Exhibit 10.13
YTB INTERNATIONAL,
INC.
2007 SALES DIRECTOR BONUS
PLAN
The purpose of
the YTB International, Inc. 2007 Sales Director Bonus Plan (the
“ Plan ”) is to provide designated Sales
Directors who perform services for YTB International, Inc. (the
“ Company ”) and its YourTravelBiz.com,
Inc. subsidiary and who reach certain performance criteria with the
opportunity to receive grants of nonqualified stock options. The
Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby
benefitting the Company’s shareholders, and will align the
economic interests of the participants with those of the
shareholders.
(a)
Committee . The Plan shall be administered and interpreted
by the Board of Directors of the Company or by the compensation
committee consisting of members of the Board, which shall be
appointed by the Board. The committee may delegate authority to one
or more subcommittees as it deems appropriate. To the extent that a
committee or subcommittee administers the Plan, references in the
Plan to the “Board” shall be deemed to refer to the
committee or subcommittee.
(b) Board
Authority . Consistent with the terms of the Plan, the Board
shall have the sole authority to (i) determine the individuals to
whom grants shall be made under the Plan and (ii) deal with any
other matters arising under the Plan.
(c) Board
Determinations . The Board shall administer and interpret the
Plan consistent with the terms of the Plan. The Board’s
interpretations of the Plan and all determinations made by the
Board pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the
Plan or in any awards granted hereunder. All powers of the Board
shall be executed in its sole discretion, in the best interest of
the Company, not as a fiduciary, and in keeping with the objectives
of the Plan and need not be uniform as to similarly situated
individuals.
Awards under the Plan shall consist of
grants of nonqualified stock options as described in Section 5
(“ Options ”). All Options shall be subject to
the terms and conditions set forth herein and to such other terms
and conditions consistent with this Plan as the Board deems
appropriate and as are specified in writing by the Board to the
individual in a grant instrument or an amendment to the grant
instrument (the “ Grant Instrument ”). All
Grants shall be made conditional upon the Grantee’s
acknowledgement, in writing or by acceptance of the Grant, that all
decisions and determination of the Board shall be final and binding
on the Grantee, his or her beneficiaries and any other person
having or claiming an interest under such Grant. The Board shall
approve the form and provisions of each Grant
Instrument.
3.
Shares Subject to the
Plan
(a) Shares
Authorized . Following the effective date of the
Company’s proposed reclassification of its common stock to be
voted upon at the June 11, 2007 Annual Meeting of Stockholders (the
“ Proposed Reclassification ”), the aggregate
number of shares of Class A common stock of the Company (“
Company Stock ”) that may be issued or transferred
under the Plan is 40,000,000 shares, subject to adjustment as
described below. The shares may be authorized but unissued shares
of Company Stock or reacquired shares of Company Stock, including
shares purchased by the Company on the open market for purposes of
the Plan. If and to the extent Options granted under the Plan
terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised, the shares subject to
such Grants shall again be available for purposes of the
Plan.
(b)
Adjustments . If, following the Proposed
Reclassification, there is any change in the number or kind of
shares of Company Stock outstanding (i) by reason of a stock
dividend, spinoff, recapitalization, stock split, or combination or
exchange of shares, (ii) by reason of a merger, reorganization or
consolidation, (iii) by reason of a reclassification or change in
par value, or (iv) by reason of any other extraordinary or unusual
event affecting the outstanding Company Stock as a class without
the Company’s receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a
result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of
shares of Company Stock available for Grants, the maximum number of
shares of Company Stock that any individual participating in the
Plan may be granted in any year, the number of shares covered by
outstanding Grants, the kind of shares issued under the Plan, and
the price per share of such Grants may be appropriately adjusted by
the Board to reflect any increase or decrease in the number of, or
change in the kind or value of, issued shares of Company Stock to
preclude, to the extent practicable, the enlargement or dilution of
rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be
eliminated. Any adjustments determined by the Board shall be final,
binding and conclusive.
4.
Eligibility for
Participation
(a) Eligible
Persons . All Sales Directors who perform services for the
Company or any of its parents or subsidiaries shall be eligible to
participate in the Plan. Sales Directors who receive Grants under
this Plan shall hereinafter be referred to as “
Grantees .”
(b) Selection
of Grantees . Sales Directors who as of June 30
th or December 31 st of
any calendar year (or the business day preceding such date) (a
“ Measurement Date ”) meet the following
conditions shall receive an Option grant as set forth in Section
5:
(i) A Sales
Director needs to have the greater of 2,000 or the next level of
number of Referring Travel Agents (“ RTAs ”) in
his or her downline organization;
(ii) A Sales
Director must increase the absolute number of RTAs in his or her
downline from the number required for the achievement level at
which the Sales Director received his or her last prior award to
the number required for the next achievement level;
(iii) A Sales
Director must satisfy the applicable balance level among his or her
downlines;
(iv) During the
prior twelve month period that includes the Measurement Date, a
Sales Director must have held no less than eight (8) RTA
certification meetings and attended all Sales Director meetings
called by our senior management; and
(v) A Sales
Director may not have become a representative for any other network
marketing company.
Each Sales Director may only receive Options for
a given achievement level one time under the Plan. A Sales Director
who achieves multiple achievement levels during the period between
one Measurement Date and the next will receive Options for each
level achieved since the prior Measurement Date. No Options will be
granted to a Sales Director based upon an increase to an
achievement level for which Options were previously granted to such
Sales Director.
(a) Option
Grants . On the fifteenth (15 th )
day after the applicable Measurement Date, (January 15
th or July 15 th ,
or if such date is not a business day, the next business day
following such date) (the “ Grant Date ”) the
Company shall grant Options to eligible Sales Directors.
(b) Shares
Underlying Option .
(i) The number
of shares underlying each Option grant shall equal the Number of
Units assigned to the Sales Director based upon the criteria set
forth in (ii) below divided by fifty percent (50%) of the Fair
Market Value (as defined below) of a share of Company Stock on the
Grant Date.
(ii) The Number
of Units assigned to each Sales Director shall be based upon the
following:
|
Achievement Level
|
|
Total Number of
RTAs
|
|
Number of Units
|
|
Level 1
|
|
500
|
|
0
|
|
Level 2
|
|
2,000
|
|
50,000
|
|
Level 3
|
|
5,000
|
|
100,000
|
|
Level 4
|
|
10,000
|
|
250,000
|
|
Level 5
|
|
25,000
|
|
1,000,000
|
(c) Type of
Option and Price.
(i) No Options
are intended to qualify as incentive stock options under Section
422 of the Internal Revenue Code of 1986, as amended (the “
Code ”). All options will be treated as nonqualified
stock options.
(ii) The purchase
price (the “ Exercise Price ”) of Company Stock
subject to an Option shall be equal to fifty percent (50%) of the
Fair Market Value (as defined below) of a share of Company Stock on
the Grant Date.
(iii) If the
Company Stock is publicly traded, then the Fair Market Value per
share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or
the Nasdaq National Market, the last reported sale price thereof on
the latest preceding date upon which a sale was reported prior to
the relevant date, or (y) if the Company Stock is not principally
traded on such exchange or market, the mean between the last
reported “bid” and “asked” prices of
Company Stock on the latest preceding date for which such
information was reported prior to the relevant date, as reported on
Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial
reporting service, as applicable and as the Board determines. If
the Company Stock is not publicly traded or, if publicly traded, is
not subject to reported transactions or “bid” or
“asked” quotations as set forth above, the Fair Market
Value per share shall be as determined by the Board.
(d) Option
Term . The term of any Option shall not exceed three (3) years
from the Grant Date. All options not otherwise exercised prior to
the earlier of (i) the exercise dates set forth in (e) below or
(ii) the expiration of their term shall terminate as of the end of
the term.
(e) Vesting
and Exercisability of Options.
(i) All Options
shall be 100% vested upon the Grant Date.
(ii) Except as
provided in (iii) below, Options may only be exercised on the
following dates:
|
Percentage of Option that Is
Exercisable
|
|
Option Exercise
Date
|
|
33.34%
|
|
Any date during the calendar year of
the Grant Date.
|
|
33.33%
|
|
December 15 th of
the calendar year following the Grant Date.
|
|
33.33%
|
|
December 15 th of
the second calendar year following the Grant Date.
|
To the extent
that application of the percentages set forth in the above table
would lead to the issuance of fractional shares of Company Stock on
any exercise date, the percentage of the Option exercisable as of
such exercise date and as of the other two exercise dates shall be
adjusted as minimally as possible (either up or down) so as to
allow for the issuance of the nearest whole number of shares upon
each such exercise date while preserving the total number of shares
issuable upon exercise of the Option as a whole.
(iii)
Notwithstanding (ii) above, to the extent that the Fair Market
Value of the Company Stock exceeds the Exercise Price upon the
earliest to occur of the following per