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EXHIBIT 4.40
STOCK OPTION AGREEMENT
OF
COMPLETE WELLNESS CENTERS, INC.
Stock Option Agreement, made as of this 27th day of January, 1998, by and
between Complete Wellness Centers, Inc., a Delaware corporation (the "Company"),
and Republic National Bank as Custodian for SEP FBO of Xxxx Xxxxx, Plan No.
372329621 (the "Optionee").
W I T N E S S E T H
WHEREAS, the Board of Directors has approved the award to the Optionee of
Options (as such terms are defined below) to purchase shares of the Company's
common stock, $.0001665 par value (the "Common Stock")(the "Options") in
consideration of Optionee's accomplishments and other contributions to the
Company, pursuant to the terms and conditions of this Agreement;
WHEREAS, the Options awarded to the Optionee are not granted pursuant to
the Company's Stock Option Plan;
NOW, THEREFORE, in consideration of the foregoing it is agreed as
follows:
1. Base Award. Optionee may purchase from the Company up to Eight
Thousand (8,000) shares of the Company's Common Stock at an exercise price of
$7.20 per share (the "Option Price") at any time through December 31, 2007.
These Options fully vest on the execution of this Agreement.
2. Assignment and Transfer. The Options granted hereunder shall,
during the Optionee's lifetime, be exercisable only by him and neither these
options nor any right hereunder shall be transferable otherwise than by will or
the laws of descent and distribution without the prior approval of the Board of
Directors of the Company, or be subject to attachment, execution or other
similar process. In the event of any attempt by the Optionee to alienate,
assign, pledge, hypothecate or otherwise dispose of this option or of any right
hereunder, without the prior approval of the Board of Directors of the Company,
or in the event of any levy or any attachment, execution or similar process upon
the rights or interest herein conferred, the Company may terminate this option
by notice to the Optionee and it shall thereupon become null and void.
3. Exercise of Options.
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The Options granted hereunder may be exercised by written notice to the
Company stating the number of shares with respect to which it is being exercised
and accompanied by payment of the Option Price (a) in currency, (b) by check,
bank draft or cashier's check, (c) by surrender or delivery to the Company of
shares of its Common Stock, or (d) in any other form acceptable to the Company,
together with payment of any Federal income or other tax required to be withheld
by the Company. As soon as practicable after receipt of such notice and payment,
the Company shall, without transfer or issue, tax or other incidental expense to
the Optionee, deliver to the Optionee at the offices of the Company at 000
Xxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, at the election of the Company,
by first-class insured mail addressed to the Optionee at his address shown in
the records of the Company, a certificate or certificates for previously
unissued shares or reacquired shares of Common Stock, as the Company may elect.
4. Delivery of Shares.
4.1 The Company may postpone the time of delivery of certificates for
shares of its Common Stock for such additional time as the Company shall deem
necessary or desirable to enable it to comply with the listing requirements of
any securities exchange upon which the Common Stock of the Company may be
listed, or the requirements of the Securities Act of 1933 or the Securities
Exchange Act of 1934 or any rules or regulations of the Securities and Exchange
Commission promulgated thereunder or the requirements of applicable state laws
relating to authorization, issuance or sale of securities.
4.2 If the Optionee fails to accept delivery of the shares of Common
Stock of the Company under tender of delivery thereof, his right to exercise
this option with respect to such undelivered shares may be terminated.
4.3 The Optionee understands that the securities issued or to be
issued have not been registered pursuant to the Securities Act of 1933, as
amended (the "Act"). The Optionee agrees:
(a) that the shares of the Company's Common Stock to be acquired by him
are being acquired for investment and not with a view to, or for resale in
connection with, any distribution of said shares within the meaning of the Act.
(b) that:
1. he will not to sell or otherwise dispose of the shares of the
Company's Common Stock in a manner that would cause issuance or
subsequent sale or disposal of such shares to be in violation of
the Act, and agrees to indemnify and exonerate the Company against
any loss, damage, liability or expense, including, without
limitation, reasonable counsel fees, arising from any distribution
of such shares in violation of the Act.
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2. unless and until he is advised to the contrary in writing by
the Company, the shares of the Company's Common Stock shall be
subject to, and the stock certificates representing such shares
(including shares issued on subsequent transfers, direct or
remote, other than those sold to the public in conformity with the
Act) will contain the following legend:
"The shares represented by this Certificate may not be sold or
transferred in the absence of any effective registration statement
for the shares under the Securities Act of 1933 or an opinion of
counsel for the Company that registration is not required under
said Act."
5. Protection Against Dilution. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of this Section 5 shall be
applied as if such capital adjustment event had occurred immediately prior to
the particular exercise date and the original Option Price had been fairly
allocated to the stock resulting from such capital adjustment; and in other
respects the provisions of this Section shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof. A rights offering to stockholders shall be deemed a stock dividend to
the extent of the bargain purchase element of the rights.
6. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware.
7. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon the Optionee, and all rights granted to the Company, hereunder shall be
binding upon the Optionee's heirs, legal representatives and successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
COMPLETE WELLNESS CENTERS, INC.
By: /s/ E. XXXXXX XXXXXX
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E. Xxxxxx Xxxxxx,
President
