EX-4.1 3 doc2.txt [GRAPHIC OMITTED] Exhibit 4.1 2003 NON QUALIFIED STOCK OPTION PLAN OF CALYPTE BIOMEDICAL CORPORATION 1. ESTABLISHMENT AND PURPOSE The purpose of this 2003 Stock Option Plan (the "Plan") is to offer selected individuals an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company's Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan are Non-statutory Options. Capitalized terms are defined in Section 12 hereunder. 2. ADMINISTRATION a. COMMITTEES OF THE BOARD OF DIRECTORS. The Plan will be administered by the Board of Directors. The Board of Directors may, at its discretion, delegate the authority for the administration of this Plan to the Compensation Committee of the Board. Subject to such delegation, any reference to the Board of Directors in the Plan shall be construed as a reference to the Compensation Committee. b. AUTHORITY OF THE BOARD OF DIRECTORS. Subject to the provisions of the Plan, the Board of Directors shall have the full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee. c. INDEMNIFICATION. To the full extent permitted by law, (i) no member of the Compensation Committee or Board of Directors as the case may be, shall be liable for any action or determination taken or made in good faith with respect to the Plan or any award made under the Plan, and (ii) the members of the Compensation Committee or Board of Directors as the case may be, shall be entitled to indemnification by the Company with regard to such actions and determinations. 3. ELIGIBILITY. a. GENERAL RULE. Only Non-officer Employees and Consultants shall be eligible for the grant of Options or the direct award or sale of Shares. Under no circumstances will a Director be eligible under the Plan. 4. STOCK SUBJECT TO PLAN. a. Basic Limitation. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. The aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall initially be ten million (10,000,000) Shares, and may thereafter be increased, but only so long as such increase does not result in the aggregate number of Shares exceeding 19.99% of the then outstanding capital stock of the Company, subject to adjustment 9 pursuant to Section 8 hereunder. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. b. ADDITIONAL SHARES. In the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the Plan. In the event the Shares issued under the Plan are reacquired by the Company pursuant to any forfeiture provision, right of repurchase or right of first refusal, such Shares shall again be available for the purposes of the Plan. 5. TERMS AND CONDITIONS OF AWARDS OR SALES. a. STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical. b. DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 90 days after the Company communicated the grant of such right to the Purchaser. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. c. PURCHASE PRICE. The Exercise Price to purchase newly issued Shares shall not be less than the par value of such Shares. Subject to the preceding two sentences, the Board of Directors shall determine the Exercise Price under an Option as the case may be, at its sole discretion. The Purchase Price shall be payable in a form described in Section 7 hereunder. d. WITHHOLDING TAXES. As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any withholding requirements. e. RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. f. ACCELERATED VESTING. Unless the applicable Stock Purchase Agreement provides otherwise, any right to repurchase a Purchaser's Shares at the original Purchase Price (if any) upon termination of the Purchaser's Service shall lapse and all of such Shares shall become vested if the Company is subject to a Change in Control before the Purchaser's Service terminates. A Stock Purchase Agreement may also provide for accelerated vesting in the event of the Optionee's death or disability or other events. 6. TERMS AND CONDITIONS OF OPTIONS. a. STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for 10 inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. b. NUMBER OF SHARES. Each Stock Option Agreements shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8 hereunder. c. EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price to purchase newly issued Shares shall not be less than the par value of such Shares. Subject to the preceding two sentences, the Board of Directors shall determine the Exercise Price under an Option as the case may be, at its sole discretion. The Exercise Price shall be payable in accordance with Section 7 hereunder. d. WITHHOLDING TAXES. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligation that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. e. EXERCISABILITY. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Board of Directors at its sole discretion shall determine the exercisability provisions of a Stock Option Agreement. f. ACCELERATED EXERCISABILITY. Unless the applicable Stock Option Agreement provides otherwise, all of an Optionee's Options shall become exercisable in full if (i) the Company is subject to a Change in Control before the Optionee's service terminates, (ii) such Options do not remain outstanding, (iii) such Options are not assumed by the surviving corporation or its parent and (iv) the surviving corporation or its parent does not substitute options with substantially the same terms for such Options. A Stock Option Agreement may also provide for accelerated exercisability in the event of the Optionee's death, disability or retirement or other events. g. BASIC TERM. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant. Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire. A Stock Option Agreement may provide for expiration prior to the end of its term in the event of the termination of the Optionee's service or death. h. NONTRANSFERABILITY. No option shall be transferable by the Optionee other than by beneficiary designation, will or the laws of descent and distribution. An Option may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee's legal guardian or legal representative. No Option or interest therein may be transferred, assigned, pledged or hypothecated by the Optionee during the Optionee's lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process. i. NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee's Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. j. MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the limitations of the Plan, the Board of Directors may modify or extend outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The 11 foregoing notwithstanding, no modification of an Option shall, without consent of the Optionee, impair the Optionee's right or increase the Optionee's obligations under such Option. k. RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions or other limitations as the Board of Directors may determine. Such restrictions shall be set forth in applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 7. PAYMENT OF SHARES. a. GENERAL RULE. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7 hereunder. b. SURRENDER OF STOCK. Cashless exercises are not permitted. c. SERVICES RENDERED. At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. At the discretion of the Board of Directors, Shares may also be awarded under the Plan in consideration if services to be rendered to the Company, a Parent or Subsidiary after the award, except that the par value of such Shares, if newly issued, shall be paid in cash or cash equivalents. 8. ADJUSTMENT OF SHARES. a. GENERAL. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors shall make proportionate and appropriate 12 adjustments in one or more (i) the number of shares available for future grants under Section 4 hereunder, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option. b. MERGERS AND CONSOLIDATION. In the event that the Company is party to a merger or consolidation, outstanding Options shall be subject to the agreement of merger or consolidation. Such agreement, without the Optionee's consent, may provide for: i) The continuation of such outstanding Option by the Company (if the Company is the surviving corporation); ii) The assumption of the Plan and such outstanding Options by the surviving corporation or its parent; or iii) The substitution by the surviving corporation or its parent of options with substantially the same terms for such outstanding Options. c. RESERVATION OF RIGHTS. Except as provided in this Section 8 hereunder, an Optionee or Purchaser shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Unless otherwise set forth in an Optionee's Stock Option Agreement, any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassification, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 9. SECURITIES LAW REQUIREMENTS. Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company's securities may then be traded. 10. NO RETENTION RIGHTS. Nothing in the Plan or in any right or Option granted under the plan shall confer upon the Purchaser or Optionee any right to continue in Service for any period of specific duration or interfere with or other wise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchase or Optionee) or of the Purchaser or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 11. DURATION AND AMENDMENTS. a. TERM OF THE PLAN. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors. The Plan shall terminate automatically 10 years after is adoption by the Board of Directors and may be determined on any earlier date pursuant to Section 11(b) hereunder. b. RIGHT TO AMEND TO AMEND OR TERMINATE THE PLAN. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason. 13 c. EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option granted under the Plan. 12. DEFINITIONS. a. "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as constituted from time to time. b. "CAUSE" for termination of Purchaser's or Optionee's employment shall exist (i) if Purchaser or Optionee is convicted of, pleads guilty to, or confesses to any felony or any act of fraud, misappropriation or embezzlement, (ii) if Purchaser or Optionee has engaged in a dishonest act to the material damage or prejudice of the Company, (iii) if Purchase or Optionee engages in any business activity reasonably deemed by the Board of Directors to be competitive with the Company, or (iv) Purchaser or Optionee willfully breaches or habitually neglects the duties he is required to perform hereunder, or performs such duties in a negligent manner. Notwithstanding the foregoing, in the event the Purchaser or Optionee has executed an employment or consulting agreement with the Company, "Cause" for termination of Purchaser's or Optionee's Service shall only exist if Purchaser's or Optionee's Service is terminated for "Cause", as defined is such Purchaser's or Optionee's employment or consulting agreement. c. "CHANGE IN CONTROL" shall mean: i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if person who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately such after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity' or ii) The sale, transfer or other disposition of all or substantially all of the Company's assets. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the person who held the Company's securities immediately before such transaction. d. "CODE" shall mean the Internal Revenue Code of 1986, as amended. e. "COMPENSATION COMMITTEE" shall mean the Compensation Committee of the Board of Directors, as constituted from time to time, as described in Section 2(a). f. "COMPANY" shall mean Calypte Biomedical Corporation, a Delaware corporation. g. "CONSULTANT" shall mean an individual who provides services to the Company under the terms of a consulting or other service agreement, except that a consultant shall not engage in services in connection with the offer or sale of securities in a capital-raising transaction for the Company, nor will he or she directly or indirectly promote or maintain a market for the Company's securities. h. "EMPLOYEE" shall mean any individual who is a common law employee of the Company, Parent or Subsidiary. 14 i. "EXERCISE PRICE" shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement. j. "FAIR MARKET VALUE" shall mean the fair market value of a Share, as determined by the Board of Directors in good faith, and unless otherwise indicated will be the current day's closing trade price reported for the Company's common stock by the primary exchange on which it is traded. Such determination shall be conclusive and binding on all persons. k. not used l. "NONSTATUTORY OPTION" shall mean a stock option not described in Sections 422(b) or 423(b) of the Code. m. "OPTION" shall mean a Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. n. "OPTIONEE" shall mean an individual who holds an Option. o. "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who is not an Employee. p. "PARENT" mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporation in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. q. "PLAN" shall mean this 2003 Stock Option Plan of Calypte Biomedical Corp. r. "PURCHASE PRICE" shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors. s. "PURCHASER" shall mean an individual to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option). t. "SERVICE" shall mean service as an Employee, Outside Director or Consultant. u. "SHARE" shall mean one share of Stock, adjusted in accordance with Section 8 hereunder (if applicable). v. "STOCK" shall mean the Common Stock of the Company, with a par value of $0.03 per Share. w. "STOCK OPTION AGREEMENT" shall mean the agreement between the Company and an Optionee, which contains the terms, conditions and restrictions pertaining to the Optionee's Option. x. "STOCK PURCHASE AGREEMENT" shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan, which contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. y. "SUBSIDIARY" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in 15 one of the other corporation in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 16