THE JARRETT/FAVRE DRIVING ADVENTURE, INC.
2001 NON-STATUTORY STOCK OPTION PLAN
1. Purpose of this Plan.
This Non-Statutory Stock Option Plan (the "Plan") is intended as an
.incentive, to aid in attracting and retaining in the employ or other
service of The Jarrett/Favre Driving Adventure, Inc. (the "Company"),
a Delaware corporation, and any Affiliated Corporation, persons of
experience and ability and whose services are considered valuable, to
encourage the sense of proprietorship in such persons, and to
stimulate the active interest of such persons in the development and
success of the Company. This Plan provides for the issuance of non-
statutory stock options ("NSOs" or "Options") which are not intended
to qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended the "Code").
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Non-Statutory Stock Option Plan
Committee (the "Committee") of the Board which shall consist of at
least three members of the Board. Until such time as the Committee is
duly constituted, the Board itself shall have and fulfill the duties
herein allocated to the Committee. The Committee shall have full
power and authority to designate Plan participants, to determine the
provisions and terms of respective NSOs (which need not be identical
as to number of shares covered by any NSO, the method of exercise as
related to exercise in whole or in installments, or otherwise),
including the NSO price, and to interpret the provisions and supervise
the administration of this Plan. The Committee may in its discretion
provide that certain NSOs not vest (that is, become exercisable) until
expiration of a certain period after issuance or until other
conditions are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum.
All decisions and selections made by the Committee pursuant to this
Plan's provisions shall be made by a majority of its members. Any
decision reduced to writing and signed by all of the members shall be
fully effective as if it had been made by a majority at a meeting duly
held. The Committee shall select one of its members as its chairman
and shall hold its meetings at such times and places as it deems
advisable. If at any time the Board shall consist of seven or more
members, then the Board may amend this Plan to provide that the
Committee shall consist only of Board members who shall not have been
eligible to participate in this Plan (or similar stock or stock option
plan) of the Company or its affiliates at any time within one year
prior to appointment to the Committee.
Each NSO shall be evidenced by a written agreement containing terms
and conditions established by the Committee consistent with the
provisions of this Plan.
3. Designation of Participants.
The persons eligible for participation in this Plan as recipients of
NSOs may include full-time and part-time employees (as determined by
the Committee) and officers of the Company or of an Affiliated
Corporation or any person, firm or corporation not employed by the
Company but performing services to the Company. In addition,
directors of the Company or any Affiliated Corporation who are not
employees of the Company or an Affiliated Corporation and any
attorney, consultant or other adviser to the Company or any Affiliated
Corporation may be eligible to participate in this Plan. For all
purposes of this Plan, any director who is not also a common law
employee and is granted an option under this Plan (as determined by
the Committee) may be considered an "employee" until the effective
date of the director's resignation or removal from the Board of
Directors, including removal due to death or disability. The
Committee shall have full power to designate, from among eligible
individuals, the persons to whom NSOs may be granted. A person who
has been granted an NSO hereunder may be granted an additional NSO or
NSOs, if the Committee shall so determine. The granting of an NSO
shall not be construed as a contract of employment or as entitling the
recipient thereof to any rights of continued employment.
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4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
1,500,000 shares of Common Stock, $.001 par value per share ("Stock"),
of the Company shall be subject to this Plan. The Stock subject to
this Plan shall consist of unissued shares or previously issued shares
reacquired and held by the Company or any Affiliated Corporation, and
such amount of shares shall be and is hereby reserved for sale for
such purpose. Any of such shares which may remain unsold and which
are not subject to outstanding NSOs at the termination of this Plan
shall cease to be reserved for the purpose of this Plan, but until
termination of this Plan, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of this Plan.
Should any NSO expire or be canceled prior to its exercise in full,
the unexercised shares theretofore subject to such NSO may again be
subjected to an NSO under this Plan.
5. Option Price.
The purchase price of each share of Stock placed under NSO for
officers and directors shall not be less than One Hundred percent
(100%) of the fair market value of such share on the date the NSO is
granted. The purchase price of each share of Stock placed under NSO
for all other eligible participants shall not be less than Eighty Five
percent (85%) of the fair market value of such share on the date the
NSO is granted. The fair market value of a share on a particular date
shall be deemed to be the average of either (i) the highest and lowest
prices at which shares were sold on the date of grant, if traded on a
national securities exchange, (ii) the high and low prices reported in
the consolidated reporting system, if traded on a "last sale reported"
system, such as NASDAQ, for over the counter securities, or (iii) the
high bid and high asked price for other over-the-counter securities.
If no transactions in the Stock occur on the date of grant, the fair
market value shall be determined as of the next earliest day for which
reports or quotations are available. If the common shares are not
then quoted on any exchange or in any quotation medium at the time the
option is granted, then the Board of Directors or Committee will use
its discretion in selecting a good faith value believed to represent
fair market value based on factors then known to them. The cash
proceeds from the sale of Stock are to be added to the general funds
of the Company.
6. Exercise Period.
(a) The NSO exercise period shall be a term of not more than ten
(10) years from the date of granting of each NSO and shall
automatically terminate:
(i) Upon termination of the optionee's engagement with the
Company for cause;
(ii) At the expiration of three (3) years (or such longer or
shorter time as may be established by the Committee as to a particular
NSO) from the date of termination of the optionee's engagement with
the Company for any reason other than death, without cause; provided,
that if the optionee dies within such nine-month period, subclause
(iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date
of death of the optionee.
(b) "Employment with the Company" as used in this Plan shall
include employment with any Affiliated Corporation, and NSOs granted
under this Plan shall not be affected by an employee's transfer of
employment among the Company and any Parent or Subsidiary thereof. An
optionee's employment with the Company shall not be deemed interrupted
or terminated by a bona fide leave of absence (such as sabbatical
leave or employment by the Government) duly approved, military leave
or sick leave.
7. Exercise of Options.
(a) The Committee, in granting NSOs, shall have discretion to
determine the terms upon which NSOs shall be exercisable, subject to
applicable provisions of this Plan. Once available for purchase,
unpurchased shares of Stock shall remain subject to purchase until the
NSO expires or terminates in accordance with Paragraph 6 above.
Unless otherwise provided in the NSO, an NSO may be exercised in whole
or in part, one or more times, but no NSO may be exercised for a
fractional share of Stock.
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(b) NSOs may be exercised solely by the optionee during his
lifetime, or after his death (with respect to the number of shares
which the optionee could have purchased at the time of death) by the
person or persons entitled thereto under the decedent's will or the
laws of descent and distribution.
(c) The purchase price of the shares of Stock as to which an NSO
is exercised shall be paid in full at the time of exercise and no
shares of Stock shall be issued until full payment is made therefor.
Payment shall be made either (i) in cash, represented by bank or
cashier's check, certified check or money order (ii) in lieu of
payment for bona fide services rendered, and such services were not in
connection with the offer or sale of securities in a capital-raising
transaction, (iii) by delivering shares of the Company's Common Stock
which have been beneficially owned by the optionee, the optionee's
spouse, or both of them for a period of at least six (6) months prior
to the time of exercise (the "Delivered Stock") in a number equal to
the number of shares of Stock being purchased upon exercise of the NSO
or (iv) by delivery of shares of corporate stock which are freely
tradable without restriction and which are part of a class of
securities which has been listed for trading on the NASDAQ system or a
national securities exchange, with an aggregate fair market value
equal to or greater than the exercise price of the shares of Stock
being purchased under the NSO, or (v) a combination of cash, services,
Delivered Stock or other corporate shares. An NSO shall be deemed
exercised when written notice thereof, accompanied by the appropriate
payment in full, is received by the Company. No holder of an NSO
shall be, or have any of the rights and privileges of, a shareholder
of the Company in respect of any shares of Stock purchasable upon
exercise of any part of an NSO unless and until certificates
representing such shares shall have been issued by the Company to him
or her.
8. Assignability.
No NSO shall be assignable or otherwise transferable (by the optionee
or otherwise) except by will or the laws of descent and distribution.
No NSO shall be pledged or hypothecated in any manner, whether by
operation of law or otherwise, nor be subject to execution, attachment
or similar process.
9. Reorganizations and Recapitalizations of the Company
(a) The existence of this Plan and NSOs granted hereunder shall
not affect in any way the right or power of the Company or its
shareholders to make or authorize any and all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior
preference stocks ahead of or affecting the Company's Common Stock or
the rights thereof, or the dissolution or liquidation of the Company,
or any sale, exchange or transfer of all or any part of its assets or
business, or the other corporation act or proceeding, whether of a
similar character or otherwise.
(b) The shares of Stock with respect to which NSOs may be granted
hereunder are shares of the Common Stock of the Company as currently
constituted. If, and whenever, prior to delivery by the Company of
all of the shares of Stock which are subject to NSOs granted
hereunder, the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a Stock dividend,
a stock split, combination of shares (reverse stock split) or
recapitalization or other increase or reduction of the number of
shares of the Common Stock outstanding without receiving compensation
therefor in money, services or property, then the number of shares of
Stock available under this Plan and the number of shares of Stock with
respect to which NSOs granted hereunder may thereafter be exercised
shall (i) in the event of an increase in the number of outstanding
shares, be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced; and (ii) in the
event of a reduction in the number of outstanding shares, be
proportionately reduced, and the cash consideration payable per share
shall be proportionately increased.
(c) If the Company is reorganized, merged, consolidated or party
to a plan of exchange with another corporation pursuant to which
shareholders of the Company receive any shares of stock or other
securities, there shall be substituted for the shares of Stock subject
to the unexercised portions of outstanding NSOs an appropriate number
<PAGE>16
of shares of each class of stock or other securities which were
distributed to the shareholders of the Company in respect of such
shares of Stock in the case of a reorganization, merger, consolidation
or plan of exchange; provided, however, that all such NSOs may be
canceled by the Company as of the effective date of a reorganization,
merger, consolidation, plan of exchange, or any dissolution or
liquidation of the Company, by giving notice to each optionee or his
personal representative of its intention to do so and by permitting
the purchase of all the shares subject to such outstanding NSOs for a
period of not less than thirty (30) days during the sixty (60) days
next preceding such effective date.
(d) Except as expressly provided above, the Company's issuance 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 shares of Stock or other securities, shall
not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to NSOs granted
hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the shares of Stock covered by this Plan have been registered
under the Securities Act of 1933, as amended, each person exercising
an NSO under this Plan may be required by the Company to give a
representation in writing 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.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of January 3, 2001, the date of its
adoption by the Board, subject to the approval of the Company's
shareholders, and no NSO shall be granted pursuant to this Plan after
its expiration. This Plan shall expire on January 3, 2011 except as
to NSOs then outstanding, which shall remain in effect until they have
expired or been exercised.
12. Amendments or Termination.
The Board may amend, alter or discontinue this Plan at any time in
such respects as it shall deem advisable in order to conform to any
change in any other applicable law, or in order to comply with the
provisions of any rule or regulation of the Securities and Exchange
Commission required to exempt this Plan or any NSOs granted thereunder
from the operation of Section 16(b) of the Securities Exchange Act of
1934, as amended ("Exchange Act"), or in any other respect not
inconsistent with Section 16(b) of the Exchange Act; provided, that no
amendment or alteration shall be made which would impair the rights of
any participant under any NSO theretofore granted, without his consent
(unless made solely to conform such NSO to, and necessary because of,
changes in the foregoing laws, rules or regulations), and except that
no amendment or alteration shall be made without the approval of
shareholders which would:
(a) Increase the total number of shares reserved for the purposes of
this Plan or decrease the NSO price provided for in Paragraph 5
(except as provided in Paragraph 9), or change the classes of persons
eligible to participate in this Plan as provided in Paragraph 3; or
(b) Extend the NSO period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to participants under
this Plan; or
(d) Materially modify the requirements as to eligibility for
participation in this Plan; or
(e) Extend the expiration date of this Plan as set forth in
Paragraph 11.
<PAGE>17
13. Government Regulations.
This Plan, and the granting and exercise of NSOs hereunder, and the
obligation of the Company to sell and deliver shares of Stock under
such NSOs, 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.
14. Liability.
No member of the Board of Directors, the Committee or officers or
employees of the Company or any Affiliated Corporation shall be
personally liable for any action, omission or determination made in
good faith in connection with this Plan.
15. Miscellaneous.
(a) The term "Affiliated Corporation" used herein shall mean any
Parent or Subsidiary.
(b) The term "Parent" used herein shall mean any corporation owning
50 percent or more of the total combined voting stock of all classes
of the Company or of another corporation qualifying as a Parent within
this definition.
(c) The term "Subsidiary" used herein shall mean any corporation
more than 50 percent of whose total combined voting stock of all
classes is held by the Company or by another corporation qualifying as
a Subsidiary within this definition.
16. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term
of this Plan, grant new options to an optionee under this Plan or any
other stock option plan of the Company on the condition that such
optionee shall surrender for cancellation one or more outstanding
options which represent the right to purchase (after giving effect to
any previous partial exercise thereof) a number of shares, in relation
to the number of shares to be covered by the new conditional grant
hereunder, determined by the Committee. If the Committee shall have
so determined to grant such new options on such a conditional basis
("New Conditional Options"), no such New Conditional Option shall
become exercisable in the absence of such optionee's consent to the
condition and surrender and cancellation as appropriate. New
Conditional Options shall be treated in all respects under this Plan
as newly granted options. Option may be granted under this Plan from
time to time in substitution for similar rights held by employees of
other corporations who are about to become employees of the Company or
an Affiliated Corporation, or the merger or consolidation of the
employing corporation with the Company or an Affiliated Corporation,
or the acquisition by the Company or an Affiliated Corporation of the
assets of the employing corporation, or the acquisition by the Company
or an Affiliated Corporation of stock of the employing corporation as
the result of which it becomes an Affiliated Corporation.
17. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be
required to collect withholding taxes upon the exercise of a NSO. The
Company may require, as a condition to the exercise of a NSO, that the
optionee concurrently pay to the Company the entire amount or a
portion of any taxes which the Company is required to withhold by
reason of such exercise, in such amount as the Committee or the
Company in its discretion may determine. In lieu of part or all of
any such payment, the optionee may elect to have the Company withhold
from the shares to be issued upon exercise of the option that number
of shares having a Fair Market Value equal to the amount which the
Company is required to withhold.
<PAGE>18
CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that
the foregoing 2001 Non-Statutory Stock Option Plan was duly approved
by the Board of Directors on January 3, 2001.
-----------------------------------
, Secretary
(SEAL)
