EXHIBIT 4.1
GREENSHIFT CORPORATION
2007 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 March 14,
2007.
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 March 14, 2007 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 2007 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
ten million (10,000,000) 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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