Exhibit 10.1
PYR ENERGY CORPORATION
2006 STOCK INCENTIVE PLAN
This 2006 Stock Incentive Plan (the "Plan") is adopted in consideration for
services rendered and to be rendered to PYR Energy Corporation and Related
Companies.
1. Definitions.
The terms used in this Plan shall, unless otherwise indicated or required
by the particular context, have the following meanings:
Agreement: The written agreement (and any amendment or supplement thereto)
between the Company and an Eligible Person designating the terms and conditions
of an Award.
Award: Any Option, Restricted Stock or Restricted Stock Unit, together with
any other right or interest granted to a Participant pursuant to this Plan.
Board: The Board of Directors of PYR Energy Corporation.
Change in Control: (i) The acquisition, directly or indirectly, by any
person or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934) of the beneficial ownership of more than fifty percent of
the outstanding securities of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated, (iii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company, (iv) a complete liquidation or
dissolution of the Company, or (v) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty percent
of the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.
Code: The Internal Revenue Code of 1986, as amended, from time to time,
including regulations thereunder and successor provisions and regulations
thereto.
Common Stock: The Common Stock of PYR Energy Corporation.
Company: PYR Energy Corporation, a corporation incorporated under the laws
of Maryland, and any successors in interest by merger, operation of law,
assignment or purchase of all or substantially all of the property, assets or
business of the Company.
Compensation Committee: The Plan shall be administered by the Compensation
Committee which shall consist of the Board or a committee of the Board as the
Board may from time to time designate; .provided, however, that, unless
otherwise determined by the Board, the Compensation Committee shall consist
solely of two or more directors, each of whom shall be (i) a "nonemployee
director" within the meaning of Rule 16b-3; and (ii) and an "outside director"
as defined under Section 162(m) of the Code, unless administration of this Plan
by an "outside director" has not been required in order to qualify for tax
deductibility under Section 162(m) of the Code.
Continuous Status: The employment by, or relationship with, the Company or
any Related Company is not interrupted or terminated. The Board, at its sole
discretion, may determine whether Continuous Status shall be considered
interrupted due to personal or other mitigating circumstances, including leaves
of absence.
Date of Grant: The date on which an Option is granted under the Plan.
Eligible Person: Officers and Employees and other persons who provide
services to the Company or any Related Company, including directors of the
Company or any Related Company.
Employee: An Employee is an employee of the Company or any Related Company.
Exchange Act: The Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules thereto.
Exercise Price: The price per share of Common Stock payable upon exercise
of an Option.
Fair Market Value: The Fair Market Value of the Option Shares. Such Fair
Market Value shall be determined, in good faith, by the Compensation Committee
after such consultation with outside legal, accounting and other experts as the
Compensation Committee may deem advisable.
Incentive Stock Options ("ISOs"): An Option granted with the intention that
it qualify as an incentive stock option within the meaning of Section 422 of the
Code or any successor provision thereto.
Non-Incentive Stock Options ("Non-ISOs"): Options which are not intended to
qualify as "Incentive Stock Options" under Section 422 of the Code or any
successor provision thereto.
Option: The rights granted to an Eligible Person to purchase Common Stock
pursuant to the terms and conditions of an Agreement.
Option Shares: The shares of Common Stock underlying an Option granted to
an Eligible Person.
Optionee: An Eligible Person who has been granted an Option.
Participant: A person who has been granted an Option, Restricted Stock or a
Restricted Stock Unit which remains outstanding, including a person who is no
longer an Eligible Person.
Related Company: Any subsidiary of the Company and any other business
venture in which the Company has a significant interest as determined in the
discretion of the Compensation Committee.
Restricted Stock: An Award of shares of Common Stock granted to a
Participant pursuant to Section 15, subject to any restrictions and conditions
as are established pursuant to such Section 15.
Restricted Stock Unit: A right, granted to a Participant pursuant to
Section 15, to receive Common Stock, cash or a combination thereof at the end of
a specified deferral period.
Rule 16b-3: Rule 16b-3, promulgated by the SEC under Section 16 of the
Exchange Act, as from time to time in effect and applicable to this Plan.
2
Securities Act: The Securities Act of 1933, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.
2. Purpose and Scope.
(a) The purpose of this Plan is to advance the interests of the Company and
its stockholders by affording Eligible Persons an opportunity for investment in
the Company and the incentive advantages inherent in stock ownership in this
Company.
(b) This Plan authorizes the Compensation Committee to grant Options to
purchase shares of Common Stock to Eligible Persons selected by the Compensation
Committee while considering criteria such as employment position or other
relationship with the Company, duties and responsibilities, ability,
productivity, length of service or association, morale, interest in the Company,
recommendations by supervisors, and other matters.
3. Administration of the Plan. The Plan shall be administered by the
Compensation Committee. The Compensation Committee shall have the authority
granted to it under this section and under each other section of the Plan. The
Compensation Committee shall have the authority, in its sole discretion, to
determine the type or types of Awards to be granted pursuant to the Plan. Such
Awards may be granted either alone, in addition to, or in tandem with, any other
type of Award.
In accordance with and subject to the provisions of the Plan and Rule
16b-3, the Compensation Committee shall select the Eligible Persons to receive
Awards, shall determine (i) the number of shares of Common Stock, Restricted
Stock or Restricted Stock Units to be subject to each Award, (ii) the time at
which each Award is to be granted, (iii) the extent to which the transferability
of shares of Common Stock issued or transferred pursuant to any Award is
restricted, (iv) the Fair Market Value of the Common Stock, (v) whether to
accelerate the time of exercisability of any Award that has been granted, (vi)
the period or periods and extent of exercisability of the Options, and (vii) the
manner in which an Option becomes exercisable. In addition, the Compensation
Committee shall fix such other terms of each Option, Restricted Stock Award and
Restricted Stock Units as the Compensation Committee may deem necessary or
desirable. The Compensation Committee shall determine the form, terms and
provisions of each Agreement to evidence each Award (which need not be
identical).
The Compensation Committee from time to time may adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Compensation Committee shall keep
minutes of its meetings and those minutes shall be available to every member of
the Board.
All actions taken and all interpretations and determinations made by the
Compensation Committee in good faith (including determinations of Fair Market
Value) shall be final and binding upon all Participants, the Company and all
other interested persons. No member of the Compensation Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, and all members of the Compensation Committee
shall, in addition to rights they may have if Directors of the Company, be fully
protected by the Company with respect to any such action, determination or
interpretation.
4. The Common Stock. The Board is authorized to appropriate, issue and sell
for the purposes of the Plan, and the Compensation Committee is authorized to
grant Options, Restricted Stock and Restricted Stock Units with respect to, a
total number, not in excess of 4,000,000 shares of Common Stock, either treasury
or authorized but unissued, as adjusted pursuant to Section 16. All or any
3
unsold shares subject to an Option, Restricted Stock or Restricted Stock Units
that for any reason expires or otherwise terminates may again be made subject to
Options, Restricted Stock or Restricted Stock Units under the Plan. No Eligible
Person may be granted Options, Restricted Stock and Restricted Stock Units under
this Plan covering in excess of an aggregate of 350,000 Option Shares and shares
of Restricted Stock and Restricted Stock Units in any calendar year, subject to
adjustments pursuant to Section 16.
5. Eligibility. Options which are intended to qualify as ISOs will be
granted only to Employees. Eligible Persons may hold more than one Option under
the Plan and may hold Options under the Plan and options granted pursuant to
other plans or otherwise, and may hold Restricted Stock and Restricted Stock
Units under the Plan.
6. Option Price. The Exercise Price for the Option Shares shall be
established by the Compensation Committee or shall be determined by a method
established by the Compensation Committee; provided that the Exercise Price to
be paid by Optionees for the Option Shares that are intended to qualify as ISOs,
shall not be less than 100 percent of the Fair Market Value of the Option Shares
on the Date of Grant (or, in the case of an individual who owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company, 110 percent of the Fair Market Value of the Option Shares on the
Date of Grant).
7. Duration and Exercise of Options.
(a) The option period shall commence on the Date of Grant and shall be as
set by the Compensation Committee, but not to exceed 10 years in length.
(b) The Compensation Committee may determine whether any Option shall be
exercisable in installments only; if the Compensation Committee determines that
an Option shall be exercisable in installments, it shall determine the number of
installments and the percentage of the Option exercisable at each installment
date. All such installments shall be cumulative.
(c) The Compensation Committee shall establish and set forth in each
Agreement that evidences an Option whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, after a termination
of Continuous Status, any of which provisions may be waived or modified by the
Compensation Committee at any time, provided that any such waiver or
modification shall satisfy the requirements for exemption under Section 409A of
the Code.
(d) Each Option shall be exercised in whole or in part by delivering to the
Company or a brokerage firm designated or approved by the Company of written
notice of the number of shares with respect to which the Option is to be
exercised and by paying in full the Exercise Price for the Option Shares
purchased as set forth in Section 8; provided, that an Option may not be
exercised in part unless the Exercise Price for the Option Shares purchased is
at least $1,000.
(e) No Option may be exercised until the Plan is approved by the
shareholders of the Company as provided in Section 17 below.
8. Payment for Option Shares. If the Exercise Price of the Option Shares
purchased by any Optionee at one time exceeds $5,000, the Compensation Committee
may permit all or part of the Exercise Price for the Option Shares to be paid by
delivery to the Company for cancellation shares of the Company's Common Stock
previously owned by the Optionee with a Fair Market Value as of the date of
4
payment equal to the portion of the Exercise Price for the Option Shares that
the Optionee does not pay in cash. In the case of all other Option exercises,
the Exercise Price shall be paid in cash or check upon exercise of the Option,
except that the Compensation Committee may permit an Optionee to elect to pay
the Exercise Price upon the exercise of an Option by authorizing a third party
to sell some or all of the Option Shares acquired upon exercise of an Option and
remit to the Company a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from such exercise.
9. Relationship to Employment or Position. Nothing contained in the Plan,
or in any Option, Restricted Stock Award or Restricted Stock Units granted
pursuant to the Plan, shall confer upon any Participant any right with respect
to continuance of employment by, or other relationship with, the Company, or
interfere in any way with the right of the Company to terminate the
Participant's employment as an Employee or other position or relationship, at
any time.
10. Nontransferability of Option. Except as otherwise provided by the
Compensation Committee, no Option granted under the Plan shall be transferable
by the Optionee, either voluntarily or involuntarily, except by will or the laws
of descent and distribution.
11. Rights as a Stockholder. No person shall have any rights as a
shareholder with respect to any share covered by an Option until that person
shall become the holder of record of such share and, except as provided in
Section 16, no adjustments shall be made for dividends or other distributions or
other rights as to which there is an earlier record date.
12. Securities Laws Requirements. No Option Shares shall be issued unless
and until, in the opinion of the Company, any applicable registration
requirements of the Securities Act of 1933, as amended, any applicable listing
requirements of any securities exchange on which stock of the same class is then
listed, and any other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery, have been fully complied with.
Each Option and each Option Share certificate may be imprinted with legends
reflecting federal and state securities laws, restrictions and conditions, and
the Company may comply therewith and issue "stop transfer" instructions to its
transfer agent and registrar in good faith without liability.
13. Disposition of Shares. Each Optionee, as a condition of exercise, shall
represent, warrant and agree, in a form of written certificate approved by the
Company, as follows: (a) that all Option Shares are being acquired solely for
his own account and not on behalf of any other person or entity; and (b) that no
Option Shares will be sold or otherwise distributed in violation of the
Securities Act of 1933, as amended, or any other applicable federal or state
securities laws.
14. Incentive Stock Options. To the extent that the aggregate Fair Market
Value of Common Stock with respect to which ISO's are exercisable for the first
time by a Participant during any calendar year exceeds $100,000 or, if
different, the maximum limitation in effect at the Date of Grant under the Code
(the Fair Market Value being determined as of the Date of Grant for the Option),
such portion in excess of $100,000 shall be treated as Non-ISO's.
15. Restricted Stock and Restricted Stock Units.
(a) Restricted Stock. The Compensation Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
x. Xxxxx and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions,
if any, as the Compensation Committee may impose, which restrictions may
5
lapse separately or in combination at such times, under such circumstances
(including based on achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Compensation
Committee may determine at the date of grant or thereafter. During the
restricted period applicable to the Restricted Stock, the Restricted Stock
may not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.
ii. Certificates for Stock. Restricted Stock granted under this Plan
may be evidenced in such manner as the Compensation Committee shall
determine. If certificates representing Restricted Stock are registered in
the name of the Participant, the Compensation Committee may require that
such certificates bear an appropriate legend referring to the terms,
conditions and restrictions of the certificates, and that the Participant
deliver a stock power to the Company, endorsed in blank, relating to the
Restricted Stock.
iii. Dividends and Splits. As a condition to the grant of an Award of
Restricted Stock, the Compensation Committee may require or permit a
Participant to elect that any cash dividends paid on a share of Restricted
Stock be automatically reinvested in additional shares of Restricted Stock
or applied to the purchase of additional Awards under this Plan. Unless
otherwise determined by the Compensation Committee, stock distributed in
connection with a stock split or stock dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect to which
such stock or other property has been distributed.
(b) Restricted Stock Units. The Compensation Committee is authorized to
grant Restricted Stock Units to Participants, which are rights to receive Common
Stock at the end of a specified deferral period, subject to the following terms
and conditions:
i. Award and Restrictions. Settlement of an Award of Restricted Stock
Units shall occur upon expiration of the deferral period specified for such
Restricted Stock Unit by the Compensation Committee (or, if permitted by
the Compensation Committee, as elected by the Participant). In addition,
Restricted Stock Units shall be subject to such restrictions (which may
include a risk of forfeiture) as the Compensation Committee may impose, if
any, which restrictions may lapse at the expiration of the deferral period
or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Compensation Committee
may determine. Restricted Stock Units shall be satisfied by the delivery of
cash or Common Stock in the amount equal to the Fair Market Value for the
specified number of shares of Common Stock covered by the Restricted Stock
Units, or a combination thereof, as determined by the Compensation
Committee at the date of grant or thereafter.
6
ii. Dividend Equivalents. Unless otherwise determined by the
Compensation Committee at date of grant, Dividend Equivalents on the
specified number of shares of Common Stock covered by an Award of
Restricted Stock Units shall be either (a) paid with respect to such
Restricted Stock Units on the dividend payment date in cash or in shares of
unrestricted Common Stock having a Fair Market Value equal to the amount of
such dividends, or (b) deferred with respect to such Restricted Stock Units
and the amount or value thereof automatically deemed reinvested in
additional Restricted Stock Units, other Awards or other investment
vehicles, as the Compensation Committee shall determine or permit the
Participant to elect.
(c) Waiver of Restrictions. The Compensation Committee, in its sole
discretion, may waive the repurchase or forfeiture period and any other terms,
conditions, or restrictions on any Restricted Stock or Restricted Stock Units
under such circumstances and subject to such terms and conditions as the
Compensation Committee shall deem appropriate; provided, however, that the
Compensation Committee may not adjust performance goals for any Restricted Stock
or Restricted Stock Units intended to be exempt under Section 162(m) of the Code
for the year in which the Restricted Stock or Restricted Stock Unit is settled
in such a manner as would increase the amount of compensation otherwise payable
to a Participant.
16. Change in Stock, Adjustments, Etc. In the event that each of the
outstanding shares of Common Stock (other than shares held by dissenting
shareholders which are not changed or exchanged) should be changed into, or
exchanged for, a different number or kind of shares of stock or other securities
of the Company, or, if further changes or exchanges of any stock or other
securities into which the Common Stock shall have been changed, or for which it
shall have been exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividends,
reclassification, split-up, combination of shares or otherwise), then
appropriate adjustment shall be made by the Compensation Committee to the
aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Options,
Restricted Stock and Restricted Stock Units as provided in the respective
Agreements in order to preserve, as nearly as practical, but not to increase,
the benefits to Participants.
17. Effective Date of Plan; Termination Date of Plan. Subject to the
approval of the Plan by the affirmative vote of the holders of a majority of the
Company's securities entitled to vote and represented at a meeting duly held in
accordance with applicable law, the Plan shall be deemed effective April 21,
2006. The Plan shall terminate at midnight on April 20, 2016, except as to
Options previously granted and outstanding under the Plan at that time. No
Options, Restricted Stock and Restricted Stock Units shall be granted after the
date on which the Plan terminates. The Plan may be abandoned or terminated at
any earlier time by the Board, except with respect to any Options, Restricted
Stock and Restricted Stock Units then outstanding under the Plan.
7
18. Withholding Taxes. The Company, or any Related Company, may take such
steps as it may deem necessary or appropriate for the withholding of any taxes
which the Company, or any Related Company, is required by any law or regulation
or any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Award including, but not limited to,
the withholding of all or any portion of any payment or the withholding of
issuance of Option Shares or Restricted Stock.
19. Change in Control.
In the event of a Change in Control of the Company, (a) the Compensation
Committee, in its discretion, may, at any time an Award is granted, or at any
time thereafter, accelerate the time period relating to the exercise or
realization of any Options, Restricted Stock and Restated Stock Units, and (b)
with respect to Options, Restricted Stock and Restricted Stock Units, the
Compensation Committee in its sole discretion may, at any time an Award is
granted, or at any time thereafter, take one or more of the following actions,
which may vary among individual Participants: (i) provide for the purchase of an
Option, Restricted Stock and Restricted Stock Units for an amount of cash or
other property that could have been received upon the exercise of the Option,
Restricted Stock and Restricted Stock Unit had the Option been currently
exercisable, (ii) adjust the terms of the Awards in a manner determined by the
Compensation Committee to reflect the Change in Control, (iii) cause the Awards
to be assumed, or new rights substituted therefor, by another entity, through
the continuance of the Plan and the assumption of outstanding Options,
Restricted Stock and Restricted Stock Units, or the substitution for such
Options, Restricted Stock and Restricted Stock Units of comparable value
covering shares of a successor corporation, with appropriate adjustments as to
the number and kind of shares and exercise prices, in which event the Plan and
such Options, Restricted Stock and Restricted Stock Units, or the new options
and rights substituted therefor, shall continue in the manner and under the
terms so provided, (iv) accelerate the time at which Options then outstanding
may be exercised so that such Options may be exercised for a limited period of
time on or before a specified date fixed by the Compensation Committee, after
which specified date, all unexercised Options and all rights of Optionees
thereunder shall terminate, or (v) make such other provision as the Committee
may consider equitable.
20. Amendment.
(a) The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the right of a
Participant under an outstanding Agreement. In addition, no such amendment shall
be made without the approval of the Company's shareholders to the extent such
approval is required by law or agreement.
(b) The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without the Participant's consent.
(c) Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without shareholder approval.
21. Other Provisions.
8
(a) The use of a masculine gender in the Plan shall also include within its
meaning the feminine, and the singular may include the plural, and the plural
may include the singular, unless the context clearly indicates to the contrary.
(b) Any expenses of administering the Plan shall be borne by the Company.
(c) This Plan shall be construed to be in addition to any and all other
compensation plans or programs. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the shareholders of the Company for approval
shall be construed as creating any limitations on the power or authority of the
Board to adopt such other additional incentive or other compensation
arrangements as the Board may deem necessary or desirable.
(d) The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and the rights of any and all
personnel having or claiming to have an interest therein or thereunder shall be
governed by and determined exclusively and solely in accordance with the laws of
the State of Maryland.
* * * * * * * *
9
