Exhibit 10.14
CROWN PARTNERS, INC.
NON-EMPLOYEE DIRECTORS, ADVISORS AND CONSULTANTS RETAINER STOCK PLAN FOR 2005
1. Introduction. This Plan shall be known as the "CROWN PARTNERS, INC.
Non-Employee Directors and Consultants Retainer Stock Plan for the Year 2005"
and is hereinafter referred to as the "Plan." The purposes of this Plan are to
enable Crown Partners, Inc., a Nevada corporation (the "Company"), to promote
the interests of the Company and its stockholders by attracting and retaining
non-employee Directors, Advisors, 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 stockholders, by paying their retainer or
fees in the form of shares of the Company's common stock, par value $0.001 per
share (the "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 Paragraph 12(d) hereof.
"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 this Plan, as more fully
defined in Paragraph 13 hereof.
"Common Stock" has the meaning set forth in Paragraph 1 hereof.
"Company" has the meaning set forth in Paragraph 1 hereof.
"Deferral Election" has the meaning set forth in Paragraph 6 hereof.
"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 Paragraph 7 hereof.
"Delivery Date" has the meaning set forth in Paragraph 6 hereof.
"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 the 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 the 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 Paragraph 3 hereof.
"Exchange Act" has the meaning set forth in Paragraph 13(b) hereof.
"Fair Market Value" means the mean between the highest and lowest reported sales
prices of the Common Stock on the New York Stock Exchange Composite Tape or, if
not listed on such exchange, on any other national securities exchange on which
the Common Stock is listed or on the Nasdaq Stock Market, or, if not so listed
on any other national securities exchange or the Nasdaq Stock Market, then the
average of the bid price of the Common Stock during the last five trading days
on the OTC Bulletin Board immediately preceding the last trading day prior to
the date with respect to which the Fair Market Value is to be determined. If the
Common Stock is not then publicly traded, then the Fair Market Value of the
Common Stock shall be the book value of the Company per share as determined on
the last day of March, June, September, or December in any year closest to the
date when the determination is to be made. For the purpose of determining book
value hereunder, book value shall be determined by adding as of the applicable
date called for herein the capital, surplus, and undivided profits of the
Company, and after having deducted any reserves theretofore established; the sum
of these items shall be divided by the number of shares of the Common Stock
outstanding as of said date, and the quotient thus obtained shall represent the
book value of each share of the Common Stock of the Company.
"Participant" has the meaning set forth in Paragraph 4 hereof.
"Payment Time" means the time when a Stock Retainer is payable to a Participant
pursuant to Paragraph 5 hereof (without regard to the effect of any Deferral
Election).
"Stock Retainer" has the meaning set forth in Paragraph 5 hereof.
"Third Anniversary" has the meaning set forth in Paragraph 6 hereof.
3. Effective Date of the Plan. This Plan was adopted by the Board
effective August 1, 2005 (the "Effective Date").
4. Eligibility. Each individual who is a Director, Advisor or Consultant
on the Effective Date and each individual who becomes a Director, Advisor or
Consultant thereafter during the term of this Plan, shall be a participant (the
"Participant") in this 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 the Common Stock pursuant to this
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 of
compensation for service to directors, advisors or consultants shall be payable
in shares of the Common Stock (the "Stock Retainer") pursuant to this Plan at
the deemed issuance price of the market price of the stock on the date of
issuance.
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 ways 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 (the "Third Anniversary"), (b) on the date
upon which the Participant ceases to be a Director or Consultant for any reason
(the "Departure Date") or (c) in five equal annual installments commencing on
the Departure Date (the "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
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 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 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 the 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 Paragraph 8 hereof, 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
the Common Stock equal to (a) the number of shares of the 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 the 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 Paragraph 8 as soon as practicable after the applicable
Delivery Date. Except with respect to a Deferral Election pursuant to Paragraph
6(c) hereof, 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 Paragraph 6(c) hereof, 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
Paragraph 6(c) hereof 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 the Common Stock needed to fulfill its obligations
under this Paragraph 8. However, Participants shall have no beneficial or other
interest in the Trust and the assets thereof, and their rights under this 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 Paragraph 8.
9. Share Certificates; Voting and Other Rights. The certificates for
shares delivered to a Participant pursuant to Paragraph 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 stockholder with respect to the
Common Stock for all such shares issued in his 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 this Plan or agreements made
pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of the Common Stock under this 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 this Plan shall prevent the Company from adopting
other or additional compensation arrangements for the Participants.
11. Shares Available. Subject to Paragraph 12 below, the maximum number of
shares of the Common Stock which may in the aggregate be paid as Stock Retainers
pursuant to this Plan is 2,000,000. Shares of the Common Stock issuable under
this 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 this
Plan, any change in corporate capitalization, such as a stock split, combination
of shares, exchange of shares, warrants or rights offering to purchase the
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, stock dividend, 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 the Common
Stock held in such Deferred Stock Account had such shares of the Common Stock
been outstanding as of the effectiveness of any such Transaction, (ii) the
number and kind of shares or other property subject to this 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 this Plan and any such modification by the Committee shall be binding and
conclusive on all persons.
(b) If the shares of the Common Stock credited to the Deferred Stock
Accounts are converted pursuant to Paragraph 12(a) into another form of
property, references in this 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 this Plan to operate in accordance with its
purposes. Without limiting the generality of the foregoing, references to
delivery of certificates for shares of the 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 Paragraph 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 the 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 the Common Stock or any
other property held in such Participant's Deferred Stock Account; and (iii) this
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
percent or more of either (1) the then outstanding shares of the Common
Stock of the Company (the "Outstanding Company Common Stock", or (2) the
combined voting power of then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "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 Paragraph 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 stockholders, 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 stockholders of the Company of a reorganization,
merger, binding share exchange or consolidation, unless, following such
reorganization, merger, binding share exchange or consolidation (1) more
than 60 percent of, respectively, 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 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, (2) 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, 20 percent or more of the
Outstanding Company Common Stock or Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20 percent
or more of, respectively, 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 then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors, and (3) 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 stockholders of the Company of (1) a complete
liquidation or dissolution of the Company, or (2) 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, (A)more than 60 percent of, respectively, then
outstanding shares of common stock of such corporation and the combined
voting power of 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, (B) 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, 20 percent or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 20 percent or more of, respectively, then
outstanding shares of common stock of such corporation and the combined
voting power of then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (3) 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) This Plan shall be administered by a committee consisting of two
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 (the "Committee"), which shall have full authority to
construe and interpret this Plan, to establish, amend and rescind rules and
regulations relating to this Plan, and to take all such actions and make all
such determinations in connection with this Plan as it may deem necessary or
desirable.
(b) The Board may from time to time make such amendments to this Plan,
including to preserve or come within any exemption from liability under Section
16(b) of 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 this
Plan for exemption under Rule 16b-3 promulgated under the Exchange Act, no
amendment to this Plan shall be adopted without further approval of the
Company's stockholders and, provided, further, that if and to the extent
required for this Plan to comply with Rule 16b-3 promulgated under the Exchange
Act, no amendment to this Plan shall be made more than once in any six month
period that would change the amount, price or timing of the grants of the Common
Stock hereunder other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the regulations
thereunder. The Board may terminate this Plan at any time by a vote of a
majority of the members thereof.
14. Miscellaneous.
(a) Nothing in this Plan shall be deemed to create any obligation on the
part of the Board to nominate any Director for reelection by the Company's
stockholders or to limit the rights of the stockholders to remove any Director.
(b) The Company shall have the right to require, prior to the issuance or
delivery of any shares of the Common Stock pursuant to this 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.
14.1 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.
14.2 Information to Shareholders. The Company shall furnish to each of its
stockholders financial statements of the Company at least annually.
IN WITNESS WHEREOF, this Plan has been executed effective as of August 1, 2005.
CROWN PARTNERS, INC.
By: /s/ Charles Smith
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Charles Smith, President