Document:

exv10w1

 

Exhibit 10.1

STOCK
OPTION PLAN (2000) OF

LAS VEGAS GAMING, INC.

A Nevada Corporation

1. Purpose of the Plan

The purpose of this Plan is to strengthen Las Vegas Gaming, Inc. (hereinafter the “Company”) by
providing incentive stock options as a means to attract, retain and motivate key corporate
personnel, through ownership of stock of the Company, and to attract individuals of outstanding
ability to render services to and enter the employment of the Company or its subsidiaries.

2. Types of Stock Options

There shall be two types of Stock Options (referred to herein as “Options” without distinction
between such different types) that may be granted under this Plan: (1) Options intended to qualify
as Incentive Stock Options under Section 422 of the Internal Revenue Code (“Qualified Stock
Options”), and (2) Options not specifically authorized or qualified for favorable income tax
treatment under the Internal Revenue Code (“Non-Qualified Stock Options”).

3. Definitions

The following definitions are applicable to the Plan:

	(a)	 	Board. The Board of Directors of the Company.
	 
	(b)	 	Code. The Internal Revenue Code of 1986, as amended from time to time.
	 
	(c)	 	Common Stock. The shares of Common Stock of the Company.
	 
	(d)	 	Company. Las Vegas Gaming, Inc., a Nevada corporation.
	 
	(e)	 	Consultant. An individual or entity that renders professional services to the Company as an
independent contractor and is not an employee or under the direct supervision and control of
the Company.
	 
	(f)	 	Disabled or Disability. For the purposes of Section 7, a disability of the type defined in
Section 22(e)(3) of the Code. The determination of whether an individual is Disabled or has a
Disability is determined under procedures established by the Plan Administrator for purposes
of the Plan.
	 
	(g)	 	Fair Market Value. For purposes of the Plan, the “fair market value” per share of Common
Stock of the Company at any date shall be: (a) if the Common Stock is listed on an established
stock exchange or exchanges or the NASDAQ National Market, the closing price per share on the
last trading day immediately preceding such date on the principal exchange on which it is
traded or as reported by NASDAQ; or (b) if the Common Stock is not then listed on an exchange
or the NASDAQ National Market, but is quoted on the NASDAQ Small Cap Market, the NASDAQ
electronic bulletin board or the National Quotation Bureau pink sheets, the average of the
closing bid and asked prices per share for the Common Stock as quoted by NASDAQ or the National

 

 

	 	 	Quotation Bureau, as the case may be, on the last trading day immediately preceding such date;
or (c) if the Common Stock is not then listed on an exchange or the NASDAQ National Market, or
quoted by NASDAQ or the National Quotation Bureau, an amount determined in good faith by the
Plan Administrator.
	 
	(h)	 	Incentive Stock Option. Any Stock Option intended to be and designated as an “incentive stock
option” within the meaning of Section 422 of the Code.
	 
	(i)	 	Non-Qualified Stock Option. Any Stock Option that is not an Incentive Stock Option.
	 
	(j)	 	Optionee. The recipient of a Stock Option.
	 
	(k)	 	Plan Administrator. The board or the Committee designated by the Board pursuant to Section 4
to administer and interpret the terms of the Plan.
	 
	(l)	 	Stock Option. Any option to purchase shares of Common Stock granted pursuant to Section 7.

4. Administration of the Plan

This Plan shall be administered by a “Compensation Committee” or “Plan Administrator” composed of
members selected by, and serving at the pleasure of, the Board of Directors. Subject to the
provisions of the Plan, the Plan Administrator shall have authority to construe and interpret the
Plan, to promulgate, amend, and rescind rules and regulations relating to its administration, to
select, from time to time, among the eligible employees and non-employee consultants (as determined
pursuant to Section 5) of the Company and its subsidiaries those employees and consultants to whom
Stock Options will be granted, to determine the duration and manner of the grant of the Options, to
determine the exercise price, the number of shares and other terms covered by the Stock Options, to
determine the duration and purpose of leaves of absence which may be granted to Stock Option
holders without constituting termination of their employment for purposes of the Plan, and to make
all of the determinations necessary or advisable for administration of the Plan. The interpretation
and construction by the Plan Administrator of any provision of the Plan, or of any agreement issued
and executed under the Plan, shall be final and binding upon all parties. No member of the
Committee or Board shall be liable for any action or determination undertaken or made in good faith
with respect to the Plan or any agreement executed pursuant to the Plan.

All of the members of the Committee shall be persons who, in the opinion of counsel to the Company,
are outside directors and “non-employee directors” within the meaning of Rule l6b-3(b)(3)(i)
promulgated by the Securities and Exchange Commission. From time to time, the Board may increase
or decrease the size of the Committee, and add additional members to, or remove members from, the
Committee. The Committee shall act pursuant to a majority vote, or the written consent of a
majority of its members, and minutes shall be kept of all of its meetings and copies thereof shall
be provided to the Board. Subject to the provisions of the Plan and the directions of the Board,
the Committee may establish and follow such rules and regulations for the conduct of its business
as it may deem advisable.

At the option of the Board, the entire Board of Directors of the Company may act as the Plan
Administrator during such periods of time as all members of the Board are “outside directors” as

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defined in Prop. Treas. Regs. §1.162-27(e)(3), except that this requirement shall not apply during
any period of time prior to the date the Company’s Common Stock becomes registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.

5. Grant of Options

The Company is hereby authorized to grant Incentive Stock Options as defined in section 422 of the
Code to any employee or director (including any officer or director who is an employee) of the
Company, or of any of its subsidiaries; provided, however, that no person who owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the Company, or any of
its parent or subsidiary corporations, shall be eligible to receive an Incentive Stock Option under
the Plan unless at the time such Incentive Stock Option is granted the Option price is at least
110% of the fair market value of the shares subject to the Option, and such Option by its terms is
not exercisable after the expiration of five years frorn the date such Option is granted.

An employee may receive more than one Option under the Plan. Non-Employee Directors shall be
eligible to receive Non-Qualified Stock Options in the discretion of the Plan Administrator. In
addition, Non-Qualified Stock Options may be granted to Consultants who are selected by the Plan
Administrator.

6. Stock Subject to Plan

The stock available for grant of Options under this Plan shall be shares of the Company’s
authorized but unissued, or reacquired, Common Stock. The aggregate sales price, or amount of
securities sold, during any 12 month period may not exceed the greater of: (1) $1 million, (2) 15%
of the total assets of the Company, or (3) 15% of the issued and outstanding common stock of the
company, including shares previously issued under this Plan or other stock option plans created by
the Company. The maximum number of shares for which an Option may be granted to any Optionee during
any calendar year shall not exceed 200,000 shares. In the event that any outstanding Option under
the Plan for any reason expires or is terminated, the shares of Common Stock allocable to the
unexercised portion of the Option shall again be available for Options under the Plan as if no
Option had been granted with regard to such shares.

7. Terms and Conditions of Options

Options granted under the Plan shall be evidenced by agreements (which need not be identical) in
such form and containing such provisions that are consistent with the Plan as the Plan
Administrator shall from time to time approve. Such agreements may incorporate all or any of the
terms hereof by reference and shall comply with and be subject to the following terms and
conditions:

	(a)	 	Number of Shares. Each Option agreement shall specify the number of shares subject to the
Option.
	 
	(b)	 	Option Price. The purchase price for the shares subject to any Option shall be determined by
the Plan Administrator at the time of the grant, but shall not be less than 85% of Fair Market
Value per share. Anything to the contrary notwithstanding, the purchase price for the shares subject
to any Incentive Stock Option shall not be less than 100% of the Fair Market Value of the shares of

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	 	 	Common Stock of the Company on the date the Stock Option is granted. In the case of any
Option granted to an employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or any of its parent or subsidiary
corporations, the Option price shall not be less than 110% of the Fair Market Value per share of
the Common Stock of the Company on the date the Option is granted. For purposes of determining
the stock ownership of an employee, the attribution rules of Section 424(d) of the Code shall
apply.
	 
	(c)	 	Notice and Payment. Any exercisable portion of a Stock Option may be exercised only by: (a)
delivery of a written notice to the Company prior to the time when such Stock Option becomes
unexercisable herein, stating the number of shares bring purchased and complying with all
applicable rules established by the Plan Administrator; (b) payment in full of the exercise
price of such Option by, as applicable, delivery of: (i) cash or check for an amount equal to
the aggregate Stock Option exercise price for the number of shares being purchased, (ii) in
the discretion of the Plan Administrator, upon such terms as the Plan Administrator shall
approve, a copy of instructions to a broker directing such broker to sell the Common Stock for
which such Option is exercised, and to remit to the Company the aggregate exercise price of
such Stock Option (a “cash1ess exercise”), or (iii) in the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, shares of the
Company’s Common Stock owned by the Optionee, duly endorsed for transfer to the Company, with
a Fair Market Value on the date of delivery equal to the aggregate purchase price of the
shares with respect to which such Stock Option or portion is thereby exercised (a
“stock-for-stock exercise”); (c) payment of the amount of tax required to be withheld (if any)
by the Company, or any parent or subsidiary corporation as a result of the exercise of a Stock
Option. At the discretion of the Plan Administrator, upon such terms as the Plan
Administrator shall approve, the Optionee my pay all or a portion of the tax withholding by:
(i) cash or check payable to the Company, (ii) a cashless exercise, (iii) a stock-for-stock
exercise, or (iv) a combination of one or more of the foregoing payment rnethods; and (d)
delivery of a written notice to the Company requesting that the Company direct the transfer
agent to issue to the Optionee (or his designee) a certificate for the number of shares of
Common Stock for which the Option was exercised or, in the case of a cashless exercise, for
any shares that were not sold in the cashless exercise. Notwithstanding the foregoing, the
Company, in its sole discretion, may extend and maintain, or mange for the extension and
maintenance of credit to any Optionee to finance the Optionee’s purchase of shares pursuant to
the exercise of any Stock Option, on such terms as may be approved by the Plan Administrator,
subject to applicable regulations of the Federal Reserve Board and any other laws or
regulations in effect at the time such credit is extended.
	 
	(d)	 	Terms of Option. No Option shall be exercisable after the expiration of the earliest of: (a)
ten years after the date the Option is granted, (b) three months after the date the Optionee’s
employment with the Company and its subsidiaries terminates, or a Non-Employee Director or
Consultant ceases to provide services to the Company, if such termination or cessation is for
any reason other than Disability or death, (c) one year after the date the Optionee’s
employment with the Company, and its subsidiaries, terminates, or a Non-Employee Director or
Consultant ceases to provide services to the Company, if such termination or cessation is a
result of death or Disability; provided, however, that the Option agreement for any Option may
provide for shorter periods in each of the foregoing instances. In the case of an Incentive
Stock Option granted to an employee who owns stock possessing more than 10% of the total combined voting power of all

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	 	 	classes of stock of the Company, or any of its parent or subsidiary corporations, the term set
forth in (a) above shall not be more than five years after the date the Option is granted.
	 
	(e)	 	Exercise of an Option. No Option shall be exercisable during the lifetime of the Optionee by
any person other than the Optionee. Subject to the foregoing, the Plan Administrator shall
have the power to set the time or times within which each Option shall be exercisable and to
accelerate the time or times of exercise; provided. However the Option shall provide the right
to exercise at the rate of at least 20% per year over five years from the date the Option is
granted. Unless otherwise provided by the Plan Administrator, each Option granted under the
Plan shall become exercisable on a cumulative basis as to one-third (1/3) of the total number
of shares covered thereby at any time after one year from the date the Option is granted and
an additional one-third (1/3) of such total number of shares at any time after the end of each
consecutive one-year period thereafter until the Option has become exercisable as to all of
such total number of shares. To the extent that an Optionee has the right to exercise an
Option and purchase shares pursuant hereto, the Option may be exercised from time to time by
written notice to the Company, stating the number of shares being purchased and accompanied by
payment in full of the exercise price for such shares.
	 
	(f)	 	No Transfer of Option. No Option shall be transferable by an Optionee otherwise than by will
or the laws of descent and distribution.
	 
	(g)	 	Limit on Incentive Stock Option. The aggregate Fair Market Value (determined at the time the
Option is granted) of the stock with respect to which an Incentive Stock Option is granted and
exercisable for the first time by an Optionee during any calendar year (under all Incentive
Stock Option plans of the Company and its subsidiaries) shall not exceed $100,000. To the
extent the aggregate Fair Market Value (determined at the time the Stock Option is granted) of
the Common Stock with respect to which Incentive Stock Options are exercisable for the first
time by an Optionee during any calendar year (under all Incentive Stock Option plans of the
Company and any parent or subsidiary corporations) exceeds $100,000, such Stock Options shall
be treated as Non-Qualified Stock Options. The determination of which Stock Options shall be
treated as Non-Qualified Stock Options shall be made by taking Stock Options into account in
the Order in which they were granted.
	 
	(h)	 	Restriction on Issuance of Shares. The issuance of Options and shares shall be subject to
compliance with all of the applicable requirements of law with respect to the issuance and
sale of securities, including, without limitation, any required qualification under state
securities laws. If an Optionee acquires shares of Common Stock pursuant to the exercise of
an Option, the Plan Administrator, in its sole discretion, may require as a condition of
issuance of shares covered by the Option that the shares of Common Stock be subject to
restrictions on transfer. The Company may place a legend on the share certificates reflecting
the fact that they are subject to restrictions on transfer pursuant to the terms of this
Section. In addition, the Optionee may be required to execute a buy-sell agreement in favor
of the Company or its designee with respect to all or any of the shares so acquired. In such
event, the terms of any such agreement shall apply to the optioned shares.
	 
	(i)	 	Investment Representation. Any Optionee may be required, as a condition of issuance of shares
covered by his or her Option, to represent that the shares to be acquired pursuant to exercise
will be acquired for investment and without a view toward distribution thereof, and in such case, the

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	 	 	Company may place a legend on the share certificate(s) evidencing the fact that they were
acquired for investment and cannot be sold or transferred unless registered under the Securities
Act of 1933, as amended, or unless counsel for the Company is satisfied that the circumstances
of the proposed transfer do not require such registration.
	 
	(j)	 	Rights as a Shareholder or Employee. An Optionee or transferee of an Option shall have no
right as a stockholder of the Company with respect to any shares covered by any Option until
the date of the issuance of a share certificate for such shares. No adjustment shall be made
for dividends (Ordinary or extraordinary, whether cash, securities, or other property), or
distributions or other rights for which the record date is prior to the date such share
certificate is issued, except as provided in paragraph (m) below. Nothing in the Plan or in
any Option agreement shall confer upon any employee any right to continue in the employ of the
Company or any of its subsidiaries or interfere in any way with any right of the Company or
any subsidiary to terminate the Optionee’s employment at any time.
	 
	(k)	 	No Fractional Shares. In no event shall the Company be required to issue fractional shares
upon the exercise of an Option.
	 
	(l)	 	Exercise in the Event of Death. In the event of the death of the Optionee, any Option or
unexercised portion thereof granted to the Optionee, to the extent exercisable by him or her
on the date of death, may be exercised by the Optionee’s personal representatives, heirs, or
legatees subject to the provisions of paragraph (d) above.
	 
	(m)	 	Recapitalization or Reorganization of the Company. Except as otherwise provided herein,
appropriate and proportionate adjustments shall be made (1) in the number and class of shares
subject to the Plan, (2) to the Option rights granted under the Plan, and (3) in the exercise
price of such Option rights, in the event that the number of shares of Common Stock of the
Company are increased or decreased as a result of a stock dividend (but only on Common Stock),
stock split, reverse stock split, recapitalization, reorganization, merger, consolidation,
separation, or like change in the corporate or capital structure of the Company. In the event
there shall be any other change in the number or kind of the outstanding shares of Common
Stock of the Company, or any stock or other securities into which such common stock shall have
been changed, or for which it shall have been exchanged, whether by reason of a complete
liquidation of the Company or a merger, reorganization, or consolidation with any other
corporation in which the Company is not the surviving corporation, or the Company becomes a
wholly-owned subsidiary of another corporation, then if the Plan Administrator shall, in its
sole discretion, determine that such change equitably requires an adjustment to shares of
Common Stock currently subject to Options under the Plan, or to prices or terms of outstanding
Options, such adjustment shall be made in accordance with such determination.
	 
	 	 	To the extent that the foregoing adjustments relate to stock or securities of the Company, such
adjustment shall be made by the Plan Administrator, the determination of which in that respect
shall be final, binding, and conclusive. No right to purchase fractional shares shall result
from any adjustment of Options pursuant to this Section. In case of any such adjustment, the
shares subject to the Option shall he rounded down to the nearest whole share. Notice of any
adjustment shall be given by the Company to each Optionee whose Options shall have been so adjusted and such

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	 	 	adjustment (whether or not notice is given) shall be effective and binding for all purposes of the Plan.
	 
	 	 	In the event of a complete liquidation of the Company or a merger, reorganization, or
consolidation of the Company with any other corporation in which the Company is not the
surviving corporation, or the Company becomes a wholly-owned subsidiary of another corporation,
any unexercised Options granted under the Plan shall be deemed cancelled unless the surviving
corporation in any such merger, reorganization, or consolidation elects to assume the Options
under the Plan or to issue substitute Options in place thereof; provided, however, that
notwithstanding the foregoing, if such Options would be cancelled in accordance with the
foregoing, the Optionee shall have the right exercisable during a ten-day period ending on the
fifth day prior to such liquidation, merger, or consolidation to exercise such Option in whole
or in part without regard to any installment exercise provisions in the Option agreement.
	 
	(n)	 	Modification, Extension and Renewal of Options. Subject to the terms and conditions and
within the limitations of the Plan, the Plan Administrator may modify, extend or renew
outstanding options granted under the Plan and accept the surrender of outstanding Options (to
the extent not theretofore exercised). The Plan Administrator shall not, however, without the
approval of the Board, modify any outstanding Incentive Stock Option in any manner that would
cause the Option not to qualify as an Incentive Stock Option within the meaning of Section 422
of the Code. Notwithstanding the foregoing. no modification of an Option shall, without the
consent of the Optionee, alter or impair any rights of the Optionee under the Option.
	 
	(o)	 	Other Provisions. Each Option may contain such other terms, provisions, and conditions not
inconsistent with the Plan as may be determined by the Plan Administrator.

8. Termination or Amendment of the Plan

The Board may at any time terminate or amend the Plan; provided that, without approval of the
holders of a majority of the shares of Common Stock of the Company represented and voting at a duly
held meeting at which a quorum is present or the written consent of a majority of the outstanding
shares of Common Stock, there shall be (except by operation of the provisions of paragraph (m)
above) no increase in the total number of shares covered by the Plan, no change in the class of
persons eligible to receive options granted under the Plan, no reduction in the exercise price of
Options granted under the Plan, and no extension of the latest date upon which Options may be
exercised; and provided further that, without the consent of the Optionee, no amendment may
adversely affect any then outstanding Option or any unexercised portion thereof.

9. Indemnification

In addition to such other rights of indemnification as they may have as members of the Board
Committee that administers the Plan, the members of the Plan Administrator shall be indemnified by
the Company against reasonable expense, including attorney’s fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with
any appeal therein to which they, or any of them, may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted thereunder, and against
any and all amounts paid by them in settlement thereof (provided such settlement is approved by
independent

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legal counsel selected by the Company). In addition, such members shall be indemnified by the
Company for any amount paid by them in satisfaction of a judgment in any action, suit, or
proceeding, except in relation to matters as to which it shall have been adjudged that such member
is liable for negligence or misconduct in the performance of his or her duties, provided however
that within 60 days after institution of any such action, suit, or proceeding, the member shall in
writing offer the Company the opportunity, at its own expense, to handle and defend the same.

10. Effective Date and Term of the Plan

This Plan shall become effective (the “Effective Date”) on the date of adoption by the board of
directors as evidenced by the date and signature below. Options granted under the Plan prior to
shareholder approval are subject to cancellation by the Plan Administrator if shareholder approval
is not obtained within 12 months of the date of adoption. Unless sooner terminated by the Board in
its sole discretion, this Plan will expire on December 31, 2009.

IN WITNESS WHEREOF, the Company by its duly authorized officer, has caused this Plan to be executed
this 1st day of January, 2000.

	 	 	 	 	 
	LAS VEGAS GAMING, INC.

	 	 
	/s/
Russel R. Roth	 	 
	By:  	Russel R. Roth	 	 
	Its:	President 	 	 
	 

8exv10w2

 

Exhibit 10.2

FIRST AMENDMENT

TO THE

STOCK OPTION PLAN (2000)

OF

LAS VEGAS GAMING, INC.

     This First Amendment (this “First Amendment”) to the Stock Option Plan (2000) of Las
Vegas Gaming, Inc. (the “Plan”) is adopted the 27th day of July 2006 by the board of directors of
Las Vegas Gaming, Inc., a Nevada corporation (the “Company”).

     Whereas, the effectiveness of this First Amendment is subject to the approval of the
Company’s stockholders, where the stockholders will be able to vote on this First Amendment at the
Company’s 2007 Annual Meeting of Stockholders;

     Whereas, the reference to “Common Stock” in the Plan is a reference to the Company’s
Common Stock Series A, $.001 par value;

1. AMENDMENT

     The total number of shares of the Company’s common stock that may be granted as stock options
pursuant to the Plan shall be amended through the amendment and restatement of Section 6 of the
Plan as follows:

The stock available for grant of Options under this Plan shall be 1,250,000 shares of Common
Stock. The maximum number of shares for which an Option may be granted to any Optionee
during any calendar year shall not exceed 200,000 shares. In the event that any outstanding
Option under the Plan for any reason expires or is terminated, the shares of Common Stock
allocable to the unexercised portion of the Option shall again be available for Options
under the Plan as if no Option had been granted with regard to such shares.

2. CONFLICT BETWEEN THE FIRST AMENDMENT AND THE PLAN

     If there is a conflict between any of the provisions of this First Amendment and any of the
provisions of the Plan, the provisions of this First Amendment shall control.

3. NO OTHER AMENDMENTS OR CHANGES

     Except as expressly amended or modified by this First Amendment, all of the terms and
conditions of the Plan shall remain unchanged and in full force and effect.

4. GOVERNING LAW

     This First Amendment shall be governed by and construed in accordance with Nevada law.

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