Exhibit
4.1
GREAT
EXPECTATIONS AND ASSOCIATES, INC.
2004
STOCK OPTION PLAN
(Effective
as of November 12, 2004)
1
.
Purpose
.
The
purposes of this 2004 Stock Option Plan (the “
Plan
”)
are to
induce certain individuals to remain in the employ or service of Great
Expectations and Associates, Inc., a Colorado corporation (the “
Company
”)
and
its present and future subsidiary corporations (each a “
Subsidiary
”),
as
defined in Section 425(f) of the Internal Revenue Code of 1986, as amended
(the
“
Code
”),
to
attract new individuals to enter into such employment and service and to
encourage such individuals to secure or increase on reasonable terms their
stock
ownership in the Company. The Board of Directors of the Company (the
“
Board
”)
believes that the granting of stock options (the “
Options
”)
under
the Plan will promote continuity of management and increased incentive and
personal interest in the welfare of the Company and aid in securing its
continued growth and financial success. Options will be either (a) “incentive
stock options” (which term, when used herein, shall have the meaning ascribed
thereto by the provisions of Section 422 (b) of the Code) or (b) options which
are not incentive stock options (“non-incentive stock options”), as determined
at the time of the grant thereof by the Administrator referred to in Section
3(A) hereof.
2
.
Shares
Subject to Plan
.
Options
may be granted to purchase up to Two Million Three Hundred Eighty One Five
Hundred Twenty Five (2,381,525) shares of the common stock, par value $0.001
per
share (the “
Common
Stock
”)
of the
Company. Of the options to purchase up to Two Million Three Hundred Eighty
One
Five Hundred Twenty Five (2,381,525) such shares shall be initially reserved
for
options to holders of options of the Advaxis, Inc., a Delaware corporation,
2002
Stock Option Plan as amended on February 19, 2003 (the “2003 Plan”) in
substitution for cancellation of the 2003 Plan.
3
.
Administration.
(
A
)
The
Plan shall be administered by either the Board or, at the option of the Board,
a
stock option committee (the “
Committee
”),
which, if appointed, shall consist of two or more members of the Board, both
or
all of whom shall be “disinterested persons” within the meaning of Rule
16b-3(c)(2)(i) promulgated under Section 16(b) of the Securities Exchange Act
of
1934 (the “
Exchange
Act
”).
The
Committee, if appointed, shall be appointed annually by the Board, which may
at
any time and from time to time remove any member or members of the Committee,
with or without cause, appoint additional members to the Committee and fill
vacancies, however caused, in the Committee. A majority of the members of the
Committee shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members present at a meeting duly called and held.
Any decision or determination of the Committee reduced to writing and signed
by
all of the members of the Committee shall be fully as effective as if it had
been made at a meeting duly called and held. The Committee, or if a Committee
has not been appointed, the Board, in its capacity as administrator of the
Plan,
is hereinafter referred to as the “
Administrator
”.
(
B
)
Subject
to the express provisions of the Plan, the Administrator shall have complete
authority, in its discretion, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, to determine the terms and
provisions of the respective option agreements or certificates (which need
not
be identical), to determine the individuals (each a “
Participant
”)
to
whom and the times and the prices at which Options shall be granted, the periods
during which each Option shall be exercisable, the number of shares of the
Common Stock to be subject to each Option and whether such Option shall be
an
incentive stock option or a non-incentive stock option and to make all other
determinations necessary or advisable for the administration of the Plan. In
making such determinations, the Administrator may take into account the nature
of the services rendered by the respective Participants, their present and
potential contributions to the success of the Company and the Subsidiaries
and
such other factors as the Administrator in its discretion shall deem relevant.
The Administrator’s determination on the matters referred to in this Section
3(B) shall be conclusive. Any dispute or disagreement which may arise under
or
as a result of or with respect to any Option shall be determined by the
Administrator, in its sole discretion, and any interpretations by the
Administrator of the terms of any Option shall be final, binding and conclusive.
4
.
Eligibility
.
An
Option
may be granted to (1) employees and consultants of the Company or a Subsidiary,
(2) directors of the Company or a Subsidiary who are not employees of the
Company or a Subsidiary (“
Outside
Directors
”),
and
(3) employees and consultants of a corporation which has been acquired by the
Company or a Subsidiary as provided in Section 17.
5
.
Option
Prices
.
(
A
)
Except
as otherwise provided in Section 17 hereof, the initial per share option price
of any Option which is an incentive stock option shall not be less than the
fair
market value of a share of the Common Stock on the date of grant; provided,
however, that, in the case of a Participant who owns more than 10% of the total
combined voting power of the Common Stock at the time an Option which is an
incentive stock option is granted to him, the initial per share option price
shall not be less than 110% of the fair market value of a share of the Common
Stock on the date of grant.
(
B
)
Except
as otherwise provided in Section 17 hereof, the initial per share option price
of any Option which is a non-incentive stock option shall not be less than
85%
of the fair market value of a share of the Common Stock on the date of grant.
(C)
For
all purposes of this Plan, the fair market value of a share of the Common Stock
on any date shall be equal to, if the Common Stock is listed on a national
securities exchange or traded on the NASDAQ National Market System, the closing
sale price of a share of the Common Stock on such date or, if there is no sale
of the Common Stock on such date, the average of the bid and asked prices on
such exchange or system at the close of trading on such date or, if the shares
of the Common Stock are not listed on a national securities exchange or such
system on such date, the last per share sales price of Common Stock on the
market or system of the NASD on which the Common Stock is then traded or listed
(the “
Relevant
Market System
”)
during
the three business days ending on the date of grant or exercise as reported
in
the market report for the Relevant Market System or if no sale has been reported
for such period, the higher of the (i) closing bid price on the Relevant Market
System on the date of grant or exercise or (ii) the average of the closing
bid
prices on the Relevant Market System for the three business days immediately
preceding the date of grant or exercise, in each case as reported in the Market
Report for the Relevant Market System or, if the shares of the Common Stock
are
not traded or listed on a market or system of the NASD, as shall be determined
in good faith by the Administrator.
6
.
Option
Term
.
Options
shall be granted for such term as the Administrator shall determine, not in
excess of ten years from the date of the granting thereof; provided, however,
that, except as otherwise provided in Section 17 hereof, in the case of a
Participant who owns more than 10% of the total combined voting power of the
Common Stock at the time an Option which is an incentive stock option is granted
to him, the term with respect to such Option shall not be in excess of five
years from the date of the granting thereof; and provided, further, however,
that the term of an Option granted to an Outside Director shall be ten years
form the date of the granting thereof.
7
.
Limitation
on Amount of Incentive Stock Options Granted
.
Except
as
otherwise provided in Section 17 hereof, the aggregate fair market value of
the
shares of the Common Stock for which any Participant may be granted incentive
stock options which are exercisable for the first time in any calendar year
(whether under the terms of the Plan or any other stock option plan of the
Company) shall not exceed $100,000.
8
.
Exercise
of Options
.
(
A
)
Except
as otherwise provided in Section 17 hereof and except as otherwise determined
by
the Administrator at the time of the grant thereof, a Participant may (i) during
the period commencing on the first anniversary of the date of the granting
of an
Option to him and ending on the day preceding the second anniversary of such
date, exercise such Option with respect to one-quarter of the shares granted
thereby, (ii) during the period commencing on such second anniversary and ending
on the day preceding the third anniversary of the date of the granting of such
Option, exercise such Option with respect to such number of shares as when
added
to the number of shares previously purchased under the Option does not exceed
one-half of the shares granted thereby, and (iii) during the period commencing
on such third anniversary, and ending on the day preceding the fourth
anniversary of the date of the granting of such Option, exercise such Option
with respect to such number of shares as when added to the number of shares
previously purchased under the Option does not exceed three-quarters of the
shares granted thereby, and (iv) during the period commencing on such fourth
anniversary, exercise such Option with respect to all of the shares granted
thereby.
(
B
)
To the
extent exercisable, an Option may be exercised either in whole at any time
or in
part form time to time.
(
C
)
An
Option may be exercised only by a written notice of intent to exercise such
Option with respect to a specific number of shares of Common Stock and payment
of the option price to the Company for the number of shares of Common Stock
specified in any one or a combination of the following: in cash, by cashless
exercise, or in kind by the delivery of shares of the Common Stock having a
fair
market value on the date of delivery equal to the portion of the option price
so
paid; provided, further, however, that, subject to the requirements of
Regulation T promulgated under the Exchange Act, the Administrator may implement
procedures to allow a broker chosen by a Participant to make payment of all
or
any portion of the option price payable upon the exercise of an Option and
receive, on behalf of such Participant, all or any portion of the shares of
the
Common Stock issuable upon such exercise.
(D)
The
Administrator may, in its discretion, permit any Option to be exercised, in
whole or in part, prior to the time when it would otherwise be
exercisable.
9
.
Transferability
.
No
Option
shall be assignable or transferable except by will and/or by the laws of descent
and distribution and, during the life of any Participant, each Option granted
to
him may be exercised only by him.
10
.
Termination
of Service
.
(
A
)
Except
as otherwise provided by the Administrator, in the event that, other than by
reason of death or disability (as such term is defined in Section 22(e)(3)
of
the Code), a Participant leaves the employ or service of the Company and the
Subsidiaries or, in the case of an Outside Director, does not stand for
re-election or is not reelected, whether voluntarily or otherwise, each Option
theretofore granted to him shall be exercisable to the extent exercisable
immediately prior to the date of termination of employment or service (or the
date the Director does not stand for reelection or is not reelected) within
the
period ending the earlier to occur of (i) the expiration of the period of three
months after the date of such termination of services or failure to stand for
or
be reelected a Director and (ii) the date specified in such Option.
(
B
)
In the
event a Participant's employment or service (including the service of an Outside
Director) with the Company and the Subsidiaries terminates by reason of his
death, each Option theretofore granted to him shall become immediately
exercisable in full and shall terminate upon the earlier to occur of (i) the
expiration of the period of one year after the date of such Participant’s death
and (ii) the date specified in such Option.
(
C
)
Except
as otherwise provided by the Administrator, in the event that, a Participant
leaves the employ or service of the Company and the Subsidiaries by reason
of
his or her disability (as such term is defined in Section 22(e)(3) of the Code),
each Option theretofore granted to him shall become immediately exercisable
in
full and shall terminate upon the earlier to occur of (i) the expiration of
the
period of three months after the date of such termination, resignation or
failure to stand for election or to be reelected and (ii) the date specified
in
such Option.
11
.
Adjustment
of Number of Shares
.
(
A
)
In the
event that a dividend shall be declared upon the Common Stock payable in shares
of the Common Stock, the number of shares of the Common Stock then subject
to
any Option and the number of shares of the Common Stock which may be purchased
upon the exercise of Options granted under the Plan but not yet covered by
an
Option shall be adjusted by adding to each share the number of shares which
would be distributable thereon if such shares had been outstanding on the date
fixed for determining the stockholders entitled to receive such stock dividend.
In the event that the outstanding shares of the Common Stock shall be changed
into or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation, whether through
reorganization, recapitalization, stock split-up, combination of shares, sale
of
assets, merger or consolidation in which the Company is the surviving
corporation, then, there shall be substituted for each share of the Common
Stock
then subject to any Option and for each share of the Common Stock which may
be
purchased upon the exercise of Options granted under the Plan but not yet
covered by an Option, the number and kind of shares of stock or other securities
into which each outstanding share of the Common Stock shall be so changed or
for
which each such share shall be exchanged.
(
B
)
In the
event that there shall be any change, other than as specified in Section 11(A)
hereof, in the number or kind of outstanding shares of the Common Stock, or
of
any stock or other securities into which the Common Stock, shall have been
changed, or for which it shall have been exchanged, then, if the Administrator
shall, in its sole discretion, determine that such change equitably requires
an
adjustment in the number or kind of shares then subject to any Option and the
number or kind of shares available for issuance in accordance with the
provisions of the Plan but not yet covered by an Option, such adjustment shall
be made by the Administrator and shall be effective and binding for all purposes
of the Plan and of each Option.
(
C
)
In the
case or any substitution or adjustment in accordance with the provisions of
this
Section 11, the option price in each Option for each share covered thereby
prior
to such substitution or adjustment shall be the option price for all shares
of
stock or other securities which shall have been substituted for such share
or to
which such share shall have been adjusted in accordance with the provisions
of
this Section 11.
(
D
)
No
adjustment or substitution provided for in this Section 11 shall require the
Company to sell a fractional share under any Option.
(
E
)
In the
event of the dissolution, liquidation, sale of substantially all of the assets
of the Company or the sale of the Company of more than 50% of the voting
securities of the Company, the Board, in its discretion, may accelerate the
exercisability of each Option and/or terminate the same within a reasonable
time
thereafter.
12
.
Purchase
for Investment, Withholding and Waivers
.
(
A
)
Unless
the delivery of the shares upon the exercise of an Option by a Participant
shall
be registered under the Securities Act of 1933, as amended, such Participant
shall, as a condition of the Company's obligation to deliver such shares, be
required to give a representation in writing that he is acquiring such shares
for his own account as an investment and not with a view to, or for sale in
connection with, the distribution of any thereof.
(
B
)
In the
event of the death of a Participant, an additional condition of exercising
any
Option shall be the delivery to the Company of such tax waivers and other
documents as the Administrator shall determine.
(
C
)
An
additional condition of exercising any non-incentive stock option shall be
the
entry by the Participant into such arrangements with the Company with respect
to
withholding as the Administrator shall determine; provided, however, that such
Participant may direct the Company to satisfy all or a portion of such
withholding obligation by withholding from the shares of the Common Stock
issuable to him on such exercise shares of the Common Stock having a fair market
value equal to the portion of the withholding obligation so satisfied.
13
.
Declining
Market Price
.
In
the
event the fair market value of the Common Stock declines below the option price
set forth in any Option, the Administrator may, subject to the approval of
the
Board, at any time, adjust, reduce, cancel and re-grant any unexercised Option
or take any similar action it deems to be for the benefit of the Participant
in
light of the declining fair market value of the Common Stock.
14
.
No
Stockholder Status; No Restrictions on Corporate Acts; No Employment
Right
.
(
A
)
Neither
any Participant nor his legal representatives, legatees or distributees shall
be
or be deemed to be the holder of any share of the Common Stock covered by an
Option unless and until a certificate for such share has been issued. Upon
payment of the purchase price therefore, a share issued upon exercise of an
Option shall be fully paid and non-assessable.
(
B
)
Neither
the existence of the Plan nor any Option shall in any way affect the right
or
power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or
dissolution or liquidation of the Company, or any sale or transfer of all or
any
part of its assets or business, or any other corporate act or proceeding whether
of a similar character or otherwise.
(
C
)
Neither
the existence of the Plan nor the grant of any Option shall require the Company
or any Subsidiary to continue any Participant in the employ or service of the
Company or such Subsidiary.
15
.
Termination
and Amendment of the Plan
.
The
Board
may at any time terminate the Plan or make such modifications of the Plan as
it
shall deem advisable; provided, however, that the Board may not, without further
approval of the holders of the shares of the Common Stock, increase the number
of shares of the Common Stock as to which Options may be granted under the
Plan
(as adjusted in accordance with the provisions of Section 11 hereof), or change
the class of persons eligible to participate in the Plan, or change the manner
of determining the Option prices, or extend the period during which an Option
may be granted or exercised. Except as otherwise provided in Section 16 hereof,
no termination or amendment of the Plan may, without the consent of the
Participant to whom any Option shall theretofore have been granted, adversely
affect the rights of such Participant under such Option.
16
.
Expiration
and Termination of the Plan
.
The
Plan
shall terminate on November 12, 2014 or at such earlier time as the Board may
determine. Options may be granted under the Plan at any time and from time
to
time prior to its termination. Any Option outstanding under the Plan at the
time
of termination of the Plan shall remain in effect until such Option shall have
been exercised or shall have expired in accordance with its terms.
17
.
Options
Granted in Connection With Acquisitions
.
The
Administrator may determine, in connection with the acquisition by the Company
or a Subsidiary by way of exchange or purchase of stock, purchase of assets,
merger or reverse merger or otherwise of another corporation which will become
a
Subsidiary or division of the Company (such corporation being hereafter referred
to as an “
Acquired
Subsidiary
”),
that
Options may be granted hereunder to employees or consultants and other personnel
of an Acquired Subsidiary in exchange for then outstanding options to purchase
securities of the Acquired Subsidiary. The Administrator, at its discretion
shall determine as to such Options, the option prices, may be exercisable
immediately or at any time or times either in whole or in part, and such other
provisions not inconsistent with the Plan, or the requirements set forth in
Section 15 hereof that certain amendments to the Plan be approved by the
stockholders of the Company.
18.
Lock-Up
.
A
Participant agrees not to effect any sale, transfer or distribution of any
Option granted hereunder or any common stock or other equity securities issued
or issuable upon exercise of an Option granted hereunder, or any interest
therein, until the earlier of (a) the date that a registration statement
with respect to the Company's equity securities purchased by certain of the
Company's investors pursuant to that certain Securities Purchase Agreement,
dated as of September 14, 2004, by and among the Company and the investors
signatory thereto has been filed with and declared effective by the
Securities and Exchange Commission, and (b) November 12, 2005, unless (i) such
sale, transfer or distribution is approved in writing by a Majority of the
Investors (as such term is defined in the aforementioned Securities Purchase
Agreement), and (ii) the transferee of such sold, transferred or
distributed Option, common stock, equity securities or other
interest agrees in writing to be bound by the terms of this Section
18.
*
*
*