GRAND SLAM TREASURERS, INC.
2001 NON-QUALIFIED STOCK OPTION PLAN
This 2001 Non-Qualified Stock Option Plan correctly sets forth the
provisions of the 2001 Non-Qualified Stock Option Plan.
ARTICLE I
ESTABLISHMENT AND PURPOSE
I.1 Establishment. Grand Slam Treasurers, Inc., a Nevada corporation
("Company"), hereby establishes a Non-Qualified stock option plan for employees,
independent contractors and consultants providing material services other than
those independent contractors and consultants involved capital-raising
activities including fundraising public relations, to the Company and its
present and future subsidiaries which shall be known as the "2001 NON-QUALIFIED
STOCK OPTION PLAN" (the "Plan"). None of the options issued to employees
pursuant to the Plan may constitute incentive stock options within the meaning
of Section 422 of the Internal Revenue Code. Options issued pursuant to the Plan
shall constitute non-qualified options.
I.2 Purpose. The purpose of this Plan is to enhance shareholder
investment by attracting, retaining and motivating key employees, independent
contractors and consultants of the Company, and to encourage stock ownership by
such persons by providing them with a means to acquire a proprietary interest in
the Company's success.
ARTICLE II
DEFINITIONS
II.1 Definitions. Whenever used herein, the following terms shall have
the respective meanings set forth below, unless the context clearly requires
otherwise, and when said meaning is intended, the term shall be capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code, as amended.
(c) "Committee" shall mean the Committee provided by Article IV
hereof, which may be created at the discretion of the Board.
(d) "Company" means Grand Slam Treasures, Inc., a Nevada corporation.
(e) "Consultant" means any person or entity, including a Parent
Corporation or a Subsidiary Corporation, who provides services
(other than as an Employee) to the Company, a Parent Corporation
or a Subsidiary Corporation, and shall include independent
contractors, Non-Employee Officers and Non-Employee Directors, as
defined subsequently.
(f) "Date of Exercise" means the date the Company receives notice, by
an Optionee, of the exercise of an Option pursuant to Section
VIII.1 of this Plan. Such notice shall indicate the number of
shares of Stock the Optionee intends to exercise.
(g) "Employee" means any person, including an officer or director of
the Company or a Subsidiary Corporation, who is employed by the
Company or a Subsidiary Corporation.
(h) "Fair Market Value" means the fair market value of Stock upon
which an option is granted under this Plan, determined as
follows:
(i) So long as the Stock is listed or traded on the OTC Bulletin
Board, the NASDAQ Stock Market or a national securities exchange,
the Fair Market Value shall be the average of the last reported
sale prices of the Stock for the 20 trading days prior to the
date of grant of this option, provided that if no sale is made on
any such trading day, the last reported sale price shall be the
average of the closing bid and asked prices for such day; or
(ii) Otherwise, Fair Market Value shall be an amount, not less than
book value, determined by the Board, such determination to be
final and binding on the Holder.
(i) "Non-Employee Director" means a member of the Board who is not an
employee of the Company at the time an Option is granted
hereunder.
(j) Non-Employee Officer" means an officer of the Company who is not
an employee of the Company at the time an Option is granted
hereunder.
(k) "Non-qualified Option" means an Option granted under this Plan
which is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code. Non-qualified
Options may be granted at such times and subject to such
restrictions as the Board shall determine without conforming to
the statutory rules of Section 422 of the Code applicable to
incentive stock options.
(l) "Option" means the right, granted under this Plan, to purchase
Stock of the Company at the option price for a specified period
of time. For purposes of this Plan, an Option may be a
Non-qualified Option.
(m) "Optionee" means an Employee or Consultant holding an Option
under the Plan
(n) "Parent Corporation" shall have the meaning set forth in Section
424(e) of the Code with the Company being treated as the employer
corporation for purposes of this definition.
(o) "Subsidiary Corporation" shall have the meaning set forth in
Section 424(f) of the Code with the Company being treated as the
employer corporation for purposes of this definition.
(p) "Significant Shareholder" means an individual who, within the
meaning of Section 422(b)(6) of the Code, owns stock possessing
more than ten percent of the total combined voting power of all
classes of stock of the Company or of any Parent Corporation or
Subsidiary Corporation of the Company. In determining whether an
individual is a Significant Shareholder, an individual shall be
treated as owning stock owned by certain relatives of the
individual and certain stock owned by corporations in which the
individual is a shareholder, partnerships in which the individual
is a partner, and estates or trusts of which the individual is a
beneficiary, all as provided in Section 424(d) of the Code.
(q) "Stock" means the $.001 par value common stock of the Company.
II.2 Gender and Number. Except when otherwise indicated by the context,
any masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
III.1 Eligibility and Participation. All Employees are eligible to
participate in this Plan and receive Non-qualified Options under the Plan. All
Consultants are eligible to participate in this Plan and receive Non-qualified
Options hereunder. Optionees in the Plan shall be selected by the Board, in its
sole discretion, from among those Employees and Consultants who, in the opinion
of the Board, are in a position to contribute materially to the Company's
continued growth and development and to its long-term financial success.
ARTICLE IV
ADMINISTRATION
IV.1 Administration. The Board shall be responsible for administering
the Plan.
(a) The Board is authorized to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the
Plan; to provide for conditions and assurances deemed necessary or
advisable to protect the interests of the Company; and to make all
other determinations necessary or advisable for the administration of
the Plan. Determinations, interpretations, or other actions made or
taken by the Board, pursuant to the provisions of this Plan, shall be
final and binding and conclusive for all purposes and upon all persons.
(b) At the discretion of the Board, this Plan may be
administered by a Committee which shall be an executive committee of
the Board, consisting of not less than two members of the Board. The
members of such Committee may be directors who are eligible to receive
Options under this Plan, but Options may be granted to such persons
only by action of the full Board and not by action of the Committee. At
such time as the Company has any class of equity security which is
registered pursuant to Section 12 of the Securities Exchange Act of
1934, the Committee shall consist solely of two or more Non-Employee
Directors as that term is defined in Rule 16b-3 under that Act. Such
Committee shall have full power and authority, subject to the
limitations of the Plan and any limitations imposed by the Board, to
construe, interpret and administer this Plan and to make determinations
which shall be final, conclusive and binding upon all persons,
including, without limitation, the Company, the shareholders, the
directors and any persons having any interests in any Options which may
be granted under this Plan, and, by resolution or resolution providing
for the creation and issuance of any such Option, to fix the terms upon
which, the time or times at or within which, the price or prices at
which any such shares may be purchased from the Company upon the
exercise of such Option. Such terms, time or times and price or prices
shall, in every case, be set forth or incorporated by reference in the
instrument or instruments evidencing such Option, and shall be
consistent with the provisions of this Plan.
(c) If the Committee has been appointed, the Board may from
time to time remove members from, or add members to, the Committee. The
Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The
Committee shall select one of its members as Chairman, and shall hold
meetings at such times and places as the Chairman may determine. A
majority of the Committee at which a quorum is present, or acts reduced
to or approved in writing by all of the members of the Committee, shall
be the valid acts of the Committee. A quorum shall consist of
two-thirds (2/3) of the members of the Committee.
(d) Where the Committee has been created by the Board,
references in this Plan to actions to be taken by the Board shall be
deemed to refer to the Committee as well, except where limited by this
Plan or by the Board.
(e) The Board shall have all of the enumerated powers of the
Committee, but shall not be limited to such powers. No member of the
Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under
it.
ARTICLE V
STOCK SUBJECT TO THE PLAN
V.1 Number. The total number of shares of Stock hereby made available
and reserved for issuance under the Plan upon exercise of Non-Qualified Options
shall be 1,650,000. The aggregate number of shares of Stock available under this
Plan shall be subject to adjustment as provided in Section V.3. The total number
of shares of Stock may be authorized but unissued shares of Stock, or Shares
acquired by purchase as directed by the Board from time to time in its
discretion, to be used for issuance upon exercise of Options granted hereunder.
V.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.
V.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification, or other similar corporate change, the
aggregate number of shares of Stock set forth in Section V.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive;
provided however, that fractional shares shall be rounded to the nearest whole
share. In any such case, the number and kind of shares that are subject to any
Option (including any Option outstanding after termination of employment) and
the Option price per share shall be proportionately and appropriately adjusted
without any change in the aggregate Option price to be paid therefor upon
exercise of the Option.
ARTICLE VI
DURATION OF THE PLAN
VI.1 Duration of the Plan. Subject to approval of shareholders, the
Plan shall be in effect for ten years from the date of its adoption by the
Board. Any Options outstanding at the end of said period shall remain in effect
in accordance with their terms. The Plan shall terminate before the end of said
period if all Stock subject to it has been purchased pursuant to the exercise of
Options granted under the Plan.
ARTICLE VII
TERMS OF STOCK OPTIONS
VII.1 Grant of Options. Subject to Section V.1, Options may be granted
to Employees or Consultants at any time and from time to time as determined by
the Board. The Board shall have complete discretion in determining the terms and
conditions and number of Options granted to each Optionee. In making such
determinations, the Board may take into account the nature of services rendered
by such Employees or Consultants, their present and potential contributions to
the Company and its Subsidiary Corporations, and such other factors as the Board
in its discretion shall deem relevant.
(a) The Board is expressly given the authority to issue
amended or replacement Options with respect to shares of Stock subject
to an Option previously granted hereunder. An amended Option amends the
terms of an Option previously granted and thereby supersedes the
previous Option. A replacement Option is similar to a new Option
granted hereunder except that it provides that it shall be forfeited to
the extent that a previously granted Option is exercised, or except
that its issuance is conditioned upon the termination of a previously
granted Option.
VII.2 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option agreement (the "Option Agreement") that includes the
non-transferability provisions required by Section X.2 hereof and specifies:
whether the Option is a Non-qualified Option; the Option price; the duration of
the Option; the number of shares of Stock to which the Option applies; any
vesting or exercisability restrictions which the Board may impose. All such
terms and conditions shall be determined by the Board at the time of grant of
the Option.
(a) If not otherwise specified by the Board, the following
terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be five years from the
date of grant.
(ii) Exercise of Option. Unless an Option is terminated as provided
hereunder, an Optionee may exercise his Option for up to, but not
in excess of, the amounts of shares subject to the Option
specified hereafter, based on the Optionee's number of years of
continuous service with the Company or a Subsidiary Corporation
from the date on which the Option is granted. In the case of an
Optionee who is an Employee, continuous service shall mean
continuous employment; in the case of an Optionee who is a
Consultant, continuous service shall mean the continuous
provision of consulting services. In applying said limitations,
the amount of shares, if any, previously purchased by the
Optionee under the Option shall be counted in determining the
amount of shares the Optionee can purchase at any time. The
Optionee may exercise his Option in the following amounts:
(A) After one year of such continuous services, up to but not in
excess of twenty percent of the shares originally subject to
the Option;
(B) After two years of such continuous services, up to but not
in excess of forty percent of the shares originally subject
to the Option;
(C) After three years of such continuous services, up to but not
in excess of sixty percent of the shares originally subject
to the Option;
(D) After four years of such continuous services, up to but not
in excess of eighty percent of the shares originally subject
to the Option; and
(E) At the expiration of the fifth year of such continuous
services, the Option may be exercised, in whole or in part,
and at any time and from time to time within its term but it
shall not be exercisable after the expiration of six years
from the date on which it was granted (five years with
respect to Significant Shareholders).
(b) The Board shall be free to specify terms and conditions
other than those set forth above, in its discretion.
VII.3 Option Price. The Option Price shall be determined by the Board
of Directors, except that Option Price for consultants and/or independent
contractors may not be less than Fair Market Value on the date of grant. The
Option exercise price shall be subject to adjustment as provided in Section V.3
above.
VII.4 Term of Options. Each Option shall expire at such time as the
Board shall determine when it is granted, provided however that under no
circumstances shall a Non-qualified Option be exercisable later than the tenth
anniversary date of its grant.
VII.5 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.
VII.6 Payment. Payment for all shares of Stock shall be made at the
time that an Option, or any part thereof, is exercised, and no shares shall be
issued until full payment therefor has been made. Payment shall be made (i) in
cash, or (ii) if acceptable to the Board, in Stock or in some other form.
ARTICLE VIII
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES, SHAREHOLDER PRIVILEGES
VIII.1 Written Notice. An Optionee wishing to exercise an Option shall
give written notice to the Company, in the form and manner prescribed by the
Board. Full payment for the shares exercised pursuant to the Option must
accompany the written notice.
VIII.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a permitted nominee of the Optionee a certificate or certificates for the
requisite number of shares of Stock.
VIII.3 Privileges of a Shareholder. An Optionee or any other person
entitled to exercise an Option under this Plan shall not have stockholder
privileges with respect to any Stock covered by the Option until the date of
issuance of a stock certificate for such stock.
ARTICLE IX
TERMINATION OF EMPLOYMENT OR SERVICES
IX.1 Death. If an Optionee's employment in the case of an Employee, or
provision of services as a Consultant in the case of a Consultant, terminates by
reason of death, the Option may thereafter be exercised at any time prior to the
expiration date of the Option or within 12 months after the date of such death,
whichever period is the shorter, by the person or persons entitled to do so
under the Optionee's will or, if the Optionee shall fail to make a testamentary
disposition of an Option or shall die intestate, the Optionee's legal
representative or representatives. The Option shall be exercisable only to the
extent that such Option was exercisable as of the date of death.
IX.2 Termination other than for Cause or Due to Death. In the event of
an Optionee's termination of employment in the case of an Employee, or
termination of the provision of services as a Consultant in the case of a
Consultant, other than by reason of death, the Optionee may exercise such
portion of his Option as was exercisable by him at the date of such termination
(the "Termination Date") at any time within three months of the Termination
Date; provided, however, that where the Optionee is an Employee, and is
terminated due to disability within the meaning of Code ss. 422, he may exercise
such portion of his Option as was exercisable by him on his Termination Date
within one year of his Termination Date. In any event, the Option cannot be
exercised after the expiration of the term of the Option. Options not exercised
within the applicable period specified above shall terminate.
(a) In the case of an Employee, a change of duties or position
within the Company or an assignment of employment in a Subsidiary
Corporation or Parent Corporation of the Company, if any, or from such
a Corporation to the Company, shall not be considered a termination of
employment for purposes of this Plan.
(b) The Option Agreements may contain such provisions as the
Board shall approve with reference to the effect of approved leaves of
absence upon termination of employment.
IX.3 Termination for Cause. In the event of an Optionee's termination
of employment in the case of an Employee, or termination of the provision of
services as a Consultant in the case of a Consultant, which termination is by
the Company or a Subsidiary Corporation for cause, any Option or Options held by
him under the Plan, to the extent not exercised before such termination, shall
terminate upon notice of termination for cause.
ARTICLE X
RIGHTS OF OPTIONEES
X.1 Service. Nothing in this Plan shall interfere with or limit in any
way the right of the Company or a Subsidiary Corporation to terminate any
Employee's employment, or any Consultant's services, at any time, nor confer
upon any Employee any right to continue in the employ of the Company or a
Subsidiary Corporation, or upon any Consultant any right to continue to provide
services to the Company or a Subsidiary Corporation.
X.2 Non-transferability. All Options granted under this Plan shall be
nontransferable by the Optionee, other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
the Optionee.
ARTICLE XI
OPTIONEE-EMPLOYEE'S TRANSFER
OR LEAVE OF ABSENCE
XI.1 Optionee-Employee's Transfer or Leave of Absence. For purposes of this
Plan:
(a) A transfer of an Optionee who is an Employee from the Company to a
Subsidiary Corporation or Parent Corporation, or from one such Corporation
to another, or
(b) A leave of absence for such an Optionee which is duly authorized
in writing by the Company or a Subsidiary Corporation shall not be deemed a
termination of employment. However, under no circumstances may an Optionee
exercise an Option during any leave of absence, unless authorized by the
Board.
ARTICLE XII
AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN
XII.1 Amendment, Modification, and Termination of the Plan.
(a) The Board may at any time terminate, and from time to time may
amend or modify the Plan, provided, however, that no such action of the
Board, without approval of the shareholders, may:
(i) increase the total amount of Stock which may be purchased
through Options granted under the Plan, except as provided in Article
V;
(ii) change the class of Employees or Consultants eligible to
receive Options;
(b) No amendment, modification, or termination of the Plan shall in
any manner adversely affect any outstanding Option under the Plan without
the consent of the Optionee holding the Option.
ARTICLE XIII ACQUISITION,
MERGER OR LIQUIDATION
XIII.1 Acquisition.
(a) In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation,
to cancel Options outstanding as of the effective date of Acquisition,
whether or not such Options are then exercisable, in return for payment
to the Optionees of an amount equal to a reasonable estimate of an
amount (hereinafter the "Spread") equal to the difference between the
net amount per share payable in the Acquisition or as a result of the
Acquisition, less the exercise price of the Option. In estimating the
Spread, appropriate adjustments to give effect to the existence of the
Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable
thereunder, and treating the shares receivable upon exercise of the
Options as being outstanding in determining the net amount per share.
(b) For purposes of this section, an "Acquisition" shall mean
any transaction in which substantially all of the Company's assets are
acquired or in which a controlling amount of the Company's outstanding
shares are acquired, in each case by a single person or entity or an
affiliated group of persons and entities. For purposes of this section,
a controlling amount shall mean more than 50% of the issued and
outstanding shares of stock of the Company. The Company shall have such
an option regardless of how the Acquisition is effectuated, whether by
direct purchase, through a merger or similar corporate transaction, or
otherwise. In cases where the acquisition consists of the acquisition
of assets of the Company, the net amount per share shall be calculated
on the basis of the net amount receivable with respect to shares upon a
distribution and liquidation by the Company after giving effect to
expenses and charges, including but not limited to taxes, payable by
the Company before the liquidation can be completed.
(c) Where the Company does not exercise its option under this
Section XIII.1 the remaining provisions of this Article XIII shall
apply, to the extent applicable.
XIII.2 Merger or Consolidation. Subject to any required action by the
shareholders, if the Company shall be the surviving corporation in any merger or
consolidation, any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.
XIII.3 Other Transactions. A dissolution or a liquidation of the
Company or a merger and consolidation in which the Company is not the surviving
corporation shall cause every Option outstanding hereunder to terminate as of
the effective date of such dissolution, liquidation, merger or consolidation.
However, the Optionee either (i) shall be offered a firm commitment whereby the
resulting or surviving corporation in a merger or consolidation will tender to
the Optionee an option (the "Substitute Option") to purchase its shares on terms
and conditions both as to number of shares and otherwise, which will
substantially preserve to the Optionee the rights and benefits of the Option
outstanding hereunder granted by the Company, or (ii) shall have the right
immediately prior to such dissolution, liquidation, merger, or consolidation to
exercise any unexercised Options whether or not then exercisable, subject to the
provisions of this Plan. The Board shall have absolute and uncontrolled
discretion to determine whether the Optionee has been offered a firm commitment
and whether the tendered Substitute Option will substantially preserve to the
Optionee the rights and benefits of the Option outstanding hereunder. In any
event, any Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code Section 424(a).
ARTICLE XIV
SECURITIES REGISTRATION
XIV.1 Securities Registration. In the event that the Company shall deem
it necessary or desirable to register under the Securities Act of 1933, as
amended, or any other applicable statute, any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any such Options or Stock under the Securities Act of 1933, as amended, or any
other statute, then the Optionee shall cooperate with the Company and take such
action as is necessary to permit registration or qualification of such Options
or Stock.
XIV.2 Representations. Unless the Company has determined that the
following representation is unnecessary, each person exercising an Option under
the Plan may be required by the Company, as a condition to the issuance of the
shares pursuant to exercise of the Option, to make a representation in writing
(i) that he is acquiring such shares for his own account for investment and not
with a view to, or for sale in connection with, the distribution of any part
thereof, (ii) that before any transfer in connection with the resale of such
shares, he will obtain the written opinion of counsel for the Company, or other
counsel acceptable to the Company, that such shares may be transferred. The
Company may also require that the certificates representing such shares contain
legends reflecting the foregoing.
ARTICLE XV
TAX WITHHOLDING
XV.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy federal, state, and local withholding tax requirements.
ARTICLE XVI
INDEMNIFICATION
XVI.1 Indemnification. To the extent permitted by law, each person who
is or shall have been a member of the Board shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party
or in which he may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in satisfaction
of judgment in any such action, suit, or proceeding against him, provided he
shall give the Company an opportunity, at its own expense, to handle and defend
the same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
articles of incorporation or bylaws, as a matter of law, or otherwise, or any
power that the Company or any Subsidiary Corporation may have to indemnify them
or hold them harmless.
ARTICLE XVII
REQUIREMENTS OF LAW
XVII.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
XVII.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Idaho.
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
XVIII.1 Effective Date. The Plan shall be effective on March 15, 2001.
ARTICLE XIX
NO OBLIGATION TO EXERCISE OPTION
XIX.1 No Obligation to Exercise. The granting of an Option shall impose
no obligation upon the holder thereof to exercise such Option.
ARTICLE XX
STOCKHOLDER APPROVAL
XX.1 Stockholder Approval. This Plan shall be submitted for approval
and ratification by a vote of the holders of a majority of the shares of Common
Stock of the Company no later than June, 2001 and shall not affect the validity
of any Option issued under this Plan.
THIS 2001 NON-QUALIFIED STOCK OPTION PLAN was adopted by the Board of
Directors of Grand Slam Treasurers, Inc. on March 15, 2001 to be effective on
that date.
GRAND SLAM TREASURES, INC.
By: /s/ Larry L. Eastland
--------------------------------
Larry L. Eastland, President and
Chief Executive Officer