Exhibit 4.1
PHOENIX HEALTHCARE CORPORATION 1999 STOCK OPTION PLAN
ARTICLE 1
THE PLAN
1.1. NAME. The name of this Plan is the Phoenix Healthcare Corporation
1999 Stock Option Plan.
1.2 PURPOSE AND SCOPE. (a) The purposes of the Plan are to (i) attract
and retain the best available personnel for positions of substantial
responsibility, (ii) reward past and future contributions to the Company (or any
Parent or Subsidiary), (iii) encourage ownership of the Company's common stock
by key employees, directors and consultants of the Company (and of any current
or future Parent or Subsidiary), and (iv) promote the Company's business success
by creating a long-term mutuality of interests between Plan participants and the
Company's shareholders.
(b) The Plan provides for the granting of both Incentive Stock
Options and Nonqualified Stock Options. Grants can be made to Employees,
Directors and Consultants; provided, that Incentive Stock Options may only be
granted to Employees.
1.3 EFFECTIVE DATE AND DURATION OF PLAN. This Plan is effective for a
10-year period commencing on January 1, 1999, and ending on December 31, 2008,
provided that any Options which are granted under the Plan prior to the
termination date shall continue to be exercisable in accordance with the terms
of the Stock Option Agreement after that date.
ARTICLE 2
DEFINITIONS
Capitalized terms in this Plan shall have the following meanings:
2.1 BOARD. The Board of Directors of the Company.
2.2 CODE. The Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder, or any replacement
legislation.
2.3 COMMON STOCK. The common stock, par value $0.001 per share, of
Phoenix Healthcare Corporation.
2.4 COMPANY. Phoenix Healthcare Corporation and any successor to such
corporation, whether by merger, consolidation, liquidation or otherwise.
2.5 CONSULTANT. Any person engaged by the Company (or any Parent or
Subsidiary) as a non-Employee service provider pursuant to the terms of a
written contract or otherwise.
2.6 DIRECTOR. A member of the Board.
2.7 DISABILITY. Permanent and total disability within the meaning of
Section 22(e)(3) of the Code.
2.8 EMPLOYEE. All persons employed by the Company or any Parent or
Subsidiary, including officers, whether full-time or part-time.
2.9 EXCHANGE ACT. The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, or any replacement
legislation.
2.10 FAIR MARKET VALUE. As of any given date, (a) the price of the last
trade of a Share as reported on NASDAQ or the OTC bulletin board, as applicable,
for that date (or if Shares were not traded on such date, for the closest
preceding date on which a trade occurred), or (b) if the Shares are not publicly
traded, the fair market value of a Share as determined by the Board in good
faith, using such criteria as the Board may, in its sole discretion, deem
appropriate.
2.11 INCENTIVE STOCK OPTION. Any stock Option granted under this Plan
which is intended to qualify as an "incentive stock option" under Section 422 of
the Code.
2.12 NONQUALIFIED STOCK OPTION. Any stock Option granted under this
Plan which is not intended to qualify as an "incentive stock option" under
Section 422 of the Code.
2.13 OPTIONED SHARES. Those Shares subject to a stock Option granted
pursuant to this Plan.
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2.14 OPTIONEE. An individual who has received a stock Option pursuant
to this Plan.
2.15 OPTION PRICE. The payment to the Company for the Shares upon the
exercise of an Option.
2.16 OPTION. An Option granted hereunder to purchase Shares.
2.17 PARENT. A parent corporation, whether now or hereafter existing,
within the meaning of Section 424(e) of the Code.
2.18 PLAN. The Phoenix Healthcare Corporation 1999 Stock Option Plan,
as amended from time to time.
2.19 SHARE. One share of the Company's Common Stock, as adjusted in
accordance with Section 5.5 of this Plan.
2.20 STOCK OPTION AGREEMENT. The Agreement containing the terms and
conditions of a stock Option grant.
2.21 SUBSIDIARY. A subsidiary corporation, whether now or hereafter
existing, within the meaning of Section 424(f) of the Code.
ARTICLE 3
PLAN ADMINISTRATION
3.1 ADMINISTRATION. (a) The Plan shall be administered by the Board.
The Board shall have full discretion to administer and interpret the Plan and to
adopt such rules, regulations, and procedures as it deems necessary or
advisable. The Board may engage a qualified brokerage or other financial
services firm to assist it in the administration of the Plan.
(b) Records shall be kept of any actions taken by the Board. A
majority of the Board shall constitute a quorum at any meeting. Any acts
approved either (i) by a majority of the Directors present at any meeting at
which there is a quorum or (ii) in writing by all Directors, shall be deemed to
be acts of the Board for purposes of this Plan.
(c) The Board may delegate any or all of its powers and duties
hereunder to one or more (i) committees consisting of such members of the Board
as it may designate, or (ii)
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Employees. The interpretation of, and all actions taken under, the Plan by the
Board or its delegate shall be final, binding, and conclusive on all interested
parties, including the Company, its shareholders, and all former, present, and
future Employees, Directors and Consultants. The Board may, as to questions of
accounting, rely conclusively upon any determinations made by independent public
accountants of the Company.
ARTICLE 4
ELIGIBILITY FOR GRANTS
4.1 ELIGIBILITY AND TERMS OF GRANTS. The Board shall have full
discretionary authority to determine the persons eligible to receive an Option,
the time or times at which the Optioned Shares may be purchased, and whether all
of the Options may be exercised at one time or in increments.
4.2 GRANTING OF OPTIONS. (a) The granting of any Option shall be
entirely in the discretion of the Board and nothing in the Plan shall be
construed as giving any Employee, Director or Consultant any right to
participate under this Plan or to receive any Option or right under it.
(b) The Board may, in its sole discretion, accept the
cancellation of outstanding Options in return for the grant of new Options for
the same or different number of Shares and at the same or different Option
Price.
(c) No person may be granted options under this Plan for more
than seven hundred and fifty thousand (750,000) Shares. This limitation shall be
construed and applied in accordance with Section 162(m) of the Code.
ARTICLE 5
GENERAL PROVISIONS
5.1 STOCK SUBJECT TO PLAN. Subject to the provisions of Section 5.5,
the maximum number of Shares for which Options may be granted pursuant to this
Plan is three million (3,000,000). Shares subject to any unexercised Option
granted under this Plan which has expired or terminated shall again become
available under this Plan. The Shares which may be issued or delivered under the
Plan may, as determined by the Board from time to time in its sole discretion,
be authorized but unissued Shares, reacquired Shares or both.
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5.2 TERM AND EXPIRATION OF OPTIONS. Each Option granted under this Plan
shall be evidenced by a Stock Option Agreement, shall be subject to such
amendment or modification from time to time as the Board shall deem necessary or
appropriate to comply with or take advantage of applicable laws or regulations,
and shall, in addition to such other terms as the Board may include, provided:
(a) that, subject to Section 5.2 (b), the Option may be
exercised only by the Optionee or Optionee's personal representative;
(b) that no Option shall be transferable by the Optionee or by
operation of law other than by will of, or by the laws of descent and
distribution applicable to, a deceased Optionee and that the Option and any and
all rights granted to the Optionee thereunder and not previously exercised shall
automatically terminate and expire upon any sale, transfer, or hypothecation or
any attempted sale, transfer, or hypothecation of such rights or upon the
bankruptcy or insolvency of the Optionee or Optionee's estate;
(c) that subject to the foregoing provisions, a Option may be
exercised at different times for portions of the total number of Shares which
have vested, provided that no Option may be exercised for a fraction of a Share;
(d) that no Optionee shall have the right to receive any
dividend on or to vote or exercise any right in respect to any Shares unless and
until the certificates for such Shares have been issued to such Optionee;
(e) that the Option shall expire at the earliest of the
following:
(i) the date specified in the Stock Option Agreement;
(ii) with respect to any Optionee,
(A) three (3) months after voluntary or
involuntary termination of Optionee's position as Employee,
Director or Consultant other than termination as described in
subparagraph (B) or (C) below;
(B) upon the discharge of Optionee for
dishonesty, gross negligence, willful misconduct, or conduct
that adversely affects the interests of the Company (or any
Parent or Subsidiary); or
(C) twelve (12) months after Optionee's
death or Disability.
(f) that, to the extent an Option provides for the vesting
thereof in increments, such vesting shall cease as of the date of the Optionee's
death, Disability, or ceasing to be an Employee, Director or Consultant, as
applicable;
(g) that the terms of the Option shall not be affected by any
change of duties or position so long as the Optionee shall continue to be
employed by, or be a Director of, or a Consultant to the Company or a Parent or
Subsidiary.
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5.3 NOTICE OF INTENT TO EXERCISE OPTION. An Option may be exercised in
whole or in part by notifying the Board (or its designee) in the manner and upon
the terms as may be provided in the Optionee's Stock Option Agreement.
5.4 EXERCISE OF OPTION. Upon receipt by the Board (or its designee) of
the notice provided in Section 5.3, an Option shall be deemed to be exercised as
to the number of Shares specified in such notice and Shares in that amount shall
be issued to the Optionee upon payment to the Company of the Option Price as
specified in Section 6.2 hereof. Payment of the Option Price shall be made in
cash (or cash equivalent) in United States dollars or already-owned Shares
(provided such shares have been owned by the Optionee for at least six months),
and may (as permitted by the Board in its sole discretion) be done in accordance
with any procedures for a "cashless exercise" established by the Company with a
brokerage or other qualified financial services company.
5.5 RECAPITALIZATION. Subject to any required action by the
stockholders of the Company, the aggregate number of Shares for which Options
may be granted hereunder, the number of Shares covered by any outstanding
Option, and the price per Share thereof under each such Option shall be
proportionately adjusted for the following: (a) Any dividend or other
distribution declared as to Common Stock which is payable in Shares; and (b) an
increase or decrease in the number of outstanding shares of Common Stock
resulting from a stock split or reverse split of shares, recapitalization or
other capital adjustment. All fractional Shares or other securities which result
from such an adjustment shall be eliminated and not carried forward to any
subsequent adjustment.
5.6 SUBSTITUTIONS AND ASSUMPTIONS. The Board shall have the right to
substitute or assume Options in connection with a stock dividend, stock split,
share combination, share exchange, recapitalization, merger, consolidation,
reorganization, or like corporate transaction which affects the number or nature
of the Shares. The number of Shares reserved pursuant to Section 5.1 may be
increased without further action by the stockholders by the corresponding number
of Options assumed and, in the case of a substitution, by the net increase in
the number of Shares subject to Options before and after the substitution. All
fractional Shares or other securities which result from such substitution shall
be eliminated and not carried forward to any subsequent substitution.
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5.7 WITHDRAWAL. An Optionee may at any time elect in writing to abandon
an Option with respect to the number of Shares as to which the Option shall not
have been exercised.
5.8 COMPLIANCE WITH APPLICABLE LAWS AND CERTIFICATE OF INCORPORATION.
(a) The Company shall have the right to place appropriate legends upon the
certificate for any Shares issued pursuant to this Plan and take such other acts
as it may deem necessary or appropriate to ensure that the issuance of Optioned
Shares complies with applicable provisions of state and federal securities laws.
(b) The Company shall not be obligated to issue Shares under
any Option granted under this Plan that would violate any law, rule or
regulation. Each Optionee may be required to make representations and
warranties, enter into restrictive agreements, or take such other actions as may
be deemed necessary or appropriate by the Company to ensure compliance with
applicable law and the Company's Certificate of Incorporation and By-laws.
ARTICLE 6
RULES FOR NONQUALIFIED STOCK OPTIONS
6.1 OPTION PRICE. The purchase price of Shares subject to a
Nonqualified Stock Option shall be determined by the Board at the time the
Option is granted; provided, that the purchase price shall not be less than
eighty percent (80%) of the Fair Market Value of such Shares on the date of the
grant.
6.2 PAYMENT UPON EXERCISE OF OPTION. The amount to be paid by the
Optionee upon exercise of a Nonqualified Stock Option shall be the full purchase
price for the Optioned Shares, together with the amount of any required federal,
state, and local tax withholding (as determined by the Company in its sole
discretion). The Company may, in its sole discretion, permit an Optionee to
elect to pay the required tax withholding by having the Company withhold Shares
having a Fair Market Value at the time of exercise equal to the amount required
to be withheld. An election by an Optionee to have Shares withheld for this
purpose will (together with such additional restrictions as the Company may
impose) be subject to the following:
(a) If an Optionee has received multiple Option grants, a
separate election must be made for each grant;
(b) The election must be made prior to the date the Option is
exercised;
(c) The election will be irrevocable; and
(d) The election may be rejected by the Company.
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ARTICLE 7
SPECIAL RULES FOR INCENTIVE STOCK OPTIONS
7.1 CONFORMANCE WITH CODE REQUIREMENTS. Incentive Stock Options granted
under this Plan shall conform to, be governed by, and be interpreted in
accordance with Section 422 of the Code and any regulations thereunder
including, without limitation, those provisions of Section 422 of the Code that
prohibit an option by its terms to be exercisable after ten (10) years from the
date that it was granted. Only Employees may be granted Incentive Stock Options.
To the extent that any option granted as an Incentive Stock Option fails to
conform to the applicable requirements, it shall be treated and honored by the
Company as a Nonqualified Stock Option.
7.2 OPTION PRICE. The purchase price of each Share optioned under the
Incentive Stock Option provisions of this Plan shall be determined by the Board
in its sole discretion but shall, in no event, be less than the Fair Market
Value on the date of grant.
7.3 LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS. The aggregate Fair
Market Value (determined on the date of grant) of the Shares with respect to
which Incentive Stock Options are exercisable by any individual for the first
time during any calendar year under all plans of the Company (and any Parent or
Subsidiary) shall not exceed $100,000 (or such other limit as may be established
by law from time to time).
7.4 LIMITATION ON GRANTS TO SUBSTANTIAL SHAREHOLDERS. An Employee may
not, immediately prior to the grant of an Incentive Stock Option hereunder, own
stock in the Company representing more than ten percent (10%) of the voting
power of all classes of stock of the Company unless the per share option price
specified by the Board for the Incentive Stock Options granted such an Employee
is at least one hundred ten percent (110%) of the Fair Market Value of the
Company's stock on the date of grant and such option, by its terms, is not
exercisable after the expiration of five (5) years from the date such option is
granted. For purposes of this limitation, Section 424(d) of the Code governs the
attribution of stock ownership.
7.5 PAYMENT UPON EXERCISE OF OPTION. The amount to be paid by the
Optionee upon exercise of an Incentive Stock Option shall be the full purchase
price thereof provided in the option.
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ARTICLE 8
AMENDMENT AND TERMINATION
8.1 AMENDMENT. (a) The Board shall have the right to amend the Plan at
any time and from time to time; provided, that no such amendment of the Plan
shall, without stockholder approval, be effective if stockholder approval of the
amendment is required at such time to qualify for any available exemption from
Section 16 of the Exchange Act or by any other applicable law, regulation, rule
or order.
(b) No amendment may be made that would cause Options not to
qualify for exemption under Section 16 of the Exchange Act.
(c) No amendment of the Plan shall, without the written
consent of the holder of a Option awarded under the Plan prior to the date of
the amendment or termination, adversely affect the rights of such holder with
respect to such Option (except to the extent necessary to comply with any
applicable law, regulation, rule or order).
(d) Notwithstanding anything herein or in any Stock Option
Agreement to the contrary, the Board shall have the power to amend the Plan in
any manner deemed necessary or advisable for Options to qualify for any
exemption provided under Section 16 of the Exchange Act and any such amendment
shall, to the extent deemed necessary or advisable by the Board, be applicable
to any outstanding Options previously granted under the Plan. In the event of
such an amendment to the Plan, the holder of any Option shall, upon request of
the Board and as a condition for exercising of such Option, execute a conforming
amendment in the form prescribed by the Board to the Stock Option Agreement
within such reasonable period of time as the Board shall specify in such
request.
8.2 TERMINATION. The Board shall have the right to terminate the Plan
at any time; provided, that no such termination shall terminate any outstanding
Option previously granted under the Plan or adversely affect the rights of such
holder without his or her written consent. No new Options may be granted under
the Plan on or after the date of termination.
ARTICLE 9
MISCELLANEOUS
9.1 REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Option
shall be subject to the requirement that if at any time the Board shall
determine that the registration, listing, or
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qualification of the Shares covered thereby upon any securities exchange or
market or under any foreign, federal, state, or local law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the purchase
of Shares thereunder, no such Option may be exercised unless and until such
registration, listing, qualification, consent, or approval shall have been
effected or obtained free of any condition not acceptable to the Company. Any
person exercising an Option shall make such representations, warranties and
agreements and furnish such information as the Board or the Company may request
to assure compliance with the foregoing or any other applicable legal
requirements.
9.2 NO RIGHTS TO CONTINUED EMPLOYMENT OR OTHER RETENTION; NO
RESTRICTIONS. Neither this Plan nor any action taken hereunder shall be
construed as giving any Employee, Director or Consultant any right to be
retained in such position or status by the Company or any Parent or Subsidiary.
Nothing in this Plan shall restrict the Company's rights to adopt other Option
plans pertaining to any or all of the Employees, Directors or Consultants
covered under this Plan or other Employees, Directors or Consultants not covered
under this Plan.
9.3 COSTS AND EXPENSES. Except as provided herein, all costs and
expenses of administering the Plan shall be paid by the Company.
9.4 PLAN UNFUNDED. This Plan shall be unfunded. Except for the Board's
reservation of a sufficient number of authorized Shares to the extent required
by law to meet the requirements of the Plan, the Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure payment of any grant under the Plan.
9.5 GOVERNMENT REGULATIONS. The rights of Optionees and the obligations
of the Company hereunder shall be subject to all applicable laws, rules, and
regulations and to such approvals as may be required by any governmental agency.
9.6 PROCEEDS FROM SALE OF STOCK. Proceeds of the purchase of Optioned
Shares by an Optionee may be used by the Company for any business purpose.
9.7 GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
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9.8 INVALIDITY. If any provision of the Plan shall be held invalid or
unlawful for any reason, such event shall not affect or render invalid or
unenforceable the remaining provisions of the Plan.
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