EXHIBIT 4.1
NEXT GENERATION MEDIA CORP.
NON-EMPLOYEE DIRECTORS AND CONSULTANTS
RETAINER STOCK OPTION PLAN
1. GENERAL PROVISIONS
1.1 Purpose.
The Non-Employee Directors And Consultants Retainer Stock Option
Plan (the "Plan") is intended to allow designated directors and
consultants (all of whom are sometimes collectively referred to herein
as "Participants") of Next Generation Media Corp., Inc., a Nevada
corporation ("NextGen") and its Subsidiaries (as that term is defined
below) which it may have from time to time (NextGen and such
Subsidiaries are referred to herein as the "Company") to receive certain
options ("Stock Options") to purchase NextGen's common stock, one tenth
of one cent ($0.001) par value ("Common Stock"). As used in this Plan,
the term "Subsidiary" shall mean each corporation which is a "subsidiary
corporation" of NextGen 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 Participants with equity-based compensation
incentives to make significant and extraordinary contributions to the
long-term performance and growth of the Company.
1.2 Administration.
1.2.1 The Plan shall be administered by the Board of Directors of
NextGen or by any committee appointed by the Board or by the President or
Chief Executive Officer, hereinafter collectively referred to as the
"Administrator". The Administrator 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 Administrator shall be governed by the provisions of NextGen's Bylaws
and of Nevada law applicable to the Board, except as otherwise provided
herein or determined by the Board.
1.2.2 The Administrator shall have full and complete authority, in
its discretion, but subject to the express provisions of the Plan: to
approve the Participants nominated by the management of the Company to be
granted Stock Options; to determine the number Stock Options to be
granted to a Participant; to determine the time or times at which Stock
Options shall be granted; to establish the terms and conditions upon
which Stock Options may be exercised; to remove or adjust any restric-
tions and conditions upon 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
Administrator, 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
Administrator and each employee of the Company, and the estate and heirs
of such Administrator or employee, against all claims, liabilities,
expenses, penalties, damages or other pecuniary losses, including legal
fees, which such Admininstrator 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 Administrator
or the Board shall be liable for any action or determination made in good
faith with respect to the Plan or Stock Option granted pursuant to the Plan.
1.3 Eligibility and Participation.
Participants eligible under the Plan shall be approved by the
Administrator from those Participants who, in the opinion of the
management of the Company, are in positions which enable them to make
significant and extraordinary contributions to the performance and growth
of the Company. In selecting Participants to whom Stock Options may be
granted, consideration shall be to a variety of factors.
A Participants eligibility to participate in the Plan shall
terminate (other than by reason of his or her death) on the date that the
Participant a) if an employee, ceases to be employed by the Company, a
parent of the Company or a subsidiary of the Company, b) if a director
and not an employee, ceases to be a member of the Company's Board of
Directors, of c) if a consultant, completes the terms of the consulting
agreement between the consultant and the Company.
The options of a Participant whose eligibility under the Plan has
terminated shall expire a) three (3) years from the date that the
Participant i) "Resigns for Good Reason" if so provided in the
Participant's employment or consulting agreement with the Company, if
any, or ii) is terminated without cause or completes the object of the
consulting agreement, b) four (4) months from the date Participant is
terminated for cause of resigns from the Company or resigns from or is
voted off the Board of Directors, as the case may be, c) twelve (12)
months from the date on which the Participant's eligibility ceases
because of any "Disability" if so provided in the Participant's
employment contract, if any, or d) upon the date the option expires by
its terms.
If the Participant dies while eligible to participate in the Plan or
within four (4) months after the termination of his or her eligibility,
the Participant's executers or administrators or any persons who acquired
the option directly from the Participant by bequest or inheritance shall
have the right to exercise the Participant's option in accordance with
its terms at any time during the twelve (12) months immediately following
Participant's death but only in respect of the number of shares for which
the right to exercise has vested at the time of exercise.
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 Five Million (5,000,000) 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 Administrator may grant Stock Options in such amounts, at such
times, and to such Participants nominated by the management of the
Company as the Administrator, in its discretion, may determine. Stock
Options shall be designated non-statutory stock options by the
Administrator on the date of grant. Each Stock Option shall be evidenced
by a written agreement (the "Option Agreement") in a form approved by the
Administrator, which shall be executed on behalf of the Company and by
the Participant to whom the Stock Option is granted, and which shall be
subject to the terms and conditions of this Plan. 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 be according to the
following: Two Million Option Shares at 40.005; One Million Option Shares
at $0.10; One Million Option Shares at $0.15 and One Million Option
Shares at $0.20. The Administrator shall have the authority to change
the price of the Options at any time.
2.3 Option Period.
The Stock Option period (the "Term") shall commence on the date of
grant of the Stock Option and shall be three (3) years or such shorter
period as is determined by the Administrator. The Term for Stock Options
shall be whatever period, if any, is set by the Board. Each Stock Option
shall provide that it is exercisable over its term in such periodic
installments as the Administrator in its sole discretion may determine.
Such provisions need not be uniform.
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 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, in its discretion, (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, or (vi) through a cashless exercise program as
established by NextGen.
2.4.2 Exercise of each Stock Option is conditioned upon the agreement
of the Participant to the terms and conditions of this Plan and of such
Stock Option as evidenced by the Participant's execution and delivery of
a Notice and Agreement of Exercise in a form to be determined by the
Administrator in its discretion. Such Notice and Agreement of Exercise
shall set forth the agreement of the Participant that: (a) no Option
Shares will be sold or otherwise distributed in violation of the the 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 lia-
bility, (d) if the Participant is a Section 16 Reporting Person, the
Participant will furnish to the Company a copy of each Form 4 or Form 5
filed by said Participant and will timely file all reports required under
federal securities laws, and (e) the Participant 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 Administrator, 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 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
Participant under the Plan shall be subject to attachment, execution,
garnishment, sequestration, the laws of bankruptcy or any other legal or
equitable process.
3. MISCELLANEOUS PROVISIONS
3.1 Adjustments Upon Change in Capitalization.
3.1.1 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, 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 Participant shall receive the
number and class of shares such Participant would have received had such
Participant 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.
3.1.2 Subject to any required shareholder action, if the Company
shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain an apply to the sercurities that a
holder of the number of shares of Stock subject to the Option would have
been entitled. The Company's Board of Directors may grant each
participant the right to exercise his or her option in whole or in part
immediately prior to the Company's dissolution or liquidation, or merger
or consolidation in which the corporation is not the surviving
corporation. If the Company is consolidated with or meged into any other
corporation, or if the Company sells or transfers all or substantially
all of its assets, or if any other similar event affecting shares of
Stock of the Company should occur, and if the exercisability of the
options is not accelaerated by the Board of Directors and the acquiring
Company assumes the Company's obligations under the options granted under
the Plan, then each Participant shall be entitled thereafter to purchase
shares of stock and other secuirites and property in the kind and amount,
and at the price, which the Participant would have been entitled to had
his or her option been exercised prior to such event. The Company shall
make lawful provisions therefore as part of any such tranasction.
3.1.3 To the extent that the foregoing adjustments relate to stock
or securities of the Company, they shall be made by the Administrator,
whose determinations shall be final, binding and conclusive.
3.1.3 The grant of an option pursuant to the Plan shall not affect
in any way the Company's right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
3.2 Withholding Taxes.
The Company shall have the right at the time of exercise of any
Stock Option, 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 Administrator in its sole
and absolute discretion in the particular case: (i) by requiring the
Participant to tender a cash payment to the Company, (ii) by withholding
from the Option Shares which would otherwise be issuable upon exercise of
the Stock Option, that number of Option 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 Participant's Tax Liability or (iii) by any other method
deemed appropriate by the Administrator. Satisfaction of the Tax
Liability of a Section 16 Reporting Person may be made by the method of
payment specified in clause (ii) above only if the following two
conditions are satisfied:
(a) the withholding of Option 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; and
(b) the withholding of Option Shares is made either (i) pursuant to
an irrevocable election ("Withholding Election") made by such Participant
at least six months in advance of the withholding of Options 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 Administrator at any time.
3.3 Amendments and Termination.
The Board of Directors may at any time suspend, amend or terminate
this Plan. No amendment or modification of this Plan may be adopted,
which would: (a) materially increase the benefits accruing to
Participants under this Plan, (b) materially increase the number of
securities which may be issued under this Plan (except for adjustments
pursuant to paragraph 3.1 hereof), or (c) materially modify the
requirements as to eligibility for participation in the Plan. The Board
of Directors or the Administrator may modify, extend, or renew
outstanding options (to the extent not theretofore exercised) and
authorize the granting or new options in substitution therefore (to the
extent theretofore exercised).
3.4 Successors in Interest.
The provisions of this Plan and the actions of the Administrator
shall be binding upon all heirs, successors and assigns of the Company
and of Participants.
3.5 Other Documents.
All documents prepared, executed or delivered in connection with
this Plan (including, without limitation, Option Agreements) shall be, in
substance and form, as established and modified by the Administrator;
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.
3.6 Term of Plan.
This Plan was adopted by the Board effective May 5, 2002. No Stock
Options or Awards may be granted under this Plan after May 5, 2005.
3.7 Governing Law.
This Plan shall be construed in accordance with, and governed by,
the laws of the State of Nevada.
3.8 Director Approval/Use of Proceeds.
No Stock Option shall be exercisable, unless and until the Directors
of the Company have approved this Plan and all other legal requirements
have been fully complied with. The granting of an option shall impose
no obligation upon the Participant to exercise such option. The proceeds
received by the Company from the sale of the Stock pursuant to the
Options under this Plan may be used for general corporate purposes.
3.9 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 this
Stock Option and to preserve the benefits to the Participants thereunder.
Such assumption and agreement shall be set forth in a written agreement
in form and substance satisfactory to the Administrator (an "Assumption
Agreement"), and shall include such adjustments, if any, in the
application of the provisions of the Stock Options and such additional
provisions, if any, as the Administrator shall require and approve, in
order to preserve such benefits to the Participants. Without limiting
the generality of the foregoing, the Administrator may require an
Assumption Agreement to include satisfactory undertakings by a successor:
(a) to provide liquidity to the Participants on the exercise of
Stock Options;
(b) to require any future successor to enter into an Assumption
Agreement; and
(c) to take or refrain from taking such other actions as the
Administrator may require and approve, in its discretion.
The Administrator referred to in this paragraph 3.12 is the Administrator
appointed by a Board of Directors in office prior to the succession then
under consideration.
3.10 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 Administrator fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable
by the Administrator.
By: /s/ Darryl Reed
Darryl Reed, Chief Executive Officer