Exhibit
10.1


 


ALLEGIANT TRAVEL COMPANY


2006 LONG-TERM INCENTIVE PLAN


 


1.                                       PURPOSES OF THE
PLAN:  The purposes of the Plan are to (a) promote
the long-term success of the Company and its Subsidiaries and to increase
stockholder value by providing Eligible Individuals with incentives to
contribute to the long-term growth and profitability of the Company by offering
them an opportunity to obtain a proprietary interest in the Company through the
grant of equity-based awards and (b) assist the Company in attracting,
retaining and motivating highly qualified individuals who are in a position to
make significant contributions to the Company and its Subsidiaries.


 


2.                                       DEFINITIONS AND
RULES OF CONSTRUCTION:


 


(a)                                  Definitions.  For purposes of the Plan, the following capitalized
words shall have the meanings set forth below:


 


“Award” means an Option,
Restricted Stock, Restricted Stock Unit, Stock Appreciation Right or Other
Award granted by the Committee pursuant to the terms of the Plan.


 


“Award Document” means an
agreement, certificate or other type or form of document or documentation
approved by the Committee that sets forth the terms and conditions of an Award.
An Award Document may be in written, electronic or other media, may be limited
to a notation on the books and records of the Company and, unless the Committee
requires otherwise, need not be signed by a representative of the Company or a
Participant.


 


“Board” means the Board of
Directors of the Company, as constituted from time to time. “CEO” means the
Chief Executive Officer of the Company.


 


“Change in Control” means: (i) The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by persons who were not stockholders of the Company immediately prior to such
merger, consolidation or other reorganization; (ii) The sale, transfer or
other disposition of all or substantially all of the Company’s assets; (iii) Any
transaction as a result of which any person is the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 50% of the total voting power
represented by the Company’s then outstanding voting securities. For purposes
of this subsection (iii), the term “person” shall have the same meaning as when
used in Sections 13(d) and 14(d) of the Exchange Act but shall
exclude a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of a Parent or Subsidiary and (B) a
corporation owned directly or 


 

















 


indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the common stock of the Company. A
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who
held the Company’s securities immediately before such transaction.
Notwithstanding the foregoing, with respect to an Award that is subject to Section 409A
of the Code, and payment or settlement of the Award will accelerate upon a
Change in Control, no event set forth in an agreement applicable to a
Participant or clauses (i), (ii) or (iii) will constitute a Change in
Control for purposes of the Plan and any Award Document unless such event also
constitutes a “Change in Ownership”, “Change in Effective Control” or “Change
in the ownership of a substantial portion of the Company’s assets” as defined
under Section 409A of the Code and the regulations and guidance
promulgated thereunder.


 


“Code” means the Internal
Revenue Code of 1986, as amended, and the applicable rulings and regulations
thereunder.


 


“Committee” means the
committee of the Board, any successor committee thereto or any other committee
appointed from time to time by the Board to administer the Plan. The Committee
shall serve at the pleasure of the Board and shall meet the requirements of Section 162(m) of
the Code and Section 16(b) of the Exchange Act; provided, however,
that the Board may perform any duties delegated to the Committee and in such
instances, any reference to the Board shall be deemed a reference to the
Committee.


 


“Common Stock” means the
common stock of the Company, par value $0.001 per share, or such other class of
share or other securities as may be applicable under Section 12(b) of
the Plan.


 


“Company” means Allegiant
Travel Company, a Nevada corporation, or any successor to all or substantially
all of its business that adopts the Plan.


 


“Effective Date” means the
date on which the Plan is approved by the stockholders of the Company.


 


“Eligible Individuals” means
the individuals described in Section 4(a) of the Plan who are
eligible for Awards under the Plan.


 


“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.


 


“Fair Market Value” means
that 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 on 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 


 


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on that day the Fair Market Value shall be determined at 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 system, but is quoted
on the National Association of Securities Dealer Automated Quotation System (“Nasdaq”),
the Fair Market Value shall be deemed to be the closing sale price (if included
in the national market list) or the mean between the closing dealer “bid” and “asked”
prices for the Company’s Common Stock as quoted on Nasdaq for such date, and if
no closing sale price or “bid” and “asked” prices are quoted for that day, the
Fair Market Value shall be determined by reference to such prices on the next
preceding day on which such prices are quoted. In the event the Company’s said
Common Stock is neither listed on an established stock exchange not quoted on
Nasdaq, the Fair Market Value on such date shall be determined by the
Committee.


 


“Incentive Stock Option”
means an Option that is intended to comply with the requirements of Section 422
of the Code or any successor provision thereto.


 


“Misconduct” shall mean the
commission of any act of fraud, embezzlement or dishonesty by the Participant,
any unauthorized use or disclosure by such person of confidential information
or trade secrets of the Company (or any Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the
Company (or any Subsidiary) in a material manner.  The foregoing definition shall not in any way
preclude or restrict the right of the Company (or any Subsidiary) to discharge
or dismiss any Participant or other person in the service of the Company (or
any Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of the Plan, to constitute grounds
for termination for Misconduct.


 


“Nonqualified Stock Option”
means an Option that is not intended to comply with the requirements of Section 422
of the Code or any successor provision thereto. “Option” means an Incentive Stock
Option or Nonqualified Stock Option granted pursuant to Section 7 of the
Plan.


 


“Other Award” means any form
of Award other than an Option, Restricted Stock, Restricted Stock Unit or Stock
Appreciation Right granted pursuant to Section 10 of the Plan.


 


“Parent” means any
corporation which at the time qualifies as a parent of the Company under the
definition of “parent corporation” contained in Section 424(c) of the
Code.


 


“Participant” means an
Eligible Individual who has been granted an Award under the Plan.


 


“Performance Period” means
the period established by the Committee and set forth in the applicable Award
Document over which Performance Targets are measured.


 


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“Performance Target” means
the targets established by the Committee and set forth in the applicable Award
Document.


 


“Plan” means the Allegiant
Travel Company 2006 Long-Term Incentive Plan, as may be amended from time to
time.


 


“Plan Limit” means the
maximum aggregate number of Shares that may be issued for all purposes under
the Plan as set forth in Section 5(a) of the Plan.


 


“Prior Plan” means that
certain Allegiant Travel Company, LLC 2005 Share Option Plan under which
389,000 options have been granted and remain outstanding as of the Effective
Date.


 


“Restricted Stock” means
stock granted or sold to a Participant pursuant to Section 8 of the Plan.


 


“Restricted Stock Unit”
means a right to receive a Share (or cash, if applicable) in the future,
granted pursuant to Section 8 of the Plan.


 


“Shares” means shares of
Common Stock.


 


“Stock Appreciation Right”
means a right to receive all or some portion of the appreciation on Shares
granted pursuant to Section 9 of the Plan.


 


“Subsidiary” means (i) a
domestic or foreign corporation or other entity with respect to which the
Company, directly or indirectly, has the power, whether through the ownership
of voting securities, by contract or otherwise, to elect at least a majority of
the members of such corporation’s board of directors or analogous governing
body, or (ii) any other domestic or foreign corporation or other entity in
which the Company, directly or indirectly, has an equity or similar interest
and which the Committee designates as a Subsidiary for purposes of the Plan.
For purposes of determining eligibility for the grant of Incentive Stock
Options under the Plan, the term “Subsidiary” shall be defined in the manner
required by Section 424(f) of the Code. (b) Rules of
Construction. The masculine pronoun shall be deemed to include the feminine pronoun,
and the singular form of a word shall be deemed to include the plural form,
unless the context requires otherwise. Unless the text indicates otherwise,
references to sections are to sections of the Plan.


 


3.                                       ADMINISTRATION:


 


(a)                                  Committee.  The Plan shall be administered by the
Committee, which shall have full power and authority, subject to the express
provisions hereof, to: (i) select the Participants from the Eligible
Individuals; (ii) grant Awards in accordance with the Plan; (iii) determine
the number of Shares subject to each Award or the cash amount payable in
connection with an Award; (iv) determine the terms and conditions of each 


 


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Award, including, without limitation, those related to term,
permissible methods of exercise, vesting, forfeiture, payment, settlement,
exercisability, Performance Periods, Performance Targets, and the effect, if
any, of a Participant’s termination of employment with the Company or any of
its Subsidiaries or a Change in Control of the Company, and including the
authority; (v) subject to Section 15, amend the terms and conditions
of an Award after the granting thereof; (vi) specify and approve the
provisions of the Award Documents delivered to Participants in connection with
their Awards; (vii) construe and interpret any Award Document delivered
under the Plan; (viii) make factual determinations in connection with the
administration or interpretation of the Plan; (ix) prescribe, amend and
rescind administrative regulations, rules and procedures relating to the
Plan; (x) employ such legal counsel, independent auditors and consultants
as it deems desirable for the administration of the Plan and to rely upon any
opinion or computation received therefrom; (xi) vary the terms of Awards to
take account of tax, securities law and other regulatory requirements of
foreign jurisdictions or to procure favorable tax treatment for participants;
and (xii) make all other determinations and take any other action desirable or
necessary to interpret, construe or implement properly the provisions of the
Plan or any Award Document.


 


(b)                                 Plan
Construction and Interpretation. The Committee shall have
full power and authority, subject to the express provisions hereof, to construe
and interpret the Plan.


 


(c)                                  Determinations
of Committee Final and Binding.  All determinations by the Committee or its
delegate in carrying out and administering the Plan and in construing and
interpreting the Plan shall be final, binding and conclusive for all purposes
and upon all persons interested herein.


 


(d)                                 Delegation of
Authority.  To the
extent not prohibited by applicable laws, rules and regulations, the
Committee may, from time to time, delegate some or all of its authority under
the Plan to a subcommittee or subcommittees thereof or other persons or groups
of persons it deems appropriate under such conditions or limitations as it may
set at the time of such delegation or thereafter, except that the Committee may
not delegate its authority pursuant to Section 15 to amend the Plan. For
purposes of the Plan, reference to the Committee shall be deemed to refer to
any subcommittee, subcommittees, or other persons or groups of persons to whom
the Committee delegates authority pursuant to this Section 3(d).


 


(e)                                  Liability of
Committee.  Subject to
applicable laws, rules or regulations, (i) no member of the Board or
Committee, the CEO, or any officer or employee of the Company to whom any
duties or responsibilities are delegated hereunder shall be liable for any action
or determination made in connection with the operation, administration or
interpretation of the Plan, and (ii) the Company shall indemnify, defend
and hold harmless each such person from any liability arising from or in
connection with the Plan, except where such liability results directly from
such person’s fraud, willful misconduct or failure to act in good faith. In the
performance of its responsibilities with respect to the Plan, the Committee
shall be entitled to rely upon information and/or advice furnished by the
Company’s officers or employees, the Company’s accountants, the Company’s
counsel 


 


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and any other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance upon
any such information and/or advice.


 


(f)                                    Action by the
Board. Anything in the Plan to the contrary notwithstanding, any authority
or responsibility that, under the terms of the Plan, may be exercised by the
Committee may alternatively be exercised by the Board.


 


4.                                       ELIGIBILITY:


 


(a)                                  Eligible
Individuals.  Awards may
be granted to officers, employees, directors and consultants of the Company or
any of its Subsidiaries or joint ventures, partnerships or business organizations
in which the Company or its Subsidiaries have an equity interest. The Committee
shall have the authority to select the persons to whom Awards may be granted
and to determine the number and terms of Awards to be granted to each such
Participant. Under the Plan, references to “employment” or “employed” include
Participants who are consultants of the Company or its Subsidiaries.


 


(b)                                 Grants to
Participants.  The
Committee shall have no obligation to grant any Eligible Individual an Award or
to designate an Eligible Individual as a Participant solely by reason of such
Eligible Individual having received a prior Award or having been previously
designated as a Participant. The Committee may grant more than one Award to a
Participant and may designate an Eligible Individual as a Participant for
overlapping periods of time.


 


5.                                       SHARES SUBJECT
TO THE PLAN:


 


(a)                                  Plan Limit.  Subject to Section 12 of the Plan, the
maximum aggregate number of Shares that may be issued for all purposes under
the Plan shall be 3,000,000 (which includes options outstanding under the Prior
Plan). Shares to be issued under the Plan may be authorized and unissued
shares, issued shares that have been reacquired by the Company (in the
open-market or in private transactions) and that are being held in treasury, or
a combination thereof.


 


(b)                                 Rules Applicable
to Determining Shares Available for Issuance. For purposes of
determining the number of Shares that remain available for issuance under the
Plan, the number of Shares corresponding to Awards under the Plan that are
forfeited or expire for any reason without having been exercised or settled,
the number of Shares tendered or withheld to pay the exercise price of an Award
(if applicable) and the number of shares withheld from any Award to satisfy a
Participant’s tax withholding obligations (if applicable) shall be added back
to the Plan Limit and again be available for the grant of Awards. The number of
Shares remaining for issuance will be reduced by the number of Shares subject
to outstanding Awards and for Awards that are not denominated by Shares, by the
number of Shares delivered upon settlement or payment of the Award.


 


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(c)                                  Special Limits. Anything to
the contrary in Section 5(a) above notwithstanding, but subject to Section 12(b) of
the Plan, the maximum number of Shares that may be subject to Options and/or
other Awards granted to any Eligible Individual in any calendar year shall not
exceed 100,000 Shares.


 


6.                                       AWARDS IN
GENERAL:


 


(a)                                  Types of Awards.  Awards under the Plan may consist of Options,
Restricted Stock Units, Restricted Stock, Stock Appreciation Rights and Other
Awards. Any Award described in Sections 7 through 10 of the Plan may be granted
singly or in combination or tandem with any other Awards, as the Committee may
determine. Awards under the Plan may be made in combination with, in
replacement of, or as alternatives to awards or rights under any other
compensation or benefit plan of the Company, including the plan of any acquired
entity.


 


(b)                                 Terms Set Forth
in Award Document.  The terms
and conditions of each Award shall be set forth in an Award Document in a form
approved by the Committee for such Award, which shall contain terms and
conditions not inconsistent with the Plan. Notwithstanding the foregoing, and
subject to applicable laws, the Committee may, in its sole discretion,
accelerate (i) the vesting or payment of any Award, (ii) the lapse of
restrictions on any Award or (iii) the date on which any Award first becomes
exercisable. The terms of Awards may vary among Participants, and the Plan does
not impose upon the Committee any requirement to make Awards subject to uniform
terms. Accordingly, the terms of individual Award Documents may vary.


 


(c)                                  Termination of
Employment.  The
Committee shall specify at or after the time of grant of an Award the
provisions governing the disposition of an Award in the event of a Participant’s
termination of employment with the Company or any of its Subsidiaries. Subject
to applicable laws, rules and regulations, in connection with a
Participant’s termination of employment, the Committee shall have the
discretion to accelerate the vesting, exercisability or settlement of,
eliminate the restrictions and conditions applicable to, or extend the
post-termination exercise period of an outstanding Award. Such provisions may
be specified in the applicable Award Document or determined at a subsequent
time.  Should a Participant’s service
with the Company be terminated for Misconduct or should a Participant otherwise
engage in Misconduct while holding one or more outstanding options under this
Plan, then all those options shall terminate immediately and cease to be
outstanding.


 


(d)                                 Change in
Control.  The Committee shall have full
authority to determine the effect, if any, of a Change in Control of the
Company on the vesting, exercisability, settlement, payment or lapse of
restrictions applicable to an Award, which effect may be specified in the
applicable Award Document or determined at a subsequent time. Except as
otherwise specified in an Award Document (or in a Participant’s employment
agreement), and subject to applicable laws, rules and regulations, the
Board or the Committee shall in its sole discretion, at any time prior to,
coincident with or after the time of a Change in Control, take such actions as
it may consider appropriate to maintain


 


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the rights of a Participant in an Award granted under the Plan,
including, without limitation: (i) providing for the acceleration of any
vesting conditions relating to the exercise or settlement of an Award or that
an Award may be exercised or settled in full on or before a date fixed by the
Board or the Committee; (ii) making such other adjustments to the Awards
then outstanding as the Board or the Committee deems appropriate to reflect
such Change in Control; or (iii) causing the Awards then outstanding to be
assumed, or new rights substituted therefor, by the surviving corporation in
such Change in Control.


 


(e)                                  Dividends and
Dividend Equivalents.  The
Committee may provide Participants with the right to receive dividends or
payments equivalent to dividends or interest with respect to an outstanding
Award, which payments can either be paid currently or deemed to have been
reinvested in Shares, and can be made in Shares, cash or a combination thereof,
as the Committee shall determine.


 


(f)                                    Rights of a
Shareholder.  A
Participant shall have no rights as a shareholder with respect to Shares
covered by an Award until the date the Participant or his nominee becomes the
holder of record of such Shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to such date, except as
provided in Section 12(b) of the Plan.


 


(g)                                 Performance-Based
Awards.  The Committee may determine
whether any Award under the Plan is intended to be “performance-based
compensation” as that term is used in Section 162(m) of the Code. Any
such Awards designated to be “performance-based compensation” shall be
conditioned on the achievement of one or more Performance Targets to the extent
required by Section 162(m) of the Code and will be subject to all
other conditions and requirements of Section 162(m). The Performance
Targets that may be used by the Committee for such Awards will be based on
measurable and attainable financial goals for the Company, one or more of its
operating divisions or Subsidiaries or any combination of the above such as net
income, total revenues, operating cash flow, operating margin, operating
revenue, revenue growth rates, pretax income, pretax operating income,
operating or gross margin, growth rates, operating income growth, return on
assets, total shareholder return, share price, return on equity, operating
earnings, diluted earnings per share or earnings per share growth, or a
combination thereof as selected by the Committee, and quantifiable nonfinancial
goals. The applicable Performance Targets will be established by the Committee
prior to the commencement of the applicable performance period (or such later
date permitted by Section 162(m) of the Code). Each Participant is
assigned a target number of Shares (subject to the limitations set forth in Section 5(c))
payable if Performance Targets are achieved. Any payment of an Award granted
with Performance Targets shall be conditioned on the written certification of
the Committee in each case that the Performance Targets and any other material
conditions were satisfied. If a Participant’s performance exceeds such
Participant’s Performance Targets, Awards may be greater than the target
number, but may not exceed two hundred percent (200%) of such Participant’s
target number. The Committee retains the right to reduce any Award if it
believes that individual performance does not warrant the Award calculated by
reference 


 


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to the result. In the event all members of the Committee are not “outside
directors” as that term is defined in Section 162(m) of the Code, the
grant and terms of Awards intended to qualify as “performance-based
compensation” will be made by a subcommittee appointed in accordance with Section 3(d) of
the Plan consisting of two or more “outside directors” for purposes of Section 162(m) of
the Code.


 


7.                                       TERMS AND
CONDITIONS OF OPTIONS:


 


(a)                                  General.  The Committee, in its discretion, may grant
Options to eligible Participants and shall determine whether such Options shall
be Incentive Stock Options or Nonqualified Stock Options. Each Option shall be
evidenced by an Award Document that shall expressly identify the Option as an
Incentive Stock Option or Nonqualified Stock Option, and be in such form and
contain such provisions as the Committee shall from time to time deem
appropriate.


 


(b)                                 Exercise Price.  The exercise price of an Option shall be
fixed by the Committee at the time of grant or shall be determined by a method
specified by the Committee at the time of grant. Payment of the exercise price
of an Option shall be made in any form approved by the Committee at the time of
grant.


 


(c)                                  Term.  An Option shall be effective for such term as
shall be determined by the Committee and as set forth in the Award Document relating
to such Option, and the Committee may extend the term of an Option after the
time of grant; provided, however, that the term of an Option may in no event
extend beyond the tenth anniversary of the date of grant of such Option.


 


(d)                                 Payment of
Exercise Price.  Subject to
the provisions of the applicable Award Document, the exercise price of an
Option may be paid (i) in cash, (ii) by actual delivery or
attestation to ownership of freely transferable Shares already owned by the
person exercising the Option, (iii) by a combination of cash and Shares
equal in value to the exercise price, (iv) through net share settlement or
similar procedure involving the withholding of Shares subject to the Option
with a value equal to the exercise price or (v) by such other means as the
Committee, in its discretion, may authorize. In accordance with the rules and
procedures authorized by the Committee for this purpose, the Option may also be
exercised through a “cashless exercise” procedure authorized by the Committee
that permits Participants to exercise Options by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or loan
proceeds necessary to pay the exercise price and the amount of any required tax
or other withholding obligations.


 


(e)                                  Incentive Stock
Options.  The exercise price per Share
of an Incentive Stock Option shall be fixed by the Committee at the time of
grant or shall be determined by a method specified by the Committee at the time
of grant, but in no event shall the exercise price of an Incentive Stock Option
be less than one hundred percent (100%) of the Fair Market Value of a Share on
the date of grant. No Incentive Stock Option may be 


 


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issued pursuant to the Plan to any individual who, at the time the
Incentive Stock Option 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 any of its Subsidiaries, unless (i) the exercise price determined as of
the date of grant is at least one hundred ten percent (110%) of the Fair Market
Value on the date of grant of the Shares subject to such Incentive Stock Option
and (ii) the Incentive Stock Option is not exercisable more than five
years from the date of grant thereof. No Participant shall be granted any
Incentive Stock Option which would result in such Participant receiving a grant
of Incentive Stock Options that would have an aggregate Fair Market Value in
excess of one hundred thousand dollars ($100,000), determined as of the time of
grant, that would be exercisable for the first time by such Participant during
any calendar year. The terms of any Incentive Stock Option granted under the
Plan shall comply in all respects with the provisions of Section 422 of
the Code, or any successor provision thereto, and any regulations promulgated
thereunder.


 


8.                                       TERMS AND
CONDITIONS OF RESTRICTED STOCK UNITS AND RESTRICTED STOCK:


 


(a)                                  Restricted
Stock Units.  The
Committee is authorized to grant Restricted Stock Units to Eligible
Individuals. A Restricted Stock Unit shall entitle a Participant to receive,
subject to the terms, conditions and restrictions set forth in the Plan and the
applicable Award Document, one or more Shares in consideration of the
Participant’s employment with the Company or any of its Subsidiaries. The
Restricted Stock Units shall be paid in Shares, cash, or a combination of cash
and Shares, with a value equal to the Fair Market Value of the Shares at the
time of payment.


 


(b)                                 Restricted
Stock.  An Award of Restricted Stock
shall consist of one or more shares of Common Stock granted or sold to an
Eligible Individual, and shall be subject to the terms and conditions
established by the Committee in connection with the Award and specified in the
applicable Award Document. Restricted Stock may, among other things, be subject
to restrictions on transferability, vesting requirements or other specified circumstances
under which it may be canceled.


 


9.                                       STOCK
APPRECIATION RIGHTS:


 


(a)                                  General.  The Committee is authorized to grant Stock
Appreciation Rights to Eligible Individuals. A Stock Appreciation Right shall
entitle a Participant to receive, upon satisfaction of the conditions to
payment specified in the applicable Award Document, an amount equal to the
excess, if any, of the Fair Market Value on the exercise date of the number of
Shares for which the Stock Appreciation Right is exercised over the grant price
for such Stock Appreciation Right specified in the applicable Award Document.
The grant price per share of Shares covered by a Stock Appreciation Right shall
be fixed by the Committee at the time of grant or, alternatively, shall be
determined by a method specified by the Committee at the time of grant, but in
no event shall the grant price of a Stock Appreciation Right be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of
grant. At the sole 


 


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discretion of the Committee, payments to a Participant upon exercise of
a Stock Appreciation Right may be made in cash or Shares, or in a combination
of cash and Shares, having an aggregate Fair Market Value as of the date of exercise
equal to such cash amount.


 


(b)                                 Methods of
Exercise.  In
accordance with the rules and procedures established by the Committee for
this purpose, and subject to the provisions of the applicable Award Document
and all applicable laws, the Committee shall determine the permissible methods
of exercise for a Stock Appreciation Right.


 


(c)                                  Stock
Appreciation Rights in Tandem with Options.  A Stock Appreciation Right granted in tandem
with an Option may be granted either at the same time as such Option or subsequent
thereto. If granted in tandem with an Option, a Stock Appreciation Right shall
cover the same number of Shares as covered by the Option (or such lesser number
of shares as the Committee may determine) and shall be exercisable only at such
time or times and to the extent the related Option shall be exercisable, and
shall have the same term as the related Option. The grant price of a Stock
Appreciation Right granted in tandem with an Option shall equal the per share
exercise price of the Option to which it relates. Upon exercise of a Stock
Appreciation Right granted in tandem with an Option, the related Option shall
be canceled automatically to the extent of the number of Shares covered by such
exercise; conversely, if the related Option is exercised as to some or all of
the shares covered by the tandem grant, the tandem Stock Appreciation Right
shall be canceled automatically to the extent of the number of Shares covered
by the Option exercise.


 


10.                                 OTHER
AWARDS:  The Committee shall have the
authority to specify the terms and provisions of other forms of equity-based or
equity-related Awards not described above that the Committee determines to be
consistent with the purpose of the Plan and the interests of the Company, which
Awards may provide for cash payments based in whole or in part on the value or
future value of Shares, for the acquisition or future acquisition of Shares, or
any combination thereof.


 


11.                                 CERTAIN
RESTRICTIONS:


 


(a)                                  Transfers. Unless the
Committee determines otherwise on or after the date of grant, no Award shall be
transferable other than by last will and testament or by the laws of descent
and distribution or pursuant to a domestic relations order, as the case may be;
provided, however, that the Committee may, in its discretion and subject to
such terms and conditions as it shall specify, permit the transfer of an Award
for no consideration (i) to a Participant’s family member, (ii) to
one or more trusts established in whole or in part for the benefit of one or
more of such family members, (iii) to one or more entities which are
beneficially owned in whole or in part by one or more such family members or (iv) to
any other individual or entity permitted under law and the rules of Nasdaq or
any other exchange that lists the Shares (collectively, “Permitted
Transferees”). Any Award transferred to a Permitted Transferee shall be further
transferable only by last will and testament or the laws of descent and
distribution or, for no consideration, to another Permitted Transferee of the
Participant.


 


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(b)                                 Award
Exercisable Only by Participant.  During the lifetime of a Participant, an
Award shall be exercisable only by the Participant or by a Permitted Transferee
to whom such Award has been transferred in accordance with Section 11(a) above.
The grant of an Award shall impose no obligation on a Participant to exercise
or settle the Award.


 


12.                                 RECAPITALIZATION
OR REORGANIZATION:


 


(a)                                  Authority of
the Company and Stockholders.  The existence of the Plan, the Award
Documents and the Awards granted hereunder shall not affect or restrict in any
way the right or power of the Company or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other change
in the Company’s capital structure or business, any merger or consolidation of
the Company, any issue of stock or of options, warrants or rights to purchase
stock or of bonds, debentures, preferred or prior preference stocks whose
rights are superior to or affect the Shares or the rights thereof or which are
convertible into or exchangeable for Shares, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.


 


(b)                                 Change in
Capitalization.  Notwithstanding any provision of the Plan or
any Award Document, the number and kind of Shares authorized for issuance under
Section 5 of the Plan, including the maximum number of Shares available
under the special limits provided for in Section 5(c), shall be equitably
adjusted in the event of a stock split, stock dividend, combination or similar
exchange of Shares, recapitalization, reorganization, merger or consolidation
and may be equitably adjusted in the sole discretion of the Committee in the
event of an extraordinary dividend, split-up, spin-off, warrants or rights
offering to purchase Shares at a price substantially below Fair Market Value or
other similar corporate event affecting the Shares, in each case in order to
preserve, but not increase, the benefits or potential benefits intended to be
made available under the Plan. In addition, upon the occurrence of a stock
split, stock dividend, combination or similar exchange of Shares,
recapitalization, reorganization, merger or consolidation, the number of
outstanding Awards and the number and kind of Shares subject to any outstanding
Award and the exercise price per Share (or the grant price per Share, as the
case may be), if any, under any outstanding Award shall be equitably adjusted
in order to preserve the benefits or potential benefits intended to be made
available to Participants granted Awards. Upon the occurrence of any of the
other events described above, the number of outstanding Awards and the number
and kind of Shares subject to any outstanding Award and the exercise price per
Share (or the grant price per Share, as the case may be), if any, under any
outstanding Award may be equitably adjusted (including by payment of cash to a
Participant) in the sole discretion of the Committee in order to preserve the
benefits or potential benefits intended to be made available to Participants
granted Awards. With respect to any such adjustments to be 


 


12

















 


made in the discretion of the Committee, such adjustments shall be made
by the Committee, in its sole discretion, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final. Unless otherwise
determined by the Committee, such adjusted Awards shall be subject to the same
restrictions and vesting or settlement schedule to which the underlying Award
is subject.


 


13.                                 TERM OF THE
PLAN:  Unless earlier terminated pursuant
to Section 15 of the Plan, the Plan shall terminate on March 31,
2016, except with respect to Awards then outstanding. No Awards may be granted
under the Plan after March 31, 2016.


 


14.                                 EFFECTIVE
DATE:  The Plan shall become effective on
the Effective Date; provided, however, that if the Plan is not approved by the
stockholders upon submission to them for approval, the Plan shall be void ab initio.


 


15.                                 AMENDMENT AND
TERMINATION:  Subject to applicable laws,
rules and regulations, the Board may at any time terminate or, from time
to time, amend, modify or suspend the Plan; provided, however, that no
termination, amendment, modification or suspension of the Plan shall materially
and adversely alter or impair the rights of a Participant in any Award
previously made under the Plan without the consent of the holder thereof.
Notwithstanding the foregoing, the Committee shall have broad authority to
amend the Plan or any Award under the Plan without the consent of a Participant
to the extent it deems necessary or desirable (a) to comply with, or take
into account changes in, applicable tax laws, securities laws, accounting rules and
other applicable laws, rules and regulations or (b) to ensure that an
Award is not subject to interest and penalties under Section 409A of the
Code.


 


16.                                 MISCELLANEOUS:


 


(a)                                  Tax Withholding.  The Company or a Subsidiary, as appropriate,
may require any individual entitled to receive a payment in respect of an Award
to remit to the Company, prior to such payment, an amount sufficient to satisfy
any applicable tax withholding requirements. In the case of an Award payable in
Shares, the Company or a Subsidiary, as appropriate, may permit such individual
to satisfy, in whole or in part, such obligation to remit taxes by directing
the Company to withhold shares that would otherwise be received by such
individual or to repurchase shares that were issued to such individual to
satisfy the minimum statutory withholding rates for any applicable tax
withholding purposes, in accordance with all applicable laws and pursuant to
such rules as the Committee may establish from time to time. The Company
or a Subsidiary, as appropriate, shall also have the right to deduct from all
cash payments made to a Participant (whether or not such payment is made in
connection with an Award) any applicable taxes required to be withheld with
respect to such payments.


 


(b)                                 No Right to
Awards or Employment.  No person
shall have any claim or right to receive Awards under the Plan. Neither the
Plan, the grant of Awards under the Plan nor any action taken or omitted to be
taken under the Plan shall be deemed to create or confer on any Eligible
Individual any right to be retained in the employ of the 


 


13

















 


Company or any Subsidiary or other affiliate thereof, or to interfere
with or to limit in any way the right of the Company or any Subsidiary or other
affiliate thereof to terminate the employment of such Eligible Individual at
any time. No Award shall constitute salary, recurrent compensation or contractual
compensation for the year of grant, any later year or any other period of time.
Payments received by a Participant under any Award made pursuant to the Plan
shall not be included in, nor have any effect on, the determination of
employment-related rights or benefits under any other employee benefit plan or
similar arrangement provided by the Company and the Subsidiaries, unless
otherwise specifically provided for under the terms of such plan or arrangement
or by the Committee.


 


(c)                                  Securities Law
Restrictions.  An Award
may not be exercised or settled and no Shares may be issued in connection with
an Award unless the issuance of such shares has been registered under the
Securities Act of 1933, as amended, and qualified under applicable state “blue
sky” laws and any applicable foreign securities laws, or the Company has
determined that an exemption from registration and from qualification under
such state “blue sky” laws is available. The Committee may require each
Participant purchasing or acquiring Shares pursuant to an Award under the Plan
to represent to and agree with the Company in writing that such Eligible
Individual is acquiring the Shares for investment purposes and not with a view
to the distribution thereof. All certificates for Shares delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any exchange upon which
the Shares are then listed, and any applicable securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.


 


(d)                                 Section 162(m) of
the Code.  The Plan is
intended to comply in all respects with Section 162(m) of the Code.


 


(e)                                  Awards to
Individuals Subject to Laws of a Jurisdiction Outside of the United States.  To the extent that Awards under the Plan are
awarded to individuals who are domiciled or resident outside of the United
States or to persons who are domiciled or resident in the United States but who
are subject to the tax laws of a jurisdiction outside of the United States, the
Committee may adjust the terms of the Awards granted hereunder to such person (i) to
comply with the laws of such jurisdiction and (ii) to permit the grant of
the Award not to be a taxable event to the Participant. The authority granted
under the previous sentence shall include the discretion for the Committee to
adopt, on behalf of the Company, one or more sub-plans applicable to separate
classes of Eligible Individuals who are subject to the laws of jurisdictions
outside of the United States.


 


(f)                                    Satisfaction of
Obligations. Subject to applicable law, the Company may apply
any cash, Shares, securities or other consideration received upon exercise or
settlement of an Award to any obligations a Participant owes to the Company and
the Subsidiaries in connection with the Plan or otherwise, including, without
limitation, any tax obligations or obligations under a currency facility
established in connection with the Plan.


 


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(g)                                 Unfunded Plan.  The Plan is intended to constitute an
unfunded plan for incentive compensation. Prior to the issuance of Shares in
connection with an Award, nothing contained herein shall give any Participant
any rights that are greater than those of a general unsecured creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Shares with respect to awards hereunder.


 


(h)                                 Award Document.  In the event of any conflict or inconsistency
between the Plan and any Award Document, the Plan shall govern and the Award
Document shall be interpreted to minimize or eliminate any such conflict or
inconsistency.


 


(i)                                     Application of
Funds.  The proceeds received by the
Company from the sale of Shares pursuant to Awards will be used for general
corporate purposes.


 


(j)                                     Headings.  The headings of sections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan.


 


(k)                                  Section 409A
of the Code.  If any
provision of the Plan or an Award Agreement contravenes any regulations or
Treasury guidance promulgated under Section 409A of the Code or could
cause an Award to be subject to the interest and penalties under Section 409A
of the Code, such provision of the Plan or any Award Agreement shall be
modified to maintain, to the maximum extent practicable, the original intent of
the applicable provision without violating the provisions of Section 409A
of the Code. Moreover, any discretionary authority that the Committee may have
pursuant to the Plan shall not be applicable to an Award that is subject to Section 409A
of the Code to the extent such discretionary authority will contravene Section 409A
or the regulations or guidance promulgated thereunder.


 


(l)                                     Governing Law.  Except as to matters of federal law, the Plan
and all actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Nevada (other than its conflict of law
rules).


 


AS APPROVED BY THE BOARD OF
DIRECTORS AND STOCKHOLDERS OF ALLEGIANT TRAVEL COMPANY ON MAY 1, 2006.


 


AS AMENDED BY THE BOARD OF
DIRECTORS ON JULY 17, 2009


 


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