EX-4.1
NON-EMPLOYEE DIRECTORS AND CONSULTANTS RETAINER STOCK PLAN
FREESTAR TECHNOLOGIES
NON-EMPLOYEE DIRECTORS AND CONSULTANTS
RETAINER STOCK PLAN
1. Introduction.
This plan shall be known as the "Freestar Technologies Non-Employee
Directors and Consultants Retainer Stock Plan" and is hereinafter
referred to as the "Plan". The purposes of the Plan are to enable
Freestar Technologies, 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 shall be effective as of October 25, 2001 ("Effective Date"),
provided that it is approved by the Board.
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 Ten Million (10,000,000). 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 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 Nevada 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.
IN WITNESS WHEREOF, this Plan has been executed as of the 25th day of
October, 2001.
Freestar Technologies
By: /s/ Paul Egan
Paul Egan, President