THE CYBER GROUP NETWORK CORPORATION
EMPLOYEE STOCK INCENTIVE PLAN
1. GENERAL PROVISIONS
1.1 Purpose.
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The Stock Incentive Plan (the "Plan") is intended to allow designated
officers and employees (all of whom are sometimes collectively referred to
herein as "Employees") of The Cyber Group Network Corporation, a Nevada
corporation ("Cyber") and its Subsidiaries (as that term is defined below) which
it may have from time to time (Cyber and such Subsidiaries are referred to
herein as the "Company") to receive certain options ("Stock Options") to
purchase Cyber common stock, Market Price ("Common Stock"), and to receive
grants of Common Stock subject to certain restrictions ("Awards"). As used in
this Plan, the term "Subsidiary" shall mean each corporation which is a
"subsidiary corporation" of Cyber 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 Employees with equity-based compensation incentives to make
significant and extraordinary contributions to the long-term performance and
growth of the Company, and to attract and retain Employees of exceptional
ability.
1.2 Administration.
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1.2.1 The Plan shall be administered by the Compensation Committee (the
"Committee") of, or appointed by, the Board of Directors of Cyber (the "Board").
Each member of the Committee shall be a "non-employee director" as that term is
defined in Rule 16b-3 promulgated by the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934 (the "Exchange
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Act"), but no action of the Committee shall be invalid if this requirement is
not met. 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 Cyber Bylaws and of Nevada 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 the Plan: to approve the
Employees nominated by the management of the Company to be granted Awards or
Stock Options; to determine the number of Awards or Stock Options to be granted
to an Employee; 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; to remove or adjust any restrictions and
conditions upon Awards or Stock Options; 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 to adopt such
rules and regulations and to make all other determinations deemed necessary or
desirable for the administration of the Plan. All interpretations and
constructions of the 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 of the Company, 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 or her estate or heirs may suffer as a result
of his or her responsibilities, obligations or duties in connection with the
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 the Plan or any Award or
Stock Option granted pursuant to the Plan.
1.3 Eligibility and Participation.
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Employees eligible under the 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 and extraordinary contributions
to the long-term performance and growth of the Company. In selecting Employees
to whom Stock Options or Awards 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. No member of the Committee shall be eligible to
participate under the Plan or under any other Company plan if such participation
would contravene the standard of paragraph 1.2.1 above relating to
"disinterested persons."
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1.4 Shares Subject to the Plan.
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The maximum number of shares of Common Stock that may be issued pursuant to
the Plan shall be ten million (10,000,000) subject to adjustment pursuant to the
provisions of paragraph 4.1. If shares of Common Stock awarded or issued under
the Plan are reacquired by the Company due to forfeiture or for any other
reason, such shares shall be cancelled and thereafter shall again be available
for purposes of the Plan. If a Stock Option expires, terminates or is cancelled
for any reason without having been exercised in full, the shares of Common Stock
not purchased there under shall again be available for purposes of the Plan.
2. PROVISIONS RELATING TO STOCK OPTIONS
2.1 Grants of Stock Options.
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The Committee may grant Stock Options in such amounts, at such times, and
to such Employees nominated by the management of the Company as the Committee,
in its discretion, may determine. Stock Options granted under the Plan shall
constitute "incentive stock options" within the meaning of Section 422 of the
Code, if so designated by the Committee on the date of grant. The Committee
shall also have the discretion to 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
seventy-five thousand dollars ($75,000.00)). 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 such Employee 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 Common Stock
not actually issued to such holder.
2.2 Purchase Price.
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The purchase price (the "Exercise Price") of shares of Common Stock subject
to each Stock Option ("Option Shares") shall equal to 25% off market price.
2.3 Option Period.
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The Stock Option period (the "Term") shall commence on the date of grant of
the Stock Option and shall be ten (10) years or such shorter period as is
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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.
Notwithstanding the foregoing, but subject to the provisions of paragraphs 1.2.2
and 2.1, Stock Options granted to Employees who are subject to the reporting
requirements of Section 16(a) of the Exchange Act ("Section 16 Reporting
Persons") shall not be exercisable until at least six (6) months and one day
from the date the Stock Option is granted.
2.4 Exercise of Options.
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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 (i) in cash, (ii) by cashier's or certified check, (iii) by surrender of
previously owned shares of the Company's Common Stock valued pursuant to
paragraph 2.2 (if the Committee authorizes payment in stock in its discretion),
(iv) 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 (v) 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 (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. 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
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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.
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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 such 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 such Employee is on leave of absence with the
consent of the Company, provided that such leave of absence shall not exceed
three (3) months and that such Employee returns to the employ of the Company at
the expiration of such leave of absence. If such Employee fails to return to
the employ of the Company at the expiration of such leave of absence, such
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 include any period during which such
Employee is a member of the Armed Forces of the United States, provided that
such Employee returns to the employ of the Company within ninety (90) days (or
such longer period as may be prescribed by law) from the date such Employee
first becomes entitled to discharge. If an Employee does not return to the
employ of the Company within ninety (90) days (or such longer period as may be
prescribed by law) from the date such Employee first becomes entitled to
discharge, such Employee's employment with the Company shall be deemed to have
terminated as of the date such Employee's military service ended.
2.6 Restrictions on Transfer.
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Each Stock Option granted under this Plan shall be transferable only by
will or the laws of descent and distribution. No interest of any Employee under
the Plan shall be subject to attachment, execution, garnishment, sequestration,
the laws of bankruptcy or any other legal or equitable process. Each Stock
Option granted under this Plan shall be exercisable during an Employee's
lifetime only by such Employee or by such Employee's legal representative.
2.7 Termination of Employment.
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2.7.1 Upon an Employee's Retirement, Disability (both terms being
defined below) or death, (a) all Stock Options to the extent then presently
exercisable shall remain in full force and effect and may be exercised pursuant
to the provisions thereof, including expiration at the end of the fixed term
thereof, and (b) unless otherwise provided by the Committee, all Stock Options
to the extent not then presently exercisable by such Employee shall terminate as
of the date of such termination of employment and shall not be exercisable
thereafter.
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2.7.2 Upon the termination of the employment of an Employee with the
Company for any reason other than the reasons set forth in paragraph 2.7.1
hereof, (a) all Stock Options to the extent then presently exercisable by such
Employee shall remain exercisable only for a period of ninety (90) days after
the date of such termination of employment (except that the ninety (90) day
period shall be extended to twelve (12) months if the Employee shall die during
such ninety (90) day period), and may be exercised pursuant to the provisions
thereof, including expiration at the end of the fixed term thereof, and (b)
unless otherwise provided by the Committee, all Stock Options to the extent not
then presently exercisable by such Employee shall terminate as of the date of
such termination of employment and shall not be exercisable thereafter.
2.7.3 For purposes of this Plan:
(a) "Retirement" shall mean an Employee's retirement from the employ of
the Company on or after the date on which such Employee attains the age of
sixty-five (65) years; and
(b) "Disability" shall mean total and permanent incapacity of an
Employee, due to physical impairment or legally established mental incompetence,
to perform the usual duties of such Employee's employment with the Company,
which disability shall be determined: (i) on medical evidence by a licensed
physician designated by the Committee, or (ii) on evidence that the Employee has
become entitled to receive primary benefits as a disabled employee under the
Social Security Act in effect on the date of such disability.
3. PROVISIONS RELATING TO AWARDS
3.1 Grant of Awards.
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Subject to the provisions of the Plan, the Committee shall have full and
complete authority, in its discretion, but subject to the express provisions of
this Plan, to (i) grant Awards pursuant to the Plan, (ii) determine the number
of shares of Common Stock subject to each Award ("Award Shares"), (iii)
determine the terms and conditions (which need not be identical) of each Award,
including the consideration (if any) to be paid by the Employee for such Common
Stock, which may, in the Committee's discretion, consist of the delivery of the
Employee's promissory note meeting the requirements of paragraph 2.4.1, (iv)
establish and modify performance criteria for Awards, and (v) make all of the
determinations necessary or advisable with respect to Awards under the Plan.
Each award under the Plan shall consist of a grant of shares of Common Stock
subject to a restriction period (after which the restrictions shall lapse),
which shall be a period commencing on the date the award is granted and ending
on such date as the Committee shall determine (the "Restriction Period"). The
Committee may provide for the lapse of restrictions in installments, for
acceleration of the lapse of restrictions upon the satisfaction of such
performance or other criteria or upon the occurrence of such events as the
Committee shall determine, and for the early expiration of the Restriction
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Period upon an Employee's death, Disability or Retirement as defined in
paragraph 2.7.3, or, following a Change of Control, upon termination of an
Employee's employment by the Company without "Cause" or by the Employee for
"Good Reason," as those terms are defined herein. For purposes of this Plan:
"Change of Control" shall be deemed to occur (a) on the date the Company
first has actual knowledge that any person (as such term is used in Sections
13(d) and 14(d) (2) of the Exchange Act) has become the beneficial owner (as
defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing forty percent (40%) or more of the
combined voting power of the Company's then outstanding securities, or (b) on
the date the shareholders of the Company approve (i) a merger of the Company
with or into any other corporation in which the Company is not the surviving
corporation or in which the Company survives as a subsidiary of another
corporation, (ii) a consolidation of the Company with any other corporation, or
(iii) the sale or disposition of all or substantially all of the Company's
assets or a plan of complete liquidation.
"Cause," when used with reference to termination of the employment of an
Employee by the Company for "Cause," shall mean:
(a) the Employee's continuing willful and material breach of his or her
duties to the Company after he or she receives a demand from the Chief Executive
of the Company specifying the manner in which he or she has willfully and
materially breached such duties, other than any such failure resulting from
Disability of the Employee or his or her resignation for "Good Reason," as
defined herein; or
(b) the conviction of the Employee of a felony; or
(c) the Employee's commission of fraud in the course of his or her
employment with the Company, such as embezzlement or other material and
intentional violation of law against the Company; or
(d) the Employee's gross misconduct causing material harm to the
Company.
"Good Reason" shall mean any one or more of the following, occurring
following or in connection with a Change of Control and within ninety (90) days
prior to the Employee's resignation, unless the Employee shall have consented
thereto in writing:
(a) the assignment to the Employee of duties inconsistent with his or
her executive status prior to the Change of Control or a substantive change in
the officer or officers to whom he or she reports from the officer or officers
to whom he or she reported immediately prior to the Change of Control; or
(b) the elimination or reassignment of a majority of the duties and
responsibilities that were assigned to the Employee immediately prior to the
Change of Control; or
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(c) a reduction by the Company in the Employee's annual base salary as
in effect immediately prior to the Change of Control; or
(d) the Company's requiring the Employee to be based anywhere outside a
35-mile radius from his or her place of employment immediately prior to the
Change of Control, except for required travel on the Company's business to an
extent substantially consistent with the Employee's business travel obligations
immediately prior to the Change of Control; or
(e) the failure of the Company to grant the Employee a performance
bonus reasonably equivalent to the same percentage of salary the Employee
normally received prior to the Change of Control, given comparable performance
by the Company and the Employee; or
(f) the failure of the Company to obtain a satisfactory Assumption
Agreement (as defined in paragraph 4.12 of the Plan) from a successor, or the
failure of such successor to perform such Assumption Agreement.
3.2 Incentive Agreements.
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Each Award granted under the Plan shall be evidenced by a written agreement
(an "Incentive Agreement") in a form approved by the Committee and executed by
the Company and the Employee to whom the Award is granted. Each Incentive
Agreement shall be subject to the terms and conditions of the Plan and other
such terms and conditions as the Committee may specify.
3.3 Waiver of Restrictions.
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The Committee may modify or amend any Award under the Plan or waive any
restrictions or conditions applicable to such Awards; provided, however, that
the Committee may not undertake any such modifications, amendments or waivers if
the effect thereof materially increases the benefits to any Employee, or
adversely affects the rights of any Employee without his or her consent.
3.4 Terms and Conditions of Awards.
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3.4.1 Upon receipt of an Award of shares of Common Stock under the
Plan, even during the Restriction Period, an Employee shall be the holder of
record of the shares and shall have all the rights of a shareholder with respect
to such shares, subject to the terms and conditions of the Plan and the Award.
3.4.2 Except as otherwise provided in this paragraph 3.4, no shares of
Common Stock received pursuant to the Plan shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period applicable to such shares. Any purported disposition of such
Common Stock in violation of this paragraph 3.4.2 shall be null and void.
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3.4.3 If an Employee's employment with the Company terminates prior to
the expiration of the Restriction Period for an Award, subject to any provisions
of the Award with respect to the Employee's death, Disability or Retirement, or
Change of Control, all shares of Common Stock subject to the Award shall be
immediately forfeited by the Employee and reacquired by the Company, and the
Employee shall have no further rights with respect to the Award. In the
discretion of the Committee, an Incentive Agreement may provide that, upon the
forfeiture by an Employee of Award Shares, the Company shall repay to the
Employee the consideration (if any) which the Employee paid for the Award Shares
on the grant of the Award. In the discretion of the Committee, an Incentive
Agreement may also provide that such repayment shall include an interest factor
on such consideration from the date of the grant of the Award to the date of
such repayment.
3.4.4 The Committee may require under such terms and conditions as it
deems appropriate or desirable that (i) the certificates for Common Stock
delivered under the Plan are to be held in custody by the Company or a person or
institution designated by the Company until the Restriction Period expires, (ii)
such certificates shall bear a legend referring to the restrictions on the
Common Stock pursuant to the Plan, and (iii) the Employee shall have delivered
to the Company a stock power endorsed in blank relating to the Common Stock.
4. MISCELLANEOUS PROVISIONS
4.1 Adjustments Upon Change in Capitalization.
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4.1.1 The number and class of shares subject to each outstanding Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of Stock Options that may be granted under the Plan, the minimum number of
shares as to which a Stock Option may be exercised at any one time, and the
number and class of shares subject to each outstanding Award, shall be
proportionately adjusted in the event of any increase or decrease in the number
of the issued shares of Common Stock which results from a split-up or
consolidation of shares, payment of a stock dividend or dividends exceeding a
total of five percent (5%) for which the record dates occur in any one fiscal
year, a recapitalization (other than the conversion of convertible securities
according to their terms), a combination of shares or other like capital
adjustment, so that (i) upon exercise of the Stock Option, the Employee shall
receive the number and class of shares such Employee would have received had
such Employee been the holder of the number of shares of Common Stock for which
the Stock Option is being exercised upon the date of such change or increase or
decrease in the number of issued shares of the Company, and (ii) upon the lapse
of restrictions of the Award Shares, the Employee shall receive the number and
class of shares such Employee would have received if the restrictions on the
Award Shares had lapsed on the date of such change or increase or decrease in
the number of issued shares of the Company.
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4.1.2 Upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which Cyber is not the surviving
corporation or in which Cyber survives as a wholly-owned subsidiary of another
corporation, or upon a sale of all or substantially all of the property of the
Company to another corporation, or any dividend or distribution to shareholders
of more than ten percent (10%) of the Company's assets, adequate adjustment or
other provisions shall be made by the Company or other party to such transaction
so that there shall remain and/or be substituted for the Option Shares and Award
Shares provided for herein, the shares, securities or assets which would have
been issuable or payable in respect of or in exchange for such Option Shares and
Award Shares then remaining, as if the Employee had been the owner of such
shares as of the applicable date. Any securities so substituted shall be
subject to similar successive adjustments.
4.2 Withholding Taxes.
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The Company shall have the right at the time of exercise of any Stock
Option, the grant of an Award, or the lapse of restrictions on Award Shares, to
make adequate provision for any federal, state, local or foreign taxes which it
believes are or may be required by law to be withheld with respect to such
exercise ("Tax Liability"), to ensure the payment of any such Tax Liability.
The Company may provide for the payment of any Tax Liability by any of the
following means or a combination of such means, as determined by the Committee
in its sole and absolute discretion in the particular case: (i) by requiring
the Employee to tender a cash payment to the Company, (ii) by withholding from
the Employee's salary, (iii) by withholding from the Option Shares which would
otherwise be issuable upon exercise of the Stock Option, or from the Award
Shares on their grant or date of lapse of restrictions, that number of Option
Shares or Award Shares having an aggregate fair market value (determined in the
manner prescribed by paragraph 2.2) as of the date the withholding tax
obligation arises in an amount which is equal to the Employee's Tax Liability or
(iv) by any other method deemed appropriate by the Committee. Satisfaction of
the Tax Liability of a Section 16 Reporting Person may be made by the method of
payment specified in clause (iii) above only if the following two conditions are
satisfied:
(a) the withholding of Option Shares or Award Shares and the exercise
of the related Stock Option occur at least six months and one day following the
date of grant of such Stock Option or Award; and
(b) the withholding of Option Shares or Award Shares is made either (i)
pursuant to an irrevocable election ("Withholding Election") made by such
Employee at least six months in advance of the withholding of Options Shares or
Award Shares, or (ii) on a day within a ten-day "window period" beginning on the
third business day following the date of release of the Company's quarterly or
annual summary statement of sales and earnings.
Anything herein to the contrary notwithstanding, a Withholding Election may be
disapproved by the Committee at any time.
4.3 Relationship to Other Employee Benefit Plans.
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Stock Options and Awards granted hereunder shall not be deemed to be salary
or other compensation to any Employee for purposes of any pension, thrift,
profit-sharing, stock purchase or any other employee benefit plan now maintained
or hereafter adopted by the Company.
4.4 Amendments and Termination.
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The Board of Directors may at any time suspend, amend or terminate this
Plan. No amendment, except as provided in paragraph 2.8, or modification of
this Plan may be adopted, except subject to stockholder approval, which would:
(a) materially increase the benefits accruing to Employees under this Plan, (b)
materially increase the number of securities which may be issued under this Plan
(except for adjustments pursuant to paragraph 4.1 hereof), or (c) materially
modify the requirements as to eligibility for participation in the Plan.
4.5 Successors in Interest.
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The provisions of this Plan and the actions of the Committee shall be
binding upon all heirs, successors and assigns of the Company and of Employees.
4.6 Other Documents.
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All documents prepared, executed or delivered in connection with this Plan
(including, without limitation, Option Agreements and Incentive Agreements)
shall be, in substance and form, as established and modified by the Committee;
provided, however, that all such documents shall be subject in every respect to
the provisions of this Plan, and in the event of any conflict between the terms
of any such document and this Plan, the provisions of this Plan shall prevail.
4.7 No Obligation to Continue Employment.
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This Plan and grants hereunder shall not impose any obligation on the
Company to continue to employ any Employee. Moreover, no provision of this Plan
or any document executed or delivered pursuant to this Plan shall be deemed
modified in any way by any employment contract between an Employee (or other
employee) and the Company.
4.8 Misconduct of an Employee.
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Notwithstanding any other provision of this Plan, if an Employee commits
fraud or dishonesty toward the Company or wrongfully uses or discloses any trade
secret, confidential data or other information proprietary to the Company, or
intentionally takes any other action materially inimical to the best interests
of the Company, as determined by the Committee, in its sole and absolute
discretion, such Employee shall forfeit all rights and benefits under this Plan.
4.9 Term of Plan.
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This Plan was adopted by the Board effective October 3, 2001. No Stock
Options or Awards may be granted under this Plan after October 3, 2001.
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4.10 Governing Law.
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This Plan shall be construed in accordance with, and governed by, the laws
of the State of Nevada.
4.11 Approval.
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No Stock Option shall be exercisable, or Award granted, unless and until
the Directors of the Company have approved this Plan and all other legal
requirements have been fully complied with.
4.12 Assumption Agreements.
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The Company will require each successor, (direct or indirect, whether by
purchase, merger, consolidation or otherwise), to all or substantially all of
the business or assets of the Company, prior to the consummation of each such
transaction, to assume and agree to perform the terms and provisions remaining
to be performed by the Company under each Incentive Agreement and Stock Option
and to preserve the benefits to the Employees thereunder. Such assumption and
agreement shall be set forth in a written agreement in form and substance
satisfactory to the Committee (an "Assumption Agreement"), and shall include
such adjustments, if any, in the application of the provisions of the Incentive
Agreements and Stock Options and such additional provisions, if any, as the
Committee shall require and approve, in order to preserve such benefits to the
Employees. Without limiting the generality of the foregoing, the Committee may
require an Assumption Agreement to include satisfactory undertakings by a
successor:
(a) to provide liquidity to the Employees at the end of the Restriction
Period applicable to Common Stock awarded to them under the Plan, or on the
exercise of Stock Options;
(b) if the succession occurs before the expiration of any period
specified in the Incentive Agreements for satisfaction of performance criteria
applicable to the Common Stock awarded thereunder, to refrain from interfering
with the Company's ability to satisfy such performance criteria or to agree to
modify such performance criteria and/or waive any criteria that cannot be
satisfied as a result of the succession;
(c) to require any future successor to enter into an Assumption
Agreement; and
(d) to take or refrain from taking such other actions as the Committee
may require and approve, in its discretion.
The Committee referred to in this paragraph 4.12 is the Committee appointed by a
Board of Directors in office prior to the succession then under consideration.
4.13 Compliance With Rule 16b-3.
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Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent that any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.
IN WITNESS WHEREOF, this Plan has been executed effective as of the 3rd day
of October, 2001.
THE CYBER GROUP NETWORK CORPORATION
By: /s/ Gregory D. Evans
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Gregory D. Evans, CEO
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