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) certain Key Advisors (as defined in Section
4(a)) who perform services for Med Gen, Inc. (the "Company") or
its
subsidiaries and (ii) 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
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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
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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
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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
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of the Company ("Company Stock") that may be issued or
transferred
under the Plan is 150,000,000 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
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unissued shares of Company Stock or reacquired shares of
Company
Stock, including shares purchased by the Company on the open
market
for purposes 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. Key advisors
and consultants who perform
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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 Non-
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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.
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
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shares of Company Stock that will be subject to each Grant of
Options
to Non-Employee Directors and Key Advisors.
(b) Type of
Option. All Options
granted under this Plan will be
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Non-Qualified Stock Options.
(c) Option Term.
The Committee shall determine the term of each
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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
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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.
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(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 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 t
