EXHIBIT 4.1
STOCK OPTION AGREEMENT
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON
THE EXERCISE OF THE OPTIONS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT") OR QUALIFIED FOR SALE UNDER THE
SECURITIES LAWS OF ANY STATE OR JURISDICTION OF THE UNITED STATES. NO
REGULATORY BODY HAS ENDORSED THESE SECURITIES. THIS OPTION CERTIFICATE, THE
OPTIONS IT EVIDENCES, AND THE UNDERLYING COMMON STOCK ISSUED ON EXERCISE OF
THE OPTIONS, MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE 1933 AND APPLICABLE STATE BLUE SKY LAWS ACT OR IN VIOLATION OF SUCH
SECURITIES LAWS.
OPTION TO PURCHASE SHARES OF COMMON STOCK OF
COMPUTERIZED THERMAL IMAGING, INC.
NO. O-CTI-063000-01 100,000 Options
This Option Certificate certifies that Xxxxxxx X. Xxxxx (the "Holder") is
the owner of 100,000 Options (subject to adjustment as provided herein), each
of which represents the right to subscribe for and purchase from COMPUTERIZED
THERMAL IMAGING, INC., a Nevada corporation (the "Company"), one share of the
common stock, par value $0.001 per share, of the Company (the common stock,
including any stock into which it may be changed, reclassified or converted,
is herein referred to as the "Common Stock") at the purchase price of $9.0625
per share (the "Exercise Price).
THESE OPTIONS ARE NOT GRANTED IN RESPECT TO ANY QUALIFIED
STOCK PLAN OF THE COMPANY. ACCORDINGLY, SUCH OPTIONS ARE
NONQUALIFIED OPTIONS FOR UNITED STATES TAX PURPOSES. THE
HOLDER HEREOF SHOULD CONTACT A TAX ADVISOR REGARDING THE
TAX TREATMENT OF THESE OPTIONS.
The Options represented by this Option Certificate are subject to the
following provisions, terms and conditions:
1. Vesting of Options.
The Holder shall be entitled to exercise the Options at any time during
the Exercise Period, as defined in Section 2 below.
2. Exercise of Options.
The Options may be exercised by the Holder in whole, or in part, (but not
as to a fractional share of Common Stock), by surrender of this Option
Certificate at the office of the Company located at 000 Xxxxxxxx Xxxx Xxxx.,
Xxxxx 000, Xxxxxx, Xxxx 00000 (or such other office or agency of the Company
as may be designated by notice in writing to the Holder at the address of such
Holder appearing on the books of the Company) with the appropriate form
attached hereto duly completed, at any time within the period beginning on the
date hereof and expiring at 5:00 p.m. Salt Lake City, Utah time, on April 17,
2003 (the "Exercise Period") and by payment to the Company by certified check
or bank draft of the Exercise Price for such shares. The Company agrees that
the shares of Common Stock so purchased shall be and are deemed to be issued
to the Holder as the record owner of such shares of Common Stock as of the
close of business on the date on which the Option Certificate shall have been
surrendered and payment made for such shares of Common Stock. Certificates
representing the shares of Common Stock so purchased, together with any cash
for fractional shares of Common Stock paid pursuant to Section 4(f), shall be
delivered to the Holder promptly, and, unless the Options have expired, a new
Option Certificate representing the number of Options represented by the
surrendered Option Certificate, if any, that shall not have been exercised
also shall be delivered to the Holder within such time.
3. Shares Fully Paid; Reservation of Shares.
All shares of Common Stock that may be issued upon the exercise of the
rights represented by this Option shall, upon issuance, be fully paid and
nonassessable, and free from all taxes (other than taxes based on the income
of the holder of this Option), with respect to the issue thereof. During the
period within which the rights represented by this Option may be exercised,
the Company shall at all times have authorized and reserved for issuance upon
exercise of the purchase right evidenced by this Option, a sufficient number
of shares of its Common Stock to provide for the exercise of the rights
represented by this Option. The Company agrees that its issuance of this
Option shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for shares of common Stock issuable upon exercise of this Option.
4. Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Option shall be subject to adjustment from time to time as
follows:
(a) Stock Dividends; Stock Splits; Reverse Stock Splits;
Reclassifications. In case the Company shall (i) pay a dividend with respect
to its Common Stock in shares of capital stock, (ii) subdivide its outstanding
shares of Common Stock, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of any class of Common Stock or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), other than
elimination of par value, a change in par value, or a change from par value to
no par value (any one of which actions is herein referred to as an "Adjustment
Event"), the number of shares of Common Stock purchasable upon exercise of
each Option immediately prior to the record date for such Adjustment Event
shall be adjusted so that the Holder shall thereafter be entitled to receive
the number of shares of Common Stock or other securities of the Company (such
other securities thereafter enjoying the rights of shares of Common Stock
under this Option Certificate) that such Holder would have owned or have been
entitled to receive after the happening of such Adjustment Event, had such
Option been exercised immediately prior to the happening of such Adjustment
Event or any record date with respect thereto. An adjustment made pursuant to
this Section 4(a) shall become effective immediately after the effective date
of such Adjustment Event retroactive to the record date, if any, for such
Adjustment Event.
(b) Adjustment of Exercise Price. Whenever the number of shares of
Common Stock purchasable upon the exercise of each Option is adjusted pursuant
to Section 4(a), the Exercise Price for each share of Common Stock payable
upon exercise of each Option shall be adjusted by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, the numerator of
which shall be the number of shares of Common Stock purchasable upon the
exercise of each Option immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.
(c) De Minimis Adjustments. No adjustment in the Exercise Price and
number of shares of Common Stock purchasable hereunder shall be required
unless such adjustment would require an increase or decrease of at least $0.15
in the Exercise Price; provided, however, that any adjustments which by reason
of this Section 4(c) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations shall be
made to the nearest full share.
(d) Adjustment Limitations. Except as provided in this section 4, no
adjustment on account of dividends or interest on Common Stock or other
securities purchasable hereunder will be made upon the exercise hereof.
(e) Statement on Option Certificates. The form of this Option
Certificate need not be changed because of any change in the Exercise Price or
in the number or kind of shares purchasable upon the exercise of a Option.
However, the Company may at any time in its sole discretion make any change in
the form of the Option Certificate that it may deem appropriate and that does
not affect the substance thereof and any Option Certificate thereafter issued,
whether in exchange or substitution for any outstanding Option Certificate or
otherwise, may be in the form so changed.
(f) Fractional Interest. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of the Options. The number
of full shares of Common Stock which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of whole shares of
Common Stock purchasable on the exercise of the Options so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 4(f), be issuable on the exercise of the Options (or specified
proportion thereof), the Company shall pay an amount in cash calculated by it
to be equal to the then fair value of one share of Common Stock, as determined
by the Board of Directors of the Company in good faith, multiplied by such
fraction computed to the nearest whole cent.
5. No Rights of Stockholder.
The Option Holder shall not be entitled to vote or to receive dividends
or shall otherwise be deemed to be the holder of shares of Common Stock for
any purpose, nor shall anything contained herein or in any Option Certificate
be construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote upon or give or withhold
consent to any action of the Company (whether upon any reorganization,
issuance of securities, reclassification or conversion of Common Stock,
consolidation, merger, sale, lease, conveyance, or otherwise), receive notice
of meetings or other action affecting stockholders (except for notices
expressly provided for herein) or receive dividends or subscription rights,
until the Option Certificate shall have been surrendered for exercise
accompanied by full and proper payment of the Exercise Price as provided
herein and shares of Common Stock hereunder shall have become issuable and
until the Holder shall have been deemed to have become a holder of record of
such shares. The Holder shall not, upon the exercise of Options, be entitled
to any dividends if the record date with respect to payment of such dividends
shall be a date prior to the date such shares of Common Stock became issuable
upon the exercise of such Options.
6. Registration Rights.
(a) Piggyback Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, for its own account
or the account of any of its stockholders, other than a registration relating
solely to employee benefit plans, the Company will include in such
registration, and in any underwriting involved therein, all the shares of
Common Stock issuable upon exercise of this Option.
(b) Period of Effectiveness. The Company shall use its best effort
to maintain the effectiveness of any registration statement pursuant to this
section 6 for a period in excess of the shorter of (i) the period during which
the Option holder shall hold any shares of Common Stock or (ii) three years
after the effective date of Holder's employment with the Company.
(c) Expenses. All fees, disbursements and expenses incurred by the
Company in connection with any registration pursuant to this section 6 shall
be borne by the Company, excluding legal fees and disbursements of counsel for
the Option holder.
7. Closing of Books.
The Company will at no time close its transfer books against the transfer
of any Option or of any shares of Common Stock or other securities issuable
upon the exercise of any Option in any manner which interferes with the timely
exercise of the Options.
8. Options Exchangeable; Loss, Theft.
This Option Certificate is exchangeable, upon the surrender hereof by any
Holder at the office or agency of the Company referred to in Section 2, for
new Option Certificates of like tenor representing in the aggregate the right
to subscribe for and purchase the number of shares of Common Stock which may
be subscribed for and purchased hereunder, each such new Option to represent
the right to subscribe and purchase such number of shares of Common Stock as
shall be designated by said Holder hereof at the time of such surrender. Upon
receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation, or upon surrender or cancellation of this Option
Certificate, the Company will issue to the Holder hereof a new Option
Certificate of like tenor, in lieu of this Option Certificate, representing
the right to subscribe for and purchase the number of shares of Common Stock
which may be subscribed for and purchased hereunder.
9. Mergers, Consolidations.
If the Company shall merge or consolidate with another corporation, the
Holder of this Option shall thereafter have the right, upon exercise hereof
and payment of the Exercise Price, to receive solely the kind and amount of
shares of stock (including, if applicable, Common Stock), other securities,
property or cash or any combination thereof receivable by a holder of the
number of shares of Common Stock, as adjusted from time to time, for which
this Option might have been exercised immediately prior to such merger or
consolidation (assuming, if applicable, that the Holder of such Common Stock
failed to exercise its rights of election, if any, as to the kind or amount of
shares of stock, other securities, property or cash or combination thereof
receivable upon such merger or consolidation).
10. Expenses.
The Holder shall bear the cost of all underwriting discounts, selling
commissions and stock transfer taxes applicable to the Option and the Common
Stock underlying the Options.
11. Representations.
The Company represents and options to the holder of this Option as
follows:
(a) This Option has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, subject to the laws of general application relating to
bankruptcy, insolvency, and the relief of debtors and the rules of law or
principles of equity governing specific performance, injunctive relief, and
other equitable remedies; and
(b) The Shares have been duly authorized and reserved by the Company
and, when issued in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable.
12. Compliance with Securities Laws.
The holder of this Option, by acceptance hereof, agrees that this Option
and the Common Stock to be issued upon exercise hereof are being acquired for
investment and that such holder will not offer, sell or otherwise dispose of
this Option or any Common Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the 1933 Act or any
applicable state Blue Sky law. This Option and all Common Stock issued upon
exercise of this Option (unless registered under the 0000 Xxx) shall bear a
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS SECURITY MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THESE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
13. Disposition of Option and Common Stock.
With respect to any offer, sale or other disposition of this Option or
any shares of Common Stock acquired pursuant to the exercise of this Option
prior to registration of such shares, the holder hereof and each subsequent
holder of this Option agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written
opinion of such holder's counsel, if requested by the Company, to the effect
that such offer, sale or other disposition may be effected without
registration or qualification of this Option or such Common Stock under the
1933 Act or any applicable state Blue Sky law then in effect, and indicating
whether or not under any of said laws certificates for this Option or such
Common Stock to be sold or otherwise disposed of require any restrictive
legend as to applicable restrictions on transferability in order to ensure
compliance therewith. Upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company shall notify such holder
that such holder can sell or otherwise dispose of this Option or such Common
Stock, all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this section 12 that
the opinion of counsel for the holder is not reasonably satisfactory to the
Company, the Company shall so notify the holder promptly after such
determination has been made.
14. Miscellaneous.
(a) Binding on Successors. This Option shall be binding upon any
successors or assigns of the Company. This Option shall constitute a contract
under the laws of the State of Utah and for all purposes shall be construed in
accordance with and governed by the laws of the State of Utah.
(b) Headings. The headings in this Option are for purposes of
convenience and reference only and shall not be deemed to constitute a part
hereof.
(c) Amendments. This Option and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by
the Company and the registered holder hereof.
Dated as of April 17, 2000
COMPUTERIZED THERMAL IMAGING, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Chief Financial Officer
[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Option)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase ____________ shares of
Common Stock and herewith tenders in payment for such shares a certified check
or bank draft payable to the order of COMPUTERIZED THERMAL IMAGING, INC. in
the amount of $__________________, all in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be registered in
the name of _____________________________________________ whose address is
_______________________________________________ and that such certificate (or
any payment in lieu thereof) be delivered to__________________________________
whose address is __________________________________________________.
Dated: _________________________ _________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Option.)
