EXHIBIT 4.1
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CAS MEDICAL SYSTEMS, INC.
1994 EMPLOYEES' INCENTIVE STOCK OPTION PLAN
1. Purpose. The purpose of this 1994 Employees' Incentive Stock Option
Plan (hereinafter referred to as the "Plan"), which is intended to qualify as an
incentive stock option plan within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), is to encourage and enable the
employees of CAS Medical Systems, Inc., and its subsidiaries, if any
(hereinafter collectively called the "Company"), to acquire a proprietary
interest in the Company through the ownership of shares of Common Stock, in
order to assure a closer identification of their interests with those of the
Company by providing them with a more direct stake in its welfare, thereby
stimulating their efforts on the Company's behalf and strengthening their desire
to remain with the Company. This is accomplished by the granting of options to
qualified employees of the Company.
2. Amount of Stock Subject to the Plan. The total number of shares of
the Company's Common Stock which may be sold pursuant to the Plan shall not
exceed 1,250,000 shares plus an indeterminate number of shares required to be
issued pursuant to Paragraph 10 of the Plan. Shares sold under the Plan may be
reacquired by the Company at any time, as the Board of Directors of the Company,
from time to time, may determine. In the event that any options granted under
the Plan shall not have been exercised in full, the shares not purchased
hereunder shall be available again for purposes of the Plan.
3. Administration of the Plan. The Board of Directors shall administer
the Plan, including, without limitation:
(a) Determination of participants, allotment of shares and prices of
shares;
(b) Construing, amending or rescinding terms of the Plan; and
(c) The terms and conditions of each option agreement for the purchase
of stock under the Plan, subject to the provisions of the Plan.
The Company's contribution to the Plan will consist of making its
shares of Common Stock available for purchase by employees and bearing all costs
of administering the Plan.
4. Eligibility. All persons employed by the Company, now, or in the
future, including officers of the Company, shall be eligible to participate
under the Plan, but shall have no right to participate in the Plan except as
specifically determined in each instance by the Board of Directors.
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5. Time of Granting Options. Neither anything contained in the Plan nor
in any resolution adopted or to be adopted by the Board of Directors or by the
stockholders of the Company shall constitute the granting of any options under
the Plan. The granting of an option to purchase stock shall take place only when
a Grant of Option shall have been duly executed and tendered to the employee by
or on behalf of the Company.
6. Terms of Options. The terms of each option granted under the Plan
shall be determined by the Board of Directors consistent with the provisions of
the Plan, and shall include the following:
(a) An option granted under the Plan must be granted within ten (10)
years from the date the Plan is adopted by the Board of Directors, or the date
the Plan is approved by the stockholders of the Company, whichever is earlier.
(b) The purchase price of the shares subject to each option shall not
be less than the fair market value of the Company's Common Stock at the time
such option is granted except, however, that if the optionee owns more than 10%
of the outstanding Common Stock of the Company at the time the option is
granted, including stock attributable to the optionee under applicable
provisions of the Code but not including stock obtainable under the option, the
purchase price of the shares to the optionee shall not be less than 110% of the
fair market value of the Common Stock at the time such option is granted. Such
fair market value shall be determined by the Board and good faith shall be
exercised in such determination.
(c) An option granted under the Plan shall become exercisable in two
equal annual installments, commencing one year from the date of the grant of the
option. Each option granted under the Plan shall be its terms expire and shall
not be exercisable after the expiration of ten (10) years from the date of the
grant except, however, that if the optionee owns more than 10% of the
outstanding Common Stock of the Company at the time the option is granted,
including stock attributable to the optionee under applicable provisions of the
Code but not including stock obtainable under the option, any option granted to
such optionee shall not be exercisable after the expiration of five (5) years
from the date of its grant. Every option granted under the Plan shall be subject
to early termination as expressly provided in Paragraph 11 hereof.
(d) In the event that employment of an optionee by the Company or any
subsidiary is terminated for any reason other than death, an option granted
hereunder shall be exercisable by the optionee at any time prior to the
expiration date of the option or within three months after the date of such
termination, whichever is earlier, but only to the extent the optionee had the
right to exercise such option at the date of such termination. In the event of
the death of an optionee while in the employ of the Company (or within three
months after termination of employment by reasons of retirement with the consent
of the Company), his option shall be exercisable by the person or persons to
whom such optionee's rights pass by will or by the laws of descent and
distribution at any time prior to the expiration date of thew option or within
three months after the date of such death, whichever is earlier, but only to the
extent the optionee had the right to exercise such option on the date of his
death.
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(e) The aggregate fair market value (determined at the time the option
is granted) of the shares with respect to which the option is exercisable for
the first time by the Optionee during any calendar year (under all plans
relating to incentive stock options, as defined in the Code, maintained by the
Company and a parent and subsidiary corporation of the Company and a predecessor
corporation of any such corporation shall not exceed one hundred thousand
dollars ($100,000).
(f) An option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (attention of the
Secretary) of written notice of the number of shares with respect to which the
option is being exercised, accompanied by payment in full by check payable to
the order of the Company, of the purchase price of such shares.
7. Status as Stockholder. No employee shall, by reason of the Plan or
any rights granted pursuant thereto, have any rights of a stockholder of the
Company until shares of stock shall have been delivered to him by the Company.
8. Non-Transferability. An option granted under the Plan shall not be
transferable other than by will or the laws of descent and distribution, and any
option granted under the Plan may be exercised during the lifetime of the holder
thereof only by him. No right granted under the Plan to an employee may be
pledged, hypothecated, assigned, or otherwise encumbered by him.
9. Use of Funds. Funds paid in purchase of the stock are to be added
to the general funds of the Company and may be used by the Company for any
lawful purpose.
10. Dilution or Other Adjustments. In the event that there is any
change in the stock subject to the Plan through merger, consolidation or
reorganization, or in the event of any change in the capital structure, the
Board of Directors of the Company shall make such adjustments as it, in its sole
discretion, deems equitable to prevent dilution or enlargement of the employee's
rights hereunder. In the event that the Company should declare a stock dividend
on its shares of Common Stock, the number of shares which an employee has
elected to purchase but which have not been delivered at the record date of such
stock dividend shall be changed proportionately to the extent of the number of
whole shares that would have been issuable on such stock; no provision will be
made for, or in lieu of, fractional shares.
11. Termination and Amendment of the Plan. The Plan is scheduled to
terminate December 31, 2003; however, the Board of Directors of the Company
shall have the right, at any time, to amend, suspend or terminate the Plan in
any respect which it may deem to be in the best interests of the Company,
provided, however, no amendments shall be made in the Plan without the approval
of the stockholders of the Company which:
(a) Increase the total number of shares for which options may be
granted under this Plan for all employees or for any one of them except as
provided herein.
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(b) Change the minimum purchase price for the optioned shares, except
as provided herein.
(c) Affect outstanding options or any unexercised rights thereunder,
except as provided herein.
(d) Extend the option period provided in Section 6 or make an option
exercisable earlier than as specified in Section 6.
(e) Extend the termination date of the Plan.
12. Plan Not an Employment Contract. The Plan does not and shall not be
deemed to constitute a contract of employment with any employee. Terms of
employment and the right of the Company to terminate the employment of any
employee, with or without cause, shall depend entirely upon the terms of
employment otherwise existing between any employee and the Company without
regard to the Plan.
13. Approval of Issuance. The Company shall not be obligated to issue
and deliver any shares of Common Stock until there has been qualification under
or compliance with such state or federal laws, rules or regulations as the
company may deem applicable. If requested by the Company, any employee acquiring
shares of Common Stock hereunder shall deliver a representation to the Company
to the effect that such shares are being acquired for investment and not with a
view to the resale or distribution thereof.
14. Governing Law. The Plan shall be governed by and all questions
arising hereunder shall be determined in accordance with the laws of the State
of Delaware.
15. Other Terms and Conditions. Any option granted hereunder shall
contain such other and additional terms, not inconsistent with the terms of this
Plan, which are deemed necessary or desirable by the Board, which such terms,
together with the terms of this Plan, shall constitute such option as an
"Incentive Stock Option" within the meaning of Section 422 of the 1986 Internal
Revenue Code and lawful regulations thereunder.
16. Effective Date, Term and Approval. Subject to the approval of the
stockholders of the Company at the Annual Meeting in 1994, the Plan shall take
effect on April 1, 1994. This Plan will terminate on December 31, 2003, and no
options may be granted under the Plan after that date unless an earlier
termination date after which no options may be granted under the Plan is fixed
by action of the Board of Directors, but any option granted prior thereto may be
exercised in accordance with its terms. The Plan and all options granted
pursuant to it are subject to all laws, approvals, requirements and regulations
of any governmental authority which may be applicable thereto and,
notwithstanding any provisions of the Plan or option agreement, the holder of an
option shall not be entitled to exercise his option nor shall the Company be
obligated to issue any shares to the holder if such exercise or issuance shall
constitute a violation by the holder or the Company of any provisions of any
such approval requirements, law or regulation.
As amended by the Board of Directors on October 26, 1999
