This Incentive Stock Option Agreement (hereinafter referred to as the
"Agreement"), is made and entered into as of _____________, _______,
between Alpha Computer Solutions, Inc. a Utah corporation (hereinafter
referred to as the "Company") with a principal place of business at 0000
Xxxxx 000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000 and _________________________,
an individual (hereinafter referred to as the "Optionee"), residing at
______________________________________________________.
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1. GRANT OF OPTION AND EFFECTIVE DATE.
Section 1.1. Grant. The Company hereby grants to Optionee pursuant to
the Company's 1998 Stock Option Plan (hereinafter referred to as the
"Plan"), an Incentive Stock Option ("ISO") to purchase all or any part of
an aggregate of _______________ shares ("ISO Shares") of the Company's
Common Stock on the terms and conditions set forth herein and in the Plan,
the terms and conditions of the Plan being incorporated into this Agreement
by reference.
Section 1.2. Effective Date. The effective date of this ISO is
_________________ (the "Effective Date").
ARTICLE 2. EXERCISE PRICE. The exercise price for the purchase of the
ISO shares covered by this ISO shall be $ ________ per share.
ARTICLE 3. TERM. Unless otherwise specified on Exhibit A, "Right of
Repurchase", attached hereto, this ISO shall expire as provided in Section
6.3.2 of the Plan.
ARTICLE 4. ADJUSTMENTS OF ISOs. The Company shall adjust the number and
kind of shares and the exercise price thereof in certain circumstances in
accordance with the provisions of Section 6.1.1 of the Plan.
ARTICLE 5. EXERCISE OF OPTIONS.
Section 5.1. Time of Exercise. The ISO shall be exercisable in whole or
in part as of the Effective Date except as provided in Exhibit A, Right of
Repurchase, attached hereto.
Section 5.2. Exercise After Termination of Employment. This ISO may be
exercised after termination of the Optionee's employment only in accordance
with the provision of Section 6.1.8 of the Plan and only to the extent then
vested in accordance with Exhibit A of this Agreement.
Section 5.3. Manner of Exercise. Optionee may exercise this ISO, or any
portion of this ISO, by giving written notice to the company at its
principal executive office, to the attention of the Secretary of the
Company, accompanied by a copy of the Stock Option Plan Purchase Agreement
(hereinafter referred to as the "Stock Purchase Agreement") executed by the
Optionee. The date the Company receives written notice of an exercise
hereunder accompanied by payment witll be considered as the date this ISO
was exercised.
Promptly after receipt of written notice of exercise of the ISO, the
Company shall, without stock issue taxes or transfer taxes to the Optionee
or other person entitled to exercise, deliver to the Optionee or other
person a certificate or certificates for the requisite number of ISO Shares.
An Optionee or transferee of an option shall not have any privileges as a
shareholder with respect to any ISO Shares covered by the option until the
date of issuance of a stock certificate.
Section 5.4. Payment. Payment in full, in cash, shall be made for all ISO
Shares purchased at the time written notice of exercise of the ISO is given
to the Company, and proceeds of any payment shall constitute general funds
of the Company.
ARTICLE 6. NONASSIGNABILITY OF ISO. This ISO is not assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the life of the Optionee, the ISO is exercisable only
by the Optionee. Any attempt to assign, pledge, transfer, hypothecate, or
otherwise dispose of this ISO in a manner not herein permitted, and any levy
of execution, attachment, or similar process on this ISO, shall be null and
void.
ARTICLE 7. COMPANY'S RIGHTS TO REPURCHASE EXERCISED SHARES UPON
TERMINATION OF EMPLOYMENT. The ISO Shares shall be subject to a right of
repurchase in favor of the Company ("Right of Repurchase"). The Company
may purchase ISO Shares subject to the Right of Repurchase for an amount per
shall equal to the price per share the Optionee paid for the ISO Shares if
the Optionee's employment, directorship or consultancy with the Company
terminates before the Right of Repurchase expires as delineated in Exhibit
A "Stock Restriction Agreement". Fractional shares subject to repurchase
shall be rounded to the fullest share. The Optionee may not dispose of or
transfer ISO Shares while such shares are subject to the Right of Repurchase
and any such attempted transfer shall be null and void.
ARTICLE 8. COMPANY'S RIGHT OF FIRST REFUSAL REPURCHASING EXERCISED SHARES.
Section 8.1. Right of First Refusal. In the event that the Optionee
proposes to sell, pledge, or otherwise transfer any ISO shares, the Company
shall have a right of first refusal ("Right of First Refusal") with respect
to such ISO Shares. Any Optionee desiring to transfer ISO Shares to any
person or entity shall give a written notice ("Transfer Notice") to the
Company describing fully the proposed transfer, including the number of ISO
Shares proposed to be transferred, the proposed transfer price, and the name
and address of the proposed transferee. The Transfer Notice shall be signed
by both the Optionee and by the proposed transferee and must constitute a
binding commitment of both parties for the transfer of such ISO Shares.
The Company shall have the right to purchase the ISO Shares subject to the
Transfer notice on the terms of the proposed transfer described in the
Transfer Notice by delivery of a notice of exercise of the Company's Right
of First Refusal within 30 days after the date the Transfer notice is
delivered to the Company. The Company's rights under this Section 8.1 shall
be freely assignable, in whole or in part.
Section 8.2. Transfer of Exercised Shares. If the Company fails to
exercise the Right of First Refusal within 30 days from the date the
Transfer Notice is delivered to the Company, the Optionee may, not less
than 30 days following delivery to the Company of the Transfer Notice,
conclude a transfer of the ISO Shares subject to the Transfer notice.
Any proposed transfer on terms and conditions different from those described
in the Transfer notice, as well as any subsequent proposed transfer by the
Optionee, shall again be subject to the Right of First Refusal and shall
require compliance by the Optionee with the procedure described in Section
8.1 of this Agreement. If the Company exercise the Right of First Refusal,
the parties shall consummate the sale of the ISO Shares on the terms set
forth in the Transfer Notice; provided, however, in the event the Transfer
Notice provides for payment for the ISO Shares other than in cash, the
Company shall have the option of paying for the ISO Shares by the discounted
cash equivalent of the consideration described in the Transfer Notice.
Section 8.3. Binding Effect. The Right of First Refusal shall inure to
the benefit of the successors and assigns of the Company and shall be
binding upon any transferee of the ISO Shares other than a transferee
acquiring ISO Shares in a transaction where the Company failed to exercise
the Right of First Refusal (a "Free Transferee") or a transferee of a Free
Transferee.
Section 8.4. Termination of the Company's Right of First Refusal.
Notwithstanding anything in this Section 8, in the event that the stock is
listed on an established stock exchange or quoted on the National
Association of Securities Dealers Automated Quotation system at the time
the Optionee desires to transfer ISO Shares, the Company shall have no Right
of First Refusal, and Optionee shall have no obligation to comply with the
procedures of Section 8.1 through Section 8.3
inclusive.
ARTICLE 9. RESTRICTION ON ISSUANCE OF SHARES.
Section 9.1. Legality of Issuance. The Company shall not be obligated to
sell or issue any ISO Shares pursuant to this Agreement if such sale or
issuance, in the opinion of the Company and the Company's counsel, might
constitute a violation by the Company of any provision of law, including
without limitation the provisions of the Securities Act of 1933, as amended
(the "Act").
Section 9.2. Registration or Qualification of Securities. The Company may,
but shall not be required to, register or qualify the sale of this ISO or
any ISO Shares under the Act or any other applicable law. The Company shall
not be obligated to take any affirmative action in order to cause the grant
or exercise of this option or the issuance or sale of any ISO Shares
pursuant thereto to comply with any law.
ARTICLE 10. RESTRICTION ON TRANSFER. Regardless of whether the sale of
the ISO Shares has been registered under the Act or has been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of the ISO Shares
(including the placement of appropriate legends on stock certificates) if,
in the judgment of the Company and the Company's counsel, such restrictions
are necessary or desirable in order to achieve compliance with the
provisions of the Act, the securities laws of any state, or any other law.
ARTICLE 11. STOCK CERTIFICATES. Stock Certificates evidencing ISO Shares
will bear such restrictive legends as the Company and the Company's counsel
deem necessary or advisable under applicable law or pursuant to this
Agreement, including, without limitation, the following legends:
"The shares represented by this certificate are subject to an option set
forth in an employee stock restriction agreement between the Company and
the registered hold, or his predecessor in interest, a copy of which is on
file at the principal office of the Company"
"The shares represented by this certificate are subject to a right of first
refusal option in favor of the Company or its assignee set forth in an
employee stock restriction agreement between the Company and the registered
holder, or his predecessor in interest, a copy of which is on file at the
principal office of this Company"
"These securities have not been registered under the Securities Act of 1933.
They may not be sold, offered for sale, pledged or hypothecated in the
absence of an effective registration statement as to the securities under
said Act or an opinion of counsel satisfactory to the Company that such
registration is not required"
ARTICLE 12. REPRESENTATION, WARRANTIES, COVENANTS AND ACKNOWLEDGEMENTS
OF THE OPTIONEE UPON EXERCISE OF ISO. Optionee hereby agrees that in the
event that the Company and the Company's counsel deem it necessary or
advisable in the exercise of their discretion, the issuance of the ISO
Shares may be conditioned upon the purchaser of ISO Shares (the "Purchaser")
making certain representations, warranties, and acknowledgments, including,
without limitation those set forth in Section 12.1 through 12.7 inclusive:
Section 12.1 Investment. Purchaser is acquiring the ISO Shares for
Purchaser's own account, and not for the account of any other person.
Purchaser is acquiring the ISO Shares for investment and not with a view
to distribution or resale thereof except in compliance with applicable
laws regulating securities.
Section 12.2 Business Experience. Purchaser is capable of evaluating the
merits and risks of Purchaser's investment in the Company evidenced by the
purchase of the ISO Shares.
Section 12.3. Relation to the Company. Purchaser is presently an officer,
director or other employee of the Company and in such capacity has become
familiar with the business affairs, financial condition, and results of
operations of the Company.
Section 12.4. Access to Information. Purchaser has had the opportunity to
ask questions of, and to receive answers from, appropriate executive
officers of the Company with respect to the terms and conditions of the
transaction contemplated hereby and with respect to the business, affairs,
financial conditions, and results of operations of the Company. Purchaser
has had access to such financial and other information as is necessary in
order for Purchaser to make a fully-informed decision as to investment in
the Company by way of purchase of the ISO Shares, and has had the
opportunity to obtain any additional information necessary to verify any
of such information to which the Purchaser has had access.
Section 12.5. Speculative Investment. Purchaser's investment in the
Company represented by the ISO Shares is highly speculative in nature and
is subject to a high degree of risk of loss in whole or in part. The amount
of such investment is within Purchaser's risk capital means and is not so
great in relation to Purchaser's total financial resources as would
jeopardize the personal financial needs of the Purchaser or Purchaser's
family in the event such investment were lost in whole or in part.
Section 12.6. Registration. Purchaser must bear the economic risk of
investment for an indefinite period of time because the sale to Purchaser
of the ISO Shares has not been registered under the Act and the ISO Shares
cannot be transferred by Purchaser unless such transfer is registered under
the Act or an exemption from such registration is available. The Company
has made no agreement, covenants or undertakings whatsoever to register the
transfer of any of the ISO Shares under the Act. The Company has made no
representations, warranties, or covenants whatsoever as to whether any
exemption including without limitation any exemption for limited sales
in routine broker's transactions pursuant to Rule 144, will be available.
Section 12.7. Tax Advice. The company has made no warranties or
representations to Purchaser with respect to the income tax consequences of
the transactions contemplated by the option agreement pursuant to which the
ISO Shares will be purchased and Purchaser is in no manner relying on the
Company or the Company's representatives for an assessment of such tax
consequences.
ARTICLE 13: ASSIGNMENT: BINDING EFFECT. Subject to the limitation set
forth in this Agreement, this Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives,
and successors of the parties hereto; provided, however, that Optionee may
not assign any of the Optionee's rights under this Agreement.
ARTICLE 14: DAMAGES. Optionee shall be liable to the Company for
all costs and damages, including incidental and consequential damages,
resulting from a disposition of shares which is not in conformity with the
provisions of this Agreement.
ARTICLE 15: GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah.
ARTICLE 16: NOTICES. All matters and other communications under this
Agreement shall be in writing. Unless and until the Optionee is notified
in writing to the contrary, all notices, communications and documents
directed to the Company and related to the Agreement if not delivered by
hand, shall be mailed to the Company's executive offices at:
Alpha Computer Solutions, Inc.
0000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's
last known address as shown on the Company's books. Notice and
communications shall be mailed by first class mail, postage prepaid;
documents shall be mailed by registered mail, return receipt requested,
postage prepaid. All mailings and deliveries related to this Agreement
shall be deemed received only when actually received.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
Alpha Computer Solutions, Inc.
By: /S/__________________________
Xxxxxxx X. Xxxxxxx
President
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
Optionee: _______________________
Name: _________________________
Date: __________________________
Optionee's spouse indicates by execution of this Incentive Stock Option
Agreement his or her consent to be bound by the terms thereof as to his
or her interest, whether as community property or otherwise, in the options
granted hereunder, and in any ISO Shares purchased pursuant to this Agreement.
Optionee's Spouse: ______________________
