EXHIBIT 4.1
GREENSHIFT CORPORATION
2006 Equity Incentive Plan
Article 1. Establishment and Purpose
1.1 Establishment of the Plan. GreenShift Corporation, a Delaware
corporation (the "Company" or "GreenShift"), hereby establishes an
incentive compensation plan (the "Plan"), as set forth in this
document.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success
and enhance the value of the Company by linking the personal interests
of Participants to those of the Company's shareholders, and by
providing Participants with an incentive for outstanding performance.
The Plan is further intended to attract and retain the services of
Participants upon whose judgment, interest, and special efforts the
successful operation of GreenShift and its subsidiaries is dependent.
1.3 Effective Date of the Plan. The Plan shall become effective on
November 20, 2006.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the
meanings set forth below and, when the meaning is intended, the
initial letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Stock, Stock Options, or Restricted Stock.
(b) "Award Agreement" means an agreement which may be entered into by
each Participant and the Company, setting forth the terms and
provisions applicable to Awards granted to Participants under
this Plan.
(c) "Board" or "Board of Directors" means the Company's Board of
Directors.
(d) "Cause" shall mean willful and gross misconduct on the part of an
Eligible Person that is materially and demonstrably detrimental
to the Company or any Subsidiary as determined by the Committee
in its sole discretion.
(e) "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than (A) a person who on November 20, 2006
was the beneficial owner of more than 25% of the outstanding
Shares, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or (C) a corporation
owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then
outstanding voting securities, or (ii) during any period of two
(2) consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company and any
new Director whose election by the Board of Directors or
nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors at the beginning
of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty-five percent
(55%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company's assets.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee or committees, as specified in
Article 3, appointed by the Board to administer the Plan with
respect to grants of Awards.
(h) "Consultant" means a natural person under contract with the
Company to provide bona fide services to the Company which are
not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly
promote or maintain a market for the Company's securities.
(i) "Director" means any individual who is a member of the GreenShift
Board of Directors.
(j) "Disability" shall mean the Participant's inability to perform
the Participant's normal Employment functions due to any
medically determinable physical or mental disability, which can
last or has lasted 12 months or is expected to result in death.
(k) "Eligible Person" means an Employee, Director or Consultant.
(l) "Employee" means any officer or employee of the Company or of one
of the Company's Subsidiaries. Directors who are not otherwise
employed by the Company shall not be considered Employees under
this Plan.
(m) "Employment," with reference to an Employee, means the condition
of being an officer or employee of the Company or one of its
Subsidiaries. "Employment," with reference to a Consultant, means
the condition of being a Consultant. "Employment," with reference
to a Director, means the condition of being a Director. The
change in status of an Eligible Person among the categories of
Employee, Director and Consultant shall not be deemed a
termination of Employment.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(o) "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option, as determined
by the Committee.
(p) "Insider" shall mean an Eligible Person who is, on the relevant
date, an officer, director, or ten percent (10%) beneficial owner
of the Company, as those terms are defined under Section 16 of
the Exchange Act.
(q) "Option" or "Stock Option" shall mean an option to purchase
Shares granted hereunder.
(r) "Participant" means a person who holds an outstanding Award
granted under the Plan.
(s) "Plan" means this 2006 Equity Incentive Plan.
(t) "Restricted Stock" means an Award of Stock granted to an Eligible
Person pursuant to Article 7 herein.
(u) "Restriction Period" means the period during which Shares of
Restricted Stock are subject to restrictions or conditions under
Article 7.
(v) "Shares" or "Stock" means the shares of common stock of the
Company.
(w) "Subsidiary" shall mean any corporation in which the Company owns
directly, or indirectly through subsidiaries, more than fifty
percent (50%) of the total combined voting power of all classes
of Stock, or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Company owns more
than fifty percent (50%) of the combined equity thereof.
Article 3. Administration
3.1 The Committee. The Plan and all Awards hereunder shall be administered
by one or more Committees of the Board as may be appointed by the
Board for this purpose. The Board may appoint a Committee specifically
responsible for Awards to Insiders (the "Disinterested Committee")
where each Director on such Disinterested Committee is a "Non-Employee
Director" (or any successor designation for determining who may
administer plans, transactions or awards exempt under Section 16(b) of
the Exchange Act), as that term is used in Rule 16b-3 under the
Exchange Act, as that rule may be modified from time to time. If no
specific Committee is appointed by the Board, then the Board in its
entirety shall be the Committee. Any Committee may be replaced by the
Board at any time.
3.2 Authority of the Committee. The Committee shall have full power,
except as limited by law and subject to the provisions herein, to
select the recipients of Awards; to determine the size and types of
Awards; to determine the terms and conditions of such Awards in a
manner consistent with the Plan; to construe and interpret the Plan
and any agreement or instrument entered into under the Plan; to
establish, amend, or waive rules and regulations for the Plan's
administration; and to amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within
the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary
or advisable for the administration of the Plan.
No Award may be made under the Plan after December 31, 2014.
All determinations and decisions made by the Committee pursuant
to the provisions of the Plan and all related orders or resolutions of
the Board shall be final, conclusive, and binding on all persons,
including the Company, its stockholders, Eligible Persons,
Participants, and their estates and beneficiaries.
Subject to the terms of this Plan, the Committee is authorized,
and shall not be limited in its discretion, to use any of the
Performance Criteria specified herein in its determination of Awards
under this Plan.
Article 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3
herein, the number of Shares available for grant under the Plan shall
not exceed twelve million (12,000,000) Shares. The Shares granted
under this Plan may be either authorized but unissued or reacquired
Shares.
4.2 Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, Shares subject to such
Award shall be again available for the grant of an Award under the
Plan.
4.3 Adjustments in Authorized Plan Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation,
liquidation, Stock dividend, split-up, Share combination, or other
change in the corporate structure of the Company affecting the Shares,
an adjustment shall be made in the number and class of Shares which
may be delivered under the Plan, and in the number and class of and/or
price of Shares subject to outstanding Awards granted under the Plan,
and/or the number of outstanding Options and Shares of Restricted
Stock constituting outstanding Awards, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or enlargement of rights.
Article 5. Stock Grant
5.1 Grant of Stock. Subject to the terms and provisions of the Plan, the
Board of Directors, at any time and from time to time, may grant
Shares of Stock to Eligible Persons in such amounts and upon such
terms and conditions as the Board of Directors shall determine.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Eligible Persons at any time and from time
to time, and under such terms and conditions, as shall be determined
by the Committee. The Committee shall have discretion in determining
the number of Shares subject to Options granted to each Eligible
Person.
6.2 Form of Issuance. Each Option grant may be issued in the form of an
Award Agreement and/or may be recorded on the books and records of the
Company for the account of the Participant. If an Option is not issued
in the form of an Award Agreement, then the Option shall be deemed
granted as determined by the Committee. The terms and conditions of an
Option shall be set forth in the Award Agreement, in the notice of the
issuance of the grant, or in such other documents as the Committee
shall determine. Such terms and conditions shall include the Exercise
Price, the duration of the Option, the number of Shares to which an
Option pertains (unless otherwise provided by the Committee, each
Option may be exercised to purchase one Share), and such other
provisions as the Committee shall determine.
6.3 Exercise Price. The Exercise Price of an Option shall be determined by
the Committee in its sole discretion.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant (which duration may be
extended by the Committee); provided, however, that no Option shall be
exercisable later than the tenth (10th) anniversary date of its grant.
If, however, the Eligible Person owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company or of its parent or subsidiary corporations, then
no Option shall be exercisable later than the fifth (5th) anniversary
date of its grant.
6.5 Vesting of Options. Options shall vest at such times and under such
terms and conditions as determined by the Committee; provided,
however, unless a different vesting period is provided by the
Committee at or before the grant of an Option, the Options will vest
on the first anniversary of the grant.
6.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need
not be the same for each grant or for each Participant.
Options shall be exercised by delivery of a written notice
(including e-mail and telecopies) to the Secretary of the Company (or,
if so provided by the Company, to its designated agent), which notice
shall be irrevocable, setting forth the exact number of Shares with
respect to which the Option is being exercised and including with such
notice payment of the Exercise Price. When Options have been
transferred, the Company or its designated agent may require
appropriate documentation that the person or persons exercising the
Option, if other than the Participant, has the right to exercise the
Option. No Option may be exercised with respect to a fraction of a
Share.
6.7 Termination of Employment. Unless otherwise provided by the Committee,
the following limitations on exercise of Options shall apply upon
termination of Employment:
(a) Termination by Death or Disability. In the event the Employment
of a Participant shall terminate by reason of death or
Disability, all outstanding Options granted to that Participant
shall immediately vest as of the date of termination of
Employment and may be exercised, if at all, no more than three
(3) years from the date of the termination of Employment, unless
the Options, by their terms, expire earlier.
(b) Termination for Cause. If the Employment of a Participant shall
be terminated by the Company for Cause, all outstanding Options
held by the Participant shall immediately be forfeited to the
Company and no additional exercise period shall be allowed,
regardless of the vested status of the Options.
(c) Retirement or Other Termination of Employment. If the Employment
of a Participant shall terminate for any reason other than the
reasons set forth in (a) or (b) above, all outstanding Options
which are vested as of the effective date of termination of
Employment may be exercised, if at all, no more than thirty (30)
days from the date of termination of Employment, unless the
Options, by their terms, expire earlier. In the event of the
death of the Participant after termination of Employment, this
paragraph (c) shall still apply and not paragraph (a), above.
(d) Options not Vested at Termination. Except as provided in
paragraph (a) above, all Options held by the Participant which
are not vested on or before the effective date of termination of
Employment shall immediately be forfeited to the Company (and
shall once again become available for grant under the Plan).
(e) Notwithstanding the foregoing, the Committee may, in its sole
discretion, establish different terms and conditions pertaining
to the effect of termination of Employment, but no such
modification shall shorten the terms of Options issued prior to
such modification.
6.9 Restrictions on Exercise and Transfer of Options. Unless otherwise
provided by the Committee:
(a) During the Participant's lifetime, the Participant's Options
shall be exercisable only by the Participant or by the
Participant's guardian or legal representative. After the death
of the Participant, an Option shall only be exercised by the
holder thereof (including, but not limited to, an executor or
administrator of a decedent's estate) or his guardian or legal
representative.
(b) No Option shall be transferable except: (i) in the case of the
Participant, only upon the Participant's death; and (ii) in the
case of any holder after the Participant's death, only by will or
by the laws of descent and distribution.
6.10 Competition. Notwithstanding anything in this Article 6 to the
contrary, in the event the Committee determines, in its sole
discretion, that a Participant is engaging in activity competitive
with the Company, any Subsidiary, or any business in which any of the
foregoing have a substantial interest (the "GreenShift Businesses"),
the Committee may cancel any Option granted to such Participant,
whether or not vested, in whole or in part. Such cancellation shall be
effective as of the date specified by the Committee. Competitive
activity shall mean any business or activity if a substantially
similar business activity is being carried on by a GreenShift
Business, including, but not limited to, representing or providing
consulting services to any person or entity that is engaged in
competition with a GreenShift Business or that takes a position
adverse to a GreenShift Business. However, competitive activity shall
not include, among other things, owning a nonsubstantial interest as a
shareholder in a competing business.
Article 7. Restricted Stock
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Eligible Persons in such amounts and
upon such terms and conditions as the Committee shall determine.
7.2 Restricted Stock Agreement. The Committee may require, as a condition
to an Award, that a recipient of a Restricted Stock Award enter into a
Restricted Stock Award Agreement, setting forth the terms and
conditions of the Award. In lieu of a Restricted Stock Award
Agreement, the Committee may provide the terms and conditions of an
Award in a notice to the Participant of the Award, on the Stock
certificate representing the Restricted Stock, in the resolution
approving the Award, or in such other manner as it deems appropriate.
7.3 Transferability. Except as otherwise provided in this Article 7, the
Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Restriction Period established by the
Committee, if any.
7.4 Other Restrictions. The Committee may impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant
to the Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each
Share of Restricted Stock and/or restrictions under applicable Federal
or state securities laws; and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.
The Company shall also have the right to retain the certificates
representing Shares of Restricted Stock in the Company's possession
until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied.
7.5 Removal of Restrictions. Except as otherwise provided in this Article
7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the
Participant after the last day of the Restriction Period and
completion of all conditions to vesting, if any. However, unless
otherwise provided by the Committee, the Committee, in its sole
discretion, shall have the right to immediately waive all or part of
the restrictions and conditions with regard to all or part of the
Shares held by any Participant at any time.
7.6 Voting Rights, Dividends and Other Distributions. During the
Restriction Period, Participants holding Shares of Restricted Stock
granted hereunder may exercise full voting rights and shall receive
all regular cash dividends paid with respect to such Shares. Except as
provided in the following sentence, in the sole discretion of the
Committee, other cash dividends and other distributions paid to
Participants with respect to Shares of Restricted Stock may be subject
to the same restrictions and conditions as the Shares of Restricted
Stock with respect to which they were paid. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the
same restrictions and conditions as the Shares of Restricted Stock
with respect to which they were paid.
7.7 Termination of Employment Due to Death or Disability. In the event the
Employment of a Participant shall terminate by reason of death or
Disability, unless otherwise provided by the Committee prior to or at
the time of the Award, all Restriction Periods and all restrictions
imposed on outstanding Shares of Restricted Stock held by the
Participant shall immediately lapse and the Restricted Stock shall
immediately become fully vested as of the date of termination of
Employment.
7.8 Termination of Employment for Other Reasons. If the Employment of a
Participant shall terminate for any reason other than those
specifically set forth in Section 7.7 herein, all Shares of Restricted
Stock held by the Participant which are not vested as of the effective
date of termination of Employment immediately shall be forfeited and
returned to the Company.
Article 8. Employee Matters
8.1 Employment Not Guaranteed. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to
terminate any Participant's Employment at any time, nor confer upon
any Participant any right to continue in the employ of the Company or
one of its Subsidiaries.
8.2 Participation. No Eligible Person shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.
8.3 Claims and Appeals. Any claim under the Plan by a Participant or
anyone claiming through a Participant shall be presented to the
Committee. Any person whose claim under the Plan has been denied may,
within sixty (60) days after receipt of notice of denial, submit to
the Committee a written request for review of the decision denying the
claim. The Committee shall determine conclusively for all parties all
questions arising in the administration of the Plan.
Article 9. Amendment, Modification, and Termination
9.1 Amendment, Modification, and Termination. The Board of Directors alone
shall have the right to alter, amend or revoke the Plan or any part
thereof at any time and from time to time, provided, however, that the
Board of Directors may not, without the approval of the holders of a
majority of the voting Shares, make any alteration or amendment to the
Plan which changes the aggregate number of shares of Common Stock
which may be issued under the Plan, extend the term of the Plan, or
change the employees or class of employees eligible to receive Awards
thereunder. The Board may at any time suspend or terminate the Plan in
whole or in part.
9.2 Awards Previously Granted. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.
Article 10. Change in Control
Upon the occurrence of a Change in Control:
(a) Any and all Options granted hereunder immediately shall become
vested and exercisable;
(b) Any Restriction Periods and all restrictions imposed on
Restricted Shares shall lapse and they shall immediately become
fully vested.
Article 11 Withholding
11.1 Tax Withholding. The Company shall deduct or withhold an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's employment tax obligations) required by law to be
withheld with respect to any taxable event arising or as a result of
this Plan ("Withholding Taxes").
11.2 Share Withholding. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event hereunder involving the
transfer of Stock to a Participant, the Company shall withhold Stock
having a Fair Market Value on the date the tax is to be determined in
an amount equal to the Withholding Taxes on such Stock. Any fractional
Share remaining after the withholding shall be withheld as additional
Federal withholding.
11.3 Payment In Lieu of Share Withholding. In any situation in which the
Company would be required to withhold Stock pursuant to ss.11.2 above,
the Participant may, in lieu of all or part of such withholding, remit
to the Company an amount in cash sufficient to satisfy the federal,
state and local withholding tax requirements or may direct the Company
to withhold from other amounts payable to the Participant, including
salary.
Article 12. Successors
All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business and/or assets of the Company.
Article 13. Legal Construction
13.1 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not
been included.
13.2 Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
13.3 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions
of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the plan or action by the Committee fails to comply
with a condition of Rule 16b-3 or its successors, it shall not apply
to the Insiders or transactions thereby.
13.4 Governing Law. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Delaware.
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