Exhibit 10.6
UNISTAR GAMING CORP.
STOCK OPTION PLAN
ARTICLE I DEFINITIONS........................................................1
1.01. Affiliate........................................................1
1.02. Agreement........................................................1
1.03. Board............................................................1
1.04. Code.............................................................1
1.05. Committee........................................................1
1.06. Common Stock.....................................................1
1.07. Company..........................................................1
1.08. Fair Market Value................................................1
1.09. Option...........................................................2
1.10. Participant......................................................2
1.11. Plan.............................................................2
1.12. Ten Percent Stockholder..........................................2
ARTICLE II PURPOSES..........................................................2
ARTICLE III ADMINISTRATION...................................................3
ARTICLE IV ELIGIBILITY.......................................................3
ARTICLE V STOCK SUBJECT TO PLAN..............................................4
5.01. Shares Issued....................................................4
5.02. Aggregate Limit..................................................4
5.03. Reallocation of Shares...........................................4
ARTICLE VI OPTIONS...........................................................4
6.01. Award............................................................4
6.02. Option Price.....................................................4
6.03. Maximum Option Period............................................5
6.04. Nontransferability...............................................5
6.05. Employee Status..................................................5
6.06. Exercise.........................................................5
6.07. Payment..........................................................6
6.08. Stockholder Rights...............................................6
6.09. Disposition of Stock.............................................6
ARTICLE VII ADJUSTMENT UPON CHANGE IN COMMON STOCK..........................6
ARTICLE VIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES...........7
ARTICLE IX GENERAL PROVISIONS................................................7
9.01. Effect on Employment.............................................7
9.02. Unfunded Plan....................................................7
9.03. Rules of Construction............................................8
ARTICLE X AMENDMENT..........................................................8
ARTICLE XI DURATION OF PLAN..................................................8
ARTICLE XII EFFECTIVE DATE OF PLAN...........................................8
UNISTAR GAMING CORP.
STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
1.01. Affiliate
Affiliate means any "subsidiary" or "parent" corporation (within the
meaning of Section 424 of the Code) of the Company.
1.02. Agreement
Agreement means a written agreement (including any amendment or supplement
thereto) between the Company and a Participant specifying the terms and
conditions of an Option.
1.03. Board
Board means the Board of Directors of the Company.
1.04. Code
Code means the Internal Revenue Code of 1986, and any amendments thereto.
1.05. Committee
Committee means the committee of the Board appointed to administer the
Plan.
1.06. Common Stock
Common Stock means the common stock of the Company.
1.07. Company
Company means Unistar Gaming Corp., a Delaware corporation.
1.08. Fair Market Value
Fair Market Value means, on any given date, the current fair market value
of a share of Common Stock which shall be determined as follows: If the Common
Stock is not listed on an established stock exchange, the Fair Market Value
shall be the average reported "closing" price of a share of Common Stock in the
over-the-counter market as reported by the National Association of Securities
Dealers, Inc. If the Common Stock is listed on an established stock exchange or
exchanges, Fair Market Value shall be the average closing price of a share of
Common Stock reported on that stock exchange or exchanges.
1.09. Option
Option means a stock option that entitles the holder to purchase from the
Company a stated number of shares of Common Stock at the price set forth in an
Agreement.
1.10. Participant
Participant means an employee of the Company, including an employee who is
a member of the Board, who satisfies the requirements of Article IV and is
selected by the Committee to receive an Option.
1.11. Plan
Plan means the Unistar Gaming Corp. Stock Option Plan.
1.12. Ten Percent Stockholder
Ten Percent Stockholder means any individual owning more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of an Affiliate. An individual shall be considered to own any voting stock
owned (directly or indirectly) by or for his brothers, sisters, spouse,
ancestors or lineal descendants and shall be considered to own proportionately
any voting stock owned (directly or indirectly) by or for a corporation,
partnership, estate or trust of which such individual is a stockholder, partner
or beneficiary.
ARTICLE II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
individuals with ability and initiative by enabling such persons to participate
in the future success of the Company and to associate their interests with those
of the Company and its stockholders. The Plan is intended to permit the grant of
Options qualifying under Section 422 of the Code (Incentive Stock Options), and
Options not so qualifying (Nonqualified Options). No Option that is intended to
be an Incentive Stock Option shall be invalid for failure to qualify as an
Incentive Stock Option. The proceeds received by the Company from the sale of
Common Stock pursuant to this Plan shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
authority to grant Options upon such terms (not inconsistent with the provisions
of this Plan) as the Committee may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option. Notwithstanding any such conditions, the
Committee may, in its discretion, accelerate the time at which any Option may be
exercised. In addition, the Committee shall have complete authority to interpret
all provisions of this Plan; to prescribe the form of Agreements; to adopt,
amend, and rescind rules and regulations pertaining to the administration of the
Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee.
Any decision made, or action taken, by the Committee or in connection with
the administration of this Plan shall be final and conclusive. Neither the
Committee nor any member of the Committee shall be liable for any act done in
good faith with respect to this Plan or any Agreement or Option. All expenses of
administering this Plan shall be borne by the Company.
ARTICLE IV
ELIGIBILITY
Any employee of the Company or an Affiliate (including a company that
becomes an Affiliate after the adoption of this Plan), is eligible to
participate in this Plan if the Committee, in its sole discretion, determines
that such person has contributed significantly or can be expected to contribute
significantly to the profits or growth of the Company. Directors of the Company
who are employees of the Company may be selected to participate in this Plan.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01. Shares Issued
Shares Issued. Upon the exercise of any Option, the Company shall deliver
to the Participant (or the Participant's broker if the Participant so directs),
shares of Common Stock from its authorized but unissued Common Stock or treasury
stock.
5.02. Aggregate Limit
Aggregate Limit. The maximum aggregate number of shares of Common Stock
that may be issued under this Plan pursuant to the exercise of Options is
1,000,000 shares, subject to adjustment as provided in Article VII.
5.03. Reallocation of Shares
Reallocation of Shares. If an Option is terminated, in whole or in part,
for any reason other than its exercise, the number of shares of Common Stock
allocated to the Option or portion thereof may be reallocated to other Options
to be granted under this Plan.
ARTICLE VI
OPTIONS
6.01. Award
Award. In accordance with the provisions of Article IV, the Committee will
designate each individual to whom an Option is to be granted and will specify
the number of shares of Common Stock covered by such awards; provided, however,
that no individual may be granted Options in any calendar year covering more
than 200,000 shares of Common Stock.
6.02. Option Price
Option Price. The price per share for Common Stock purchased on the
exercise of an Option shall be determined by the Committee on the date of grant,
but shall not be less than the Fair Market Value on the date the Option is
granted if the Option is intended to be an Incentive Stock Option.
Notwithstanding the preceding sentence, the price per share for Common Stock
purchased on the exercise of any Option shall not be less than 110% of the Fair
Market Value on the date the Option is granted in the case of an Option that is
intended to be an Incentive Stock Option granted to an individual who is a Ten
Percent Stockholder on the date such Option is granted.
6.03. Maximum Option Period
Maximum Option Period. The maximum period in which an Option may be
exercised shall be determined by the Committee on the date of grant, except that
no Option that is intended to be an Incentive Stock Option shall be exercisable
after the expiration of ten years from the date such Option was granted. In the
case of an Option that is intended to be an Incentive Stock Option that is
granted to a Participant who is a Ten Percent Stockholder on the date of grant,
such Option shall not be exercisable after the expiration of five years from the
date of grant. The terms of any Option that is intended to be an Incentive Stock
Option may provide that it is exercisable for a period less than such maximum
period.
6.04. Nontransferability
Nontransferability. Each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the Option is granted, the Option
may be exercised only by the Participant. No right or interest of a Participant
in any Option shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.
6.05. Employee Status
Employee Status. For purposes of determining the applicability of Section
422 of the Code (relating to Incentive Stock Options), or in the event that the
terms of any Option provide that it may be exercised only during employment or
within a specified period of time after termination of employment, the Committee
may decide to what extent leaves of absence for governmental or military
service, illness, temporary disability, or other reasons shall not be deemed
interruptions of continuous employment.
6.06. Exercise
Exercise. Subject to the provisions of this Plan and the applicable
Agreement, an Option may be exercised in whole at any time or in part from time
to time at such times and in compliance with such requirements as the Committee
shall determine; provided, however, that Options that are intended to be
Incentive Stock Options (granted under the Plan and all plans of the Company and
its Affiliates) may not be first exercisable in a calendar year for stock having
a Fair Market Value (determined as of the date an Option is granted) exceeding
$100,000. An Option granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the Option could be
exercised. A partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the Option.
6.07. Payment
Payment. Unless otherwise provided by the Agreement, payment of the Option
price shall be made in cash or a cash equivalent acceptable to the Committee. If
the Agreement provides, payment of all or part of the Option price may be made
by surrendering shares of Common Stock to the Company. If Common Stock is used
to pay all or part of the Option price, the sum of the cash and cash equivalent
and the Fair Market Value (determined as of the day preceding the date of
exercise) of the shares surrendered must not be less than the Option price of
the shares for which the Option is being exercised.
6.08. Stockholder Rights
Stockholder Rights. No Participant shall have any rights as a stockholder
with respect to shares subject to his Option until the date of exercise of such
Option.
6.09. Disposition of Stock
Disposition of Stock. A Participant shall notify the Company of any sale
or other disposition of Common Stock acquired pursuant to an Option that was
intended to be an Incentive Stock Option if such sale or disposition occurs (i)
within two years of the grant of an Option or (ii) within one year of the
issuance of the Common Stock to the Participant. Such notice shall be in writing
and directed to the Secretary of the Company.
ARTICLE VII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares as to which Options may be granted under
this Plan, the individual limitation of Section 6.01 and the terms of
outstanding Options shall be adjusted as the Committee shall determine to be
equitably required in the event that (a) the Company (i) effects one or more
stock dividends, stock split-ups, subdivisions or consolidations of shares or
(ii) engages in a transaction to which Section 424 of the Code applies or (b)
there occurs any other event which in the judgment of the Committee necessitates
such action. Any determination made under this Article VII by the Committee
shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the maximum
number of shares as to which Options may be granted, the individual limitation
of Section 6.01 or the terms of outstanding Options.
The Committee may grant Options in substitution for stock options or
similar awards held by an individual who becomes an employee of the Company or
an Affiliate in connection with a transaction described in the first paragraph
of this Article VII. Notwithstanding any provision of the Plan (other than the
limitation of Section 5.02), the terms of such substituted Option grants shall
be as the Committee, in its discretion, determines is appropriate.
ARTICLE VIII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock for
which an Option is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws
and regulations. No Option shall be exercisable, no Common Stock shall be
issued, and no certificate for shares shall be delivered under this Plan until
the Company has obtained such consent or approval as the Committee may deem
advisable from regulatory bodies having jurisdiction over such matters.
ARTICLE IX
GENERAL PROVISIONS
9.01. Effect on Employment
Effect on Employment. Neither the adoption of this Plan, its operation,
nor any documents describing or referring to this Plan (or any part thereof)
shall confer upon any individual any right to continue in the employ of the
Company or in any way affect any right and power of the Company to terminate the
employment of any individual at any time with or without assigning a reason
therefor.
9.02. Unfunded Plan
Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this
Plan. No such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.
9.03. Rules of Construction
Rules of Construction. Headings are given to the articles and sections of
this Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
ARTICLE X
AMENDMENT
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until stockholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Common
Stock that may be issued under the Plan (other than an adjustment as provided in
Article VII) or (ii) the amendment changes the class of individuals eligible to
become Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Option outstanding at
the time such amendment is made.
ARTICLE XI
DURATION OF PLAN
No Option may be granted under this Plan more than ten years after the
earlier of the date this Plan is adopted by the Board or the date this Plan is
approved by stockholders in accordance with Article XII. Options granted before
that date shall remain valid in accordance with their terms.
ARTICLE XII
EFFECTIVE DATE OF PLAN
Options may be granted under this Plan upon its adoption by the Board,
provided that no Option shall be effective or exercisable unless, within twelve
months of such adoption, this Plan is approved by the Company's stockholders by
their unanimous written consent or by a majority of the votes entitled to be
cast by the Company's stockholders, voting either in person or by proxy, at a
duly held stockholders' meeting.