FIRST ENTERTAINMENT HOLDING CORP.
2000 STOCK OPTION PLAN
As Adopted As Of June 2, 2000
This 2000 Stock Option (the "Plan") is adopted by First
Entertainment Holding Corp. (the "Company") effective as of June 2,
2000.
1. Definitions.
Unless otherwise indicated or required by the particular
context, the terms used in this Plan shall have the following meanings:
Board: The Board Of Directors of the Company.
Code: The Internal Revenue Code of 1986, as amended.
Common Stock: The $.008 par value common stock of the
Company.
Company: First Entertainment Holding Corp., a corporation
incorporated under the laws of Nevada, any current or future wholly
owned subsidiaries of the Company, and any successors in interest by
merger, operation of law, assignment or purchase of all or
substantially all of the property, assets or business of the Company.
Date Of Grant: The date on which an Option, as defined
below, is granted under the Plan.
Fair Market Value: The Fair Market Value of the Option
Shares (defined below). The Fair Market Value as of any date shall be
as reasonably determined by the Option Committee (defined below);
provided, however, that if there is a public market for the Common
Stock, the Fair Market Value of the Option Shares as of any date shall
not be less than the last reported sale price for the Common Stock on
that date (or on the preceding stock market business day if such date
is a Saturday, Sunday, or a holiday), on a national securities
exchange, as reported in The Wall Street Journal, or if not reported in
The Wall Street Journal, as reported in The Denver Post, Denver,
Colorado or, if no last sale price for a national securities exchange
is available, then the last reported sale price on either another stock
exchange or on a national or local over-the-counter market, as reported
by The Wall Street Journal, or if not available there, in The Denver
Post; provided further, that if no such published last sale price is
available and a published bid price is available from one of those
sources, then the Fair Market Value of the shares shall not be less
than such last reported bid price for the Common Stock, and if no such
published bid price is available, the Fair Market Value of such shares
shall not be less than the average of the bid prices quoted as of the
close of business on that date by any two independent persons or
entities making a market for the Common Stock, such persons or entities
to be selected by the Option Committee.
Incentive Options: "Incentive stock options" as that term
is defined in Code Section 422 or the successor to that Section.
Key Employee: A person designated by the Option Committee
who is employed by the Company and whose continued employment is
considered to be in the best interests of the Company; provided,
however, that Key Employees shall not include those members of the
Board who are not employees of the Company.
Key Individual: A person, other than an employee of the
Company, who is committed to the interests of the Company; provided,
however, that Key Individuals shall not include those members of the
Board who are not employees of the Company.
Non-Employee Director: A director of the Company who (a)
is not currently an officer of the Company or a parent or subsidiary of
the Company, or otherwise currently employed by the Company or a parent
or subsidiary of the Company, (b) does not receive compensation, either
directly or indirectly, from the Company or a parent or subsidiary of
the Company, for services rendered as a consultant or in any capacity
other than as a director, except for an amount that does not exceed the
dollar amount for which disclosure would be required pursuant to
Regulation S-K, Item 404(a), under the Securities Act of 1933, as
amended, (c) does not possess an interest in any other transaction for
which disclosure by the Company would be required pursuant to
Regulation S-K, Item 404(a), and (d) is not engaged in a business
relationship for which disclosure by the Company would be required
pursuant to Regulation S-K, Item 404(a).
Non-Qualified Options: Options that are not intended to
qualify, or otherwise do not qualify, as "incentive stock options"
under Code Section 422 or the successor to that Section. To the extent
that Options that are designated by the Option Committee as Incentive
Options do not qualify as "incentive stock options" under Code Section
422 or the successor to that Section, those Options shall be treated as
Non-Qualified Options.
Option: The rights to purchase Common Stock granted
pursuant to the terms and conditions of an Option Agreement (defined
below).
Option Agreement: The written agreement (including any
amendments or supplements thereto) between the Company and either a Key
Employee or a Key Individual designating the terms and conditions of an
Option.
Option Committee: The Plan shall be administered by an
Option Committee ("Option Committee") composed of the Board or by a
committee of at least two directors selected by the Board; provided,
however, that (a) if the Option Committee consists of less than the
entire Board, each member shall be a Non-Employee Director and (b) to
the extent necessary for any Option intended to qualify as Performance-
Based Compensation to so qualify, each member of the Option Committee,
whether or not it consists of the entire Board, shall be an Outside
Director. For purposes of the proviso to the preceding sentence (the
"Proviso"), if one or more members of the Committee is not, in the case
of clause (a) of the Proviso, a Non-Employee Director, or, in the case
of clause (b) of the Proviso, an Outside Director, and, in either case,
recuses himself or herself or abstains from voting with respect to a
particular action taken by the Option Committee, then the Option
Committee, with respect to that action, shall be deemed to consist only
of the members of the Option Committee who have not recused themselves
or abstained from voting.
Option Shares: The shares of Common Stock underlying an
Option granted pursuant to this Plan.
Optionee: A Key Employee or Key Individual who has been
granted an Option.
Outside Director: "Outside Director" shall have the
meaning set forth in Section 162 of the Code or the successor to that
Section and any regulations promulgated under that or the successor to
that Section.
Performance-Based Compensation: "Performance-Based
Compensation" means any Option that is intended to constitute
"performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code and the regulations promulgated thereunder.
Permitted Transferee: A Permitted Transferee means, with
respect to any person, such person's immediate family, trusts solely
for the benefit of such family members and partnerships in which such
family members and/or trusts are the only partners. For this purpose,
immediate family of a person means the person's spouse, parents,
children, stepchildren and grandchildren and the spouses of such
parents, children, stepchildren and grandchildren.
2. Purpose And Scope.
(a) The purpose of the Plan is to advance the interests
of the Company and its stockholders by affording Key Employees and Key
Individuals, upon whose initiative and efforts, in the aggregate, the
Company is largely dependent for the successful conduct of its
business, an opportunity for investment in the Company and the
incentive advantages inherent in stock ownership in the Company.
(b) This Plan authorizes the Option Committee to grant
Incentive Options to Key Employees and to grant Non-Qualified Options
to Key Employees and Key Individuals, selected by the Option Committee
while considering criteria such as employment position or other
relationship with the Company, duties and responsibilities, ability,
productivity, length of service or association, morale, interest in the
Company, recommendations by supervisors, the interests of the Company,
and other matters.
3. Administration Of The Plan.
(a) The Plan shall be administered by the Option
Committee. The Option Committee shall have the authority granted to it
under this Section and under each other section of the Plan.
(b) In accordance with and subject to the provisions of
the Plan, the Option Committee shall select the Optionees and shall
determine (i) the number of shares of Common Stock to be subject to
each Option, (ii) the time at which each Option is to be granted, (iii)
whether an Option shall be granted in exchange for the cancellation and
termination of a previously granted option or options under the Plan or
otherwise, (iv) the purchase price for the Option Shares, provided that
the purchase price shall be a fixed, and cannot be a fluctuating,
price, (v) the option period, including provisions for the termination
of the Option prior to the expiration of the exercise period upon the
occurrence of certain events, (vi) the manner in which the Option
becomes exercisable, including whether portions of the Option become
exercisable at different times and including determining that, at any
time, the portion not yet exercisable shall become exercisable upon the
occurrence of certain events, and (vii) such other terms and conditions
as the Option Committee may deem necessary or desirable. The Option
Committee shall determine the form of Option Agreement to evidence each
Option and may amend the terms of any Option (subject to Section 3(d)
below).
(c) The Option Committee from time to time may adopt
such rules and regulations for carrying out the purposes of the Plan as
it may deem proper and in the best interests of the Company. The
Option Committee shall keep minutes of its meetings and those minutes
shall be distributed to every member of the Board.
(d) The Board from time to time may make such changes in
and additions to the Plan as it may deem proper and in the best
interests of the Company provided, however, that no such change or
addition shall impair any Option previously granted under the Plan, and
that no change that under applicable law requires the approval of
stockholders may be made without such approval.
(e) Each determination, interpretation or other action
made or taken by the Option Committee, unless otherwise determined by
the Board, shall be final, conclusive and binding on all persons,
including without limitation, the Company, the stockholders, directors,
officers and employees of the Company, and the Optionees and their
respective successors in interest. No member of the Option Committee
shall be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan, and all
members of the Option Committee shall be, in addition to rights they
may have as directors of the Company, fully protected by the Company
with respect to any such action, determination or interpretation. If
the Board makes a determination contrary to the Option Committee's
determination, interpretation or other action, then the Board's
determination shall be final and conclusive in the same manner.
4. The Common Stock.
The Board is authorized to appropriate, issue and sell for
the purposes of the Plan, and the Option Committee is authorized to
grant Options with respect to, a total number not in excess of
1,000,000 shares of Common Stock, either treasury or authorized and
unissued, or the number and kind of shares of stock or other securities
which in accordance with Section 9 shall be substituted for the
1,000,000 shares or into which such 1,000,000 shares shall be adjusted.
All or any unsold shares subject to an Option, that for any reason
expires or otherwise terminates before it has been exercised, again may
be made subject to Options under the Plan. No one person may be
granted during any two year period Options under the Plan to purchase
more than 500,000 shares.
5. Eligibility.
Incentive Options may be granted only to Key Employees.
Non-Qualified Options may be granted both to Key Employees and to Key
Individuals. Key Employees and Key Individuals may hold more than one
Option under the Plan and may hold Options under the Plan as well as
options granted pursuant to other plans or otherwise.
6. Option Price.
The Option Committee shall determine the purchase price for
the Option Shares; provided, however, that with respect to Option
Shares underlying Incentive Options, (a) the purchase price shall not
be less than 100 percent of the Fair Market Value of the Option Shares
on the Date Of Grant and (b) provided further that the purchase price
shall be a fixed, and cannot be a fluctuating, price.
7. Duration And Exercise Of Options.
(a) Except as provided in Section 17, the option period
shall commence on the Date Of Grant and shall continue for the period
designated by the Option Committee up to a maximum of ten years from
the Date Of Grant.
(b) During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee; provided that, subject to the
following sentence and paragraph (d) of this Section 7, in the event of
the legal disability of an Optionee, the guardian or personal
representative of the Optionee may exercise the Option. If the Option
is an Incentive Option, it may be exercised by the guardian or personal
representative of the Optionee only if the guardian or personal
representative obtains a ruling from the Internal Revenue Service or an
opinion of counsel to the effect that neither the grant nor the
exercise of such power is violative of Code Section 422(b)(5) or the
successor to that provision. Any opinion of counsel must be both from
counsel acceptable to the Option Committee and in a form acceptable to
the Option Committee.
(c) If the Optionee's employment or affiliation with the
Company is terminated for any reason except the Optionee's death, any
Option then held, to the extent that the Option was exercisable
according to its terms on the date of termination, may be exercised
only to the extent determined by the Option Committee at the time of
grant of the Option or thereafter, but in no case more than three
months after termination. If the Optionee's employment or affiliation
with the Company is terminated because of the Optionee's death, any
Option then held, to the extent that the Option was exercisable
according to its terms on the date of termination, may be exercised
only to the extent determined by the Option Committee on the Date of
Grant or thereafter, but in no case more than one year after
termination. Any options remaining unexercised shall expire at the
later of termination or the end of the extended exercise period, if
any.
(d) Each Option shall be exercised in whole or in part
by delivering to the office of the Treasurer of the Company written
notice of the number of shares with respect to which the Option is to
be exercised and by paying in full the purchase price for the Option
Shares purchased as set forth in Section 8 herein; provided, that an
Option may not be exercised in part unless the purchase price for the
Option Shares purchased is at least $1,000.
(e) No Incentive Option may be exercised until the Plan
is approved by the stockholders of the Company as provided in Section
15 below.
8. Payment For Option Shares.
(a) If the purchase price of the Option Shares purchased
by any Optionee at one time exceeds $1,000, the Option Committee, in
its sole discretion, upon request by the Optionee, may permit all or
part of the purchase price for the Option Shares to be paid by delivery
to the Company for cancellation shares of the Common Stock previously
owned by the Optionee ("Previously Owned Shares") with a Fair Market
Value as of the date of the payment equal to the portion of the
purchase price for the Option Shares that the Optionee does not pay in
cash. Notwithstanding the above, an Optionee shall be permitted to
exercise his Option by delivering Previously Owned Shares only if he
has held, and provides appropriate evidence of such, the Previously
Owned Shares for more than six months prior to the date of exercise (or
such lessor period as the Option Committee may permit). This period
(the "Holding Period") may be extended by the Option Committee acting
in its sole discretion as is necessary, in the opinion of the Option
Committee, so that, under generally accepted accounting principles, no
compensation shall be considered to have been or to be paid to the
Optionee as a result of the exercise of the Option in this manner. At
the time the Option is exercised, the Optionee shall provide an
affidavit, and such other evidence and documents as the Option
Committee shall request, to establish the Optionee's Holding Period.
(b) If payment for the exercise of an Option is made
other than by the delivery to the Company for cancellation of shares of
the Common Stock, the purchase price shall be paid in cash, certified
funds, or Optionee's check. Payment shall be considered made when the
Treasurer of the Company receives delivery of the payment at the
Company's address, provided that a payment made by check is honored
when first presented to the Optionee's bank.
9. Change In Stock, Adjustments, Etc.
In the event that each of the outstanding shares of Common
Stock (other than shares held by dissenting stockholders which are not
changed or exchanged) should be changed into, or exchanged for, a
different number or kind of shares of stock or other securities of the
Company, or if further changes or exchanges of any stock or other
securities into which the Common Stock shall have been changed, or for
which it shall have been exchanged, shall be made (whether by reason of
merger, consolidation, reorganization, recapitalization, stock
dividends, reclassification, split-up, combination of shares or
otherwise), then there shall be substituted for each share of Common
Stock that is subject to the Plan but not subject to an outstanding
Option hereunder, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock (other
than shares held by dissenting stockholders which are not changed or
exchanged) shall be so changed or for which each outstanding share of
Common Stock (other than shares held by dissenting stockholders) shall
be so changed or for which each such share shall be exchanged. Any
securities so substituted shall be subject to similar successive
adjustments.
In the event of any such changes or exchanges, (i) the
Option Committee shall determine whether, in order to prevent dilution
or enlargement of rights, an adjustment should be made in the number,
or kind, or option price of the shares or other securities that are
then subject to an Option or Options granted pursuant to the Plan, (ii)
the Option Committee shall make any such adjustment, and (iii) such
adjustments shall be made and shall be effective and binding for all
purposes of the Plan.
10. Relationship To Employment Or Position.
Nothing contained in the Plan, or in any Option or Option
Share granted pursuant to the Plan, (i) shall confer upon any Optionee
any right with respect to continuance of his employment by, or position
or affiliation with, or relationship to, the Company, or (ii) shall
interfere in any way with the right of the Company at any time to
terminate the Optionee's employment by, position or affiliation with,
or relationship to, the Company.
11. Nontransferability Of Option.
No Option shall be transferable by the Optionee otherwise
than by will or by the laws of descent and distribution or, in the case
of an Option other than an Incentive Stock Option, pursuant to a
domestic relations order (within the meaning of Rule 12a-12 promulgated
under the Exchange Act), and Options shall be exercisable during the
lifetime of an Optionee only by the Optionee or his or her guardian or
legal representative. Notwithstanding the foregoing, the Committee may
set forth in the Agreement evidencing an Option (other than an
Incentive Stock Option) at the time of grant or thereafter, that the
Option may be transferred to Permitted Transferees of the Optionee, and
for purposes of this Plan, a Permitted Transferee of an Optionee shall
be deemed to be the Optionee. The terms of an Option shall be final,
binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
12. Rights As A Stockholder.
No person shall have any rights as a stockholder with
respect to any share covered by an Option until that person shall
become the holder of record of such share and, except as provided in
Section 9, no adjustments shall be made for dividends or other
distributions or other rights as to which there is an earlier record
date.
13. Securities Laws Requirements.
No Option Shares shall be issued unless and until, in the
opinion of the Company, any applicable registration requirements of the
Securities Act of 1933, as amended, any applicable listing requirements
of any securities exchange on which stock of the same class is then
listed, and any other requirement of law or of any regulatory bodies
having jurisdiction over such issuance and delivery, have been fully
complied with. Each Option Agreement and each Option Share certificate
may be imprinted with legends reflecting federal and state securities
laws restrictions and conditions, and the Company may comply therewith
and issue "stop transfer" instructions to its transfer agent and
registrar in good faith without liability.
14. Disposition Of Shares.
To the extent reasonably requested by the Company, each
Optionee, as a condition of exercise, shall represent, warrant and
agree, in a form of written certificate approved by the Company, as
follows: (a) that all Option Shares are being acquired solely for his
own account and not on behalf of any other person or entity; (b) that
no Option Shares will be sold or otherwise distributed in violation of
the Securities Act of 1933, as amended, or any other applicable federal
or state securities laws; (c) that he will report all sales of Option
Shares to the Company in writing on a form prescribed by the Company;
and (d) that if he is subject to reporting requirements under Section
16(a) of the Exchange Act, (i) he will not violate Section 16(b) of the
Exchange Act, (ii) he will furnish the Company with a copy of each Form
4 and Form 5 filed by him, and (iii) he will timely file all reports
required under the federal securities laws.
15. Effective Date Of Plan; Termination Date Of Plan.
The Plan shall be deemed effective as of June 2, 2000;
provided however, that no Options granted under the Plan may be
considered Incentive Options unless the Plan is approved on or before
June 1, 2001 by the affirmative vote of the holders of a majority of
the shares of Common Stock entitled to vote and represented at a
meeting duly held or by written action without a meeting in accordance
with the applicable laws of the State of Delaware. The Plan shall
terminate at midnight on the date that is ten years from that date,
except as to Options previously granted and outstanding under the Plan
at that time. No Options shall be granted after the date on which the
Plan terminates. The Plan may be abandoned or terminated at any
earlier time by the Board, except with respect to any Options then
outstanding under the Plan.
16. Limitation On Amount Of Option.
The aggregate Fair Market Value of the Option Shares
underlying all Incentive Options that have been granted to a particular
Optionee and that become exercisable for the first time during the same
calendar year shall not exceed $100,000, provided that this amount
shall be increased or decreased, from time to time, as Code Section 422
or the successor to that Section is amended, so that this amount at all
times shall equal the amount of the limitation set forth in the Code.
For purposes of the preceding sentence, Fair Market Value of the Shares
underlying any particular Option shall be determined as of the Date of
Grant of that Option.
17. Ten Percent Stockholder Rule.
No Incentive Option may be granted to a Key Employee who,
at the time the Incentive Option is granted, owns stock possessing more
than 10 percent of the total combined voting power of all classes of
stock of the Company or of any "parent corporation" or "subsidiary
corporation", as those terms are defined in Section 424, or its
successor provision, of the Code, unless at the time the Incentive
Option is granted the purchase price for the Option Shares is at least
110 percent of the Fair Market Value of the Option Shares on the Date
Of Grant and the Incentive Option by its terms is not exercisable after
the expiration of five years from the Date Of Grant. For purposes of
the preceding sentence, stock ownership shall be determined as provided
in Section 424, or its successor provision, of the Code.
18. Withholding Taxes.
The Option Agreement shall provide that the Company may
take such steps as it may deem necessary or appropriate for the
withholding of any taxes which the Company is required by any law or
regulation or any governmental authority, whether federal, state or
local, domestic or foreign, to withhold in connection with any Option
including, but not limited to, the withholding of all or any portion of
any payment or the withholding of issuance of Option Shares to be
issued upon the exercise of any Option.
19. Effect Of Changes In Control And Certain Reorganizations.
(a) In event of a Change In Control of the Company (as
defined below), then all Options granted pursuant to the Plan shall
become exercisable immediately at the time of such Change In Control,
and, in addition, the Option Committee, in its sole discretion, shall
have the right, but not the obligation, to do any or all of the
following:
(i) provide for an Optionee to surrender an
Option (or portion thereof) and to
receive in exchange a cash payment, for
each Option share underlying the
surrendered Option, equal to the excess
of the aggregate Fair Market Value of the
Option Share on the date of surrender
over the exercise price for the Option
Share. To the extent any Option is
surrendered pursuant to this Subparagraph
19(a) (i), it shall be deemed to have
been exercised for purposes of Section 4
hereof; and
(ii) make any other adjustments, or take any
other action, as the Option Committee, in
its discretion, shall deem appropriate
provided that any such adjustments or
actions would not result in an Optionee
receiving less value than pursuant to
Subparagraph 19(a)(i) above.
For purposes of this Section 19, a "Change In
Control" of the Company shall mean a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act regardless of
whether the Company is then subject to such reporting requirement.
(b) In the event that the Company enters into, or the
Board shall propose that the Company enter into, a Reorganization Event
(as defined below), then all Options granted pursuant to the Plan shall
become exercisable immediately at the time of such Reorganization
Event, and, in addition, the Option Committee, in its sole discretion,
may make any or all of the following adjustments:
(i) by written notice to each Optionee
provide that such Optionee's
Options shall be terminated or
cancelled, unless exercised within 30 days
(or such other period as the Option
Committee shall determine) after the
date of such notice;
(ii) provide for termination or cancellation of an
Option in exchange for payment to the Optionee
of an amount in cash or securities equal to the
excess, if any, over the exercise price of that
Option of the Fair Market Value of the Option
Shares subject to the Option at the time of
such termination or cancellation; and
(iii) make any other adjustments, or take any other
action, as the Option Committee, in its
discretion, shall deem appropriate, provided
that any such adjustments or actions shall not
result in the Optionee receiving less value
than is possible pursuant to any or all of
Subparagraphs 19(b)(i) and 19(b)(ii) above.
Any action taken by the Option Committee may be
made conditional upon the consummation of the
applicable Reorganization Event.
For purposes of this Section 19, a
"Reorganization Event" shall be deemed to occur if (A) the Company is
merged or consolidated with another corporation, (B) one person becomes
the beneficial owner of all of the issued and outstanding equity
securities of the Company (for purposes of this Section 19(b), the terms
"person" and "beneficial owner" shall have the meanings assigned to
them in Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder), (C) a division or subsidiary of the Company is
acquired by another corporation, person or entity, (D) all or
substantially all the assets of the Company are acquired by another
corporation, or (E) the Company is reorganized, dissolved or
liquidated.
20. Other Provisions.
The following provisions are also in effect under the Plan:
(a) The use of a masculine gender in the Plan shall also
include within its meaning the feminine, and the singular may include
the plural, and the plural may include the singular, unless the context
clearly indicates to the contrary.
(b) Any expenses of administering the Plan shall be borne
by the Company.
(c) This Plan shall be construed to be in addition to any
and all other compensation plans or programs. Neither the adoption of
the Plan by the Board nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such
other additional incentive or other compensation arrangements as the
Board may deem necessary or desirable.
(d) The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations,
and the rights of any and all persons having or claiming to have an
interest therein or thereunder shall be governed by and determined
exclusively and solely in accordance with the laws of the State of
Colorado, except in those instances where the rules of conflicts of
laws would require application of the laws of the State of Nevada.
