This excerpt taken from the WWE DEF 14A filed Mar 31, 2008.
PROPOSAL 2APPROVAL AND ADOPTION OF THE 2007 OMNIBUS INCENTIVE PLAN
The Company currently maintains the 1999 Long-Term Incentive Plan (the LTIP) which provides for stock-based awards to our eligible employees, directors and independent contractors. The Company also maintains a Management Incentive Bonus Plan which provides for annual cash bonuses provided certain performance targets are met (the MIP). The Board believes that these plans have been effective in attracting qualified employees, directors and consultants to the Company and in providing long-term and medium-term incentives and rewards to those individuals responsible for the Companys growth and success. However, the MIP expires in April 2008, and the LTIP, although it is flexible in types of stock awards that are available and has numerous shares for grant still available, does not allow the Company to treat stock-based grants as performance based and therefore such awards are not tax deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).
Accordingly, the Board of Directors believes that it is timely to adopt and approve a new long-term incentive plan and, on July 20, 2007, subject to the stockholder approval requested hereby, the Board approved the 2007 Omnibus Incentive Plan (the Incentive Plan) which will permit the grant of performance and restricted stock units, restricted stock, stock options, incentive stock options, stock appreciation rights, and other stock-based and cash-based incentive awards. This will provide the Company a flexible and dynamic long-term incentive compensation structure and will allow for the tax deductibility by the Company of awards under Code Section 162(m). The Company currently awards only (i) performance stock units, which are generally subject to both performance and time vesting requirements; (ii) restricted stock units, which are generally subject to time vesting requirements; (iii) annual cash bonuses; and (iv) solely for independent directors, shares of Common Stock as a part of their directors fees under a formula plan. Stockholder approval of the Incentive Plan is desired because it is good corporate governance and is necessary to comply with Code Section 162(m) and the listing requirements of the New York Stock Exchange.
Upon approval of the Incentive Plan by the Companys stockholders, both the LTIP and the MIP will be frozen and no further grants or awards will be made under either such plan. However, these Plans will continue in effect after approval of the Incentive Plan for so long as and solely to the extent necessary to administer previously-granted awards that remain outstanding under such plans.
The material features of the Incentive Plan are summarized below. The summary is qualified in its entirety by reference to the specific provisions of the Incentive Plan.