Non-Qualified Stock Option Agreement
This Non-Qualified Stock Option Agreement
(this
“Agreement”), dated as of January 4, 2008, is by and
between Compliance Systems Corporation, a Nevada corporation
(the
“Corporation”), and
____________, an individual residing at ___________________ (the
"Optionee").
WHEREAS ,
the Optionee is a valued employee, director and/or officer of,
and/or service provider to, the Corporation; and
WHEREAS, the
Corporation deems it desirable and in the Corporation’s best
interests that Optionee be given an opportunity to acquire shares
(each, an “Option Share”) of the common stock, par
value $0.001 per share (the "Common Stock"), of the Corporation
upon the terms and subject to the conditions set forth in this
Agreement in order to provide further incentive to Optionee that is
directly linked to increases in stockholder value which will
therefore inure to the benefit of all stockholders of the
Corporation.
NOW, THEREFORE ,
for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, and the mutual covenants and
agreements contained in this Agreement, the parties agree as
follows:
(a)
The
Corporation hereby grants to the Optionee the right, privilege
and option (the "Option") to purchase from the Corporation up
to an aggregate of _______________ Option Shares (subject to
adjustment as provided in section 6), on the terms and subject
to the conditions set forth in this Agreement.
(b)
The
purchase price payable upon any exercise of the Option is
$0.026 per Option Share, subject to adjustment as provided in
section 6 (the “Purchase Price”).
(c)
Optionee
acknowledges and agrees that the Option is not intended to be
an “Incentive Stock Option” as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
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2. |
Exercise of the Option .
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(a)
Subject
to the provisions of sections 3 and 4, the Option shall be
exercisable, in whole or part and from time to time, by
written notice of such exercise, delivered to the President or
Secretary of the Corporation, at the Corporation’s
principal executive offices by either (i) personal delivery,
against written receipt therefor, or (ii) by pre-paid,
certified or registered mail, return receipt requested. Such
notice shall specify the number of Option Shares for which the
Option is being exercised (which number, if less than all of
the Option Shares then subject to exercise, shall be 100,000
or an integral multiple thereof;
provided ,
however ,
that, in the event that less than 100,000 Options Shares remain
then subject to exercise, the Option may be exercised for such
remaining Option Shares) and shall be accompanied by (A) payment of
the full aggregate Purchase Price for the Option Shares for which
the Option is being exercised and (B) delivery of a duly executed
representation letter of Optionee, in a form reasonably acceptable
to the Corporation, (1) certifying that Optionee is acquiring such
the Option Shares for investment purposes only and not with a view
to their sale or distribution, (2) agreeing not to sell, pledge,
hypothecate or otherwise distribute the Option Shares, unless a
registration statement including such Option Shares is effective
under the Securities Act of 1933, as amended (the "Securities
Act"), or there is available an applicable exemption thereunder and
(3) agreeing that an appropriate legend may be placed on the stock
certificate(s) representing the Option Shares have not been
registered under the Act and may only be disposed in accordance
with the Act or an exemption thereunder. As soon as practicable
after receipt by the Corporation of such notice, payment in full of
the aggregate Purchase Price for all the Option Shares with respect
to which the Option is being exercised and duly executed
Representation Letter, the Corporation shall take all necessary
actions to cause such Option Shares to be issued and a certificate
or certificates representing such Option Shares shall be delivered
to the Optionee.
(b)
The
form of payment of the Purchase Price for Option Shares
purchased pursuant to the Option shall consist of: (i) cash;
(ii) check (subject to collection); (iii) in the discretion of
the Board of Directors (the"Board") of the Corporation, (A)
surrender to the Corporation of other shares of Common Stock
owned by Optionee which are then registered under the
Securities Act or otherwise publicly saleable under Rule 144
or other applicable exemption promulgated under the Securities
Act and have a fair market value on the date of surrender
equal to the aggregate Purchase Price of the Option Shares
being exercised, (B) assignment to the Company of the net
proceeds (to the extent necessary to pay such aggregate
Purchase Price) to be received from a registered broker upon
the sale of all or a portion of such Option Shares or
assignment of the net proceeds (to the extent necessary to pay
such aggregate Purchase Price) of a loan from such broker in
such amount or (C) such other consideration and method of
payment for the issuance of stock to the extent permitted
under all applicable state and federal laws; or (iv) any
combination of such methods of payment.
(c)
No
Option Shares shall be delivered upon exercise of the Option
until all laws, rules and regulations which the Board may deem
applicable have been complied with.
(d)
Optionee
shall not be considered a record holder of the Option Shares
acquired upon exercise of the Option for any purpose until the
date on which Optionee is actually recorded as the holder of
such Option Shares on the records of the
Corporation.
(a)
Subject
to the earlier termination as provided in this section 3, the
Option shall expire as of 5:00 P.M., Eastern Standard Time, on
January 4, 2013 (the “Termination
Time”).
(b)
Notwithstanding
the provisions of paragraph 3(a), the Option, to the extent
not previously exercised, shall terminate upon the first to
occur of the following events:
(i)
the
first anniversary of Optionee's death;
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