1998 Non-qualfied Stock Option Plan

ACTION PERFORMANCE COMPANIES, INC.
1998 NON-QUALIFIED STOCK OPTION PLAN


Adopted by the Board of Directors as of March 2, 1998


1. Purpose. The purpose of this 1998 Non-Qualified Stock Option Plan (the "Plan") is to attract, retain, and motivate employees and independent contractors by providing them with the opportunity to acquire a proprietary interest in ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation (the "Company") and to link their interests and efforts to the long-term interests of the Company's shareholders.


2. Plan Administration


2.1 In General. The Plan shall be administered by the Company's Board of Directors (the "Board"). Except for the power to amend the Plan as provided in Section 11, the Board, in its sole discretion, may delegate its authority and duties under the Plan to a committee appointed by the Board, under such conditions and limitations as the Board may from time to time establish. The Board and/or any committee that has been delegated the authority to administer the Plan shall be referred to as the "Plan Administrator." Except as otherwise explicitly set forth in the Plan, the Plan Administrator shall have the authority, in its discretion, to determine all matters relating to options granted under the Plan, including selection of the individuals to be granted options, the type of options, the number of shares of the Company's common stock, par value $.01 per share (the "Common Stock") subject to an option, vesting conditions, and any and all other terms, conditions, restrictions, and limitations, if any, of an option. All decisions made by the Plan Administrator pursuant to the Plan and related orders and resolutions shall be final and conclusive.


2.2 Other Plans. The Plan Administrator shall also have authority to grant options as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company, including the plan of any entity acquired by the Company.


3. Eligibility. Employees of the Company and independent contractors and consultants shall be eligible to receive options under the Plan, provided that no person who is a director or executive officer of the Company shall be eligible to receive options under the Plan. For purposes of this Section 3, the "Company" includes any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Plan Administrator.


4. Shares Subject to the Plan


4.1 Number and Source. The shares offered under the Plan shall be shares of the Company's Common Stock and may be unissued shares or shares now held or subsequently acquired by the Company as treasury shares, as the Plan Administrator may from time to time determine. Any shares subject to an option granted under the Plan that is forfeited, terminated or canceled, or any shares that do not vest, shall again be available for the granting of options under the Plan. Subject to adjustment as provided in Section 4.2, the aggregate number of shares that may be issued under the Plan shall not exceed 500,000 shares.


4.2 Adjustment of Shares Available. The aggregate number and type of shares available for issuance under the Plan, the maximum number and type of shares that may be subject to an option granted to any individual under the Plan, the number and type of shares covered by each outstanding option, and the exercise price per share (but not the total price) for an option outstanding under the Plan shall all be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from any split-up, combination or exchange of shares, consolidation, spin-off or recapitalization of shares or any like capital adjustment or the payment of any stock dividend.


4.3 Transfer of Control. In the event of a Transfer of Control, as ...