, the number of ISOs that may be granted under this Plan
shall not exceed 7,500,000 and the number of Awards (other than
Options) that may be granted under this Plan shall not exceed
7,500,000. However, the aggregate number of Options (including
exercised Options) plus Awards (other than Options) that may be
outstanding at any one time under the Plan shall not exceed
7,500,000. The maximum number of Options or Stock Appreciation
Rights that may be granted to any one Employee in any calendar year
shall not exceed 1,500,000.
B. Lapsed Awards . To the
extent that an Award is canceled, terminates, expires, is
forfeited, or lapses for any reason, any shares of Stock subject to
the Award will again be available for the grant of an Award under
the Plan. In addition, shares subject to other Awards settled in
cash (if any) will be available for the grant of an Award under the
Plan. Substitute Awards issued in the course of acquisition of
another company shall also be excluded in determining the number of
Options or Awards outstanding. If the Option Price of any Option
granted under the Plan is satisfied by tendering shares of Stock to
the Company (whether by actual delivery, by attestation or by the
withholding of shares issued on exercise of the Option), only the
number of shares of Stock issued net of the shares of Stock
tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery under the
Plan.
C. Stock Distributed . Any
Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock
purchased on the open market.
6. Eligibility
. Awards may be granted to those
Employees and Non-Employees selected by the Committee in its sole
discretion from time to time who have and exercise key management
functions for the Company or who discharge other responsibilities
important to the success of the Company. Notwithstanding anything
to the contrary in this Plan, an Award
4
may be granted to a director who is a member of
the Committee if otherwise exempt from Section 16(b) of the
Securities Exchange Act of 1934 pursuant to Regulation Section
240.16b-3, SEC interpretations thereof or any subsequently
promulgated rule or regulation. The granting of an Award to any
Participant shall neither entitle such Participant to, nor
disqualify such Participant from, participation in any future
Awards.
7. Stock
Options .
A. Grant of Options . The
Committee shall have the authority, subject to the terms of the
Plan, to: (a) determine and designate from time to time those
Employees and Non-Employees to whom Options are to be granted; (b)
determine the number of Shares subject to each Option; (c)
determine the duration of the exercise period for any Option; (d)
determine the conditions to be met (if any) prior to the
exercisability of any Options; (e) determine that the Options
granted to a Participant may be exercised only in installments; and
(f) specify such other terms and conditions of each Option as the
Committee in its sole discretion deems advisable. The date of grant
of an Option under the Plan will be the date on which the Option is
awarded by the Committee.
B. Terms and Conditions of
Options . Each Option shall be evidenced by an Award Agreement
which shall contain such terms and conditions consistent with the
provisions of the Plan as may be approved by the Committee. Each
such Award Agreement shall state whether the Option evidenced
thereby is intended to be an ISO or an NQSO. Each Option granted
under the Plan shall be subject to such terms and conditions as
follows:
|
|
(i)
|
Terms of ISOs.
ISOs granted hereunder shall be subject to the terms and conditions
contained in subparagraphs (ii)-(ix) below and to such other terms
and conditions as the Committee may deem appropriate; provided,
however, that no Option that is intended to qualify as an ISO shall
be subject to any condition that is inconsistent with the
provisions of Code Section 422(b). In the event that any condition
imposed hereunder on an Option intended to qualify as an ISO is at
any time determined by the Internal Revenue Service or a court of
competent jurisdiction to be inconsistent with Code Section 422,
then such Option shall be deemed to have been granted without such
condition and such Option shall continue in effect under such
remaining terms and conditions as may be applicable as if the
invalid condition had not been included.
|
|
|
(ii)
|
Option Period.
Each ISO Award Agreement shall specify the period during which the
ISO thereunder is exercisable (which shall not exceed ten years
from the date of grant) and shall provide that the ISO shall expire
at the end of such period.
|
|
|
(iii)
|
Option Price.
The Option Price per share shall be determined by the Committee at
the time any ISO is granted and shall not be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock
on the day that the ISO is granted. Such price shall be subject to
adjustment as provided in Section 13.
|
|
|
(iv)
|
Ten Percent
Stockholders. ISOs shall not be granted to any Employee who,
immediately before the ISO is granted, owns stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of its Parent or Subsidiary;
provided, however, that this prohibition shall not apply if at the
time such ISO is granted the Option Price is at least one hundred
ten percent (110%) of the Fair Market Value of the Common Stock and
such ISO is not exercisable after the expiration of five (5) years
from the date such ISO is granted.
|
|
|
(v)
|
Limit on
Incentive Stock Options. To the extent the aggregate Fair Market
Value of the shares (valued at the time of grant in accordance with
subparagraph (iii) above) with respect to which ISOs (determined
without regard to this subparagraph (v)) are exercisable for the
first time by any individual during any calendar year (under all
incentive stock option plans of the Company and any Parent and
Subsidiary) exceeds $100,000, such ISOs in excess of $100,000 shall
be treated as Options which are NQSOs. This subparagraph (v) shall
be applied by taking ISOs into account in the order in which they
were granted.
|
|
|
(vi)
|
Termination of
Employment other than as a Result of Death or Disability. Except as
otherwise provided in Section 12K hereof, 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 applicable Award Agreement but in
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
|
5
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.
|
|
(vii)
|
Termination of
Employment as a Result of Death or Disability. In the event of the
death or Disability of the Participant while employed by Company,
the personal representative of the Participant (in the event of his
death) or the Participant (in the event of his Disability) may,
subject to the provisions hereof and before the date (the
“Option Termination Date”) specified in the ISO Award
Agreement, which date is not later than the earlier of the ISOs
expiration date or the expiration of one (1) year after the date of
such death or Disability, exercise the ISO granted to such
Participant to the same extent the Participant might have exercised
such ISO on the date of his death or Disability, but, unless
otherwise provided in the ISO Award Agreement, not further or
otherwise. To the extent any ISO is not, and does not in accordance
with the terms of the Award Agreement become, exercisable as of the
date of the death or Disability of a Participant, such ISO shall
terminate on the date of death or Disability. 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.
|
|
|
(viii)
|
Period to
Exercise Option. Any IS
|
