EXHIBIT 4.1
EXHIBIT 4.1
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SHARED TECHNOLOGIES FAIRCHILD, INC.
1994 DIRECTOR OPTION PLAN
1. PURPOSE
The purpose of this 1994 Director Option Plan (The "Plan") of Shared
Technologies Fairchild, Inc., a Delaware corporation (the "Company"), is to
encourage ownership in the Company by outside directors of the Company whose
continued services are considered essential to the Company's future progress and
to provide them with a further incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors shall supervise and administer the Plan. Grants
of stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic and nondiscretionary in accordance with Section 5.
However, all questions of interpretation of the Plan or of any options issued
under it shall be determined by the Board of Directors and such determination
shall be final and binding upon all persons having an in interest in the Plan.
3. DIRECTORS ELIGIBLE FOR PARTICIPATION
Each director of the Company who is not an employee of the Company or
any Subsidiary, or affiliate of the Company shall be eligible to participate in
the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be issued under the
Plan shall be 250,000 shares of the Company's Common Stock, $.004 par value per
share ("Common Stock")
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares
allocable to the unexcercised portion of such option shall again become
available for grant pursuant to the Plan.
(c) All options granted under the Plan shall be non-statutory
options not entitled to special tax treatment under Section 422 of the Internal
Revenue Code of 1986, as amended to date and as may be amended from time to time
(the "Code").
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors
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shall from time to time approve, which agreements shall comply with and be
subject to the following terms and conditions.
(a) Option Grant Dates. Each eligible director, including a
director serving in that capacity on the effective date of the Plan, will
automatically receive an option to purchase 15,000 thousand shares for each
three-year term to which he or she is elected, issuable as of the date of
election. Each eligible director who received a one-time option grant on
September 22, 1994 who is elected to a new term as a director in 1995 or 1996
shall receive upon such reelection a grant of an option for 5,000 or 10,000
options, respectively. In the event that an eligible director becomes a director
by filling a vacancy on the Board of Directors, then such director shall receive
an option grant in an amount pro rated for the remaining term of vacancy being
filled. All options granted shall vest at the rate of one-third per year for
grants of 15,000 options and, for any pro-rata grants, such pro-rata amounts of
less than 5,000 options shall vest upon the later of (i) six months after the
date of grant, or (ii) the next annual election of directors by the Company's
stockholders.
(b) Option Exercise Price. The option exercise price per share
for each option granted under the Plan shall be equal: (i) if the Common Stock
is then traded on the over-the-counter market the closing bid ask price for the
shares of Common Stock in such over-the-counter market for the last date
preceding the date of grant, or otherwise for the last date on which there was a
sale of such Common Stock in such market, (ii) if the Common Stock is then
listed on a national securities exchange, the closing bid price per share for
the last date preceding the date of grant, or otherwise for the last date on
which there was a sale of such Common Stock on such exchange, or (iii) if, on
the relevant date, the Common Stock is not publicly traded or reported as
described in (i) or (ii), the value determined in good faith by the Board of
Directors.
(c) Options Non-Transferable. Each option granted under the
Plan by its terms shall not be transferable by the optionee otherwise than by
will, or by the laws of descent and distribution, and shall be exercised during
the lifetime of the optionee only by him. No option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
(d) Exercise Period. Each option may be exercised fully, once
vested, provided that, subject to the provisions of Section 5(e), no option may
be exercised more than ninety (90) days after the optionee ceases to serve as a
director of the Company. No option shall be exercisable after the expiration of
ten (10) years from the date of grant or prior
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to approval of the Plan by the stockholders of the Company, whichever is
earlier.
(e) Exercise Period Upon Disability or Death. Notwithstanding
the provisions of Section 5(d), any option granted under the Plan:
(i) may be exercised in full by an optionee who
becomes disabled (within the meaning of Section 22(e)(3) of the Code or any
successor provision thereto) while serving as a director of the Company, or (ii)
may be exercised
(x) in full upon the death of an optionee while
serving as a director of the Company, or
(y) to the extent then exercisable upon the death of
an optionee within ninety (90) days of ceasing to serve as a director of the
Company, by the person to whom it is transferred by will, by the laws of descent
and distribution, or by written notice filed pursuant to Section 5(h); in such
case within six months (or such longer period as may be determined by the Board
of Directors in its sole discretion) after the date the optionee ceases to be
such a director, provided, that in no option shall be exercisable after the
expiration of ten (10) years from the date of grant.
(f) Exercise Procedure. Options may be exercised only by
written notice to the Company at its principal office accompanied by payment of
the full consideration for the shares as to which they are exercised.
(g) Payment of Purchase Price. Options granted under the Plan
may provide for the payment of the exercise price (i) by delivery of cash (or
cash equivalent) in an amount equal to the exercise price of such options or,
(ii) to the extent provided in the applicable option agreement, by delivery to
the Company of shares of Common Stock then owned by the optionee having a fair
market value equal in amount to the exercise price of the options being
exercised, or (iii) by any combination of such methods of payment. The fair
market value of any shares of Common Stock or other non-cash consideration which
may be delivered upon exercise of an option shall be determined by the Board of
Directors.
(h) Exercise by Representative Following Death of Director. A
director, by written notice to the Company, may designate one or more persons
(and for time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to exercise
all or a portion of the option. If the person or persons so
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designated wish to exercise all or a portion of the option, they must do so
within the term of the option as provided herein. Any exercise by a
representative shall be subject to the provisions of the Plan.
6. ASSIGNMENTS
The rights and benefits under the Plan may not be assigned
except for the designation of a beneficiary as provided in Section 5.
7. LIMITATION OF RIGHTS
(a) No Right to Continue as a Director. Neither the Plan, nor
the granting of an option not any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time.
(b) No Stockholders' Right for Options. An optionee shall have
no rights as a stockholder with respect to the shares covered by his options
until the date of the issuance to him of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such certificate is issued.
8. CHANGES IN CAPITAL STOCK.
(a) If (x) the outstanding shares of Common Stock are
increased, decreased or exchanged for a different number or kind of shares or
other securities of the Company, or (y) additional shares of Common Stock or new
or different shares of Common Stock or other securities of the Company or other
non-cash assets are distributed with respect to such shares or other securities,
through or as a result of any merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction with respect to such shares or other
securities, an appropriate and proportionate adjustment shall be made in (i) the
maximum number and kind of shares reserved for issuance under the Plan, and (ii)
the number and kind of shares or other securities subject to any then
outstanding options under the Plan, and (iii) the price for each share subject
to any then outstanding options under the Plan without changing the aggregate
purchase price for each share subject to any then outstanding options under the
Plan, without changing the aggregate purchase price as to which such options
remain exercisable. No fractional shares will be issued under the Plan on
account of any such adjustments. Notwithstanding the foregoing, no adjustment
shall be made pursuant to this Section 8 if such adjustment would cause the Plan
to fail to comply with Rule 16b-3 or any
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successor rule promulgated pursuant to Section 16 of the Securities Exchange Act
of 1934.
(b) In the event that the Company is merged or consolidated
into or with another corporation (in which consolidation or merger, the
stockholders of the Company receive distributions of cash or securities of
another issuer as a result thereof), or in the event that all or substantially
all of the assets of the Company are acquired by any other person or entity, or
in the event of a reorganization or liquidation of the Company, the Board of
Directors of the Company, or the Board of Directors of any corporation assuming
the obligations of the Company, shall, as to outstanding options, take one or
more of the following actions,(i) provide that such options shall be assumed, or
equivalent options shall be substituted , by the acquiring or succeeding
corporation (or an affiliate thereof), (ii) upon written notice to the
optionees, provide that all unexercised options will terminate immediately prior
to the consummation of each transaction unless exercised by the optionee within
a specified period following the date of such notice, or (iii) if, under the
terms of a merger transaction, holders of the Common Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the merger (the "Merger Price"), make or provide for a cash payment to the
optionees equal to the difference between (A) the Merger Price times the number
of shares of Common Stock subject to such outstanding options (to the extent
then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options.
9. AMENDMENT OF THE PLAN
The Board of Directors may suspend or discontinue the Plan or review or
amend it in any respect whatsoever, provided, however that without approval of
the stockholders of the Company no revision or amendment shall change the number
of shares subject to the Plan or the number of shares issuable to any director
of the Company under the Plan (except as provided in Section 8), change the
designation of the class of any directors eligible to receive options, or
materially increase the benefits accruing to participants under the Plan. The
Plan may not be amended more than once in any six-month period.
10. WITHHOLDING
Prior to issuance of shares of Common Stock upon exercise of
an Option, the Optionee shall pay or make adequate provision for any federal or
local taxes or any kind required by law to be withheld by the Company with
respect to any shares issued upon exercise of options under the Plan.
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11. EFFECTIVE DATE AND DURATION OF THE PLAN
(a) Effective Date. The Plan shall become effective when
adopted by the Board of Directors and approved by the Company's stockholders.
Amendments to the Plan not requiring stockholder approval shall become effective
when adopted by the Board of Directors; amendments requiring stockholder
approval shall become effective when adopted by the Board of Directors,
amendments requiring stockholder approval shall become effective when adopted by
the Board of Directors, but no option granted after the date of such amendment
shall become exercisable (to the extent that such amendment to the Plan was
required to enable the Company to grant such option to a particular optionee)
unless and until such amendment shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve months
of the Board's adoption of such amendment, any options granted on or after the
date of such amendment shall terminate to the extent that such amendment to the
Plan was required to enable the Company to grant such option to a particular
optionee.
(b) Termination. Unless sooner terminated in accordance with
Section 9, the Plan shall terminate upon the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the Board of
Directors.
12. COMPLIANCE WITH RULE 16b-3
Transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successor promulgated pursuant to
Section 16 of the Securities Exchange Act of 1934. To the extent any provision
of the Plan or action by the Board of Directors in administering the Plan fails
to so comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Board of Directors.
13. GOVERNING LAW
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware.
14. SUCCESSORS AND ASSIGNS
This Plan shall inure to the benefit of and be binding upon
each successor and assign of the Company. All obligations imposed upon an
optionee, and all rights granted to the Company hereunder, shall be binding upon
the optionee's heirs, legal representatives and successors.
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15. ENTIRE AGREEMENT
This Plan and the written agreement with respect to each
option granted under this Plan constitute the entire agreement with respect to
the subject matter hereof and thereof, provided that in the event of any
inconsistency between the Plan and such written agreement, the terms and
conditions of this Plan shall control.