PTS, INC.
2004/B EMPLOYEE BONUS STOCK PLAN
1. GENERAL
PROVISIONS.
1.1 PURPOSE. This 2004/B Employee Bonus Stock
Plan (the "Plan") is intended to
allow designated
employees (all of whom are sometimes collectively referred
to herein as the
"Employees,"
or individually as the "Employee") of
PTS,
Inc., a Nevada
corporation (the "Company") including its Subsidiaries,
if
any,
(as that term is
defined below)
which it may have from
time to time
(the Company
including any such
Subsidiaries is
referred to herein as the
"Company")
to receive
certain options (the "Stock Options") to purchase
common
stock of the
Company, par value $0.001 per share (the "Common
Stock"),
and to receive grants of the Common Stock subject to certain
restrictions
(the "Awards").
As used in this Plan,
the term
"Subsidiary"
shall mean each
corporation
which is a
"subsidiary
corporation"
of the
Company within
the meaning of Section
424(f) of the Internal
Revenue Code
of 1986,
as amended (the
"Code"). The purpose of this Plan is to
provide
the Employees with equity-based compensation incentives who make
significant and
extraordinary
contributions
to the long-term
growth and
performance of
the Company, and to attract and retain the Employees.
1.2 ADMINISTRATION.
1.2.1The Plan shall be administered by the Board of
Directors of the Company or
the Compensation Committee of, or appointed by, the Board (referred to
herein as the
"Committee"). If appointed, the Committee shall select one of
its members as
Chairman and shall act by vote of a majority of a quorum, or
by unanimous
written consent. A
majority of its members shall constitute a
quorum.
The Committee shall be
governed by the provisions of the Company's
bylaws
and of Nevada law as applicable to boards of directors of
corporations,
except as otherwise
provided herein or determined by the
Board.
1.2.2 If appointed, the Committee shall
have full and complete authority, in its
discretion, but
subject to the
express provisions of this Plan (a) to
approve
the Employees
nominated by the
management
of the Company to
be
granted
Awards or Stock Options; (b) to determine the number of
Awards or
Stock
Options to be granted
to an Employee; (c) to
determine the time or
times at
which Awards or Stock Options shall be granted; (d) to establish
the
terms and conditions upon which Awards or Stock Options may be
exercised;
(e) to remove or
adjust any
restrictions and
conditions upon
Awards or
Stock Options; (f) to specify, at the time of grant, provisions
relating
to exercisability of Stock Options and to accelerate or
otherwise
modify
the exercisability of any Stock Options; and (g) to adopt such
rules
and regulations and to make all other determinations deemed
necessary
or desirable for the administration of this Plan. All
interpretations and
constructions of this Plan by the Committee, and all
of its
actions hereunder,
shall be binding and
conclusive on all persons
for all
purposes.
1.2.3 The Company hereby agrees to indemnify
and hold harmless each
Committee
member
and each Employee, and the estate and heirs of such Committee
member or
Employee, against all claims, liabilities, expenses, penalties,
damages
or other pecuniary losses, including legal fees, which such
Committee
member or Employee,
his estate or heirs
may suffer as a result
of his
responsibilities,
obligations
or duties in
connection with
this
Plan, to
the extent that insurance, if any, does not cover the payment
of
such
items. No member of
the Committee
or the Board shall be
liable for
any action
or determination
made in good faith
with respect to this Plan
or any
Award or Stock Option granted pursuant to this Plan.
<PAGE>
1.3 ELIGIBILITY AND PARTICIPATION. The Employees eligible under this Plan
shall be
approved by the Committee from those Employees who, in the
opinion of
the management of the
Company, are in
positions which
enable
them to
make significant
contributions to the
long-term performance
and
growth of
the Company. In
selecting the
Employees to whom Award or Stock
Options
may be granted,
consideration shall be
given to factors such
as
employment
position, duties and responsibilities, ability, productivity,
length of
service, morale,
interest in the Company and recommendations of
supervisors.
1.4 SHARES SUBJECT TO THIS PLAN. The maximum number of shares of the Common
Stock that
may be issued pursuant to this Plan shall be 98,000,000 subject
to
adjustment pursuant to
the provisions of
Paragraph 4.1. If
shares of
the Common
Stock awarded or
issued under this Plan are reacquired by the
Company
due to a forfeiture or for any other reason, such shares shall be
cancelled
and thereafter shall again be available
for purposes of
this
Plan. If a
Stock Option expires, terminates or is cancelled for any reason
without
having been exercised
in full, the shares of the Common Stock not
purchased
thereunder shall again be available for purposes of this Plan.
2. PROVISIONS RELATING TO
STOCK OPTIONS.
2.1 GRANTS OF STOCK OPTIONS. The Committee may grant Stock Options in
such
amounts,
at such times, and to
the Employees
nominated by the management
of the
Company as the Committee, in its discretion, may determine. The
Committee
has the discretion to grant Stock Options which constitute
"incentive
stock options"
within the meaning of
Section 422 of the Code,
if so
designated
by the Committee on the date of grant, or do not
constitute
incentive stock options, and any such Stock Options shall
be
designated
non-statutory
stock options by the Committee on the date of
grant.
The aggregate Fair Market Value (determined as of the time an
incentive
stock option is granted) of the Common
Stock with
respect to
which
incentive stock options are exercisable for the first time by
any
Employee
during any one
calendar year (under all plans of the Company and
any parent
or subsidiary of the Company) may not exceed the maximum amount
permitted
under Section 422 of the Code (currently, $100,000.00).
Non-statutory stock
options shall not be subject to the limitations
relating
to incentive stock options contained in the preceding
sentence.
Each Stock
Option shall be evidenced by a written agreement (the "Option
Agreement") in a form approved by the Committee, which shall be executed
on behalf
of the Company and by the Employee to whom the Stock
Option is
granted,
and which shall be
subject to the terms and conditions of this
Plan.
In the discretion of the Committee, Stock Options may include
provisions
(which need not be uniform), authorized by the Committee in its
discretion, that accelerate an Employee's rights to exercise Stock
Options
following
a "Change in Control," upon termination of the Employee's
employment
by the Company
without "Cause" or by the Employee for "Good
Reason,"
as such terms are defined in Paragraph 3.1 hereof. The holder of
a Stock
Option shall not be entitled to the privileges of stock
ownership
as to any
shares of the Common Stock not actually issued to such holder.
2.2 PURCHASE PRICE. The purchase
price (the "Exercise Price") of shares of the
Common
Stock subject to an
Incentive Stock Option
(the "Option
Shares")
shall not
be less than 85 percent of the Fair Market Value of the Common
Stock on
the date of exercise.
For an Employee
holding greater than 10
percent
of the total
voting power of all stock of the
Company, either
Common or
Preferred, the Exercise Price of an incentive stock option
shall
be at
least 110 percent of
the Fair Market Value
of the Common Stock
on
the date
of the grant of the option. As used herein, "Fair Market Value"
means, if
the Common Stock trades on a national exchange, the average of
the
highest and lowest
reported sales
prices of the Common
Stock on the
date with
respect to which the Fair Market Value is to be determined,
or,
if not
listed on a national exchange, the average of the bid price of
the
Common
Stock during the last five trading days immediately preceding the
last
trading day prior to
the date with respect
to which the Fair Market
Value is
to be determined. If the Common Stock is not then publicly
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<PAGE>
traded,
then the Fair Market
Value of the Common
Stock shall be the book
value of
the Company per share as determined on the last day of the last
fiscal
quarter or year end closest to the date when the determination is
to be
made. For the purpose
of determining
book value
hereunder,
book
value
shall be determined
from the balance
sheet of the Company,
or if
there is
no balance sheet by adding as of the applicable date called for
herein the
capital surplus,
and undivided profits of the Company,
and
after
having deducted any
reserves theretofore
established;
the sum of
these
items shall be divided
by the number of shares of the Common Stock
and the
number of shares of common stock into which any debt or
preferred
shares
outstanding as of said date are convertible, and the quotient thus
obtained
shall represent the
book value of each share of the Common Stock
of the
Company.
2.3 OPTION PERIOD. The Stock Option period (the
"Term") shall commence on the
date of
grant of the Stock
Option and shall the period as determined by
the
Committee not to exceed ten years.
Each Stock Option
shall provide
that it is
exercisable over its term in such periodic installments as the
Committee
in its sole discretion
may determine. Such
provisions need not
be
uniform. Section
16(b) of the
Securities
Exchange Act of 1934, as
amended
(the "Exchange
Act") exempts persons normally subject to the
reporting
requirements of
Section 16(a) of the Exchange Act (the "Section
16
Reporting Persons")
pursuant to a qualified employee stock option plan
from the
normal requirement
of not selling until
at least six months and
one day
from the date the Stock Option is granted.
2.4 EXERCISE OF OPTIONS.
2.4.1 Each Stock Option may be exercised in whole or in part (but not as
to
fractional
shares) by delivering
it for surrender or
endorsement to the
Company,
attention of the
Corporate Secretary, at the principal office of
the
Company, together with
payment of the Exercise Price and an executed
Notice and
Agreement of Exercise in the form prescribed by Paragraph
2.4.2.
Payment may be made
(a) in cash, (b) by
cashier's or certified
check,
(c) by surrender of previously owned shares of the Common
Stock
valued
pursuant to Paragraph 2.2 (if the Committee authorizes payment in
stock in
its discretion), (d)
by withholding from the Option Shares which
would
otherwise be issuable upon the exercise of the Stock Option
that
number of
Option Shares equal to
the exercise price of
the Stock Option,
if such
withholding is
authorized by the Committee in its discretion, or
(e) in the
discretion of the Committee, by the delivery to the Company
of
the
optionee's
promissory
note secured by the Option Shares, bearing
interest
at a rate sufficient
to prevent the imputation of interest under
Sections
483 or 1274
of the Code, and having such other terms and
conditions
as may be satisfactory to the Committee.
2.4.2 Exercise of each Stock Option is conditioned upon the agreement of the
Employee
to the terms and conditions of this Plan and of such Stock
Option
as
evidenced by the Employee's execution and delivery of a Notice and
Agreement
of Exercise in a form to be determined by the Committee in its
discretion. Such
Notice and Agreement
of Exercise shall set forth the
agreement
of the Employee that (a) no Option Shares will be sold or
otherwise
distributed
in violation
of the Securities Act of 1933, as
amended
(the "Securities Act")
or any other
applicable federal or
state
securities
laws, (b) each Option
Share certificate may
be imprinted with
legends
reflecting
any applicable federal and state securities law
restrictions and
conditions,
(c) the Company may comply with said
securities
law restrictions and issue "stop transfer" instructions to its
Transfer
Agent and Registrar without liability, (d) if the Employee is a
Section 16
Reporting Person,
the Employee
will furnish to the
Company a
copy of
each Form 4 or Form 5 filed by said Employee and will timely file
all
reports required under
federal securities
laws, and (e) the Employee
will
report all sales of Option Shares to the Company in writing on a
form
prescribed
by the Company.
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<PAGE>
2.4.3 No Stock Option shall be exercisable unless and until any applicable
registration or qualification requirements of federal and state
securities
laws, and
all other legal requirements, have been fully complied with.
The
Company
will use reasonable
efforts to maintain
the effectiveness
of a
Registration Statement
under the Securities Act for the issuance of Stock
Options
and shares
acquired thereunder, but there may be times when no
such
Registration Statement
will be currently effective. The exercise of
Stock
Options may be temporarily suspended without liability to the
Company
during times when no such Registration Statement is currently
effective,
or during times when, in the reasonable opinion of the
Committee,
such suspension is necessary to preclude violation of any
requirements of
applicable law or regulatory bodies having jurisdiction
over the
Company. If any Stock
Option would expire for any reason except
the end of
its term during
such a suspension, then if exercise of such
Stock
Option is duly
tendered before its
expiration,
such Stock Option
shall be
exercisable
and exercised (unless the attempted exercise is
withdrawn)
as of the first day after the end of such suspension. The
Company
shall have no obligation to file any Registration Statement
covering
resales of Option Shares.
2.5 CONTINUOUS EMPLOYMENT. Except as provided in Paragraph 2.7 below, an
Employee
may not exercise a Stock Option unless from the date of grant
to
the date
of exercise the Employee remains continuously in the employ of
the
Company. For purposes
of this Paragraph 2.5, the period of continuous
employment
of an Employee with the Company shall be deemed to include
(without
extending the term of the Stock Option) any
period during which
the
Employee is on leave of absence
with the consent of the Company,
provided
that such leave of absence shall not exceed three months and
that
the
Employee returns to the employ of the
Company at the
expiration of
such leave
of absence. If the
Employee fails to return to the employ
of
the
Company at the
expiration of such
leave of absence, the
Employee's
employment
with the Company shall be deemed terminated as of the date such
leave of
absence commenced. The
continuous employment of an Employee with
the
Company shall also be
deemed to inclu
