EX-4.1
NORTH LILY MINING COMPANY
RETAINER STOCK PLAN
1. INTRODUCTION
This plan shall be known as the "North Lily Mining Company Retainer Stock Plan"
and is hereinafter referred to as the "Plan". The purposes of the Plan are to
enable North Lily Mining Company, a Utah corporation (the "Company"), to promote
the interests of the Company and its shareholders by attracting and retaining
Directors, Officers, Employees 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 all
or part in the form of shares of the Company's common stock, par value $0.10
(the "Common Stock").
2. DEFINITIONS
The following terms shall have the meaning set forth below:
"Anniversary" has the meaning set forth in Section 6.
"Annual Meeting" means the annual meeting of the shareholders of the Company.
The "Board" means the Board of Directors of the Company.
"Change of Control" has the meaning set forth in Section 12 (d).
"The Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations there under. 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.
The "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.
The "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.
The "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.
The "Effective Date" has the meaning set forth in Section 3.
The "Exchange Act" has the meaning set forth in Section 13 (b).
The "Fair Market Value" means the mean between the highest and lowest sales
prices of the Common Stock on the securities exchange or over the counter market
on which the Common Stock is listed 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 Section4.
"Payment Time" means the time when a Stock Retainer is payable to a Participant
pursuant to Section 5 (without regard to eth effect of any Deferral Election).
"Stock Retainer" has the meaning set forth in Section 5.
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3. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective November 20, 2000, pursuant to the unanimous
approval of the Board.
4. ELIGIBILTY
Each individual who is a Director, Officer, Employee or Consultant on the
Effective Date and each individual who becomes such 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, Officer, Employee or
Consultant 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 of compensation for service to
Directors, Officers, Employees or Consultants shall, upon written approval by
the parties and the Company, become at least partially payable in shares of
Common Stock (the "Stock Retainer") pursuant to this Plan.
6. DEFERAL ELECTION
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 of the following ways the Stock Retainer is to be delivered:
(a) on the date which is one to three years after the date of the Meeting for
which it was originally payable (the "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 the "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 beginning on the Effective Date, and Deferral
Election or revocation thereof must be delivered no later than the close of
business on the 30th day prior to the 2000 Meeting.
7. DEFFERED 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), 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,
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provided that, if in order to equalize such installments, fractional shares
that would have to be delivered with 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 the 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, the "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 certificate 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 the following conditions:
(i) Listing or approval for listing upon official notice of issuance of
such shares on such 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
of 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 2,000,000. Shares of Common Stock issuable under the Plan may be
authorized and unissued shares of the Company or may be taken from treasury
shares of the Company or purchased on the open market.
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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 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 or 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.
(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 acquisitions by any individual, entity of group (within the meaning
of Section13 (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 (the
"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 (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 Section
12(d) are satisfied; or
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(ii)individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Board" and, as of the date hereof, the
"Incumbent Board") cease for any reason to constitute at lest 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 a least a majority of
the directors them comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, by 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 or Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitations or proxies or
comments 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 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
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, and 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% or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 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 shares
exchange or consolidation were member s of the Incumbent Board at the time
of the execution of the initial agreement providing for such
reorganization, merger, binding shares exchange or consolidation; or (iv)
Approval by the shareholders of the Company of (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 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 an 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 my be, (y) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company or such corporation
and person beneficially owns, directly of indirectly, 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 were members or 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.
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13. ADMINISTRATION; AMENDMENT AND TERMINATION
(a) The Plan shall be administered by a committee consisting of the Board
("Committee") or by a committee of the Board, consisting of at least two
Directors elected by the Board who shall be Non-Employee Directors, as
defined in Rule 16b-3 under the Exchange Act. The Committee 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 for liability under Section 16(b) of the Securities Exchange Act
1934, as amended (the "Exchange Act") as it may deem proper and in the best
interest of the Company without any further approval from the Company's
shareholders, provided that, to the extent required under Utah 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-month period 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 there under. (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 a Director for reelections by the Company's
shareholder 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 make arrangements satisfactory to the Committee for the
withholding of any taxes required by the 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 cash
payment to the Company by the Participant.
15. GOVERNING LAW
The Plan and all actions taken there under shall be governed by and
construed in accordance with the laws of the State of Utah.
Steve Flechner, President
North Lily Mining Company
November 20, 2000
