EXHIBIT 4.1
NONTRANSFERABLE
NONQUALIFIED STOCK OPTION
AGREEMENT, dated January
31, 2002, between Memry
Corporation, a Delaware
corporation (the
"Company"), and Xxxxxx X.
Xxxxxxxx (the "Optionee",
which term as used herein
shall be deemed to include
any successor to the
Optionee by will or by the
laws of descent and
distribution, unless the
context shall otherwise
require).
The Company hereby issues to the Optionee, effective as of
January 31, 2002 (the "Grant Date"), a nonqualified stock option to purchase up
to an aggregate of 75,000 shares of common stock, $0.01 par value, of the
Company (the "Common Stock"), at the price (the "Option Price") of $1.20 per
share, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as follows:
1. Option; Option Price. The Company hereby grants to the
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Optionee the option (the "Option") to purchase, subject to the terms and
conditions of this Agreement, 75,000 shares of Common Stock of the Company at an
exercise price per share equal to the Option Price, which Option is not intended
to qualify for federal income tax purposes as an "incentive stock option" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Term. The term (the "Option Term") of the Option commenced on
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the Grant Date and shall expire on the third anniversary of the Grant Date,
unless such Option shall theretofore have been terminated in accordance with the
terms hereof.
3. Time of Exercise. (a) The Option may be exercised at any time
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during the Option Term, subject to the terms hereof.
4. Termination of Option. The unexercised portion of the Option
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shall automatically terminate and shall become null and void and be of no
further force or effect upon the first to occur of the following:
(a) the expiration of the Option Term;
(b) except to the extent permitted by Section 10 hereof, the
date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will
or the laws of descent and distribution), assigned, pledged,
hypothecated, attached or otherwise disposed of by the Optionee;
and
(c) the date on which the Optionee breaches (1) Section 4, 5
or 7 of the Employment Agreement by and between the Company,
dated January 1, 2000, or (2) any of the material terms of the
Settlement Agreement and Mutual Release, by and between the
Optionee and the Company, dated January 28, 2002.
5. Procedure for Exercise. (a) The Option may be exercised, from
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time to time, in whole or in part (but for the purchase of whole shares only),
by delivery of a written notice (the "Notice") from the Optionee to the
Secretary of the Company, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares of Common Stock with respect
to which the Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares
pursuant to Section 5(b) hereof;
(iv) state the date upon which the Optionee desires to
consummate the purchase of the Optioned Shares (which date must
be prior to the termination of such Option and no later than 30
days from the delivery of such Notice);
(v) include any representations of the Optionee required
under Section 8(b) hereof; and
(vi) if the Option shall be exercised pursuant to Section 10
hereof by any person other than the Optionee, include evidence to
the satisfaction of the Company of the right of such person to
exercise the Option.
(b) Payment of the Option Price for the Optioned Shares
shall be made (i) in cash or by personal or certified check, (ii) by
delivery of stock certificates (in negotiable form) representing
shares of Common Stock that have been owned of record by the Optionee
for at least six months prior to the date of exercise and that have a
fair market value on the date of exercise equal to the product of (A)
the number of Optioned Shares which are being purchased pursuant to
the exercise of such Option, multiplied by (B) the applicable Option
Price, (iii) a combination of either of the methods set forth in
clauses (i) and (ii) above, (iv) if approved by the Company, by
delivering to the Company a properly executed exercise notice,
together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale proceeds necessary
to pay the purchase price, and, if requested by the Company, reduced
by the amount of any federal, state or local withholding taxes, or (v)
in such other consideration as shall be acceptable to the Company.
(c) The Company shall issue a stock certificate in the name
of the Optionee (or such other person exercising the Option in
accordance with the provisions of Section 10 hereof) for the Optioned
Shares as soon as practicable
after receipt of the Notice and payment of the aggregate Option Price
for such shares.
6. No Rights as a Stockholder. The Optionee shall not have any
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privileges of a stockholder of the Company with respect to any Optioned Shares
until the date of issuance of a stock certificate pursuant to Section 5(c)
hereof.
7. Adjustments. If the outstanding shares of Common Stock of the
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Company are increased, decreased, or exchanged for a different number or kind of
shares or other securities, or if additional shares or new or different shares
or other securities are distributed with respect to such shares of Common Stock
or other securities, through merger, consolidation, sale of all or substantially
all of the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Common Stock or other securities,
then an appropriate and proportionate adjustment shall be made in (i) the number
and kind of shares or other securities subject to the Option and (ii) the price
for each share or other unit of any other securities subject to the Option
without change in the aggregate purchase price or value as to which such Option
remains exercisable or subject to restrictions. Any adjustment under this
Section 7 shall be made by the Company's Board of Directors, whose determination
as to what adjustments shall be made and the extent thereof will be final,
binding and conclusive; provided that any such adjustment shall be no less
favorable to the Optionee than adjustments made to similar options issued to the
Company's officers or directors. No fractional interests will be issued under
this Section 7 resulting from any such adjustment.
8. Additional Provisions Related to Exercise. (a) The Option
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shall be exercisable only on such date or dates and during such period and for
such number of shares of Common Stock as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow the
procedures set forth in Section 5 hereof. Unless at the time of
exercise of the Option there shall be, in the opinion of counsel
for the Company, a valid and effective registration statement
under the Securities Act of 1933 (the "`33 Act") and appropriate
qualification and registration under applicable state securities
laws relating to the Optioned Shares being acquired pursuant to
the Option, the Optionee shall be required, upon exercise of the
Option, to give to the Company a written representation, in a
form reasonably satisfactory to the Company, that he is acquiring
the Optioned Shares for his own account for investment and not
with a view to, or for sale in connection with, the resale or
distribution of any such shares. The Optionee shall be further
required to agree that he will not sell or transfer any Optioned
Shares acquired pursuant to exercise of the Option until he
requests and receives an opinion of the Company's counsel to the
effect that such proposed sale or transfer will not result in a
violation of the `33 Act, or a registration statement covering
the sale or transfer of the shares has been declared effective by
the Securities and Exchange Commission, or he obtains a no-action
letter from the Securities and Exchange Commission with respect
to the proposed transfer.
(c) Stock certificates representing shares of Common Stock
acquired upon the exercise of this Option shall bear the
following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH SALE, OFFER FOR SALE,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION DOES NOT VIOLATE THE
PROVISIONS OF SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH
ACT.
9. No Evidence of Employment or Service. Nothing contained in
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this Option Agreement shall confer upon the Optionee any right to employment by
the Company.
10. Restriction on Transfer. The Option may not be transferred,
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pledged, assigned, hypothecated or otherwise disposed of in any way by the
Optionee, except by will or by the laws of descent and distribution or as may
otherwise be required by law, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable, during the period specified in Sections 3 and 4 hereof, by his
executors or administrators to the full extent to which the Option was
exercisable by the Optionee at the time of his death. The Option shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.
11. Notices. All notices or other communications which are
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required or permitted hereunder shall be in writing and sufficient if (i)
personally delivered, (ii) sent by nationally-recognized overnight courier or
(iii) sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Optionee, to the address set forth on the signature
page hereto; and
If to the Company, to:
Memry Corporation
0 Xxxxxxxxx Xxxx.
Xxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered or if sent by nationally-recognized overnight courier, and
(ii) on the third Business Day (as hereinafter defined) following the date on
which the piece of mail containing such communication is posted, if sent by
mail. As used
herein, "Business Day" means a day that is not a Saturday, Sunday or a day on
which banking institutions in the city to which the notice or communication is
to be sent are not required to be open.
12. Taxes. Whenever shares of Common Stock are to be delivered to
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the Optionee upon exercise of the Option, the Company shall be entitled to
require as a condition of delivery that the Optionee remit or, in appropriate
cases, agree to remit when due, an amount sufficient to satisfy all current or
estimated future federal, state and local withholding tax and employment tax
requirements relating thereto.
13. No Waiver. No waiver of any breach or condition of this
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Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
14. Optionee Undertaking. The Optionee hereby agrees to take
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whatever additional actions and execute whatever additional documents the
Company may in its reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Agreement.
15. Modification of Rights. The rights of the Optionee are
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subject to modification and termination in certain events as provided in this
Agreement.
16. Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Delaware applicable to
contracts made and to be wholly performed therein.
17. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
18. Interpretation. The Company shall have the power to interpret
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and administer this Option Agreement and to make any determination and take any
action that the Company deems necessary for the administration of this
Agreement, and any such interpretation, determinations or action shall be
binding on the Company and the Optionee.
19. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties with respect to the subject matter hereof, and
supersedes all previously written or oral negotiations, commitments,
representations and agreements with respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the date first written above.
MEMRY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chairman & CEO
OPTIONEE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Address: 00 Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx
