EXHIBIT 4.1
MED GEN, INC.
NONQUALIFIED STOCK OPTION PLAN
The purpose of the Med Gen, Inc. Non-Qualified Stock Option
Plan
(the "Plan") is to provide (i) designated employees of Med Gen,
Inc. (the "Company") and its subsidiaries (ii) certain Key
Advisors (as defined in Section 4(a)) who perform services for
the Company or its subsidiaries and (iii) non-employee members
of
the Board of Directors of the Company (the "Board") with the
opportunity to receive grants of nonqualified stock options.
The
Company believes that the Plan will encourage the participants
to
contribute materially to the growth of the Company, thereby
benefiting the Company's shareholders, and will align the
economic interests of the participants with those of the
shareholders.
1. Administration
(a) Committee. The Plan shall be administered and interpreted
by
the Board of Directors or a committee appointed by the Board
(the
Board of Directors in such capacity or any committee appointed
by
the Board of Directors is referred to hereafter as the
"Committee"). The Committee as appointed by the Board shall
consist of two or more persons appointed by the Board, all of
whom may or may not be "outside directors" as defined under
section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") and related Treasury regulations and may be "non-
employee directors" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) Committee Authority. The Committee shall have the sole
authority to (i) determine the individuals to whom grants shall
be made under the Plan, (ii) determine the type, size and terms
of the grants to be made to each such individual, (iii)
determine
the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the
criteria
for exercisability and the acceleration of exercisability, (iv)
amend the terms of an Outstanding Grant at any time and (v)
deal
with any other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have full
power
and authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the
Plan
and for the conduct of its business as it deems necessary or
advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall
be
conclusive and binding on all persons having any interest in
the
Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best
interest of the Company, not as a fiduciary, and in keeping
with
the objectives of the Plan and need not be uniform as to
similarly situated individuals.
2. Grants
Awards under the Plan will consist of grants of nonqualified
stock options as described in Section 5 ("Nonqualified Stock
Options," "Options" or "Grants.") All Grants shall be subject
to
the terms and conditions set forth herein and to such other
terms
and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to
the individual in a grant instrument (the "Grant Instrument")
or
an amendment to the Grant Instrument. In the event there is an
inconsistency between the terms of the Grant Instrument and the
terms of the Plan, the terms of the Plan shall govern. The
Committee shall approve the form and provisions of each Grant
Instrument. Grants under a particular Section of the Plan need
not be uniform as among the grantees.
3. Shares Subject to the Plan
(a) Shares Authorized. The aggregate number of shares of common
stock of the Company ("Company Stock") that may be issued or
transferred under the Plan is 750,000,000 shares. The maximum
aggregate number of shares of Company Stock that shall be
subject
to Grants made under the Plan to any individual during any
calendar year shall be as determined by the Committee ("Award
Limit"). The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including
shares purchased by the Company on the open market for purposes
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of the Plan. If and to the extent Options granted under the
Plan
terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised, the shares subject
to
such Grants shall again be available for purposes of the Plan.
However, to the extent Section 162(m) of the Code requires,
such
shares continue to be counted against the Award Limit.
Adjustments. There shall be no adjustment in the number of
shares
issued under the Plan in the event that there is any change in
the number or kind of shares of Company Stock outstanding (i)
by
reason of a stock dividend, spinoff, recapitalization, stock
split or combination or exchange of shares, (ii) by reason of a
merger, reorganization or consolidation in which the Company is
the surviving corporation, (iii) by reason of a
reclassification
or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding
Company
Stock as a class without the Company's receipt of
consideration.
4. Eligibility for Participation
(a)
Eligible Persons.
All employees of the
Company and its
subsidiaries ("Employees"), including Employees who are
officers
or members
of the Board, and
members of the Board who are not
Employees
("Non-Employee
Directors") shall
be eligible to
participate in the Plan. Key advisors and consultants who
perform
services to
the Company or any of its subsidiaries ("Key
Advisors") shall be
eligible to participate in the Plan if the
Key Advisors render
bona fide services and such services are not
in connection with the
offer or sale of securities in a capital-
raising transaction.
(b)
Selection of
Grantees. The
Committee shall select
the
Employees,
Non-Employee Directors and Key Advisors to receive
Grants and shall determine the number of shares of Company
Stock
subject to a
particular Grant in
such manner as the Committee
determines. Employees,
Key Advisors and
Non-Employee
Directors
who receive Grants
under this Plan shall hereinafter be referred to as "Grantees."
5.
Granting of Options
(a) Number of Shares. The Committee shall determine the number
of
shares of Company
Stock that will be subject to each Grant of
Options to Employees, Non-Employee Directors and Key Advisors.
(b) Type of Option. All Options granted under this Plan will be
Non-Qualified Stock Options.
(c) Option Term. The Committee shall determine the term of each
Option. The term of any Option shall not exceed ten years from
the date of grant.
(d) Vesting and Exercisability of Options. Options shall vest
and
become exercisable in accordance with such terms and
conditions,
consistent with the Plan, as may be determined by the Committee
and specified in the Grant Instrument or an amendment to the
Grant Instrument. The Committee may accelerate the vesting
and/or
exercisability of any or all outstanding Options at any time
for
any reason. Options may, at the discretion of the Committee, be
exercised prior to vesting, provided that the optionee grants
the
Company a right to repurchase any unvested shares at the
exercise
price upon termination of the optionee's service to the
Company.
(e) Termination of Employment, Disability or Death.
(i) Except as provided below, an Option may only be exercised
while the Grantee is employed by or otherwise providing service
to the Company as a Key Advisor or member of the Board. In the
event that a Grantee ceases to be employed by the Company for
any
reason other than a "disability", or "termination for cause",
any
Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one hundred eighty days after
the date on which the Grantee ceases to be employed by the
Company (or within such other period of time as may be
specified
in a Grant Instrument), but in any event no later than the date
of expiration of the Option term. Any of the Grantee's Options
that are not otherwise exercisable as of the date on which the
Grantee ceases to be employed by the Company shall terminate as
of such date (unless specified to the contrary in a Grant
Instrument).
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(ii) In the event the Grantee ceases to be employed by the
Company on account of a "termination for cause" by the Company,
the unvested portion of any Option held by the Grantee shall
terminate on the date on which the Grantee ceases to be
employed
by the Company. Any of the Grantee's Options which are not
otherwise exercisable as of the date on which the Grantee
ceases
to be employed by the Company shall terminate as of such date.
(iii) In the event the Grantee ceases to be employed by the
Company because the Grantee is "disabled", any Option which is
otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee
ceases to be employed by the Company (or within such other
period
of time as may be specified in a Grant Instrument), but in any
event no later than the date of expiration of the Option term.
Any of the Grantee's Options which are not otherwise
exercisable
as of the date on which the Grantee ceases to be employed by
the
Company shall terminate as of such date (unless specified to
the
contrary in a Grant Instrument).
(iv) If the Grantee dies while employed by the Company or
within
90 days after the date on which the Grantee ceases to be
employed
on account of a termination of employment specified in Section
5(e)(i) above (or within such other period of time as may be
specified in a Grant Instrument), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to
be
employed by the Company (or within such other period of time as
may be specified in a Grant Inst
