THE PLAYERS NETWORK
2004 NON-QUALIFIED STOCK OPTION PLAN
1. Purpose. This 2004 Non-Qualified Stock Option Plan (the "Plan") is intended
to promote the financial success and interests of The Players Network. (the
"Company") and materially increase shareholder value by giving incentives to the
eligible officers and other employees and directors of and consultants and
advisors to the Company, its parent (if any) and any present or future
subsidiaries of the Company (collectively, "Related Corporations") through
providing opportunities to acquire stock in the Company. As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation", respectively, as those terms are defined in Sections 424(e) and
424(f) or successor provisions of the Internal Revenue Code of 1986 as amended
from time to time (the "Code"). Any proceeds of cash or property received by the
Company for the sale of The Players Network corporate purposes.
2. Structure of the Plan. The Plan permits the following separate types of
grant:
A. Options may be granted hereunder to purchase shares of common stock
of the Company. These options will not qualify as Incentive Stock
Options. The Non-Qualified Options are sometimes referred to
hereinafter as "Options".
B. Awards of stock in the Company ("Awards") may be granted.
C. Opportunities to make direct purchases of stock in the Company
("Purchases") may be authorized.
Options, Awards and authorizations to make Purchases are sometimes referred to
hereinafter as "Stock Rights".
3. Administration of the Plan.
A. The Plan shall be administered by the Board of Directors of the
Company (the "Board"). The Board may in its sole discretion grant
Options, authorize Purchases and grant Awards, as provided in the
Plan. The Board shall have full power and authority, subject to the
express provisions of the Plan, to construe and interpret the Plan
and all Option agreements, Purchase authorizations and Award grants
thereunder, to establish, amend and rescind such rules and
regulations as it may deem appropriate for the proper administration
of the Plan, to determine in each case the terms and provisions
which shall apply to a particular Option agreement, Purchase
authorization, or Award grant, and to make all other determinations
which are, in the Board's judgment, necessary or desirable for the
proper administration of the Plan. The Board may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in
any Option agreement, Purchase authorization or Award grant in the
manner and to the extent it shall, in its sole discretion, consider
expedient. Decisions of the Board shall be final and binding on all
parties who have an interest in the Plan or any Option, Purchase,
Award, or stock issuance thereunder. No director or person acting
pursuant to authority delegated by the Board shall be liable for any
action or determination under the Plan made in good faith.
B. The Board may, to the full extent permitted by and consistent with
applicable law and the Company's By-laws, and subject to
Subparagraph D hereinbelow, delegate any or all of its powers with
respect to the administration of the Plan to a committee (the
"Committee") appointed by the Board. If a Committee has been
appointed, all references in this Plan to the Board shall mean and
relate to that Committee.
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C. Those provisions of this Plan which make express reference to Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor rule ("Rule 16b-3"), or which are
required in order for certain option transactions to qualify for
exemption under Rule 16b-3, shall apply only to those persons
required to file reports under Section 16(a) of the Exchange Act (a
"Reporting Person").
D. If the Company registers any class of equity security under Section
12 of the Exchange Act, the selection of a director or an officer
(as the terms "director" and "officer" are defined for purposes of
Rule 16b-3) as a recipient of an option, the timing of the option
grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board,
if all of the Board members are disinterested persons within the
meaning of Rule 16(b)(3), or (ii) by two or more directors having
full authority to act in the matter, each of whom shall be such a
disinterested person.
4. Eligible Employees and Others. Non-Qualified Options, Awards, and
authorizations to make Purchases may be granted to any employee, officer or
director of, or consultant or advisor to the Company or any Related Corporation,
except for instances where services are in connection with the offer or sale of
securities in a capital-raising transaction, or they directly or indirectly
promote or maintain a market for the Company's securities. In making such
determinations, the Board and/or the Committee may take into account the nature
of the services rendered by such person, his or her present and potential
contribution to the Company's success, and such other factors as the Company
and/or Committee in its discretion shall deem relevant. The granting of any
Stock Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
5. Stock. The stock subject to Options, Awards and Purchases shall be authorized
but unissued shares of common stock of the Company ("Common Stock"), or shares
of Common Stock reacquired by the Company in any manner. The aggregate number of
shares which may be issued under the Plan is Three Million Five Hundred Thousand
(3,500,000), subject to adjustment as provided in Paragraph 14. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, or if the Company shall reacquire any nonvested shares issued
pursuant to Awards or Purchases, the unpurchased shares subject to such Option,
or such nonvested shares so reacquired shall again be available for grants of
Stock Rights under the Plan. No fractional shares of Common Stock shall be
issued, and the Board and/or Committee shall determine the manner in which
fractional share value shall be treated.
6. Option Agreements. As a condition to the grant of an Option, each recipient
of an Option shall execute an option agreement in such form not inconsistent
with the Plan as the Board shall approve. These option agreements may differ
among recipients. The Board may, in its sole discretion, include additional
provisions in option agreements, including without limitation restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guarantee loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Board;
provided, however, that such additional provisions shall not be inconsistent
with any provision of the Plan.
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7. Option Exercise Price.
A. Subject to Subparagraph 3D of this Plan and Subparagraphs B and C of
this Paragraph 7, the purchase price per share of Common Stock
deliverable upon the exercise of an Option ("exercise price") shall
be determined by the Board.
B. The exercise price of each Non-Qualified Option granted under the
Plan shall in no event be less than the par value per share of the
Company's Common Stock.
8. Cancellation and New Grant of Options, Etc. The Board shall have the
authority to effect, at any time and from time to time, with the
consent of the affected optionees, the cancellation of any or all
outstanding Options and the grant in substitution therefor of new
Options covering the same or different shares of Common Stock and
having an exercise price per share which may be lower or higher than
the exercise price per share of the canceled Options.
9. Exercise of Options.
A. Each Option granted under the Plan shall be exercisable either in
full or in installments at such time or times and during such period
as shall be set forth in the agreement evidencing the Option,
subject to the provisions of the Plan. The partial exercise of an
option shall not cause the expiration, termination or cancellation
of the remaining portion thereof. The Board may, in its sole
discretion, (i) accelerate the date or dates on which all or any
particular Option or Options granted under the Plan may be exercised
or (ii) extend the dates during which all, or any particular, Option
or Options granted under the Plan may be exercised.
B. Options granted under the Plan may provide for payment of the
exercise price by any of the following methods:
(i) In cash, by wire transfer, by certified or cashier's check, or
by money order; or
(ii) By delivery to the Company of an exercise notice that requests
the Company to issue to the Optionee the full number of shares
as to which the Option is then exercisable, less the number of
shares that have an aggregate Fair Market Value, as determined
by the Board in its sole discretion at the time of exercise,
equal to the aggregate purchase price of the shares to which
such exercise relates. (This method of exercise allows the
Optionee to use a portion of the shares issuable at the time
of exercise as payment for the shares to which the option
relates and is often referred to as a "cashless exercise." For
example, if the Optionee elects to exercise 1,000 shares at an
exercise price of $0.25 and the current Fair Market Value of
the shares on the date of exercise is $1.00, the Optionee can
use 250 of the 1,000 shares at $1.00 per share to pay for the
exercise of the entire Option (250 x $1.00 = $250.00) and
receive only the remaining 750 shares.)
For purposes of this section, " Fair Market Value" shall be defined as the
average closing price of the common stock (if actual sales price information on
any trading day is not available, the closing bid price shall be used) for the
five trading days prior to the Date of Exercise of this Option (the "Average
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Closing Bid Price"), as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or if the common stock is not
traded on NASDAQ, the Average Closing Bid Price in the over-the-counter market;
provided, however, that if the common stock is listed on a stock exchange, the
Fair Market Value shall be the Average Closing Bid Price on such exchange; and,
provided further, that if the common stock is not quoted or listed by any
organization, the fair value of the common stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive, shall be
used). In no event shall the Fair Market Value of any share of Common Stock be
less than its par value.
10. Option Period. Subject to earlier termination under other provisions of this
Plan, each Option and all rights thereunder shall expire on such date as shall
be set forth in the applicable option agreement.
11. Nontransferability of Options. Options shall not be assignable or
transferable by the optionee, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the life of
theoptionee, shall be exercisable only by the optionee.
12. Effect of Termination of Employment or Other Relationship. Subject to all
other provisions of the Plan, the Board shall determine the period of time
during which an Optionee may exercise an Option following (i) the termination of
the optionee's employment or other relationship with the Company or a Related
Corporation or (ii) the death or disability of the optionee. Such periods shall
be set forth in the agreement evidencing the Option.
13. Adjustments.
A. If, through or as a result of any merger, consolidation, sale of all
or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the
outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other
securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of
Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (a) the maximum number and kind of
shares reserved for issuance under the Plan, (b) the number and kind
of shares or other securities subject to any then outstanding
Options under the Plan, and (c) the price for each share subject to
any then outstanding Options under the Plan, without changing the
aggregate purchase price as to which such Options remain
exercisable. No fractional shares shall be issued under the Plan on
account of any such adjustments.
B. Any adjustments under this Paragraph 13 shall be made by the Board
of Directors, whose determination as to what adjustments, if any,
will be made and the extent thereof shall be final, binding and
conclusive.
14. Rights as a Shareholder. The holder of an Option shall have no rights as a
shareholder with respect to any shares covered by the option (including, without
limitation, any voting rights, the right to inspect or receive the Company's
balance sheets or financial statements or any rights to receive dividends or
non-cash distributions with respect to such shares) until the date of issue of a
stock certificate for such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date such stock
certificate is issued.
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15. Merger, Consolidation, Asset Sale, Liquidation, Etc.
A. Except as may otherwise be provided in the applicable option
agreement, in the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities,
cash or other property of any other corporation or business entity,
or in the event of the liquidation of the Company (each, a "Change
in Control"), the Board, or the board of directors of any
corporation assuming the obligations of the Company, shall, in its
discretion, take any one or more of the following actions, as to
outstanding Options: (i) provide that such Options shall be assumed,
or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof); (ii) upon written
notice to the Optionees, provide that any and all outstanding
Options shall become exercisable in full (to the extent not
otherwise so exercisable) as of a specified date or time
("Accelerated Vesting Date") prior to the consummation of such
transaction, and that all unexercised Options shall terminate as of
a specified date or time ("Accelerated Expiration Date") following
the Accelerated Vesting Date unless exercised by the Optionee prior
to the Accelerated Expiration Date; provided, however, that the
Optionees shall be given a reasonable period of time within which to
exercise or provide for the exercise of outstanding Options
following such written notice and before the Accelerated Expiration
Date; (iii) in the event of a merger under the terms of which
holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment for each share surrendered in
the merger (the "Merger Price"), terminate each outstanding Option
in exchange for a payment, made or provided for by the Company,
equal in amount to the excess, if any, of the Merger Price over the
per-share exercise price of each such Option, times the number of
shares of Common Stock subject to such Option; or (iv) terminate
each outstanding Option in exchange for a cash payment equal in
amount to the product of the excess, if any, of the fair market
value of a share of Common Stock over the per-share exercise price
of each such Option, times the number of shares subject to such
Option. The Board shall determine the fair market value of a share
of Common Stock for purposes of the foregoing, and the Board's
determination of such fair market value shall be final, binding and
conclusive.
B. In the event of a Change in Control and to the extent the rights
described in this Section 16B are not already substantially provided
to each Qualified Option Recipient by the Board (or the board of
directors of any corporation assuming the obligations of the
Company) pursuant to Section 16A, beginning on the date which is 180
days from the date of such Change in Control, each Qualified Option
Recipient (as defined below) shall have the right to exercise and
receive from the Company or its successor their respective
Acceleration Amount (as defined below). A "Qualified Option
Recipient" is defined as an option recipient hereunder who both (A)
has maintained a relationship as an employee, officer or director
of, or consultant or advisor to, the Company or its successor for
the 180 days immediately prior to the Change in Control and (B) on
the date which is 180 days after the date of the Change in Control,
either (i) maintains a relationship as an employee, officer or
director of, or consultant or advisor to, the Company or its
successor or (ii) fails to maintain a relationship as an employee,
officer or director of, or consultant or advisor to, the Company or
its successor by reason of having such relationship terminated by
the Company or its successor other than for Cause, where "Cause"
means willful misconduct or willful failure of the option recipient
to perform the responsibilities of such option recipient's
agreed-upon business relationship with the Company or its successor,
including without limitation such option recipient's breach of any
provision of any employment, consulting, nondisclosure,
non-competition or similar agreement between the option recipient
and the Company. With respect to each Qualified Option Recipient,
the "Acceleration Amount" shall mean the lesser of (a) the number of
additional shares of Common Stock (or their equivalent) which would
have become vested pursuant to their option agreement over the
twelve (12) month period following the date of the Change in Control
or (b) fifty percent (50%) of the shares of Common Stock (or their
equivalent) which had not yet vested pursuant to their option
agreement as of the date of the Change in Control. The Board and,
where applicable, the board of directors of any corporation assuming
the obligations of the Company, shall take all necessary action to
accomplish the purposes of this Section 16B, including all such
actions as are necessary to provide for the assumption of such
obligation upon the Change in Control.
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C. The Company may grant Options under the Plan in substitution for
Options held by employees of another corporation who become
employees of the Company or a Related Corporation as the result of a
merger or consolidation of the employing corporation with the
Company or a Related Corporation, or as a result of the acquisition
by the Company or a Related Corporation of property or stock of the
employing corporation. The Company may direct that substitute
Options be granted on such terms and conditions as the Board
considers appropriate in the circumstances.
D. In the event of a Change in Control and with respect thereto, the
rights and responsibilities of holders of Stock Rights pursuant to
this Plan shall be governed first and foremost by the Company's
agreement with the respective recipient of such Stock Rights and
then, to the extent applicable, by the terms of this Section 16.
16. Stock Restriction Agreement. As a condition to the grant of an Award or a
Purchase authorization under the Plan, the recipient of the Award or Purchase
authorization shall execute an agreement ("Stock Restriction Agreement") in such
form not inconsistent with the Plan as may be approved by the Board. Stock
Restriction Agreements may differ among recipients. Stock Restriction Agreements
may include any provisions the Board determines should be included and that are
not inconsistent with any provision of the Plan.
17. No Special Employment Rights. Nothing contained in the Plan or in any option
agreement or other agreement or instrument executed pursuant to the provisions
of the Plan shall confer upon any Optionee any right with respect to the
continuation of his or her employment by the Company or any Related Corporation
or interfere in any way with the right of the Company or a Related Corporation
at any time to terminate such employment or to increase or decrease the
compensation of the Optionee.
18. Other Employee Benefits. Except as to plans which by their terms include
such amounts as compensation, no amount of compensation deemed to be received by
an employee as a result of the grant or exercise of an Option or the sale of
shares received upon such exercise, or as a result of the grant of an Award or
the authorization or making of a Purchase will constitute compensation with
respect to which any other employee benefits of such employee are determined,
including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board.
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19. Amendment of the Plan.
A. The Board may at any time, and from time to time, modify or amend
the Plan in any respect.
B. The termination or any modification or amendment of the Plan shall
not, without the consent of an Optionee, affect the Optionee's
rights under an Option previously granted. With the consent of the
Optionee affected, the Board may amend outstanding option agreements
in a manner not inconsistent with the Plan. The Board shall have the
right to amend or modify (i) the terms and provisions of the Plan
and of any outstanding Option, and (ii) the terms and provisions of
the Plan and of any outstanding Option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.
20. Investment Representations. The Board may require any person to whom an
Option is granted, as a condition of exercising such Option, and any person to
whom an Award is granted or a Purchase is authorized, as a condition thereof, to
give written assurances in substance and form satisfactory to the Board to the
effect that such person is acquiring the Common Stock subject to the Option,
Award or Purchase for such person's own account for investment and not with any
present intention of selling or otherwise distributing the same, and to such
other effects as the Company deems necessary or appropriate in order to comply
with federal and applicable state securities laws, or with covenants or
representations made by the Company in connection with any public offering of
its Common Stock.
21. Compliance With Securities Laws. Each Option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
thereunder, such Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration or qualification, or to satisfy such
condition.
22. Withholding. The Company shall have the right to deduct from payments of any
kind otherwise due to the Optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of Options under the Plan or upon the grant of an Award, the making of a
Purchase of Common Stock for less than its fair market value, the making of a
Disqualifying Disposition (as defined in Paragraph 24), or the vesting of
restricted Common Stock acquired pursuant to a Stock Right. The Board in its
sole discretion may condition the exercise of an Option, the grant of an Award,
the making of a Purchase, or the vesting of restricted shares acquired by
exercising a Stock Right on the grantee's payment of such additional withholding
taxes.
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23. Effective Date and Duration of the Plan.
A. The Plan shall become effective when adopted by the Board and Stock
Rights granted under the Plan shall become exercisable upon the
Board's approval of the Plan. Amendments to the Plan not requiring
shareholder approval shall become effective when adopted by the
Board. Stock Rights may be granted under the Plan at any time after
the effective date and before the termination date of the Plan.
B. Unless sooner terminated as provided elsewhere in this Plan, this
Plan shall terminate upon the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the
Board. Stock Rights outstanding on such date shall continue to have
force and effect in accordance with the provisions of the
instruments evidencing such Stock Rights.
Adopted by the Board of Directors on August 31, 2004.
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