Exhibit 4.2
PCS EDVENTURES!.COM, INC.
2004 NONQUALIFIED STOCK OPTION PLAN
Table of Contents
Article
I. Purposes of the Plan
II. Amount of Stock Subject to Plan
III. Effective Date and Term of the Plan
IV. Administration
V. Eligibility
VI. Options: Price and Payment
VII. Use of Proceeds
VIII. Term of Options and Limitations on the Right of Exercise
IX. Exercise of Options
X. Nontransferability of Options and Stock Appreciation Rights
XI. Termination of Directors, Employees and Independent Contractors
XII. Adjustment of Shares; Effect of Certain Transactions
XIII. Right to Terminate Employees and Independent Contractors
XIV. Purchase for Investment
XV. Issuance of Certificates; Legends; Payment of Expenses
XVI. Amendment of the Plan
XVII. Termination or Suspension of the Plan
XVIII. Governing Law
XIX. Partial Invalidity
PCS EDVENTURES!.COM, INC.
2004 NONQUALIFIED STOCK OPTION PLAN
I. PURPOSES OF THE PLAN
1.01 PCS Edventures!.com, Inc. , an Idaho corporation ("Company"), desires to
provide to certain of its directors, officers, employees and independent
contractors and the directors, officers, employees and independent contractors
of any subsidiary corporation or parent corporation of the Company who are
responsible for the continued growth of the Company an opportunity to acquire
a proprietary interest in the Company, and, therefore, to create in such
directors, employees and independent contractors an increased interest in and
a greater concern for the welfare of the Company.
The Company, by means of this 2004 Nonqualified Stock Option Plan (the
"Plan"), seeks to retain the services of persons now serving in certain
capacities and to secure the services of persons capable of serving in similar
capacities.
1.02 The stock options (the "Options") offered pursuant to the Plan are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director, employee, or independent
contractor.
1.03 The Options are intended to be options that do not satisfy the
requirements for Incentive Options within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code").
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
2.01 The total number of shares of common stock of the Company which may be
purchased pursuant to the exercise of Options shall not exceed, in the
aggregate, ten million (10,000,000) shares of the authorized common stock, no
par value per share, of the Company (the "Shares"),
2.02 The Shares which may be acquired pursuant to the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options expire or terminate without having been exercised, new Options may be
granted with respect to Shares subject to such expired or terminated Options;
provided, however, that the grant and the terms of such new Options shall in
all respects comply with the provisions of the Plan.
III. EFFECTIVE DATE AND TERM OF THE PLAN
3.01 The Plan shall become effective on the date (the "Effective Date") on
which the Plan is adopted by the Board of Directors of the Company (the "Board
of Directors").
3.02 The Company may, from time to time during the period beginning on the
Effective Date and ending on April 30, 2014 (the "Termination Date"), grant
Options to persons eligible to participate in the Plan, pursuant to the terms
of the Plan. Options granted prior to the Termination Date may extend beyond
the Termination Date, in accordance with the terms thereof.
3.03 A director, employee or independent contractor to whom Options are
granted may be referred to in the Plan as a "Participant."
IV. ADMINISTRATION
4.01 The Board of Directors shall administer the Plan. A majority of the
members of the Board of Directors shall constitute a quorum, and the act of a
majority of the members of the Board of Directors shall be the act of the
Board of Directors.
4.02 Subject to the express provisions of the Plan, the Board of Directors
shall have the authority, in its discretion,
(i) to determine the directors, officers, employees and independent
contractors to whom Options shall be granted, the time when Options
shall be granted, the number of Shares which shall be subject to each
Option, the purchase price or exercise price of each Share which shall
be subject to each Option, the period(s) during which Options shall be
exercisable (whether in whole or in part), and the other terms and
provisions of the Options (which are not required to be identical);
(ii) to construe the Plan and the Options;
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan; and
(iv) to make all other determinations necessary or appropriate for
administering the Plan.
4.03 Without limiting the generality of the foregoing, the Board of
Directors also shall have the authority to require, in its discretion, as a
condition of the granting of any Option, that the Participant agree (i) not to
sell or otherwise dispose of Shares acquired pursuant to such Option for a
period of twelve (12) months following the date of acquisition of such Shares
and (ii) that in the event of termination of directorship, employment, term of
any independent contractor relationship or agreement, or term of any
consulting relationship agreement of such Participant with the Company, other
than as a result of dismissal without cause, such Participant will not, for a
period to be determined at the time of the grant of such Option, enter into
any employment or participate directly or indirectly in any business or
enterprise which is competitive with the business of the Company or any
subsidiary corporation or parent corporation of the Company, or enter into any
employment or participate directly or indirectly in any business or enterprise
in which such person will be called upon to utilize special knowledge obtained
through directorship, employment, term of any independent contractor
relationship or agreement, or term of any consulting relationship agreement
with the Company or any subsidiary corporation or parent corporation of the
Company. The determination of the Board of Directors on matters referred to in
this Article IV shall be conclusive.
4.04 The Board of Directors may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred in
the engagement of such counsel, consultant or agent shall be paid by the
Company. No member or former member of the Board of Directors shall be liable
for any action or determination made in good faith with respect to the Plan or
any Option.
V. ELIGIBILITY
Options may be granted only to directors, officers, employees and independent
contractors of the Company, or of any subsidiary corporation or parent
corporation of the Company now existing or hereafter formed or acquired. Any
person who shall have retired from active employment by the Company, including
such person having entered into an independent contractor agreement with the
Company shall also be eligible to receive an Option.
VI. OPTIONS: PRICE AND PAYMENT
6.01 The purchase price for each Share purchasable pursuant to any Option
shall be such amount as the Board of Directors shall determine to be
appropriate.
6.02 Upon the exercise of an Option, the Company shall cause the purchased
Shares to be issued only when the Company shall have received the full and
complete purchase price for such Shares. Payment may include the receipt by
the Company of a promissory note from the Participant exercising such Option
by Participants that are not Directors and/or Officers of the Company.
VII. USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to Options are to be added to
the general funds of the Company and used for the Company's general corporate
purposes, as the Board of Directors shall determine.
VIII. TERM OF OPTIONS AND LIMITATIONS
ON THE RIGHT OF EXERCISE
8.01 Any Option shall be exercisable at such times, in such amounts and
during such period or periods as the Board of Directors shall determine at the
date of the grant of such Option.
8.02 Subject to the provisions of Article XVI of the Plan, the Board of
Directors shall have the right to accelerate, in whole or in part, from time
to time, conditionally or unconditionally, the right to exercise any Option.
8.03 To the extent that an Option is not exercised within the period of
exerciseability specified therein, such Option shall expire as to the then
unexercised part. In no event shall an Option be exercisable for a fraction of
a Share.
IX. EXERCISE OF OPTIONS
Any Option shall be exercised by the Participant holding such Option as to all
or part of the Shares contemplated by such Option by giving written notice of
such exercise to the Secretary of the Company at the principal business office
of the Company, such written notice must specify the number of Shares to be
purchased and a business day not more than fifteen (15) days from the date
such notice is given, for the payment of the purchase price against delivery
of the Shares being purchased. Subject to the provisions of Article XVI of the
Plan, the Company shall cause certificates for the Shares so purchased to be
delivered to the Participant at the principal business office of the Company,
in exchange for payment of the full and complete purchase price, on the date
specified in the notice of exercise.
X. NONTRANSFERABILITY OF OPTIONS
AND STOCK APPRECIATION RIGHTS
No Option shall be transferable, whether by operation of law or otherwise,
other than by will or the laws of descent and distribution, and any Option
shall be exercisable, during the lifetime of a Participant, only by such
Participant.
XI. TERMINATION OF DIRECTORS, EMPLOYEES
AND INDEPENDENT CONTRACTORS
11.01 Upon termination of the directorship, employment, term of any
independent contractor relationship or agreement, or term of any consulting
relationship agreement of any Participant with the Company and all subsidiary
corporations and parent corporations of the Company, any Option previously
granted to the Participant, unless otherwise specified by the Board of
Directors in the Option, shall, to the extent not theretofore exercised,
terminate and become null and void, provided that:
(a) if such Participant shall die while serving as a director, while in the
employ of the Company or any such corporation, during the term of any
independent contractor relationship or agreement, or during the term of any
consulting relationship or agreement with the Company or any such corporation
and at a time when such Participant was entitled to exercise an Option, the
legal representative of such Participant, or such person who acquired such
Option by bequest or inheritance or by reason of the death of such
Participant, may, not later than six (6) months from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of
any or all of such number of Shares as specified by the Committee in such
Option; and
(b) if the directorship, employment, term of any independent contractor
relationship or agreement, or term of any consulting relationship agreement
between the Company or any such corporation or any Participant to whom such
Option shall have been granted shall terminate by reason of the Participant's
retirement (at such age or upon such conditions as shall be specified by the
Board of Directors), disability or dismissal by the Company or any such
corporation other than "for cause" (as defined below), and while such
Participant is entitled to exercise such Option, such Participant shall have
the right to exercise such Option, to the extent not theretofore exercised, in
respect of any or all of such number of Shares as specified by the Board of
Directors in such Option, at any time up to and including (i) three (3) months
after the date of such termination of directorship, employment, term of any
independent contractor relationship or agreement, or term of any consulting
relationship agreement in the case of termination by reason of retirement or
dismissal other than "for cause" and (ii) six (6) months after the date of
termination of directorship, employment, term of any independent contractor
relationship or agreement, or term of any consulting relationship agreement in
the case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise any Option
after the expiration of the period of exerciseability of such Option as
specified therein.
11.02 If a Participant voluntarily terminates his or her directorship,
employment, term of any independent contractor relationship or agreement, or
term of any consulting relationship or agreement with the Company and all
subsidiary corporations and parent corporations of the Company, or is
discharged "for cause", any Option granted pursuant to the Plan shall, unless
otherwise specified by the Board of Directors in such Option, forthwith
terminate with respect to any unexercised portion thereof.
11.03 If an Option shall be exercised by the legal representative of a
deceased Participant, or by a person who acquired an Option by bequest or
inheritance or by reason of the death of any Participant, written notice of
such exercise shall be accompanied by a certified copy of letter testamentary
or equivalent proof of the right of such legal representative or other person
to exercise such Option.
11.04 For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company
or a subsidiary corporation or parent corporation of the Company, which
agreement or plan specifies a definition of "for cause" or "cause" (or words
of similar meaning) for purposes of termination of employment pursuant thereto
by the Company or such subsidiary corporation or parent corporation of the
Company, "for cause" or "cause" as defined in the most recent of such
agreements or plans; or (ii) in all other cases, as determined by the Board of
Directors, in its sole discretion, (a) the willful commission by an employee
or independent contractor of a criminal or other act that causes or probably
will cause substantial economic damage to the Company or a subsidiary
corporation or parent corporation of the Company or substantial injury or
damage to the business reputation of the Company or a subsidiary corporation
or parent corporation of the Company; (b) the commission by an employee or
independent contractor of an act of fraud in the performance of such
employee's or independent contractor's duties on behalf of the Company or a
subsidiary corporation or parent corporation of the Company; (c) the
continuing willful failure of an employee or independent contractor to perform
the duties of such employee or independent contractor to the Company or a
subsidiary corporation or parent corporation of the Company (other than such
failure resulting from the employee's or independent contractor's incapacity
due to physical or mental illness) after written notice thereof (specifying
the particulars thereof in reasonable detail) and a reasonable opportunity to
be heard and cure such failure are given to the employee or independent
contractor by the Board of Directors; or (d) the order of a court of competent
jurisdiction requiring the termination of the employee's employment, or term
of any independent contractor relationship or agreement, or term of any
consulting relationship agreement. For purposes of the Plan, no act, or
failure to act, by an employee or independent contractor shall be considered
"willful" unless done or omitted to be done by the employee or independent
contractor not in good faith and without reasonable belief that the employee's
or independent contractor's action or omission was in the best interest of the
Company or a subsidiary corporation or parent corporation of the Company.
11.05 For the purposes of the Plan, an employment relationship shall be
deemed to exist between a person and a corporation if, at the time of the
determination, such person was an "employee" of such corporation. If a person
is on maternity, military, or sick leave or other bona fide leave of absence,
such person shall be considered an "employee" for purposes of the exercise of
an Option and shall be entitled to exercise such Option during such leave if
the period of such leave does not exceed ninety (90) days, or, if longer, if
such person's right to reemployment with his or her employer is guaranteed
either by statute or by contract. If the period of leave exceeds ninety (90)
days, the employment relationship shall be deemed to have terminated on the
ninety-first (91st) day of such leave, unless such person's right to
reemployment is guaranteed by statute or contract.
11.06 An employee or independent contractor shall not be deemed terminated
by reason of (i) the transfer of a Participant from the Company to a
subsidiary corporation or a parent corporation of the Company or (ii) the
transfer of a Participant from a subsidiary corporation or a parent
corporation of the Company to the Company or by another subsidiary corporation
or parent corporation of the Company.
XII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
12.01 In the event of any change in the issued and outstanding Shares as a
result of merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, combination or exchange
of shares, or other similar change in capital structure of the Company, an
adjustment shall be made to each issued and outstanding Option such that each
such Option shall thereafter be exercisable for such securities, cash or other
property as would have been received in respect of the Shares subject to such
Option had such Option been exercised in full immediately prior to such
change, and such an adjustment shall be made successively each time any such
change shall occur. The term "Shares" after any such change shall refer to the
securities, cash or property then receivable upon exercise of an Option. In
addition, in the event of any such change, the Board of Directors shall make
any additional adjustment as may be appropriate to the maximum number of
Shares subject to the Plan, the maximum number of Shares, if any, for which
Options may be granted to any one employee or independent contractor, and the
number of Shares and price per Share subject to outstanding Options as shall
be appropriate to prevent dilution or enlargement of rights under such
Options, and the determination of the Board of Directors as to these matters
shall be conclusive.
12.02 For purposes of the Plan, a "change in control" of the Company occurs
if (i) any "person" (defined as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as amended) other than the current owner is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing ten percent (10%) or more of the combined voting power of
the Company's outstanding securities then entitled to vote for the election of
directors; or (ii) during any period of two consecutive years, persons who at
the beginning of such period constitute the Board of Directors cease for any
reason to constitute at least a majority thereof; or (iii) the Board of
Directors shall approve the sale of all or substantially all of the assets of
the Company or any merger, consolidation, issuance of securities or purchase
of assets, the result of which would be the occurrence of any event described
in clause (i) or (ii) above.
12.03 In the event of a change in control of the Company (defined above),
the Board of Directors, in its discretion, may determine that, upon the
occurrence of a transaction described in the preceding section, each Option
issued and outstanding shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each
Share subject to such Option, an amount of cash equal to the excess of the
fair market value of such Share immediately prior to the occurrence of such
transaction increases the exercise price per Share of such Option. The
provisions specified in the preceding sentence shall be inapplicable to an
Option granted within six (6) months before the occurrence of a transaction
described above, if the holder of such Option is a director or officer of the
Company or a beneficial owner of the Company who is described in Section 16(a)
of the Securities Exchange Act of 1934, unless such holder dies or becomes
disabled prior to the expiration of such six-month period. Alternatively, the
Board of Directors may determine, in its discretion, that all then issued and
outstanding Options shall immediately become exercisable upon a change of
control of the Company.
XIII. RIGHT TO TERMINATE EMPLOYEES
AND INDEPENDENT CONTRACTORS
The Plan shall not impose any obligation on the Company or on any subsidiary
corporation or parent corporation of the Company to continue the retention of
any Participant. The Plan shall not impose any obligation on the part of any
Participant to remain in the employ of the Company or of any subsidiary
corporation or parent corporation thereof.
XIV. PURCHASE FOR INVESTMENT
Except as provided otherwise in the Plan, a Participant shall, upon any
exercise of an Option, execute and deliver to the Company a written statement,
in form satisfactory to the Company, in which such Participant represents and
warrants that such Participant is purchasing or acquiring the Shares acquired
pursuant thereto for such Participant's own account, for investment only and
not with an intention of the resale or distribution thereof, and agrees that
any subsequent offer for sale or sale or distribution of any of such Shares
shall be made only pursuant to either (i) a Registration Statement on an
appropriate form pursuant to the Securities Act of 1933, as amended
("Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being offered or sold, or (ii) a specific
exemption from the registration and prospectus delivery requirements of the
Securities Act, but in claiming such exemption the holder shall, if so
requested by the Company, prior to any offer for sale or sale of such Shares,
obtain a prior favorable written opinion, in form and substance satisfactory
to the Company, from counsel for or approved by the Company, as to the
applicability of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company if the Shares being issued are
registered pursuant to the Securities Act and a prospectus relating thereto is
current or (ii) reofferings of Shares by affiliates of the Company (as defined
in Rule 405 or any successor rule or regulation promulgated pursuant to the
Securities Act) if the Shares being reoffered are registered pursuant to the
Securities Act and a prospectus relating thereto is current.
XV. ISSUANCE OF CERTIFICATES; LEGENDS
15.01 Upon any exercise of an Option and payment of the purchase price, a
certificate or certificates for the Shares as to which such Option has been
exercised shall be issued by or on behalf of the Company in the name of the
person exercising such Option and shall be delivered to or upon the order of
such person.
15.02 The Company may endorse such legend or legends upon the certificates
for Shares issued upon exercise of an Option and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as, in
its discretion, the Company determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, or (ii) implement the provisions of the
Plan and any agreement between the Company and the optionee with respect to
such Shares.
XVI. AMENDMENT OF THE PLAN
The Board of Directors may, from time to time, amend the Plan. The rights and
obligations pursuant to any Option granted before amendment of the Plan or any
unexercised portion of such Option shall not be adversely affected by
amendment of the Plan without the consent of the holder of such Option.
XVII. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time and for any or no reason, suspend or
terminate the Plan. The Plan, unless sooner terminated pursuant to Article III
of the Plan or by action of the Board of Directors, shall terminate at the
close of business on the Termination Date. An Option may not be granted while
the Plan is suspended or after the Plan is terminated. Options granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom such
Option was granted. The power of the Board of Directors pursuant to Article IV
of the Plan to construe and administer any Options granted prior to the
termination or suspension of the Plan shall continue after such termination or
during such suspension.
XVIII. GOVERNING LAW
The Plan and all Options as may be granted pursuant thereto and all related
matters shall be governed by, and construed and enforced in accordance with,
the laws of the State of Idaho, as from time to time amended.
XIX. PARTIAL INVALIDITY
The invalidity or illegality of any provision of the Plan shall not be deemed
to affect the validity of any other provision of the Plan.
As adopted by the Board of Directors of the Company on this 28th day of April,
2004
PCS Edventures!.com, Inc.,
an Idaho corporation
By: /s/ Anthony A. Maher
Anthony A. Maher, President