Exhibit 4.1
SEPTEMBER 2004 EMPLOYEE STOCK INCENTIVE PLAN OF AXIA GROUP,
INC.
1. GENERAL
PROVISIONS.
1.1
PURPOSE. This
September 2004
Employee Stock
Incentive Plan of
Axia
Group, Inc. (the "PLAN") is intended to
allow designated
officers and employees
(including so-called "leased employees")
(all of whom are sometimes collectively
referred to herein as the "EMPLOYEES," or individually as the "EMPLOYEE") of
Axia Group, Inc., a Nevada corporation (the
"COMPANY") and its Subsidiaries (as
that term is defined below) which they may have from time to
time (the Company
and such Subsidiaries are referred to herein as the "COMPANY") to receive
certain options (the "STOCK OPTIONS") to purchase common stock
of the Company,
no par value (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.
1.2.1 The Plan shall be administered by the Compensation Committee
(the "COMMITTEE") of, or appointed by, the Board of Directors of the
Company
(the "BOARD"). 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 Colorado law
applicable to the Board, except as otherwise provided herein or determined by
the Board.
1.2.2 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; to
establish the terms and conditions upon which
Awards or Stock Options may be exercised; (d) to remove or adjust any
restrictions and conditions upon Awards or
Stock Options; (e) 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 (f)
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.
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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 THE PLAN. The maximum number of shares of the Common
Stock that may be issued pursuant to this Plan shall be Five
Hundred Million
(500,000,000), subject to adjustment pursuant to
the provisions of Section 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. Stock Options
granted under this Plan may constitute "incentive stock options" within the
meaning of Section 422 of the Code,
if so designated by the Committee on the
date of grant and if the requirements of Section 422 of the
Code have been met.
The Committee may also grant Stock
Options which 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
Section 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
<PAGE>
2.2
PURCHASE PRICE. The purchase price (the "EXERCISE PRICE") of shares
of
the Common Stock subject to each Stock Option (the
"OPTION SHARES") shall be
determined by the Committee at the time of grant but, in the case of an
incentive stock option, shall not be less than 100 percent
of the Fair Market
Value on the date of the grant of the
option, and in the case of any other stock
option, shall not be less than 85 percent
of the Fair Market
Value on the date
of the grant of the option. For an Employee holding or who is deemed to be
holding (by reason of the attribution
rules applicable under Section 424(d)
of
the Code) greater than 10% of the total voting power of all stock of the
Company, the Exercise Price of an incentive
stock option shall be at least 110%
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 the mean
between the highest
and lowest reported sales prices of the Common Stock on the New York Stock
Exchange Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Common Stock is listed or on The
Nasdaq Stock Market, or, if not so listed on any other national securities
exchange or The Nasdaq Stock Market, then the average of the bid price
of the
Common Stock during the last five trading days on the OTC Bulletin Board
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 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 March,
June, September, or December in any year closest to the date when the
determination is to be made. For the purpose of determining book value
hereunder, book value shall be determined 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 outstanding
as of said date, 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 be 10 years or such
shorter
period as is determined by the Committee. 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 Section
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
Section 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, (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., or
(f) if the Employee and the Company so
agree, deliver to the Optionee's NASD
licensed broker-dealer
and to the Company
an irrevocable notice of exercise of the option,
together with irrevocable
instructions from the Optionee to the Company to deliver
the Option Shares
to
the broker-dealer. Upon receipt of such notice,
the Company shall
immediately
deliver to the Employee's broker-dealer the share
certificate(s)
representing
the Option Shares so purchased, and upon receipt of such
certificate(s),
the
broker shall sell the Option Shares and
remit the purchase
price for all Option
Shares then being purchased, and any
withholding taxes to the Corporation.
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<PAGE>
Subject
to the provisions of this Section 2.4 and Section 2.5, the
Employee shall have the right to exercise
the Employee's
Stock Options at
the
rate of at least twenty percent (20%) per
year over five (5) years from the date
the stock option is granted.
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.
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. At no time shall the total number of
securities issuable upon the exercise
of all outstanding options under this Plan, and the
total number of securities
provided for under any bonus or similar
plan or agreement of the Company exceed
a number of securities which is equal to 30 percent (30%) of the then
outstanding securities of the Company, unless a percentage higher than 30
percent (30%) is approved by at least a
two-thirds of the outstanding securities
entitled to vote. The Company will use reasonable efforts to maintain the
effectiveness of a registration statement under the Securities Act (a
"REGISTRATION STATEMENT") 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.
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<PAGE>
2.5
CONTINUOUS
EMPLOYMENT.
Except as provided in
Section 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
(which shall be deemed to included
Employees who are "leased" by the Company
from a third party). For purposes of this Section 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 Employ
