U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE CYBER GROUP NETWORK CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 88-0407473
(State of Incorporation) (I.R.S. Employer ID No.)
720 East Carnegie Drive, Suite 200, San Bernardino, California 92408
(Address of Principal Executive Offices) (Zip Code)
Employee Stock Incentive Plan
Non-Employee Directors and Consultants Retainer Stock Plan
(Full title of the Plans)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113, Newport Beach,
California 92660
(Name and address of agent for service)
(949) 975-0544
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities Registered Maximum Aggregate Registration
to be Offering Offering Fee
Registered Price Per Price
Share (1)
Common
Stock 20,000,000 $0.06 (2) $1,200,000 $300.00
Common
Stock 20,000,000 $0.001 (3) $ 20,000 $ 5.00
(1) The Offering Price is used solely for purposes of
estimating the registration fee pursuant to Rule 457(h)
promulgated pursuant to the Securities Act of 1933.
(2) This Offering Price per Share is established pursuant to the
option exercise price set forth in the Employee Stock Incentive
Plan, set forth in Exhibit 4.1 to this Form S-8.
(3) This Offering Price per Share is established pursuant to the
Non-Employee Directors and Consultants Retainer Stock Plan, set
forth in Exhibit 4.2 to this Form S-8.
Part I
Information Required in the Section 10(a) Prospectus
Item 1. Plan Information.
See Item 2 below.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in Part I,
Items 1 and 2, will be delivered to each of the participants in
accordance with Form S-8 and Rule 428 promulgated under the
Securities Act of 1933. The participants shall be provided a
written statement notifying them that upon written or oral
request they will be provided, without charge, (i) the documents
incorporated by reference in Item 3 of Part II of the
registration statement, and (ii) other documents required to be
delivered pursuant to Rule 428(b). The statement will inform the
participants that these documents are incorporated by reference
in the Section 10(a) prospectus, and shall include the address
(giving title or department) and telephone number to which the
request is to be directed.
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference.
The following are hereby incorporated by reference:
(a) The Registrant's latest annual report on Form 10-KSB for the
fiscal year ended December 31, 1999.
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by
the Form 10-KSB referred to in (a) above.
(c) A description of the Registrant's securities contained in
the Registration Statement on Form 10-SB filed by the Registrant
on November 16, 1999 to register the common stock under the
Securities Exchange Act, including all amendments filed for the
purpose of updating such common stock description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Securities Exchange
Act of 1934, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in the registration
statement and to be part thereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
No named expert or counsel was hired on a contingent basis, will
receive a direct or indirect interest in the small business
issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the Registrant.
Item 6. Indemnification of Directors and Officers.
Limitation of Liability.
The articles of incorporation of the Registrant provide the
following with respect to liability:
"A director or officer of the corporation shall not be personally
liable to this corporation or its stockholders for damages for
breach of fiduciary duty as a director or officer, but this
Article shall not eliminate or limit the liability of a director
or officer for (i) acts or omissions which involve intentional
misconduct, mud or a knowing violation of the law or (ii) the
unlawful payment of dividends. Any repeal or modification of this
Article by stockholders of the corporation shall be prospective
only, and shall not adversely affect any limitation on the
personal liability of a director or officer of the corporation
for acts or omissions prior to such repeal or modification."
Indemnification.
(a) Articles of Incorporation.
The articles of incorporation of the Registrant provide the
following with respect to indemnification:
"Every person who was or is a party to, or is threatened to be
made a party to, or is involved in any such action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by the reason of the fact that he or she, or a
person with whom he or she is a legal representative, is or was a
director of the corporation. or who is serving at the request of
the corporation as a director or officer of another corporation,
or is a representative in a partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under the laws of the State of
Nevada from time to time against all expenses, liability and loss
(including attorneys' fees, judgments, fines, and amounts paid or
to be paid in a settlement) reasonably incurred or suffered by
him or her in connection therewith. Such right of
indemnification shall be a contract right which may be enforced
in any manner desired by such person. The expenses of officers
and directors incurred in defending a civil suit or proceeding
must be paid by the corporation as incurred and in advance of the
final disposition of the action, suit, or proceeding, under
receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to
be indemnified by the corporation. Such right of indemnification
shall not be exclusive of any other right of such directors,
officers or representatives may have or hereafter acquire, and,
without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under any
bylaw, agreement, vote of stockholders, provision of law, or
otherwise, as well as their rights under this article.
Without limiting the application of the foregoing, the Board of
Directors may adopt Bylaws from time to time without respect to
indemnification, to provide at all times the fullest
indemnification permitted by the laws of the State of Nevada, and
may cause the corporation to purchase or maintain insurance on
behalf of any person who is or was a director or officer."
(b) Bylaws.
The bylaws of the Registrant provide the following with respect
to indemnification:
"The Corporation shall indemnify its directors, officers and
employees as follows:
Every director, officer, or employee of the Corporation shall be
indemnified by the Corporation against all expenses and
liabilities, including counsel fees, reasonably incurred by or
imposed upon him/her in connection with any proceeding to which
he/she may be made a party, or in which he/she may become
involved, by reason of being or having been a director, officer,
employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or
agent of the Corporation, partnership, joint venture, trust or
enterprise, or any settlement thereof, whether or not he/she is a
director, officer, employee or agent at the time such expenses
are incurred, except in such cases wherein the director, officer,
employee or agent is adjudged guilty of willful misfeasance or
malfeasance in the performance of his/her duties; provided that
in the event of a settlement the indemnification herein shall
apply only when the Board of Directors approves such settlement
and reimbursement as being for the best interests of the Corporation.
The Corporation shall provide to any person who is or was a
director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of the corporation, partnership, joint
venture, trust or enterprise, the indemnity against expenses of a
suit, litigation or other proceedings which is specifically
permissible under applicable law.
The Board of Directors may, in its discretion, direct the
purchase of liability insurance by way of implementing the
provisions of this Article."
(c) Nevada Revised Statutes.
A. NRS 78.7502 Discretionary and mandatory indemnification of
officers, directors, employees and agents: General provisions.
1. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in
good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and that, with respect to any criminal action
or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit
if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that
the court in which the action or suit was brought or other court
of competent jurisdiction determines upon application that in
view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for such expenses as the
court deems proper.
3. To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections 1 and 2, or in defense of any claim, issue or
matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.
B. NRS 78.751 Authorization required for discretionary
indemnification; advancement of expenses; limitation on
indemnification and advancement of expenses.
1. Any discretionary indemnification under NRS 78.7502
unless ordered by a court or advanced pursuant to subsection 2,
may be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit
or proceeding;
(c) If a majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding so orders,
by independent legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties
to the action, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion.
2. The articles of incorporation, the bylaws or an
agreement made by the corporation may provide that the expenses
of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any
rights to advancement of expenses to which corporate personnel
other than directors or officers may be entitled under any
contract or otherwise by law.
3. The indemnification and advancement of expenses authorized
in NRS 78.7502 or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be
entitled under the articles of incorporation or any bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to or for the
advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director or officer if a final
adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law
and was material to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the
heirs, executors and administrators of such a person.
C. NRS 78.752 Insurance and other financial arrangements
against liability of directors, officers, employees and agents.
1. A corporation may purchase and maintain insurance or
make other financial arrangements on behalf of any person who is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not
the corporation has the authority to indemnify him against such
liability and expenses.
2. The other financial arrangements made by the corporation
pursuant to subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or
surety.
No financial arrangement made pursuant to this subsection may
provide protection for a person adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be
liable for intentional misconduct, fraud or a knowing violation
of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
3. Any insurance or other financial arrangement made on
behalf of a person pursuant to this section may be provided by
the corporation or any other person approved by the board of
directors, even if all or part of the other person's stock or
other securities is owned by the corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the
propriety of the terms and conditions of any insurance or other
financial arrangement made pursuant to this section and the
choice of the person to provide the insurance or other financial
arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal liability for
his action,even if a director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other financial arrangement.
5. A corporation or its subsidiary which provides self-
insurance for itself or for another affiliated corporation
pursuant to this section is not subject to the provisions of
Title 57 of NRS.
6. The Registrant, with approval of the Registrant's Board
of Directors, has obtained directors' and officers' liability.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(e) To deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting
the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not
set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information
(h) That insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorize, in the City
of San Bernardino, State of California, on March 12, 2001.
The Cyber Group Network Corporation
By: /s/ Nisha Kapoor
Nisha Kapoor, President
Special Power of Attorney
The undersigned constitute and appoint Nisha Kapoor their true
and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place, and stead, in any
and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form S-8 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the U.S. Securities
and Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Nisha Kapoor President/Director March 12, 2001
Nisha Kapoor
/s/ Leah Cunningham Secretary/Treasurer March 12, 2001
Leah Cunningham (principal financial and
accounting officer)/Director
/s/ Thomas Hobson Director March 12, 2001
Thomas Hobson
EXHIBIT INDEX
Exhibit Description
No.
4.1 Employee Stock Incentive Plan, dated March 8, 2001 (see below).
4.2 Non-Employee Directors and Consultants Retainer Stock
Plan, dated March 8, 2001 (see below).
5 Opinion Re: Legality (see below).
23.1 Consent of Accountants (see below).
23.2 Consent of Counsel (see below).
24 Special Power of Attorney (see signature page).
EX-4.1
EMPLOYEE STOCK INCENTIVE PLAN
THE CYBER GROUP NETWORK CORPORATION
EMPLOYEE STOCK INCENTIVE PLAN
1. GENERAL PROVISIONS
1.1 Purpose.
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, one tenth of one cent ($0.001) par
value ("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.
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 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 restric-
tions 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.
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."
1.4 Shares Subject to the Plan.
The maximum number of shares of Common Stock that may be
issued pursuant to the Plan shall be Twenty Million (20,000,000)
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 a 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
thereunder shall again be available for purposes of the 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 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 one hundred thousand dollars
($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 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.
The purchase price (the "Exercise Price") of shares of Common
Stock subject to each Stock Option ("Option Shares") shall equal
six cents ($0.06) per share.
2.3 Option Period.
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 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.
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 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.
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.
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.
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.
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.
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 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
(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.
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.
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.
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.
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.
4.1.1 The number and class of shares subject to each out-
standing 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.
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.
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.
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.
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.
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.
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.
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.
Notwithstanding any other provision of this Plan, if an
Employee commits fraud or dishonesty toward the Company or wrong-
fully 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.
This Plan was adopted by the Board effective March 9, 2001.
No Stock Options or Awards may be granted under this Plan after
March 9, 2011.
4.10 Governing Law.
This Plan shall be construed in accordance with, and governed
by, the laws of the State of Nevada.
4.11 Approval.
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.
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.
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 8th day of March, 2001.
The Cyber Group Network Corporation
By: /s/ Nisha Kapoor
Nisha Kapoor, President
EX-4.2
RETAINIER STOCK PLAN FOR NON-EMPLOYEE DIRECTORS AND CONSULTANTS
THE CYBER GROUP NETWORK CORPORATION
RETAINER STOCK PLAN FOR
NON-EMPLOYEE DIRECTORS AND CONSULTANTS
1. Introduction.
This plan shall be known as "The Cyber Group Network
Corporation's Retainer Stock Plan For Non-Employee Directors and
Consultants" is hereinafter referred to as the "Plan". The
purposes of the Plan are to enable The Cyber Group Network
Corporation, a Nevada corporation ("Company"), to promote the
interests of the Company and its shareholders by attracting and
retaining non-employee Directors and Consultants capable of
furthering the future success of the Company and by aligning
their economic interests more closely with those of the Company's
shareholders, by paying their retainer or fees in the form of
shares of the Company's common stock, par value one tenth of one
cent ($0.001) per share ("Common Stock").
2. Definitions.
The following terms shall have the meanings set forth below:
"Board" means the Board of Directors of the Company.
"Change of Control" has the meaning set forth in Section 12(d).
"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder. References to any provision
of the Code or rule or regulation thereunder shall be deemed to
include any amended or successor provision, rule or regulation.
"Committee" means the committee that administers the Plan, as
more fully defined in Section 13.
"Common Stock" has the meaning set forth in Section 1.
"Company" has the meaning set forth in Section 1.
"Deferral Election" has the meaning set forth in Section 6.
"Deferred Stock Account" means a bookkeeping account maintained
by the Company for a Participant representing the Participant's
interest in the shares credited to such Deferred Stock
Account pursuant to Section 7.
"Delivery Date" has the meaning set forth in Section 6.
"Director" means an individual who is a member of the Board of
Directors of the Company.
"Dividend Equivalent" for a given dividend or other distribution
means a number of shares of Common Stock having a Fair Market
Value, as of the record date for such dividend or distribution,
equal to the amount of cash, plus the fair market value on the
date of distribution of any property, that is distributed with
respect to one share of Common Stock pursuant to such dividend or
distribution; such fair market value to be determined by the
Committee in good faith.
"Effective Date" has the meaning set forth in Section 3.
"Exchange Act" has the meaning set forth in Section 13(b).
"Fair Market Value" means the mean between the highest and lowest
reported sales prices of the Common Stock on the NYSE Composite
Tape or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on
NASDAQ on the last trading day prior to the date with respect to
which the Fair Market Value is to be determined.
"Participant" has the meaning set forth in Section 4.
"Payment Time" means the time when a Stock Retainer is payable to
a Participant pursuant to Section 5 (without regard to the effect
of any Deferral Election).
"Stock Retainer" has the meaning set forth in Section 5.
"Third Anniversary" has the meaning set forth in Section 6.
3. Effective Date of the Plan.
The Plan was adopted by the Board effective March 8, 2001
("Effective Date").
4. Eligibility.
Each individual who is a Director or Consultant on the Effective
Date and each individual who becomes a Director or Consultant
thereafter during the term of the Plan, shall be a participant
("Participant") in the Plan, in each case during such period as
such individual remains a Director or Consultant and is not an
employee of the Company or any of its subsidiaries. Each credit
of shares of Common Stock pursuant to the Plan shall be evidenced
by a written agreement duly executed and delivered by or on
behalf of the Company and a Participant, if such an agreement is
required by the Company to assure compliance with all applicable
laws and regulations.
5. Grants of Shares.
Commencing on the Effective Date, the amount for service to
directors or consultants shall instead be payable in shares of
Common Stock ("Stock Retainer") pursuant to this Plan at the
deemed issuance price of one tenth of one cent ($0.001) per
Share.
6. Deferral Option.
From and after the Effective Date, a Participant may make an
election (a "Deferral Election") on an annual basis to defer
delivery of the Stock Retainer specifying which one of the
following way the Stock Retainer is to be delivered: (a) on the
date which is three years after the Effective Date for which it
was originally payable ("Third Anniversary"), (b) on the date
upon which the Participant ceases to be a Director or Consultant
for any reason ("Departure Date") or (c) in five equal annual
installments commencing on the Departure Date ("Third
Anniversary" and "Departure Date" each being referred to herein
as a "Delivery Date"). Such Deferral Election shall remain in
effect for each Subsequent Year unless changed, provided that,
any Deferral Election with respect to a particular Year may not
be changed less than six (6) months prior to the beginning of
such Year and provided, further, that no more than one Deferral
Election or change thereof may be made in any Year.
Any Deferral Election and any change or revocation thereof shall
be made by delivering written notice thereof to the Committee no
later than six (6) months prior to the beginning of the Year in
which it is to be effected; provided that, with respect to the
Year beginning on the Effective Date, any Deferral Election or
revocation thereof must be delivered no later than the close of
business on the thirtieth (30th) day after the Effective Date.
7. Deferred Stock Accounts.
The Company shall maintain a Deferred Stock Account for each
Participant who makes a Deferral Election to which shall be
credited, as of the applicable Payment Time, the number of shares
of Common Stock payable pursuant to the Stock Retainer to which
the Deferral Election relates. So long as any amounts in such
Deferred Stock Account have not been delivered to the Participant
under Section 8, each Deferred Stock Account shall be credited as
of the payment date for any dividend paid or other distribution
made with respect to the Common Stock, with a number of shares of
Common Stock equal to (a) the number of shares of Common Stock
shown in such Deferred Stock Account on the record date for such
dividend or distribution multiplied by (b) the Dividend
Equivalent for such dividend or distribution.
8. Delivery of Shares.
(a) The shares of Common Stock in a Participant's Deferred Stock
Account with respect to any Stock Retainer for which a Deferral
Election has been made (together with dividends attributable to
such shares credited to such Deferred Stock Account) shall be
delivered in accordance with this Section 8 as soon as
practicable after the applicable Delivery Date. Except with
respect to a Deferral Election pursuant to Section 6(c), or other
agreement between the parties, such shares shall be delivered at
one time; provided that, if the number of shares so delivered
includes a fractional share, such number shall be rounded to the
nearest whole number of shares. If the Participant has in effect
a Deferral Election pursuant to Section 6(c), then such shares
shall be delivered in five equal annual installments (together
with dividends attributable to such shares credited to such
Deferred Stock Account), with the first such installment being
delivered on the first anniversary of the Delivery Date; provided
that, if in order to equalize such installments, fractional
shares would have to be delivered, such installments shall be
adjusted by rounding to the nearest whole share. If any such
shares are to be delivered after the Participant has died or
become legally incompetent, they shall be delivered to the
Participant's estate or legal guardian, as the case may be, in
accordance with the foregoing; provided that, if the Participant
dies with a Deferral Election pursuant to Section 6(c) in effect,
the Committee shall deliver all remaining undelivered shares to
the Participant's estate immediately. References to a Participant
in this Plan shall be deemed to refer to the Participant's estate
or legal guardian, where appropriate.
(b) The Company may, but shall not be required to, create a
grantor trust or utilize an existing grantor trust (in either
case, "Trust") to assist it in accumulating the shares of Common
Stock needed to fulfill its obligations under this Section 8.
However, Participants shall have no beneficial or other interest
in the Trust and the assets thereof, and their rights under the
Plan shall be as general creditors of the Company, unaffected by
the existence or nonexistence of the Trust, except that
deliveries of Stock Retainers to Participants from the Trust
shall, to the extent thereof, be treated as satisfying the
Company's obligations under this Section 8.
9. Share Certificates; Voting and Other Rights.
The certificates for shares delivered to a Participant pursuant
to Section 8 above shall be issued in the name of the
Participant, and from and after the date of such issuance the
Participant shall be entitled to all rights of a shareholder with
respect to Common Stock for all such shares issued in his or her
name, including the right to vote the shares, and the Participant
shall receive all dividends and other distributions paid or made
with respect thereto.
10. General Restrictions.
(a) Notwithstanding any other provision of the Plan or
agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for
shares of Common Stock under the Plan prior to fulfillment of all
of the following conditions:
(i) Listing or approval for listing upon official notice of
issuance of such shares on the New York Stock Exchange, Inc., or
such other securities exchange as may at the time be a market for
the Common Stock;
(ii) Any registration or other qualification of such shares
under any state or federal law or regulation, or the maintaining
in effect of any such registration or other qualification which
the Committee shall, upon the advice of counsel, deem necessary
or advisable; and
(iii) Obtaining any other consent, approval, or permit from any
state or federal governmental agency which the Committee shall,
after receiving the advice of counsel, determine to be necessary
or advisable.
(b) Nothing contained in the Plan shall prevent the Company from
adopting other or additional compensation arrangements for the
Participants.
11. Shares Available.
Subject to Section 12 below, the maximum number of shares of
Common Stock which may in the aggregate be paid as Stock
Retainers pursuant to the Plan is Twenty Million (20,000,000).
Shares of Common Stock issueable under the Plan may be taken from
treasury shares of the Company or purchased on the open market.
12. Adjustments; Change of Control.
(a) In the event that there is, at any time after the Board
adopts the Plan, any change in corporate capitalization, such as
a stock split, combination of shares, exchange of shares,
warrants or rights offering to purchase Common Stock at a price
below its fair market value, reclassification, or
recapitalization, or a corporate transaction, such as any merger,
consolidation, separation, including a spin-off, or other
extraordinary distribution of stock or property of the Company,
any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or
any partial or complete liquidation of the Company (each of the
foregoing a "Transaction"), in each case other than any such
Transaction which constitutes a Change of Control (as defined
below), (i) the Deferred Stock Accounts shall be credited with
the amount and kind of shares or other property which would have
been received by a holder of the number of shares of Common Stock
held in such Deferred Stock Account had such shares of Common
Stock been outstanding as of the effectiveness of any such
Transaction, (ii) the number and kind of shares or other property
subject to the Plan shall likewise be appropriately adjusted to
reflect the effectiveness of any such Transaction and (iii) the
Committee shall appropriately adjust any other relevant
provisions of the Plan and any such modification by the Committee
shall be binding and conclusive on all persons.
(b) If the shares of Common Stock credited to the Deferred Stock
Accounts are converted pursuant to Section 12(a) into another
form of property, references in the Plan to the Common Stock
shall be deemed, where appropriate, to refer to such other form
of property, with such other modifications as may be required for
the Plan to operate in accordance with its purposes. Without
limiting the generality of the foregoing, references to delivery
of certificates for shares of Common Stock shall be deemed to
refer to delivery of cash and the incidents of ownership of any
other property held in the Deferred Stock Accounts.
(c) In lieu of the adjustment contemplated by Section 12(a), in
the event of a Change of Control, the following shall occur on
the date of the Change of Control: (i) the shares of Common
Stock held in each Participant's Deferred Stock Account shall be
deemed to be issued and outstanding as of the Change of Control;
(ii) the Company shall forthwith deliver to each Participant who
has a Deferred Stock Account all of the shares of Common Stock or
any other property held in such Participant's Deferred Stock
Account; and (iii) the Plan shall be terminated.
(d) For purposes of this Plan, Change of Control shall mean any
of the following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty percent (20%)
or more of either (a) the then outstanding shares of common stock
of the Company ("Outstanding Company Common Stock") or (b) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors ("Outstanding Company Voting Securities"); provided,
however, that the following acquisitions shall not constitute a
Change of Control: (a) any acquisition directly from the Company
(excluding an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was
itself acquired directly from the Company), (b) any acquisition
by the Company, (c) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (d) any acquisition by
any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (a), (b) and
(c) of paragraph (iii) of this Section 12(d) are satisfied; or
(ii) Individuals who, as of the date hereof, constitute the
Board of the Company (as of the date hereof, "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Approval by the shareholders of the Company of a
reorganization, merger, binding share exchange or consolidation,
unless, following such reorganization, merger, binding share
exchange or consolidation (a) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger, binding
share exchange or consolidation and the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger, binding share
exchange or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization,
merger, binding share exchange or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (b) no Person (excluding the
Company, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such reorganization,
merger, binding share exchange or consolidation and any Person
beneficially owning, immediately prior to such reorganization,
merger, binding share exchange or consolidation, directly or
indirectly, twenty percent (20%) or more of the Outstanding
Company Common Stock or Outstanding Company Voting Securities, as
the case may be) beneficially owns, directly or indirectly,
twenty percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting
from such reorganization, merger, binding share exchange or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (c) at least a
majority of the members of the board of directors of the
corporation resulting from such reorganization, merger, binding
share exchange or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement
providing for such reorganization, merger, binding share exchange
or consolidation; or
(iv) Approval by the shareholders of the Company of (a) a
complete liquidation or dissolution of the Company or (b) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect
to which following such sale or other disposition, (x) more than
sixty percent (60%) of, respectively, the then outstanding shares
of common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (y) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company or such
corporation and any Person beneficially owning, immediately prior
to such sale or other disposition, directly or indirectly, twenty
percent (20%) or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%)
or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (z) at least a
majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the
Company.
13. Administration; Amendment and Termination.
(a) The Plan shall be administered by a committee consisting of
three members who shall be the current directors of the Company
or senior executive officers or other directors who are not
Participants as may be designated by the Chief Executive Officer
("Committee"), which shall have full authority to construe and
interpret the Plan, to establish, amend and rescind rules and
regulations relating to the Plan, and to take all such actions
and make all such determinations in connection with the Plan as
it may deem necessary or desirable. (b) The Board may from time
to time make such amendments to the Plan, including to preserve
or come within any exemption from liability under Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as it may deem proper and in the best interest of the
Company without further approval of the Company's stockholders,
provided that, to the extent required under Florida law or to
qualify transactions under the Plan for exemption under Rule 16b-
3 promulgated under the Exchange Act, no amendment to the Plan
shall be adopted without further approval of the Company's
stockholders and, provided, further, that if and to the extent
required for the Plan to comply with Rule 16b-3 promulgated under
the Exchange Act, no amendment to the Plan shall be made more
than once in any six (6) month period that would change the
amount, price or timing of the grants of Common Stock hereunder
other than to comport with changes in the Internal Revenue Code
of 1986, as amended, the Employee Retirement Income Security Act
of 1974, as amended, or the regulations thereunder. (c) The
Board may terminate the Plan at any time by a vote of a majority
of the members thereof.
14. Miscellaneous.
(a) Nothing in the Plan shall be deemed to create any obligation
on the part of the Board to nominate any Director for reelection
by the Company's shareholders or to limit the rights of the
shareholders to remove any Director.
(b) The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock pursuant to
the Plan, that a Participant make arrangements satisfactory to
the Committee for the withholding of any taxes required by law to
be withheld with respect to the issuance or delivery of such
shares, including without limitation by the withholding of shares
that would otherwise be so issued or delivered, by withholding
from any other payment due to the Participant, or by a cash
payment to the Company by the Participant.
15. Governing Law.
The Plan and all actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of Nevada.
The Cyber Group Network Corporation
By: /s/ Nisha Kapoor
Nisha Kapoor, President
EX-5
OPINION RE: LEGALITY
Brian F. Faulkner
A Professional Law Corporation
3900 Birch Street, Suite 113
Newport Beach, California 92660
(949) 975-0544
March 8, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Cyber Group Network Corporation - Form S-8
Dear Sir/Madame:
I have acted as counsel to The Cyber Group Network Corporation, a
Nevada corporation ("Company"), in connection with its
Registration Statement on Form S-8 relating to the registration
of twenty million (20,000,000) shares of its common stock
("Shares"), $0.001 par value per Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan, and the
registration of twenty million (20,000,000) Shares which are
issuable pursuant to the Company's Non-Employee Directors and
Consultants Retainer Stock Plan.
In my representation I have examined such documents, corporate
records, and other instruments as I have deemed necessary or
appropriate for purposes of this opinion, including, but not
limited to, the Articles of Incorporation, and all amendments
thereto, and Bylaws of the Company.
Based upon and in reliance on the foregoing, and subject to the
qualifications and assumptions set forth below, it is my opinion
that the Company is duly organized and validly existing as a
corporation under the laws of the State of Nevada, and that the
Shares, when issued and sold, will be validly issued, fully paid,
and non-assessable.
My opinion is limited by and subject to the following:
(a) In rendering my opinion I have assumed that, at the time of
each issuance and sale of the Shares, the Company will be a
corporation validly existing and in good standing under the laws
of the State of Nevada.
(b) In my examination of all documents, certificates and
records, I have assumed without investigation the authenticity
and completeness of all documents submitted to me as originals,
the conformity to the originals of all documents submitted to me
as copies and the authenticity and completeness of the originals
of all documents submitted to me as copies. I have also assumed
the genuineness of all signatures, the legal capacity of natural
persons, the authority of all persons executing documents on
behalf of the parties thereto other than the Company, and the due
authorization, execution and delivery of all documents by the
parties thereto other than the Company. As to matters of fact
material to this opinion, I have relied upon statements and
representations of representatives of the Company and of public
officials and have assumed the same to have been properly given
and to be accurate.
(c) My opinion is based solely on and limited to the federal
laws of the United States of America and the Nevada Revised
Statutes. I express no opinion as to the laws of any other
jurisdiction.
Sincerely,
/s/ Brian F. Faulkner
Brian F. Faulkner, Esq.
EX-23.1
CONSENT OF ACCOUNTANTS
Michael F. DeLuca
Certified Public Accountant
23001 E. La Palma Avenue, Suite 220A
Yorba Linda, California 92887
March 8, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Cyber Group Network Corporation - Form S-8
Dear Sir/Madame:
As an independent certified public accountant, I hereby consent
to the incorporation by reference in this Registration Statement
on Form S-8 of my report dated March 17, 2000 in The Cyber Group
Network Corporation's Form 10-KSB, and to all references to my
firm included in this Registration Statement.
Sincerely,
/s/ Michael F. DeLuca, CPA
Michael F. DeLuca, CPA
EX-23.2
CONSENT OF COUNSEL
Brian F. Faulkner
A Professional Law Corporation
3900 Birch Street, Suite 113
Newport Beach, California 92660
(949) 975-0544
March 8, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Cyber Group Network Corporation - Form S-8
Dear Sir/Madame:
I have acted as counsel to The Cyber Group Network Corporation, a
Nevada corporation ("Company"), in connection with its
Registration Statement on Form S-8 relating to the registration
of twenty million (20,000,000) shares of its common stock
("Shares"), $0.001 par value per Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan, and the
registration of twenty million (20,000,000) Shares which are
issuable pursuant to the Company's Non-Employee Directors and
Consultants Retainer Stock Plan. I hereby consent to all
references to my firm included in this Registration Statement,
including the opinion of legality.
Sincerely,
/s/ Brian F. Faulkner
Brian F. Faulkner