May 11, 1993
STOCK OPTION EXERCISE NOTICE
(Exhibit A to Plan)
COMPATIBLE SYSTEMS CORPORATION
Sir or Madam:
The undersigned elects to exercise the option to purchase _____ shares of Common Stock ("Shares") of COMPATIBLE SYSTEMS CORPORATION (the "Corporation") under and pursuant to the incentive stock option _____ or non-qualified stock option _____ (check one) granted to the undersigned by the Corporation on ____________, l9___, pursuant to the Corporation's 1993 Stock Option Plan (the "Plan").
Prior to issuance of said Shares, I will make full payment of the purchase price for the Shares in cash, if permitted by the Corporation by tender of stock of the Corporation having a fair market value not less than the purchase price, or as otherwise approved by the Corporation's Board of Directors.
I represent and agree that I am over twenty-one (21) years of age, that I am acquiring the Shares for investment and that I have no intention to transfer, sell or otherwise dispose of such Shares, except as permitted pursuant to the Plan and in compliance with applicable securities laws.
I understand I may be required or requested, from time to time, to sign additional documents concerning or related to my investment and compliance with other laws, and will do so. I understand I must sign a Stockholders' Agreement if requested to do so by the Corporation, if that agreement is applicable to holders of 67% or more of the outstanding Common Stock.
I further acknowledge and understand that the Shares must be held indefinitely unless they are subsequently registered under the Securities Act of 1933 or an exemption from such registration is available. I further acknowledge and understand that the Corporation is under no obligation to register the Shares and that, in the absence of registration, the Shares may not be transferred. I understand that the instrument evidencing the Shares will be imprinted with legends which prohibit the transfer of the Shares unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Corporation. I do not have any contract, agreement or arrangement with any persons to sell, transfer or grant participations to such person or to any third person with respect to any of the Shares.
THE FOLLOWING PARAGRAPH APPLIES PRIMARILY IF THE CORPORATION IS A PUBLIC COMPANY:
I am aware of the adoption of Rule 144 by the Securities and Exchange Commission, promulgated under the Securities Act of 1933, which permits limited public resale of securities acquired on a non-public offering subject to the satisfaction of certain conditions, including, among other things: the availability of certain public information about the Corporation, the
resale occurring not less than two years after the party has purchased and paid for the securities to be sold, the sale being through a broker in an unsolicited "brokers' transaction," and the amount of securities being sold during any three-month period not exceeding specified limitations (generally, 1% of the total amount outstanding).
I agree further that said Shares are being acquired by me in accordance with and subject to the terms, provisions and conditions of the Plan and the Stock Option Agreement, to all of which I hereby expressly assent. These statements shall bind and inure to the benefit of my heirs, legal representatives, successors and assigns.
My address of record is:
and my Social Security Number is:
Very truly yours,
Receipt of the above is hereby acknowledged:
COMPATIBLE SYSTEMS CORPORATION
May 11, 1993
COMPATIBLE SYSTEMS CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
(EXHIBIT B TO PLAN)
COMPATIBLE SYSTEMS CORPORATION (the "Corporation"), a Colorado corporation, hereby grants to _____________________ (the "Optionee"), a non-qualified stock option to purchase a total of _______ shares of common stock ("Common Stock") of the Corporation, at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of this Agreement and the 1993 Stock Option Plan (the "Plan") adopted by the Corporation, which is incorporated herein by reference.
1. Option Price.
The option price is $_______ for each share.
2. Exercise of Option.
The option shall be exercisable in accordance with provisions of
the Plan as follows:
(i) Right to Exercise.
The Board of Directors has determined that Optionee's
options shall be exercisable in accordance with the
(a) 25% of such shares will become exercisable after 12
months from the date of grant;
(b) 2.083% of such shares will become exercisable every
month thereafter (on the monthly anniversary of the
option grant date); and
(c) 100% of such shares will be exercisable after 48
months from the date of grant.
(ii) Method of Exercise.
This option shall be exercisable by written notice in the
form attached hereto which shall state the election to
exercise the option, the number of shares in respect of
which the option is being exercised, and such other
representations and agreements as to the holder's
investment intent and other matters with respect to such
shares as may be required by the Corporation pursuant to
the provisions of the Plan including Exhibits thereto.
Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the
President of the Corporation
prior to the expiration of the term of the option as set
forth in Section 4 below, accompanied by full payment of
the purchase price in cash, by tender of stock of the
Corporation having a fair market value not less than the
purchase price, or as otherwise approved by the
Corporation's Board of Directors. The certificate or
certificates for the shares as to which the option shall
be exercised shall be registered in the name of the person
or persons exercising the option.
(iii) Restrictions on Exercise.
This option may not be exercised if the issuance of such
shares upon such exercise would constitute a violation of
any applicable federal or state securities laws or other
law or regulations. As a condition to the exercise of this
option, the Corporation may require the Optionee to make
any representation, warranty or agreement to the
Corporation as may be required by any applicable law or
regulation or as the Corporation may reasonably require.
3. Non-Transferability of Option.
This option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by Optionee;
provided, however, that if Optionee becomes legally disabled,
Optionee's legal representative may exercise the option on his or
her behalf, and if Optionee dies, the estate or other person who
acquired the right to exercise the option by bequest or
inheritance may exercise the option. The terms of this option
shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
4. Term of Option.
This option may not be exercised after eight years from the date
of grant of this option, as set forth below, and may be exercised
during such term only in accordance with the Plan and the terms
of this agreement.
5. Right of First Refusal.
Before any shares of Common Stock issued upon the exercise of
this Option or securities of the Corporation issued by the
Corporation in respect thereof or as a result thereof, may be
sold or transferred (including transfer by operation of law) such
securities shall first be offered to the Corporation.
(a) The Optionee shall deliver a notice ("Notice") to the
Corporation stating (i) Optionee's bona fide intention to
sell or transfer such securities, (ii) the number of such
securities to be sold or transferred, (iii) the price for
which he or she proposes to sell or transfer such
securities, and (iv) the name of the proposed purchaser or
(b) Within thirty (30) days after receipt of the Notice, the
Corporation or its assignee may elect to purchase any or
all securities to which the Notice refers, at the price
per security and on the terms specified in the Notice.
(c) If all the securities to which the Notice refers are not
elected to be purchased, as provided in subparagraph 5(b)
hereof, the Optionee may sell the remaining securities to
any person named in the Notice at the price specified in
the Notice or at a higher price, provided that such sale
or transfer is consummated within three (3) months of the
date of said Notice to the Corporation, and provided,
further, that any such sale is materially in accordance
with all the terms and conditions hereof. Any securities
not sold or transferred within such three (3) month period
will be subject to the provisions of this Section 5 upon
any subsequent transfer.
(d) Optionee's obligations under this paragraph 5 shall
terminate upon (i) the merger, reorganization or
consolidation of the Corporation in which the holders of
the outstanding voting securities of the Corporation
immediately prior to such merger, reorganization or
consolidation do not hold a majority of the voting
securities of the surviving entity outstanding immediately