**Exhibit 10.15**

 

**SKYWEST, INC.**

 

**2010LONG-TERM INCENTIVE PLAN**

 

SkyWest, Inc. (the “Company”), a Utah corporation, herebyestablishes and adopts the following SkyWest, Inc. 2010 Long-TermIncentive Plan (the “Plan”).

 

**1.****                                 ****PURPOSE OF THE PLAN**

 

The purpose of the Plan is to assist the Company and its Subsidiariesin attracting and retaining selected individuals to serve as employees,directors, consultants and/or advisors who are expected to contribute to theCompany’s success and to achieve long-term objectives that will benefitstockholders of the Company through the additional incentives inherent in theAwards hereunder.

 

**2.****                                     ****DEFINITIONS**

 

**2.1.**         “*Award*” shallmean any Option, Stock Appreciation Right, Restricted Stock Award, RestrictedStock Unit Award, Other Share-Based Award, Performance Award or any otherright, interest or option relating to Shares or other property (including cash)granted pursuant to the provisions of the Plan.

 

**2.2.**         “*Award Agreement*”shall mean any agreement, contract or other instrument or document evidencingany Award hereunder, whether in writing or through an electronic medium.

 

**2.3.**         “*Board*” shallmean the board of directors of the Company.

 

**2.4.**         “*Code*” shallmean the Internal Revenue Code of 1986, as amended from time to time.

 

**2.5.**         “*Committee*”shall mean the Compensation Committee of the Board or a subcommittee thereofformed by the Compensation Committee to act as the Committee hereunder. TheCommittee shall consist of no fewer than two Directors, each of whom is: (i) a“Non-Employee Director” within the meaning of Rule 16b-3 of the ExchangeAct; (ii) an “outside director” within the meaning of Section 162(m) ofthe Code; and (iii) an “independent director” for purpose of the rules ofthe applicable Securities Exchange on which the Shares are traded, to theextent required by such rules.

 

**2.6.**         “*Consultant*”shall mean any consultant or advisor who is a natural person and who providesservices to the Company or any Subsidiary, so long as such person: (i) rendersbona fide services that are not in connection with the offer and sale of theCompany’s securities in a capital-raising transaction; (ii) does notdirectly or indirectly promote or maintain a market for the Company’ssecurities; and (iii) otherwise qualifies as a consultant under the applicablerules of the Securities and Exchange Commission for registration of sharesof stock on a Form S-8 registration statement.

 

**2.7.**         “*Covered Employee*”shall mean an employee of the Company or its Subsidiaries who is a “coveredemployee” within the meaning of Section 162(m) of the Code.

 

**2.8.**         “*Director*”shall mean a non-employee member of the Board.

 

**2.9.**         “*Dividend Equivalents*”shall have the meaning set forth in Section 12.5.

 

**2.10.**       “*Employee*” shallmean any employee of the Company or any Subsidiary and any prospective employeeconditioned upon, and effective not earlier than, such person becoming anemployee of the Company or any Subsidiary.

 

**2.11.**       “*Exchange Act*”shall mean the Securities Exchange Act of 1934, as amended.

 

**2.12.**       “*Fair Market Value*”shall mean, with respect to Shares as of any date: (i) the closing priceof the Shares as reported on the Securities Exchange on which the Shares arelisted and traded on such date, or, if there is no closing price on that date,then on the last preceding date on which such a closing price was reported; (ii) ifthe Shares are not listed on any Securities Exchange but are quoted in aninter-dealer quotation system on a last sale basis, the final ask price of theShares reported on the inter-dealer quotation system for such date, or, ifthere is no such sale on such date, then on the last preceding date on which asale was reported; or (iii) if the Shares are neither listed on aSecurities Exchange nor quoted on an inter-dealer quotation system on a lastsale basis, the amount 

 

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determinedby the Committee to be the fair market value of the Shares as determined by theCommittee in its sole discretion. The Fair Market Value of any property otherthan Shares shall mean the market value of such property determined by suchmethods or procedures as shall be established from time to time by theCommittee.

 

**2.13.**       *“Incentive Stock Option”*shall mean an Option which when granted is intended to qualify as an incentivestock option for purposes of Section 422 of the Code.

 

**2.14.**       “*Limitations*”shall have the meaning set forth in Section 10.5.

 

**2.15.**       “*Option*” shallmean any right granted to a Participant under the Plan allowing suchParticipant to purchase Shares at such price or prices and during such periodor periods as the Committee shall determine.

 

**2.16.**       “*Other Share-Based Award*”shall have the meaning set forth in Section 8.1.

 

**2.17.**       “*Participant*”shall mean an Employee, Director or Consultant who is selected by the Committeeto receive an Award under the Plan.

 

**2.18.**       “*Payee*” shallhave the meaning set forth in Section 13.2.

 

**2.19.**       “*Performance Award*”shall mean any Award of Performance Cash, Performance Shares or PerformanceUnits granted pursuant to Article 9.

 

**2.20.**       *“Performance Cash”*shall mean any cash incentives granted pursuant to Article 9 payable tothe Participant upon the achievement of such performance goals as the Committeeshall establish.

 

**2.21.**       “*Performance Period*”shall mean the period established by the Committee during which any performancegoals specified by the Committee with respect to a Performance Award are to bemeasured.

 

**2.22.**       “*Performance Share*”shall mean any grant pursuant to Article 9 of a unit valued by referenceto a designated number of Shares, which value may be paid to the Participantupon achievement of such performance goals as the Committee shall establish.

 

**2.23.**       “*Performance Unit*”shall mean any grant pursuant to Article 9 of a unit valued by referenceto a designated amount of cash or property other than Shares, which value maybe paid to the Participant upon achievement of such performance goals duringthe Performance Period as the Committee shall establish.

 

**2.24.**       “*Permitted Assignee*”shall have the meaning set forth in Section 12.3.

 

**2.25.**       “*Plan*” shallmean the SkyWest, Inc. 2010 Long-Term Incentive Plan as set forth herein,and as subsequently amended from time to time.

 

**2.26.**       “*Prior Plans*”shall mean, collectively, the Company’s 2006 Long-Term Incentive Plan and theCompany’s prior Executive Stock Incentive Plan and Allshare Stock Option Plan.

 

**2.27.**       “*Restricted Stock*”shall mean any Share issued with the restriction that the holder may not sell,transfer, pledge or assign such Share and with such other restrictions as theCommittee, in its sole discretion, may impose, which restrictions may lapseseparately or in combination at such time or times, in installments orotherwise, as the Committee may deem appropriate.

 

**2.28.**       “*Restricted Stock Award*”shall have the meaning set forth in Section 7.1.

 

**2.29****.**       *“Restricted Stock Unit”*means an Award that is valued by reference to a Share, which value may be paidto the Participant in Shares or cash as determined by the Committee in its solediscretion upon the satisfaction of vesting restrictions as the Committee mayestablish, which restrictions may lapse separately or in combination at suchtime or times, in installments or otherwise, as the Committee may deemappropriate.

 

**2.30****.**        “*Restricted Stock UnitAward*” shall have the meaning set forth in Section 7.1.

 

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**2.31.**       “*Securities Exchange*”means the principal U.S. national securities exchange on which the Shares arelisted and traded on the date in question. As of the date hereof, theapplicable Securities Exchange is The NASDAQ Global Select Market.

 

**2.32.**       “*Shares*” shallmean the shares of common stock, no par value, of the Company.

 

**2.33.**       “*Stock Appreciation Right*”shall mean the right granted to a Participant pursuant to Article 6.

 

**2.34.**       “*Subsidiary*”shall mean any corporation (other than the Company) in an unbroken chain ofcorporations beginning with the Company if, at the relevant time each of thecorporations other than the last corporation in the unbroken chain owns stockpossessing 50% or more of the total combined voting power of all classes ofstock in one of the other corporations in the chain.

 

**2.35.**       “*Substitute Awards*”shall mean Awards granted or Shares issued by the Company in assumption of, orin substitution or exchange for: (i) awards previously granted by anentity (other than the Company or a Subsidiary) that is acquired by the Companyor any Subsidiary or with which the Company or any Subsidiary combines; or (ii) theright or obligation of any entity acquired by the Company or acquired by anySubsidiary, or with which the Company or any Subsidiary combines, to makefuture awards.

 

**2.36.**       “*Vesting Period*”shall mean the period of time specified by the Committee during which vestingrestrictions for an Award are applicable.

 

**3.****                                     ****SHARES SUBJECT TO THE PLAN**

 

**3.1**          *Number of Shares*.

 

(a)           Subjectto adjustment as provided in Section 12.2, a total of 5,150,000 Sharesshall be authorized for grant under the Plan, decreased by one (1) Sharefor every one (1) Share that was subject to an option or stockappreciation right granted under the Prior Plans after December 31, 2009and one and sixty-five one hundredths (1.65) Shares for every one (1) Sharethat was subject to an award (other than an option or stock appreciation right)granted under the Prior Plans after December 31, 2009, and increased byShares covered by awards granted under the Prior Plans that again becomeavailable for grant pursuant to Section 3.1(b). Shares shall be counted asused as of the applicable grant date. Any Shares that are subject to Options orStock Appreciation Rights shall be counted against this limit as one (1) Sharefor every one (1) Share granted, and any Shares that are subject to Awardsother than Options or Stock Appreciation Rights shall be counted against thislimit as one and sixty-five one-hundredths (1.65) Shares for every one (1) Sharegranted. After the effective date of the Plan as provided in Section 13.13,no further awards shall be granted under any Prior Plan.

 

(b)           If(i) any Shares subject to an Award are forfeited, an Award expires or anAward is settled for cash (in whole or in part), or (ii) after December 31,2009 any Shares subject to an award under the Prior Plans are forfeited, anaward under Prior Plans expires, or an award under the Prior Plans is settledfor cash (in whole or in part), the Shares subject to such Award or award underthe Prior Plans shall, to the extent of such forfeiture, expiration or cashsettlement, again be available for Awards under the Plan, in accordance with Section 3.1(d) below.Notwithstanding anything to the contrary contained herein, the following Sharesshall not be added to the Shares authorized for grant under paragraph (a) ofthis Section: (i) Shares tendered by the Participant or withheld by theCompany in payment of the purchase price of an Option or an option grantedunder the Prior Plans, or to satisfy any tax withholding obligation withrespect to an Award or an award granted under the Prior Plans; (ii) Sharessubject to a Stock Appreciation Right or a stock appreciation right grantedunder the Prior Plans that are not issued in connection with its stocksettlement on exercise thereof; and (iii) Shares reacquired by the Companyon the open market or otherwise using cash proceeds from the exercise of Optionsor options granted under the Prior Plans.

 

(c)           SubstituteAwards shall not reduce the Shares authorized for grant under the Plan or theapplicable Limitations applicable to a Participant under Section 10.5, norshall Shares subject to a Substitute Award again be available for Awards underthe Plan to the extent of any forfeiture, expiration or cash settlement asprovided in paragraph (b) above. Additionally, in the event that acompany acquired by the Company or any Subsidiary or with which the Company orany Subsidiary combines has shares available under a pre-existing plan approvedby stockholders and not adopted in contemplation of such acquisition orcombination, the shares available for grant pursuant to the terms of suchpre-existing plan (as adjusted, to the extent appropriate, using the exchangeratio or other adjustment or valuation ratio or formula used in suchacquisition or combination to determine the consideration payable to theholders of common stock of the entities party to such acquisition orcombination) may be used for Awards under the Plan and shall not reduce theShares authorized for grant under Section 3.1(a) of the Plan;provided that Awards using such available shares shall not be made after thedate 

 

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awards or grants could have been made under the terms of thepre-existing plan, absent the acquisition or combination, and shall only bemade to individuals who were not Employees or Directors prior to suchacquisition or combination.

 

(d)           AnyShares that again become available for grant pursuant to Section 3.1(b) shallbe added back as: (i) one (1) Share if such Shares were subject toOptions or Stock Appreciation Rights granted under the Plan or options or stockappreciation rights granted under the Prior Plans; and (ii) as one andsixty-five one-hundredths (1.65) Shares if such Shares were subject to Awardsother than Options or Stock Appreciation Rights granted under the Plan orawards other than options or stock appreciation rights granted under the PriorPlans.

 

**3.2.***         Character of Shares.*  Any Shares issued hereunder may consist, inwhole or in part, of authorized and unissued shares, treasury shares or sharespurchased in the open market or otherwise.

 

**4.****                                     ****ELIGIBILITY AND ADMINISTRATION**

 

**4.1.***         Eligibility.*  Any Employee, Director or Consultant shall beeligible to be selected as a Participant.

 

**4.2.***         Administration.*

 

(a)           ThePlan shall be administered by the Committee. The Committee shall have fullpower and authority, subject to the provisions of the Plan and subject to suchorders or resolutions not inconsistent with the provisions of the Plan as mayfrom time to time be adopted by the Board, to: (i) select the Employees,Directors and Consultants to whom Awards may from time to time be grantedhereunder; (ii) determine the type or types of Awards to be granted toeach Participant hereunder; (iii) determine the number of Shares (ordollar value) to be covered by each Award granted hereunder; (iv) determinethe terms and conditions, not inconsistent with the provisions of the Plan, ofany Award granted hereunder; (v) determine whether, to what extent andunder what circumstances Awards may be settled in cash, Shares or otherproperty; (vi) determine whether, to what extent, and under whatcircumstances cash, Shares, other property and other amounts payable withrespect to an Award made under the Plan shall be deferred either automaticallyor at the election of the Participant; (vii) determine whether, to whatextent, and under what circumstances any Award shall be canceled or suspended; (viii) interpretand administer the Plan and any instrument or agreement entered into under orin connection with the Plan, including any Award Agreement; (ix) correctany defect, supply any omission, or reconcile any inconsistency in the Plan orany Award in the manner and to the extent that the Committee shall deemdesirable to carry it into effect; (x) establish such rules andregulations and appoint such agents as it shall deem appropriate for the properadministration of the Plan; (xi) determine whether any Award, other thanan Option or Stock Appreciation Right, will have Dividend Equivalents; and(xii) make any other determination and take any other action that theCommittee deems necessary or desirable for the administration of the Plan.

 

(b)           Decisionsof the Committee shall be final, conclusive and binding on all persons orentities, including the Company, any Participant, and any Subsidiary. Amajority of the members of the Committee may determine its actions, includingfixing the time and place of its meetings. Notwithstanding the foregoing, anyaction or determination by the Committee specifically affecting or relating toa Director on the Committee shall require the prior approval of the Board.

 

(c)           Tothe extent not inconsistent with applicable law, including Section 162(m) ofthe Code, or the rules and regulations of the Securities Exchange on whichthe Shares are traded, the Committee may delegate to a committee of one or moredirectors of the Company any of the authority of the Committee under the Plan,including the right to grant, cancel or suspend Awards.

 

**5.****                                     ****OPTIONS**

 

**5.1.***         Grant of Options.*  Options may be granted hereunder toParticipants either alone or in addition to other Awards granted under thePlan. Any Option shall be subject to the terms and conditions of this Article andto such additional terms and conditions, not inconsistent with the provisionsof the Plan, as the Committee shall deem desirable.

 

**5.2.***  Award Agreements.*  All Options shall be evidenced by a writtenAward Agreement in such form and containing such terms and conditions as theCommittee shall determine which are not inconsistent with the provisions of thePlan. The terms and conditions of Options need not be the same with respect toeach Participant. Granting an Option pursuant to the Plan shall impose noobligation on the recipient to exercise such Option. Any individual who isgranted an Option pursuant to this Article may hold more than one Optiongranted pursuant to the Plan at the same time.

 

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**5.3.***         Option Price.*  Other than in connection with SubstituteAwards, the option price per each Share purchasable under any Option grantedpursuant to this Article shall not be less than 100% of the Fair MarketValue of one Share on the date of grant of such Option; provided, however, thatin the case of an Incentive Stock Option granted to a Participant who, at thetime of the grant, owns stock representing more than 10% of the voting power ofall classes of stock of the Company or any Subsidiary, the option price pershare shall be no less than 110% of the Fair Market Value of one Share on thedate of grant. Other than pursuant to Section 12.2, the Committee shallnot without the approval of the Company’s stockholders: (a) lower theoption price per Share of an Option after it is granted; (b) cancel anOption in exchange for cash or another Award (other than in connection with aChange in Control as defined in Section 11.3); or (c) take any otheraction with respect to an Option that would be treated as a repricing under therules and regulations of the Securities Exchange on which the Shares arethen traded.

 

**5.4.***         Option Term.*  The term of each Option shall be fixed by theCommittee in its sole discretion; provided that no Option shall be exercisableafter the expiration of seven (7) years from the date the Option isgranted, except in the event of death or disability; provided, however, thatthe term of the Option shall not exceed five (5) years from the date theOption is granted in the case of an Incentive Stock Option granted to aParticipant who, at the time of the grant, owns stock representing more than10% of the voting power of all classes of stock of the Company or any Subsidiary.

 

**5.5.***         Exercise of Options.*

 

(a)           VestedOptions granted under the Plan shall be exercised by the Participant or by aPermitted Assignee thereof (or by the Participant’s executors, administrators,guardian or legal representative, as may be provided in an Award Agreement) asto all or part of the Shares covered thereby, by giving notice of exercise tothe Company or its designated agent, specifying the number of Shares to bepurchased. The notice of exercise shall be in such form, made in such manner,and shall comply with such other requirements consistent with the provisions ofthe Plan as the Committee may prescribe from time to time

 

(b)           Unlessotherwise provided in an Award Agreement, full payment of such purchase priceshall be made at the time of exercise and shall be made: (i) in cash orcash equivalents (including certified check or bank check or wire transfer ofimmediately available funds); (ii) by tendering previously acquired Shares(either actually or by attestation) valued at their then Fair Market Value; (iii) withthe consent of the Committee, by delivery of other consideration having a FairMarket Value on the exercise date equal to the total purchase price; (iv) withthe consent of the Committee, by withholding Shares otherwise issuable inconnection with the exercise of the Option; (v) through any other methodspecified in an Award Agreement (including same-day sales through a broker); or(vi) any combination of any of the foregoing. The notice of exercise,accompanied by such payment, shall be delivered to the Company at its principalbusiness office or such other office as the Committee may from time to timedirect, and shall be in such form, containing such further provisionsconsistent with the provisions of the Plan, as the Committee may from time totime prescribe. In no event may any Option granted hereunder be exercised for afraction of a Share.

 

(c)           Notwithstandingthe foregoing, an Award Agreement evidencing an Option may provide that if onthe last day of the term of the Option the Fair Market Value of one Shareexceeds the option price per Share, the Participant has not exercised theOption (or a tandem Stock Appreciation Right, if applicable) and the Option hasnot expired, the Option shall be deemed to have been exercised by theParticipant on such day with payment made by withholding Shares otherwiseissuable in connection with the exercise of the Option. In such event, theCompany shall deliver to the Participant the number of Shares for which theOption was deemed exercised, less the number of Shares required to be withheldfor the payment of the total purchase price and required withholding taxes;provided, however, any fractional Share shall be settled in cash.

 

**5.6.***         Form of Settlement.*  In its sole discretion, the Committee mayprovide that the Shares to be issued upon an Option’s exercise shall be in theform of Restricted Stock or other similar securities.

 

**5.7.***         Incentive Stock Options.*  The Committee may grant Incentive StockOptions to any Employee of the Company or any Subsidiary, subject to therequirements of Section 422 of the Code. Solely for purposes ofdetermining whether Shares are available for the grant of Incentive StockOptions under the Plan, the maximum aggregate number of Shares that may beissued pursuant to Incentive Stock Options granted under the Plan shall be4,200,000 Shares, subject to adjustment as provided in Section 12.2.

 

**6.****                                     ****STOCK APPRECIATION RIGHTS**

 

**6.1.***         Grant and Exercise.*  The Committee may provide Stock AppreciationRights: (a) in tandem with all or part of any Option granted under thePlan or at any subsequent time during the term of such Option; (b) intandem with all or part of any Award 

 

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(otherthan an Option) granted under the Plan or at any subsequent time during theterm of such Award; or (c) without regard to any Option or other Award ineach case upon such terms and conditions as the Committee may establish in itssole discretion.

 

**6.2.***         Terms and Conditions.*  Stock Appreciation Rights shall be subject tosuch terms and conditions, not inconsistent with the provisions of the Plan, asshall be determined from time to time by the Committee, including thefollowing:

 

(a)           Uponthe exercise of a Stock Appreciation Right, the holder shall have the right toreceive the excess of: (i) the Fair Market Value of one Share on the dateof exercise (or such amount less than such Fair Market Value as the Committeeshall so determine at any time during a specified period before the date ofexercise), over (ii) the grant price of the Stock Appreciation Right.

 

(b)           TheCommittee shall determine in its sole discretion whether payment on exercise ofa Stock Appreciation Right shall be made in cash, in whole Shares or otherproperty, or any combination thereof.

 

(c)           Theterms and conditions of Stock Appreciation Rights need not be the same withrespect to each recipient.

 

(d)           TheCommittee may impose such other terms and conditions on the exercise of anyStock Appreciation Right, as it shall deem appropriate. A Stock AppreciationRight shall: (i) have a grant price per Share of not less than the FairMarket Value of one Share on the date of grant or, if applicable, on the dateof grant of an Option with respect to a Stock Appreciation Right granted in exchangefor or in tandem with, but subsequent to, the Option (subject to therequirements of Section 409A of the Code) except in the case of SubstituteAwards or in connection with an adjustment provided in Section 12.2; and (ii) havea term not greater than seven (7) years.

 

(e)           AnAward Agreement evidencing a Stock Appreciation Right may provide that if onthe last day of the term of a Stock Appreciation Right the Fair Market Value ofone Share exceeds the grant price per Share of the Stock Appreciation Right,the Participant has not exercised the Stock Appreciation Right or the tandemOption (if applicable), and the Stock Appreciation Right has not expired, theStock Appreciation Right shall be deemed to have been exercised by theParticipant on such day. In such event, the Company shall make payment to theParticipant in accordance with this Section, reduced by the number of Shares(or cash) required for withholding taxes. Any fractional Share shall be settledin cash.

 

(f)            Withoutthe approval of the Company’s stockholders, other than pursuant to Section 12.2,the Committee shall not: (i) reduce the grant price of any StockAppreciation Right after the date of grant; (ii) cancel any StockAppreciation Right in exchange for cash or another Award (other than inconnection with a Change in Control as defined in Section 11.3); or (iii) takeany other action with respect to a Stock Appreciation Right that would betreated as a repricing under the rules and regulations of the SecuritiesExchange on which the Shares are then traded.

 

**7.****                                     ****RESTRICTED STOCK AND RESTRICTED STOCK UNITS**

 

**7.1.***         Grants.*  Awards of Restricted Stock and of RestrictedStock Units may be issued hereunder to Participants either alone or in additionto other Awards granted under the Plan (a “Restricted Stock Award” or “RestrictedStock Unit Award” respectively), and such Restricted Stock Awards andRestricted Stock Unit Awards shall also be available as a form of payment ofPerformance Awards and other earned cash-based incentive compensation. Each RestrictedStock Award and Restricted Stock Unit Award shall be subject to vestingrestrictions imposed by the Committee covering a period of time specified bythe Committee (the “Vesting Period”). The Committee has absolute discretion todetermine whether any consideration (other than services) is to be received bythe Company or any Subsidiary as a condition precedent to the issuance ofRestricted Stock Awards or Restricted Stock Unit Awards.

 

**7.2.***         Award Agreements.*  The terms of any Restricted Stock Award orRestricted Stock Unit Award granted under the Plan shall be set forth in anAward Agreement which shall contain provisions determined by the Committee andnot inconsistent with the Plan. The terms of Restricted Stock Awards andRestricted Stock Unit Awards need not be the same with respect to eachParticipant.

 

**7.3.***         Rights of Holders of Restricted Stockand Restricted Stock Units.*

 

(a)           Unlessotherwise provided in the applicable Award Agreement, beginning on the date ofgrant of the Restricted Stock Award and subject to execution of the AwardAgreement, the Participant shall become a stockholder of the Company withrespect to all Shares subject to the Award Agreement and shall have all of therights of a stockholder, including the right to vote such Shares and the rightto receive dividends and other distributions made with respect to such Shares.Except as otherwise provided in an Award Agreement, any Shares or any otherproperty (other than cash) distributed as a dividend or otherwise with respectto any Restricted Stock Award as to which the restrictions have not yet lapsedshall be subject to the same restrictions as apply to the Restricted Stockunder such Restricted Stock Award. Any provision herein to the contrarynotwithstanding, unless otherwise provided in the applicable Award Agreement,cash dividends with respect to 

 

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any Restricted Stock Award and any other property (other than cash)distributed as a dividend or otherwise with respect to any Restricted StockAward shall be: (i) accumulated subject to restrictions and risk offorfeiture to the same extent as the underlying Restricted Stock with respectto which such cash, Shares or other property has been distributed; and (ii) either(A) paid to the Participant at the time such restrictions and risk offorfeiture lapse or (B) forfeited to the extent the underlying RestrictedStock that is forfeited.

 

(b)           AParticipant receiving a Restricted Stock Unit Award shall not possess votingrights or the right to receive any dividends or other distributions withrespect to such Award. The applicable Award Agreement may, however, grant theParticipant Dividend Equivalencies with respect to Restricted Stock Units.

 

(c)           Notwithstandingthe provisions of this Section, cash dividends with respect to any RestrictedStock Award and any other property (other than cash) distributed as a dividendor otherwise with respect to any Restricted Stock Award or the number of Sharescovered by a Restricted Stock Unit Award that vests based on achievement ofperformance goals shall be accumulated, shall be subject to restrictions andrisk of forfeiture to the same extent as the Restricted Stock or RestrictedStock Units with respect to which such cash, Shares or other property has beendistributed and shall be paid at the time such restrictions and risk offorfeiture lapse.

 

**7.4.***         Minimum Vesting Period.*  Except as otherwise provided in theapplicable Award Agreement or in special circumstances determined by theCommittee in its sole discretion, Restricted Stock Awards and Restricted StockUnit Awards shall have a Vesting Period of not less than: (i) three (3) yearsfrom date of grant (but permitting pro rata vesting over such time) if subjectonly to continued service with the Company or a Subsidiary; or (ii) one (1) yearfrom date of grant if subject to the achievement of performance objectives.

 

**7.5.***         Issuance of Shares.*  Any Restricted Stock granted under the Planmay be evidenced in such manner as the Board may deem appropriate, includingbook-entry registration or issuance of a stock certificate or certificates,which certificate or certificates shall be held by the Company. Suchcertificate or certificates shall be registered in the name of the Participantand shall bear an appropriate legend referring to the restrictions applicableto such Restricted Stock.

 

**8.****                                     ****OTHER SHARE-BASED AWARDS**

 

**8.1.***         Grants.*  Other Awards of Shares and other Awards thatare valued in whole or in part by reference to, or are otherwise based on,Shares or other property (“Other Share-Based Awards”), including deferred stockunits, may be granted hereunder to Participants either alone or in addition toother Awards granted under the Plan. Other Share-Based Awards shall also beavailable as a form of payment of other Awards granted under the Plan and otherearned cash-based compensation. Other Share-Based Awards shall be subject tosuch vesting restrictions as are imposed by the Committee covering a period oftime specified by the Committee (the “Vesting Period”).

 

**8.2.***         Award Agreements.*  The terms of Other Share-Based Award grantedunder the Plan shall be set forth in an Award Agreement which shall containprovisions determined by the Committee and not inconsistent with the Plan. Theterms of such Awards need not be the same with respect to each Participant.Notwithstanding the provisions of this Section, any cash, Shares or property(other than cash) distributed as a dividend or otherwise with respect to thenumber of Shares covered by a Other Share-Based Award that vests based onachievement of performance goals shall be subject to restrictions and risk offorfeiture to the same extent as the Shares covered by the Other Share-BasedAward with respect to which such cash, Shares or other property has been distributed.

 

**8.3.***         Minimum Vesting Period.*  Except as otherwise provided in theapplicable Award Agreement or in special circumstances as determined by theCommittee in its sole discretion, Other Share-Based Awards shall have a VestingPeriod of not less than: (i) three (3) years from date of grant (butpermitting pro rata vesting over such time) if subject only to continuedservice with the Company or a Subsidiary; or (ii) one (1) year fromdate of grant if subject to the achievement of performance objectives.

 

**8.4.***         Payment.*  Except as may be provided in an AwardAgreement, Other Share-Based Awards may be paid in cash, Shares, otherproperty, or any combination thereof, in the sole discretion of the Committee.Other Share-Based Awards may be paid in a lump sum or in installments or, inaccordance with procedures established by the Committee, on a deferred basissubject to the requirements of Section 409A of the Code.

 

**9.****                                     ****PERFORMANCE AWARDS**

 

**9.1.***         Grants.*  Performance Awards in the form of PerformanceCash, Performance Shares or Performance Units, as determined by the Committeein its sole discretion, may be granted hereunder to Participants, for noconsideration or for such minimum consideration as may be required byapplicable law, either alone or in addition to other Awards granted under thePlan. The performance goals to be achieved for each Performance Period shall beconclusively determined by the Committee and may be based upon the criteria setforth in Section 10.2.

 

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**9.2.***         Award* Agreements.  The terms of any Performance Award grantedunder the Plan shall be set forth in an Award Agreement (or, if applicable, ina resolution duly adopted by the Committee) which shall contain provisionsdetermined by the Committee and not inconsistent with the Plan, includingwhether such Awards shall have Dividend Equivalents. The terms of PerformanceAwards need not be the same with respect to each Participant.

 

**9.3.***         Terms and Conditions.*  The performance criteria to be achievedduring any Performance Period and the length of the Performance Period shall bedetermined by the Committee upon the grant of each Performance Award; provided,however, that a Performance Period shall not be shorter than one (1) yearnor longer than five (5) years unless the Award is not payable in Shares.The amount of the Award to be distributed shall be conclusively determined bythe Committee.

 

**9.4.***         Payment.*  Except as provided in Article 11 or asmay be provided in an Award Agreement, Performance Awards will be distributedonly after the end of the relevant Performance Period. Performance Awards maybe paid in cash, Shares, other property, or any combination thereof, in thesole discretion of the Committee. Performance Awards may be paid in a lump sumor in installments following the close of the Performance Period or, inaccordance with procedures established by the Committee, on a deferred basissubject to the requirements of Section 409A of the Code.

 

**10.****                              ****CODE SECTION 162(m) PROVISIONS**

 

**10.1.***       Application.*  Notwithstanding any other provision of thePlan, if the Committee determines at the time a Restricted Stock Award, aRestricted Stock Unit Award, a Performance Award or an Other Share-Based Awardis granted to a Participant who is, or is likely to be, as of the end of thetax year in which the Company would claim a tax deduction in connection withsuch Award, a Covered Employee, then the Committee may provide thatSections 10.2 through 10.4 are applicable to such Award. Additionally, theindividual limitations set forth in Section 10.5 shall apply to any Awardgranted under the Plan to a Participant regardless of whether the Participantis or is expected to become a Covered Employee.

 

**10.2.***       Performance Criteria.*  If the Committee determines that a RestrictedStock Award, a Restricted Stock Unit, a Performance Award or an OtherShare-Based Award is intended to be subject to this Section 10.2, thelapsing of restrictions thereon and the distribution of cash, Shares or otherproperty pursuant thereto, as applicable, shall be subject to the achievementof one or more objective performance goals established by the Committee, whichshall be based on the attainment of specified levels of one or any combinationof the following: net sales; revenue; revenue growth or product revenue growth;operating income (before or after taxes); pre- or after-tax income or loss(before or after allocation of corporate overhead and bonus); earnings or lossper share; net income or loss (before or after taxes); return on equity; totalstockholder return; return on assets or net assets; appreciation in and/ormaintenance of the price of the Shares or any other publicly-traded securitiesof the Company; market share; gross profits; earnings or losses (includingearnings or losses before taxes, before interest and taxes, or before interest,taxes, depreciation and amortization); economic value-added models orequivalent metrics; comparisons with various stock market indices; reductionsin costs; cash flow or cash flow per share (before or after dividends); returnon capital (including return on total capital or return on invested capital);cash flow return on investment; improvement in or attainment of expense levelsor working capital levels, including cash and accounts receivable; operatingmargin; gross margin; year-end cash; cash margin; debt reduction; stockholdersequity; operating efficiencies; market share; customer satisfaction; customergrowth; employee satisfaction; regulatory achievements (including submitting orfiling applications or other documents with regulatory authorities or receivingapproval of any such applications or other documents and passing pre-approvalinspections (whether of the Company or the Company’s third-partymanufacturer)); strategic partnerships or transactions; co-development,co-marketing, profit sharing, joint venture or other similar arrangements;financial ratios, including those measuring liquidity, activity, profitabilityor leverage; cost of capital or assets under management; financing and other capitalraising transactions (including sales of the Company’s equity or debtsecurities; sales or licenses of the Company’s assets, including itsintellectual property, whether in a particular jurisdiction or territory orglobally; or through partnering transactions); cost per available seat mile;revenue per available seat mile; revenue or cost per revenue seat mile;percentage of flights completed on time; percentage of scheduled flightscompleted; lost passenger baggage per passenger or per seat mile; aircraftutilization; revenue per employee; and implementation, completion or attainmentof measurable objectives with respect to commercialization, projects, servicevolume levels, acquisitions and divestitures; transactions; and recruiting andmaintaining personnel. Such performance goals also may be based solely byreference to the Company’s performance or the performance of a Subsidiary,division, business segment or business unit of the Company, or based upon therelative performance of other companies or upon comparisons of any of theindicators of performance relative to other companies. The Committee may alsoexclude charges related to an event or occurrence which the Committeedetermines should appropriately be excluded, including: (a) restructurings,discontinued operations, extraordinary items, and other unusual ornon-recurring charges; (b) an event either not directly related to theoperations of the Company or not within the reasonable control of the Company’smanagement; or (c) the cumulative effects of tax or accounting changes inaccordance with U.S. generally accepted accounting principles. Such performancegoals shall be set by the Committee within the time period prescribed by, andshall otherwise comply with the requirements of, Section 162(m) ofthe Code, and the regulations thereunder.

 

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**10.3.***       Adjustments.*  Notwithstanding any provision of the Plan(other than Article 11), with respect to any Restricted Stock Award,Restricted Stock Unit Award, Performance Award or Other Share-Based Award thatis subject to Section 10.2, the Committee may adjust downwards, but notupwards, the amount payable pursuant to such Award, and the Committee may notwaive the achievement of the applicable performance goals except in the case ofthe death or disability of the Participant, a Change in Control, or asotherwise determined by the Committee in special circumstances.

 

**10.4.***       Restrictions.*  The Committee shall have the power to imposesuch other restrictions on Awards subject to this Article as it may deemnecessary or appropriate to ensure that such Awards satisfy all requirementsfor “performance-based compensation” within the meaning of Section 162(m) ofthe Code.

 

**10.5.***       Limitations on Grants to Individual Participants.*  Subject to adjustment as provided in Section 12.2,no Participant may: (i) be granted Options or Stock Appreciation Rightsduring any 36-month period with respect to more than 1,000,000 Shares; and (ii) earnmore than 500,000 Shares with respect to Restricted Stock Awards, RestrictedStock Unit Awards, Performance Awards and/or Other Share-Based Awards that areintended to comply with the performance-based exception under Code Section 162(m) andare denominated in Shares in any 36-month period (collectively, the “Limitations”).In addition to the foregoing, the maximum dollar value that may be earned byany Participant for each 12 months in a Performance Period with respect toPerformance Awards that are intended to comply with the performance-basedexception under Code Section 162(m) and are denominated in cash is$5,000,000. If an Award is cancelled, the cancelled Award shall continue to becounted toward the applicable Limitation (or, if denominated in cash, towardthe dollar amount in the preceding sentence).

 

**11.****                              ****CHANGE IN CONTROL PROVISIONS**

 

**11.1.***       Impact on Certain Awards.*  Award Agreements may provide that in theevent of a Change in Control of the Company (as defined in Section 11.3): (i) Optionsand Stock Appreciation Rights outstanding as of the date of the Change inControl shall be cancelled and terminated without payment therefor if the FairMarket Value of one Share as of the date of the Change in Control is less thanthe per Share Option exercise price or Stock Appreciation Right grant price;and (ii) Performance Awards shall be considered to be earned and payable(either in full or pro rata based on the portion of Performance Periodcompleted as of the date of the Change in Control) and any limitations or otherrestrictions shall lapse and such Performance Awards shall be immediatelysettled or distributed.

 

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**11.2.***       Assumption or Substitution of CertainAwards.*

 

(a)           Unlessotherwise provided in the applicable Award Agreement, in the event of a Changein Control of the Company in which the successor company assumes or provides asubstitute award for an Option, Stock Appreciation Right, Restricted StockAward, Restricted Stock Unit Award or Other Share-Based Award (or in which theCompany is the ultimate parent corporation and continues the Award), if aParticipant’s employment with such successor company (or the Company) or asubsidiary thereof terminates within 24 months following such Change inControl (or such other period set forth in the Award Agreement, including priorthereto if applicable) without “cause” or for “good reason” as defined in theAward Agreement or under other circumstances specified in the Award Agreement: (i) Optionsand Stock Appreciation Rights outstanding as of the date of such termination ofemployment will immediately vest, become fully exercisable, and may thereafterbe exercised for 24 months (or such other longer period of time as is setforth in the applicable Award Agreement); (ii) the restrictions, limitationsand other conditions applicable to Restricted Stock and Restricted Stock Unitsoutstanding as of the date of such termination of employment shall lapse andthe Restricted Stock and Restricted Stock Units shall become free of allrestrictions, limitations and conditions and become fully vested; and (iii) therestrictions, limitations and other conditions applicable to any OtherShare-Based Awards or any other Awards shall lapse, and such Other Share-BasedAwards or such other Awards shall become free of all restrictions, limitationsand conditions and become fully vested and transferable to the full extent ofthe original grant. For the purposes of this Section 11.2, an Option,Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award orOther Share-Based Award shall be considered assumed or substituted for if,following the Change in Control, the Award confers the right to purchase orreceive, for each Share subject to the Option, Stock Appreciation Right,Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Awardimmediately prior to the Change in Control, the consideration (whether stock,cash or other securities or property) received in the transaction constitutinga Change in Control by holders of Shares for each Share held on the effectivedate of such transaction (and if holders were offered a choice ofconsideration, the type of consideration chosen by the holders of a majority ofthe outstanding Shares); provided, however, that if such consideration receivedin the transaction constituting a Change in Control is not solely common stockof the successor company, the Committee may, with the consent of the successorcompany, provide that the consideration to be received upon the exercise orvesting of an Option, Stock Appreciation Right, Restricted Stock Award,Restricted Stock Unit Award or Other Share-Based Award, for each Share subjectthereto, will be solely common stock of the successor company substantiallyequal in fair market value to the per Share consideration received by holdersof Shares in the transaction constituting a Change in Control. Thedetermination of such substantial equality of value of consideration shall bemade by the Committee in its sole discretion and its determination shall beconclusive and binding.

 

(b)           Unlessotherwise provided in the applicable Award Agreement, in the event of a Changein Control of the Company to the extent the successor company does not assumeor substitute for an Option, Stock Appreciation Right, Restricted Stock Award,Restricted Stock Unit Award or Other Share-Based Award (or in which the Companyis the ultimate parent corporation and does not continue the Award), thenimmediately prior to the Change in Control: (i) those Options and StockAppreciation Rights outstanding as of the date of the Change in Control thatare not assumed or substituted for (or continued) shall immediately vest andbecome fully exercisable; (ii) all restrictions, limitations and otherconditions applicable to Restricted Stock and Restricted Stock Units that arenot assumed or substituted for (or continued) shall lapse and the RestrictedStock and Restricted Stock Units shall become free of all restrictions,limitations and conditions and become fully vested; and (iii) therestrictions, other limitations and other conditions applicable to any OtherShare-Based Awards or any other Awards that are not assumed or substituted for(or continued) shall lapse, and such Other Share-Based Awards or such otherAwards shall become free of all restrictions, limitations and conditions andbecome fully vested and transferable to the full extent of the original grant.

 

(c)           TheCommittee, in its discretion, may determine that, upon the occurrence of aChange in Control of the Company, each Option and Stock Appreciation Rightoutstanding shall terminate within a specified number of days after notice tothe Participant, and/or that each Participant shall receive, with respect toeach Share subject to such Option or Stock Appreciation Right, an amount equalto the excess of the Fair Market Value of such Share immediately prior to theoccurrence of such Change in Control over the exercise price per Share of suchOption and/or Stock Appreciation Right; such amount to be payable in cash, inone or more kinds of stock or property (including the stock or property, ifany, payable in the transaction) or in a combination thereof, as the Committee,in its discretion, shall determine.

 

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**11.3.***       Change in Control.*  For purposes of the Plan, unless otherwiseprovided in an Award Agreement, Change in Control means the occurrence of anyone of the following events:

 

(a)           Duringany twenty-four (24) month period, individuals who, as of the beginning ofsuch period, constitute the Board (the “Incumbent Directors”) cease for anyreason to constitute at least a majority of the Board, provided that any personbecoming a director subsequent to the beginning of such period whose electionor nomination for election was approved by a vote of at least a majority of theIncumbent Directors then on the Board (either by a specific vote or by approvalof the proxy statement of the Company in which such person is named as anominee for director, without written objection to such nomination) shall be anIncumbent Director; *provided*, *however*, that no individual initiallyelected or nominated as a director of the Company as a result of an actual orthreatened election contest with respect to directors or as a result of anyother actual or threatened solicitation of proxies by or on behalf of anyperson other than the Board shall be deemed to be an Incumbent Director;

 

(b)           Any“person” (as such term is defined in the Exchange Act and as used inSections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomesa “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of securities of the Company representing 50% or moreof the combined voting power of the Company’s then outstanding securitieseligible to vote for the election of the Board (the “Company Voting Securities”);*provided*, *however*, that the event described in thisparagraph (b) shall not be deemed to be a Change in Control by virtueof any of the following acquisitions: (i) by the Company or anySubsidiary; (ii) by any employee benefit plan (or related trust) sponsoredor maintained by the Company or any Subsidiary; (iii) by any underwritertemporarily holding securities pursuant to an offering of such securities; (iv) pursuantto a Non-Qualifying Transaction, as defined in paragraph (c); or (v) byany person of Voting Securities from the Company, if a majority of theIncumbent Board approves in advance the acquisition of beneficial ownership of50% or more of Company Voting Securities by such person;

 

(c)           Theconsummation of a merger, consolidation, statutory share exchange or similarform of corporate transaction involving the Company or any of its Subsidiariesthat requires the approval of the Company’s stockholders, whether for suchtransaction or the issuance of securities in the transaction (a “BusinessCombination”), unless immediately following such Business Combination: (i) morethan 50% of the total voting power of (A) the corporation resulting fromsuch Business Combination (the “Surviving Corporation”), or (B) ifapplicable, the ultimate parent corporation that directly or indirectly hasbeneficial ownership of 100% of the voting securities eligible to electdirectors of the Surviving Corporation (the “Parent Corporation”), isrepresented by Company Voting Securities that were outstanding immediatelyprior to such Business Combination (or, if applicable, is represented by sharesinto which such Company Voting Securities were converted pursuant to suchBusiness Combination), and such voting power among the holders thereof is insubstantially the same proportion as the voting power of such Company VotingSecurities among the holders thereof immediately prior to the BusinessCombination, (ii) no person (other than any employee benefit plan (orrelated trust) sponsored or maintained by the Surviving Corporation or theParent Corporation), is or becomes the beneficial owner, directly orindirectly, of 50% or more of the total voting power of the outstanding votingsecurities eligible to elect directors of the Parent Corporation (or, if thereis no Parent Corporation, the Surviving Corporation) and (iii) at least amajority of the members of the board of directors of the Parent Corporation(or, if there is no Parent Corporation, the Surviving Corporation) followingthe consummation of the Business Combination were Incumbent Directors at thetime of the Board’s approval of the execution of the initial agreementproviding for such Business Combination (any Business Combination whichsatisfies all of the criteria specified in (i), (ii) and (iii) aboveshall be deemed to be a “Non**-**QualifyingTransaction”); or

 

(d)           Thestockholders of the Company approve a plan of complete liquidation ordissolution of the Company or the consummation of a sale of all orsubstantially all of the Company’s assets.

 

Notwithstandingthe foregoing, a Change in Control shall not be deemed to occur solely becauseany person acquires beneficial ownership of 50% or more of the Company VotingSecurities as a result of the acquisition of Company Voting Securities by theCompany which reduces the number of Company Voting Securities outstanding; *provided*, *that*if after such acquisition by the Company such person becomes the beneficialowner of additional Company Voting Securities that increases the percentage ofoutstanding Company Voting Securities beneficially owned by such person, aChange in Control of the Company shall then occur.

 

**12.****                              ****GENERALLY APPLICABLE PROVISIONS**

 

**12.1.***       Amendment and Termination of the Plan.*  The Board may, from time to time, alter,amend, suspend or terminate the Plan as it shall deem advisable, subject to anyrequirement for stockholder approval imposed by applicable law, including the rules andregulations of the Securities Exchange on which the Shares are then traded;provided that the Board may not amend the Plan in any manner that would resultin noncompliance with Rule 16b-3 of the Exchange Act; and further providedthat the Board may not, without the approval of the Company’s stockholders (tothe extent stockholder approval is required by the Code or other applicable 

 

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law),amend the Plan to: (a) increase the number of Shares that may be thesubject of Awards under the Plan (except for adjustments pursuant to Section 12.2);(b) expand the types of awards available under the Plan; (c) materiallyexpand the class of persons eligible to participate in the Plan; (d) amendSection 5.3 or Section 6.2(f) to eliminate the requirementsrelating to minimum exercise price, minimum grant price and stockholderapproval; (e) increase the maximum permissible term of any Optionspecified by Section 5.4 or the maximum permissible term of a StockAppreciation Right specified by Section 6.2(d); or (f) increase theLimitations. The Board may not, without the approval of the Company’sstockholders, cancel an Option or Stock Appreciation Right in exchange for cashor take any action with respect to an Option or Stock Appreciation Right thatwould be treated as a repricing under the rules and regulations of theSecurities Exchange on which the Shares are then traded, including a reductionof the exercise price of an Option or the grant price of a Stock AppreciationRight or the exchange of an Option or Stock Appreciation Right for cash or anotherAward. In addition, no amendments to, or termination of, the Plan shall impairthe rights of a Participant in any material respect under any Award previouslygranted without such Participant’s consent.

 

**12.2.***       Adjustments.*  In the event of any merger, reorganization,consolidation, recapitalization, dividend or distribution (whether in cash,shares or other property, other than a regular cash dividend), stock split,reverse stock split, spin-off or similar transaction or other change incorporate structure affecting the Shares or the value thereof, such adjustmentsand other substitutions shall be made to the Plan and to Awards as theCommittee deems equitable or appropriate taking into consideration theaccounting and tax consequences, including such adjustments in the aggregatenumber, class and kind of securities that may be delivered under the Plan, theLimitations, the maximum number of Shares that may be issued pursuant toIncentive Stock Options and, in the aggregate or to any Participant, in the number,class, kind and option or exercise price of securities subject to outstandingAwards granted under the Plan (including, if the Committee deems appropriate,the substitution of similar options to purchase the shares of, or other awardsdenominated in the shares of, another company) as the Committee may determineto be appropriate; provided, however, that the number of Shares subject to anyAward shall always be a whole number.

 

**12.3.***       Transferability of Awards.*  Except as provided below, no Award and no Sharesthat have not been issued or as to which any applicable restriction,performance or deferral period has not lapsed, may be sold, assigned,transferred, pledged or otherwise encumbered, other than by will or the laws ofdescent and distribution, and such Award may be exercised during the life ofthe Participant only by the Participant or the Participant’s guardian or legalrepresentative. To the extent and under such terms and conditions as determinedby the Committee, a Participant may assign or transfer an Award (eachtransferee thereof, a “Permitted Assignee”) to: (i) the Participant’sspouse, children or grandchildren (including any adopted and step children orgrandchildren), parents, grandparents or siblings; (ii) to a trust for thebenefit of one or more of the Participant or the persons referred to inclause (i); (iii) to a partnership, limited liability company orcorporation in which the Participant or the persons referred to in clause (i) arethe only partners, members or shareholders; or (iv) for charitabledonations; provided that such Permitted Assignee shall be bound by and subjectto all of the terms and conditions of the Plan and the Award Agreement relatingto the transferred Award and shall execute an agreement satisfactory to theCompany evidencing such obligations; and provided further that such Participantshall remain bound by the terms and conditions of the Plan. The Company shallcooperate with any Permitted Assignee and the Company’s transfer agent ineffectuating any transfer permitted under this Section.

 

**12.4.***       Termination of Employment or Services.*  The Committee shall determine and set forthin each Award Agreement whether any Awards granted in such Award Agreement willcontinue to be exercisable, continue to vest or be earned and the terms of suchexercise, vesting or earning, on and after the date that a Participant ceasesto be employed by or to provide services to the Company or any Subsidiary(including as a Director), whether by reason of death, disability, voluntary orinvoluntary termination of employment or services, or otherwise. The date oftermination of a Participant’s employment or services will be determined by theCommittee, which determination will be final.

 

**12.5.      ***Deferral;Dividend Equivalents.*  TheCommittee in its sole discretion shall be authorized to establish procedurespursuant to which the payment of any Award may be deferred. Subject to theprovisions of the Plan and any Award Agreement, the recipient of an Award otherthan an Option or Stock Appreciation Right may, if so determined by theCommittee, be entitled to receive, currently or on a deferred basis, amountsequivalent to cash, stock or other property dividends on Shares (“DividendEquivalents”) with respect to the number of Shares covered by the Award, asdetermined by the Committee, in its sole discretion. The Committee may providethat the Dividend Equivalents (if any) shall be deemed to have been reinvestedin additional Shares or otherwise reinvested and may provide that the DividendEquivalents are subject to the same vesting or performance conditions as theunderlying Award. Notwithstanding the foregoing, Dividend Equivalentsdistributed in connection with an Award that vests based on the achievement ofperformance goals shall be subject to restrictions and risk of forfeiture tothe same extent as the Award with respect to which such cash, stock or otherproperty has been distributed.

 

**13.****                              ****MISCELLANEOUS**

 

**13.1.***       Award Agreements.*  Each Award Agreement shall either be: (a) inwriting in a form approved by the Committee and executed by the Company by anofficer duly authorized to act on its behalf; or (b) an electronic noticein a form approved by the 

 

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Committeeand recorded by the Company (or its designee) in an electronic recordkeepingsystem used for the purpose of tracking one or more types of Awards as theCommittee may provide; in each case and if required by the Committee, the AwardAgreement shall be executed or otherwise electronically accepted by therecipient of the Award in such form and manner as the Committee may require.The Committee may authorize any officer of the Company to execute any or allAward Agreements on behalf of the Company. The Award Agreement shall set forththe material terms and conditions of the Award as established by the Committeeconsistent with the provisions of the Plan.

 

**13.2.***       Tax Withholding.*  The Company shall have the right to make allpayments or distributions pursuant to the Plan to a Participant (or a PermittedAssignee thereof) (any such person, a “Payee”) net of any applicable federal,state and local taxes required to be paid or withheld as a result of: (a) thegrant of any Award; (b) the exercise of an Option or Stock AppreciationRight; (c) the delivery of Shares or cash; (d) the lapse of anyrestrictions in connection with any Award; or (e) any other eventoccurring pursuant to the Plan. The Company or any Subsidiary shall have theright to withhold from wages or other amounts otherwise payable to such Payeesuch withholding taxes as may be required by law, or to otherwise require thePayee to pay such withholding taxes. If the Payee shall fail to make such taxpayments as are required, the Company or its Subsidiaries shall, to the extentpermitted by law, have the right to deduct any such taxes from any payment ofany kind otherwise due to such Payee or to take such other action as may benecessary to satisfy such withholding obligations. The Committee shall beauthorized to establish procedures for election by Participants to satisfy suchobligation for the payment of such taxes by tendering previously acquiredShares (either actually or by attestation, valued at their then Fair MarketValue), or by directing the Company to retain Shares (up to the Participant’sminimum required tax withholding rate or such other rate that will not cause anadverse accounting consequence or cost) otherwise deliverable in connectionwith the Award.

 

**13.3.***       Right of Discharge Reserved; Claims toAwards.*  Nothing in the Plan nor thegrant of an Award hereunder shall confer upon any Employee, Director orConsultant the right to continue in the employment or service of the Company orany Subsidiary or affect any right that the Company or any Subsidiary may haveto terminate the employment or service of (or to demote or to exclude fromfuture Awards under the Plan) any such Employee, Director or Consultant at anytime for any reason “at will.” Except as specifically provided by theCommittee, the Company shall not be liable for the loss of existing orpotential profit from an Award granted in the event of termination of anemployment or other relationship. No Employee, Director or Consultant shallhave any claim to be granted any Award under the Plan, and there is noobligation for uniformity of treatment of Employees, Directors or Consultantsunder the Plan.

 

**13.4.***       Substitute Awards.*  Notwithstanding any other provision of thePlan, the terms of Substitute Awards may vary from the terms set forth in thePlan to the extent the Committee deems appropriate to conform, in whole or inpart, to the provisions of the awards in substitution for which they aregranted.

 

**13.5.***       Cancellation of Award; Forfeiture ofGain.*  Notwithstanding anything to thecontrary contained herein, an Award Agreement may provide that the Award shallbe canceled if the Participant, without the consent of the Company, whileemployed by or providing services to the Company or any Subsidiary or aftertermination of such employment or service, violates a non-competition,non-solicitation or non-disclosure covenant or agreement or otherwise engagesin activity that is in conflict with or adverse to the interest of the Companyor any Subsidiary (including conduct contributing to any financial restatementsor financial irregularities), as determined by the Committee in its solediscretion. The Committee may provide in an Award Agreement that if within thetime period specified in the Agreement the Participant establishes arelationship with a competitor or engages in an activity referred to in thepreceding sentence, the Participant will forfeit any gain realized on thevesting or exercise of the Award and must repay such gain to the Company.

 

**13.6.***       Stop Transfer Orders.*  All certificates for Shares delivered underthe Plan pursuant to any Award shall be subject to such stop-transfer ordersand other restrictions as the Committee may deem advisable under the rules,regulations and other requirements of the U.S. Securities and ExchangeCommission (“SEC”), any stock exchange upon which the Shares are then listed,and any applicable federal or state securities law, and the Committee may causea legend or legends to be put on any such certificates to make appropriatereference to such restrictions.

 

**13.7.***       Nature of Payments.*  All Awards made pursuant to the Plan are inconsideration of services performed or to be performed for the Company or anySubsidiary, division or business unit of the Company. Any income or gainrealized pursuant to Awards under the Plan constitutes a special incentivepayment to the Participant and shall not be taken into account, to the extentpermissible under applicable law, as compensation for purposes of any of theemployee benefit plans of the Company or any Subsidiary except as may bedetermined by the Committee or by the Board or board of directors of theapplicable Subsidiary.

 

**13.8.***       Other Plans.*  Nothing contained in the Plan shall preventthe Board from adopting other or additional compensation arrangements, subjectto stockholder approval if such approval is required; and such arrangements maybe either generally applicable or applicable only in specific cases.

 

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**13.9.***       Severability.*  The provisions of the Plan shall be deemedseverable. If any provision of the Plan shall be held unlawful or otherwiseinvalid or unenforceable in whole or in part by a court of competentjurisdiction or by reason of change in a law or regulation, such provisionshall: (a) be deemed limited to the extent that such court of competentjurisdiction deems it lawful, valid and/or enforceable and as so limited shallremain in full force and effect; and (b) not affect any other provision ofthe Plan or part thereof, each of which shall remain in full force and effect.If the making of any payment or the provision of any other benefit requiredunder the Plan shall be held unlawful or otherwise invalid or unenforceable bya court of competent jurisdiction, such unlawfulness, invalidity orunenforceability shall not prevent any other payment or benefit from being madeor provided under the Plan, and if the making of any payment in full or theprovision of any other benefit required under the Plan in full would beunlawful or otherwise invalid or unenforceable, then such unlawfulness,invalidity or unenforceability shall not prevent such payment or benefit frombeing made or provided in part, to the extent that it would not be unlawful,invalid or unenforceable, and the maximum payment or benefit that would not beunlawful, invalid or unenforceable shall be made or provided under the Plan.

 

**13.10.***     Construction.*  As used in the Plan, the words “*include*” and “*including*,” and variations thereof, shall not be deemed tobe terms of limitation, but rather shall be deemed to be followed by the words “*without limitation*.”

 

**13.11.***     Unfunded Status of the Plan.*  The Plan is intended to constitute an “unfunded”plan for incentive compensation. With respect to any payments not yet made to aParticipant by the Company, nothing contained herein shall give any suchParticipant any rights that are greater than those of a general creditor of theCompany. In its sole discretion, the Committee may authorize the creation oftrusts or other arrangements to meet the obligations created under the Plan todeliver the Shares or payments in lieu of or with respect to Awards hereunder;provided, however, that the existence of such trusts or other arrangements isconsistent with the unfunded status of the Plan.

 

**13.12.***     Governing Law.*  The Plan and all determinations made andactions taken thereunder, to the extent not otherwise governed by the Code orthe laws of the United States, shall be governed by the laws of the State ofUtah, without reference to principles of conflict of laws, and construedaccordingly.

 

**13.13.***     Effective Date of Plan; Termination ofPlan.*  The Plan shall be effective onthe date of the approval of the Plan by the holders of a majority of the sharesentitled to vote at a duly constituted meeting of the stockholders of theCompany at which a quorum is present. The Plan shall be null and void and of noeffect if the foregoing condition is not fulfilled and in such event each Awardshall, notwithstanding any of the preceding provisions of the Plan, be null andvoid and of no effect. Awards may be granted under the Plan at any time andfrom time to time on or prior to the tenth (10th) anniversary of the effective date of the Plan, onwhich date the Plan will expire except as to Awards then outstanding under thePlan. Such outstanding Awards shall remain in effect until they have beenexercised or terminated, or have expired.

 

**13.14.***     Foreign Employees and Consultants.*  Awards may be granted to Participants who areforeign nationals or employed or providing services outside the United States,or both, on such terms and conditions different from those applicable to Awardsto Employees or Consultants providing services in the United States as may, inthe judgment of the Committee, be necessary or desirable in order to recognizedifferences in local law or tax policy. The Committee also may imposeconditions on the exercise or vesting of Awards in order to minimize theCompany’s obligation with respect to tax equalization for Employees orConsultants on assignments outside their home country.

 

**13.15.***     Compliance with Section 409A of theCode.*  This Plan is intended to complyand shall be administered in a manner that is intended to comply with Section 409Aof the Code and shall be construed and interpreted in accordance with suchintent. To the extent that an Award or the payment, settlement or deferralthereof is subject to Section 409A of the Code, the Award shall begranted, paid, settled or deferred in a manner that will comply with Section 409Aof the Code, including regulations or other guidance issued with respectthereto, except as otherwise determined by the Committee. Any provision of thisPlan that would cause the grant of an Award or the payment, settlement ordeferral thereof to fail to satisfy Section 409A of the Code shall beamended to comply with Section 409A of the Code on a timely basis, whichmay be made on a retroactive basis, in accordance with regulations and otherguidance issued under Section 409A of the Code.

 

**13.16.***     No Registration Rights; No Right to Settlein Cash.*  The Companyhas no obligation to register with any governmental body or organization(including, without limitation, the SEC) any of: (a) the offer or issuanceof any Award; (b) any Shares issuable upon the exercise of any Award; or (c) thesale of any Shares issued upon exercise of any Award, regardless of whether theCompany in fact undertakes to register any of the foregoing. In particular, inthe event that any of: (i) any offer or issuance of any Award; (ii) anyShares issuable upon exercise of any Award; or (iii) the sale of anyShares issued upon exercise of any Award are not registered with anygovernmental body or organization (including, without limitation, the SEC), theCompany will not under any circumstance be required to settle its obligations,if any, under this Plan in cash.

 

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**13.17.***     Captions.*  The captions in the Plan are for convenienceof reference only, and are not intended to narrow, limit or affect thesubstance or interpretation of the provisions contained herein.

 

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