<PAGE>
As filed with the Securities and Exchange Commission on December 3, 1996
SEC Registration No. ________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
COLORADO MEDTECH, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0731006
- ------------------------- -------------------
(State or other juris- (IRS Employer
diction of incorporation) Identification No.)
6175 Longbow Drive
Boulder, Colorado 80301
-------------------------------
(Address of Principal Executive
Offices, including Zip Code)
COLORADO MEDTECH, INC. STOCK OPTION PLAN
COLORADO MEDTECH, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN
NON-STATUTORY OPTIONS
DIRECTOR WARRANTS
CONSULTANT OPTION AND COUNSEL WARRANT
-------------------------------------
(Full title of the plan)
Bruce L. Arfmann
COLORADO MEDTECH, INC.
6175 Longbow Drive
Boulder, Colorado 80301
(303) 530-2660
-------------------------------------------------
(Name, address, including zip code, and telephone
number, including area code of agent for service)
Copies to
---------
Christopher M. Hazlitt, Esq.
Peter J. Jensen, Esq.
Chrisman, Bynum & Johnson, P.C.
1900 Fifteenth Street
Boulder, CO 80302
(303) 546-1300
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Proposed Proposed maximum
Amount maximum aggregate Amount of
Title of securities to be offering price offering registration
to be registered registered per share (1) price (1) fee
- ------------------------------------------------------------------------------------
Common Stock
(no par value) 3,134,440 $2.94 $9,215,254 $2,793
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Computed pursuant to Rule 457(c) using the average of the high and low
prices for the Registrant's Common Stock as quoted on the Nasdaq System on
November 27, 1996.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
This Registration Statement registers an aggregate amount of 3,134,440 shares
of the no par value common stock ("Common Stock") of Colorado MEDtech, Inc.
(the "Company"). The shares of Common Stock are offered as follows: (i)
2,000,000 shares pursuant to the Colorado MEDtech, Inc. Stock Option Plan
(the "Option Plan"). The Option Plan was approved by the Board of Directors
on June 25, 1992, and an increase in the number of shares of Common Stock
available for grants under the Option Plan from 1,400,000 to 2,000,000 was
approved by the Company's shareholders on November 22, 1996; (ii) 240,000
shares pursuant to the Colorado MEDtech, Inc. 1996 Employee Stock Purchase
Plan (the "Purchase Plan"). The Purchase Plan was approved by the Board of
Directors on September 27, 1996 and was approved by the Company's
shareholders on November 22, 1996; (iii) 424,440 shares pursuant to
non-statutory options; (iv) 360,000 shares pursuant to warrants issued to
directors of the Company; (v) 100,000 shares pursuant to a warrant issued to
counsel to the Company; and (vi) 10,000 shares pursuant to a non-statutory
stock option issued to a recruiting consultant to the Company.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and all other documents subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment which
indicates that all the Common Stock offered hereby has been sold or which
deregisters all such Common Stock then remaining unsold, are hereby
incorporated herein by reference to be a part of this Registration Statement
from the date of filing such documents:
(a) The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by
the annual reports referred to in (a) above; and
(c) The description of the Common Stock which is contained in the
Company's Registration Statement No. 2-83841-D filed under the Securities Act
of 1933.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws of the Company provide that the
Company shall indemnify to the fullest extent permitted by Colorado law any
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, by reason of the
fact that he or she is or was a director or officer of the Company or, while
serving as a director or officer of the Company, is or was serving at the
request of the Company as a director, officer, partner or trustee of, or in
any similar managerial or fiduciary position of, or as an employee or agent
of, another corporation, partnership, joint venture, trust, association or
other entity. The Colorado Business Corporation Act (the "Colorado Act")
permits the Company to indemnify an officer or director who was or is a party
or is threatened to be made a party to any proceeding because of his or her
position, if the officer or director acted in good faith and in a manner he
or she reasonably believed to be in the best interests of the Company or, if
such officer or director was not acting in an official capacity for the
Company, he or she reasonably believed the conduct was not opposed to the
best interests of the Company. Indemnification is mandatory if the officer
or director was wholly successful, on the merits or otherwise, in defending
such proceeding. Such indemnification (other than as ordered by a court)
shall be made by the Company only upon a determination that indemnification
is proper in the circumstances because the individual met the applicable
standard of conduct. Advances for such indemnification may be made pending
such determination. Such determination shall be made by a majority vote of a
quorum consisting of disinterested directors or of a committee of at least
two disinterested directors, or by independent legal counsel or by the
shareholders.
II-1
<PAGE>
In addition, the Articles of Incorporation provide for the elimination, to
the extent permitted by Colorado law, of personal liability of directors to
the Company and its shareholders for monetary damages for breach of fiduciary
duty as directors. The Colorado Act provides for the elimination of personal
liability of directors for damages occasioned by breach of fiduciary duty,
except for liability based on the director's duty of loyalty to the Company,
liability for acts or omissions not made in good faith, liability for acts or
omissions involving intentional misconduct, liability based on payments of
improper dividends, liability based on violations of state securities laws,
and liability for acts occurring prior to the date such provision was added.
ITEM 8. EXHIBITS.
Exhibit No. Description of Exhibit
- ---------- ----------------------
4.1 Form of certificate for shares of Common Stock (Incorporated
by reference from the Registrant's Registration Statement on
Form S-18 (No. 2-83841-D)).
5.1 Opinion of Chrisman, Bynum & Johnson, P.C.
23.1 Consent of Chrisman, Bynum & Johnson, P.C. (included in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
99.1 Colorado MEDtech, Inc. Stock Option Plan
99.2 Colorado MEDtech, Inc. 1996 Employee Stock Purchase Plan
99.3 Form of non-statutory options.
99.4 Form of director warrants.
99.5 Consultant option.
99.6 Counsel warrant.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement and include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boulder, State of Colorado, on the
25th day of November, 1996.
COLORADO MEDTECH, INC.
By: /s/ JOHN V. ATANASOFF II
--------------------------------
John V. Atanasoff II, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ JOHN V. ATANASOFF II Chief Executive Officer, November 25, 1996
- ------------------------ President and Director
John V. Atanasoff II (Principal Executive Officer)
/s/ BRUCE L. ARFMANN Chief Financial Officer, November 25, 1996
- ------------------------ Secretary
Bruce L. Arfmann (Principal Financial and
Accounting Officer)
Director
- ------------------------ November 25, 1996
Michael R. Barr
/s/ IRA M. LANGENTHAL Director November 25, 1996
- ------------------------
Ira M. Langenthal
/s/ DEAN A. LEFFINGWELL Director November 25, 1996
- ------------------------
Dean A. Leffingwell
/s/ CLIFFORD W. MEZEY Director November 25, 1996
- ------------------------
Clifford W. Mezey
/s/ ROBERT L. SULLIVAN Director November 25, 1996
- ------------------------
Robert L. Sullivan
/s/ JOHN E. WOLFE Director November 25, 1996
- ------------------------
John E. Wolfe
II-3
<PAGE>
EXHIBIT INDEX
Sequential
Page
Exhibit No. Description of Exhibit Number
- ---------- ---------------------- ----------
4.1 Form of certificate for shares of Common Stock
(Incorporated by reference from the Registrant's
Registration Statement on Form S-18 (No. 2-83841-D)).
5.1 Opinion of Chrisman, Bynum & Johnson, P.C.
23.1 Consent of Chrisman, Bynum & Johnson, P.C. (included in
Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
99.1 Colorado MEDtech, Inc. Stock Option Plan
99.2 Colorado MEDtech, Inc. 1996 Employee Stock Purchase Plan
99.3 Form of non-statutory options.
99.4 Form of director warrants.
99.5 Consultant option.
99.6 Counsel warrant.
II-4
<PAGE>
[LETTERHEAD]
December 2, 1996
Colorado MEDtech, Inc.
6175 Longbow Drive
Boulder, CO 80301
Ladies and Gentlemen:
We have acted as counsel to Colorado MEDtech, Inc. (the "Company") in connection
with the preparation and filing of a Registration Statement on Form S-8
("Registration Statement") covering registration under the Securities Act of
1933 of 3,134,440 shares of the Company's Common Stock, no par value per share
("Shares"). The Shares are offered as follows: (i) 2,000,000 shares pursuant to
the Colorado MEDtech, Inc. Stock Option Plan; (ii) 240,000 shares pursuant to
the Colorado MEDtech, Inc. 1996 Employee Stock Purchase Plan; (iii) 424,440
shares pursuant to non-statutory options; (iv) 360,000 shares pursuant to
warrants issued to directors of the Company; (v) 100,000 shares pursuant to a
warrant issued to counsel to the Company; and (vi) 10,000 shares pursuant to a
warrant issued to a recruiting consultant to the Company. The above-referenced
plans and instruments pursuant to which the Shares are offered are referred to
collectively herein as the "Offering Documents." As such, we have examined the
Registration Statement, the Company's Articles of Incorporation, as amended, its
Bylaws and minutes of meetings of its Board of Directors.
Based upon the foregoing, we are of the opinion that, upon issuance of the
Shares, each in accordance with the terms of the respective Offering Documents,
the Shares will be validly issued, fully paid and nonassessable shares of Common
Stock of the Company.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to our firm in the Prospectus which is made a
part of the Registration Statement.
Very truly yours,
/s/ Chrisman, Bynum & Johnson, P.C.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated August
23, 1996 included in Colorado MEDtech, Inc.'s Form 10-KSB for the year ended
June 30, 1996 and to all references to our firm included in this registration
statement.
Denver, Colorado,
December 2, 1996.
<PAGE>
COLORADO MEDTECH, INC. EXHIBIT 99.1
STOCK OPTION PLAN
I. PURPOSE
The COLORADO MEDTECH, INC. Stock Option Plan (the "Plan") provides for the
grant of Stock Options, Stock Appreciation Rights and Supplemental Bonuses to
Employees and non-employee directors of Colorado MEDtech, Inc. (the "Company"),
and such of its subsidiaries (as defined in Section 424(f) of the Internal
Revenue Code of 1986, as amended (the "Code")) as the Board of Directors of the
Company (the "Board") shall from time to time designate ("Participating
Subsidiaries"), in order to advance the interests of the Company and its
Participating Subsidiaries through the motivation, attraction and retention of
their respective Employees and non-employee directors.
II. INCENTIVE STOCK OPTIONS AND NON-INCENTIVE STOCK OPTIONS
The Stock Options granted under the Plan may be either:
(a) Incentive Stock Options ("ISOs") which are intended to be "Incentive
Stock Options" as that term is defined in Section 422 of the Code; or
(b) Nonstatutory Stock Options ("NSOs") which are intended to be options
that do not qualify as "Incentive Stock Options" under Section 422 of the Code.
All Stock Options shall be ISOs unless the Option Agreement clearly
designates the Stock Options granted thereunder, or a specified portion thereof,
as NSOs. Subject to the other provisions of the Plan, a Participant may receive
ISOs and NSOs at the same time, provided that the ISOs and NSOs are clearly
designated as such, and the exercise of one does not affect the exercise of the
other.
Except as otherwise expressly provided herein, all of the provisions and
requirements of the Plan relating to Stock Options shall apply to ISOs and NSOs.
III. ADMINISTRATION
3.1 COMMITTEE. The Plan shall be administered by the Board or by a
committee composed solely of two or more directors ("Committee") each of whom is
a Non-Employee Director. The Committee or the Board, as the case may be, shall
have full authority to administer the Plan, including authority to interpret and
construe any provision of this Plan and any Stock Option, Stock Appreciation
Right or Supplemental Bonus granted hereunder, and to adopt such rules and
regulations for administering the Plan as it may deem necessary in order to
comply with the requirements of the Code, or in order that Stock Options that
are intended to be ISOs will be classified as incentive stock options under the
Code, or in order to conform to any regulation or to any change in any law or
regulation applicable thereto. The Committee or the Board may delegate any of
its responsibilities under this Plan, other than its responsibility to grant
Stock Options, to determine whether the Stock Appreciation Rights or
Supplemental Bonuses, if any, payable to a Participant shall be paid in cash, in
shares of Common Stock or a combination thereof, or to interpret and construe
this Plan. The Board of Directors may reserve to itself any of the authority
granted to the Committee as set forth herein, and it may perform and discharge
all of the functions and responsibilities of the Committee at any time that a
duly constituted Committee is not appointed and serving. All references in this
Plan to the "Committee" shall be deemed to refer to the Board of Directors
whenever the Board is discharging the powers and responsibilities of the
<PAGE>
Committee, and to any special committee appointed by the Board to administer
particular aspects of this Plan.
3.2 ACTIONS OF THE COMMITTEE. All actions taken and all interpretations
and determinations made by the Committee in good faith (including determinations
of Fair Market Value) shall be final and binding upon all Participants, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Plan, and all members of the Committee shall, in
addition to their rights as directors, be fully protected by the Company with
respect to any such action, determination or interpretation. Rule 16b-3 under
the Securities Exchange Act of 1934 (the "Exchange Act") provides that the grant
of a stock option to a director or officer of a company will be exempt from the
provisions of Section 16(b) of the Exchange Act if the conditions set forth in
said Rule are satisfied. Unless otherwise specified by the Committee, grants of
Stock Options hereunder to and exercises of Stock Options by individuals who are
officers or directors of the Company shall be made in a manner that satisfies
the conditions of said Rule.
IV. DEFINITIONS
4.1 "STOCK OPTION". A Stock Option is the right granted under the Plan
to purchase, at such time or times and at such price or prices ("Option Price")
as are determined by the Committee, the number of shares of Common Stock
determined by the Committee.
4.2 "STOCK APPRECIATION RIGHT". A Stock Appreciation Right is the right
to receive payment, in shares of Common Stock, cash or a combination of shares
of Common Stock and cash, of the Redemption Value of a specified number of
shares of Common Stock then purchasable under a Stock Option.
4.3 "REDEMPTION VALUE". The Redemption Value of shares of Common Stock
purchasable under a Stock Option shall be the amount, if any, by which the Fair
Market Value of one share of Common Stock on the date on which the Stock Option
is exercised exceeds the Option Price for such share.
4.4 "COMMON STOCK". A share of Common Stock means a share of authorized
but unissued or reacquired Common Stock (no par value per share) of the Company.
4.5 "FAIR MARKET VALUE". If the Common Stock is not traded publicly, the
Fair Market Value of a share of Common Stock on any date shall be determined, in
good faith, by the Committee after such consultation with outside legal,
accounting and other experts as the Committee may deem advisable, and the
Committee shall maintain a written record of its method of determining such
value. If the Common Stock is traded publicly, the Fair Market Value of a share
of Common Stock on any date shall be the average of the representative closing
bid and asked prices, as quoted by the National Association of Securities
Dealers through NASDAQ (its automated system for reporting quotes), for the date
in question or, if the Common Stock is listed on the NASDAQ National Market
System or is listed on a national stock exchange, the officially quoted closing
price on NASDAQ or such exchange, as the case may be, on the date in question.
4.6 "EMPLOYEE". An Employee is an employee of the Company or any
Participating Subsidiary.
-2-
<PAGE>
4.7 "PARTICIPANT". A Participant is a person to whom a Stock Option,
Stock Appreciation Right or Supplemental Bonus is granted.
4.8 "NON-EMPLOYEE DIRECTOR". A Non-Employee Director is a person who
satisfies the definition of a "non-employee director" set forth in Rule 16b-3
under the Exchange Act or any successor rule or regulation, as it may be amended
from time to time.
4.9 "SUPPLEMENTAL BONUS". A Supplemental Bonus is the right to receive
payment, in shares of Common Stock, cash or a combination of shares of Common
Stock and cash, of an amount determined under Section 7.7.
V. ELIGIBILITY AND PARTICIPATION
Grants of Stock Options, Stock Appreciation Rights and Supplemental Bonuses
may be made to Employees or non-employee directors of the Company or any
Participating Subsidiary; PROVIDED, HOWEVER, that only Employees, including
directors of the Company who are also Employees, shall be eligible to receive
ISOs. The Committee shall from time to time determine the Participants to whom
Stock Options shall be granted, the number of shares of Common Stock subject to
each Stock Option to be granted, the Option Price of such Stock Options and
other terms and provisions of such Stock Options, all as provided in this Plan.
The Option Price of any ISO shall be not less than the Fair Market Value of a
share of Common Stock on the date on which the Stock Option is granted, but the
Option Price of an NSO may be less than the Fair Market Value on the date the
NSO is granted if the Committee so determines. If an ISO is granted to an
Employee who then owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company, the Option Price of such ISO shall be at least 110%
of the Fair Market Value of the Common Stock subject to the ISO at the time such
ISO is granted, and such ISO shall not be exercisable after five years after the
date on which it was granted. Each Stock Option shall be evidenced by a written
agreement ("Option Agreement") containing such terms and provisions as the
Committee may determine, subject to the provisions of this Plan.
VI. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
6.1 MAXIMUM NUMBER. The maximum aggregate number of shares of Common
Stock that may be made subject to Stock Options shall be 2,000,000 authorized
but unissued shares. The aggregate Fair Market Value (determined as of the time
the ISO is granted) of the Common Stock as to which all ISOs granted to an
Employee may first become exercisable in a particular calendar year may not
exceed $100,000. If any shares of Common Stock subject to Stock Options are not
purchased or otherwise paid for before such Stock Options expire, such shares
may again be made subject to Stock Options.
6.2 CAPITAL CHANGES. In the event any changes are made to the shares of
Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of ten percent (10%) at any single
time, stock split, combination of shares, exchange of shares, change in
corporate structure or otherwise), appropriate adjustments shall be made in: (i)
the number of shares of Common Stock theretofore made subject to Stock Options,
and in the purchase price of said shares; and (ii) the aggregate number of
shares which may be made subject to Stock Options. If any of the foregoing
adjustments shall result in a fractional share, the fraction shall be
disregarded, and the
-3-
<PAGE>
Company shall have no obligation to make any cash or other payment with
respect to such a fractional share.
VII. EXERCISE OF STOCK OPTIONS
7.1 TIME OF EXERCISE. Subject to the provisions of the Plan, including
without limitation Section 7.5, the Committee, in its discretion, shall
determine the time when a Stock Option, or a portion of a Stock Option, shall
become exercisable, and the time when a Stock Option, or a portion of a Stock
Option, shall expire. Such time or times shall be set forth in the Option
Agreement evidencing such Stock Option. A Stock Option shall expire, to the
extent not exercised, no later than the tenth anniversary of the date on which
it was granted. The Committee may accelerate the vesting of any Participant's
Stock Option by giving written notice to the Participant. Upon receipt of such
notice, the Participant and the Company shall amend the Option Agreement to
reflect the new vesting schedule. The acceleration of the exercise period of a
Stock Option shall not affect the expiration date of that Stock Option.
7.2 EXCHANGE OF OUTSTANDING STOCK. The Committee, in its sole discretion,
may permit a Participant to surrender to the Company shares of Common Stock
previously acquired by the Participant as part or full payment for the exercise
of a Stock Option. Such surrendered shares shall be valued at their Fair Market
Value on the date of exercise.
7.3 USE OF PROMISSORY NOTE; EXERCISE LOANS. The Committee may, in its
sole discretion, impose terms and conditions, including conditions relating to
the manner and timing of payments, on the exercise of Stock Options. Such terms
and conditions may include, but are not limited to, permitting a Participant to
deliver to the Company his promissory note as full or partial payment for the
exercise of a Stock Option. The Committee, in its sole discretion, may
authorize the Company to make a loan to a Participant in connection with the
exercise of Stock Options, or authorize the Company to arrange or guarantee
loans to a Participant by a third party.
7.4 STOCK RESTRICTION AGREEMENT. The Committee may provide that shares of
Common Stock issuable upon the exercise of a Stock Option shall, under certain
conditions, be subject to restrictions whereby the Company has a right of first
refusal with respect to such shares or a right or obligation to repurchase all
or a portion of such shares, which restrictions may survive a Participant's term
of employment with the Company. The acceleration of time or times at which a
Stock Option becomes exercisable may be conditioned upon the Participant's
agreement to such restrictions.
7.5 TERMINATION OF EMPLOYMENT BEFORE EXERCISE. If a Participant's
employment with the Company or a Participating Subsidiary shall terminate for
any reason other than the Participant's disability, any Stock Option granted to
the Participant, to the extent then exercisable under the applicable Option
Agreement(s), shall remain exercisable after the termination of his employment
for a period of 30 days (but, in the case of an ISO, in no event beyond ten
years from the date of grant of the ISO). If the Participant's employment is
terminated because the Participant is disabled within the meaning of Section
22(e)(3) of the Code, any Stock Option granted to the Participant, to the extent
then exercisable under the applicable Option Agreement(s), shall remain
exercisable after the termination of his employment for a period of three months
(but, in the case of an ISO, in no event beyond ten years from the date of grant
of the ISO). If the Stock Option is not exercised during the applicable period,
it shall be deemed to have been forfeited and of no further force or effect.
-4-
<PAGE>
7.6 DISPOSITION OF FORFEITED STOCK OPTIONS. Any shares of Common Stock
subject to Stock Options forfeited by a Participant shall not thereafter be
eligible for purchase by the Participant but may be made subject to Stock
Options granted to other Participants.
7.7 GRANT OF SUPPLEMENTAL BONUSES. The Committee, either at the time of
grant or at any time prior to exercise of any Stock Option or Stock Appreciation
Right, may provide for a Supplemental Bonus from the Company or Participating
Subsidiary in connection with a specified number of shares of Common Stock then
purchasable, or which may become purchasable, under a Stock Option, or a
specified number of Stock Appreciation Rights which may be or become
exercisable. Such Supplemental Bonus shall be payable upon the exercise of the
Stock Option or Stock Appreciation Right with regard to which such Supplemental
Bonus was granted. A Supplemental Bonus shall not exceed the amount necessary
to reimburse the Participant for the income tax liability incurred by him upon
the exercise of the Stock Option or upon the exercise of such Stock Appreciation
Right, calculated using the maximum combined federal and applicable state income
tax rates then in effect and taking into account the tax liability arising from
the Participant's receipt of the Supplemental Bonus. The Committee may, in its
discretion, elect to pay any part or all of the Supplemental Bonus in: (i) cash;
(ii) shares of Common Stock; or (iii) any combination of cash and shares of
Common Stock. The provisions of Section 8.3 shall apply to the giving of
notice, the determination of the number of shares to be delivered, and the time
for delivering shares. In applying Section 8.3, the Supplemental Bonus shall be
treated as if it were a Stock Appreciation Right that the Participant exercised
on the day the Supplemental Bonus became payable. Shares of Common Stock issued
pursuant to this Section 7.7 shall not be deemed to have been issued upon the
exercise of a Stock Option for purposes of the limitations imposed by Section
6.1 of the Plan.
VIII. STOCK APPRECIATION RIGHTS
8.1 GRANT OF STOCK APPRECIATION RIGHTS. The Committee may, from time to
time, grant Stock Appreciation Rights to a Participant with respect to not more
than the number of shares of Common Stock which are, or may become, purchasable
under any Stock Option held by the Participant. The Committee may, in its sole
discretion, specify the terms and conditions of such rights, including without
limitation the time period or time periods during which such rights may be
exercised and the date or dates upon which such rights shall expire and become
void and unexercisable; provided, however, that in no event shall such rights
expire and become void and unexercisable later than the time when the related
Stock Option is exercised, expires or terminates. Each Participant to whom
Stock Appreciation Rights are granted shall be given written notice advising him
of the grant of such rights and specifying the terms and conditions of the
rights, which shall be subject to all the provisions of this Plan.
8.2 EXERCISE OF STOCK APPRECIATION RIGHTS. Subject to Section 8.3, and in
lieu of purchasing shares of Common Stock upon the exercise of a Stock Option
held by him, a Participant may elect to exercise the Stock Appreciation Rights,
if any, he has been granted and receive payment of the Redemption Value of all,
or any portion, of the number of shares of Common Stock subject to such Stock
Option with respect to which he has been granted Stock Appreciation Rights;
provided, however, that the Stock Appreciation Rights may be exercised only when
the Fair Market Value of the Common Stock subject to such Stock Option exceeds
the exercise price of the Stock Option. A Participant shall exercise his Stock
Appreciation Rights by delivering a written notice to the Committee specifying
the number of shares with respect to which he exercises Stock Appreciation
Rights and agreeing to surrender the rights to purchase an equivalent number of
shares of Common Stock subject to his Stock Option. If a Participant exercises
Stock Appreciation Rights, payment of his Stock Appreciation Rights shall be
made
-5-
<PAGE>
in accordance with Section 8.3 on or before the 90th day after the date of
exercise of the Stock Appreciation Rights.
8.3 FORM OF PAYMENT. If a Participant elects to exercise Stock
Appreciation Rights as provided in Section 8.2, the Committee may, in its
absolute discretion, elect to pay any part or all of the Redemption Value of the
shares with respect to which the Participant has exercised Stock Appreciation
Rights in: (i) cash; (ii) shares of Common Stock; or (iii) any combination of
cash and shares of Common Stock. The Committee's election pursuant to this
Section 8.3 shall be made by giving written notice to the Participant within
said 90-day period, which notice shall specify the portion which the Committee
elects to pay in cash, shares of Common Stock or a combination thereof. In the
event any portion is to be paid in shares of Common Stock, the number of shares
to be delivered shall be determined by dividing the amount which the Committee
elects to pay in shares of Common Stock by the Fair Market Value of one share of
Common Stock on the date of exercise of the Stock Appreciation Rights. Any
fractional share resulting from any such calculation shall be disregarded. Said
shares, together with any cash payable to the Participant, shall be delivered
within said 90-day period.
IX. NO CONTRACT OF EMPLOYMENT
Nothing in this Plan shall confer upon the Participant the right to
continue in the employ of the Company, or any Participating Subsidiary, nor
shall it interfere in any way with the right of the Company, or any such
Participating Subsidiary, to discharge the Participant at any time for any
reason whatsoever, with or without cause. Nothing in this Article IX shall
affect any rights or obligations of the Company or any Participant under any
written contract of employment.
X. NO RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder with respect to any
shares of Common Stock subject to a Stock Option. Except as provided in Section
6.2, no adjustment shall be made in the number of shares of Common Stock issued
to a Participant, or in any other rights of the Participant upon exercise of a
Stock Option by reason of any dividend, distribution or other right granted to
shareholders for which the record date is prior to the date of exercise of the
Participant's Stock Option.
XI. ASSIGNABILITY
No Stock Option, Stock Appreciation Right or Supplemental Bonus right
granted under this Plan, nor any other rights acquired by a Participant under
this Plan, shall be assignable or transferable by a Participant, other than by
will or the laws of descent and distribution or, in the case of an NSO, pursuant
to a qualified domestic relations order as defined by the Code, Title I of the
Employee Retirement Income Security Act, or the rules thereunder.
Notwithstanding the preceding sentence, the Committee may, in its sole
discretion, permit the assignment or transfer of an NSO, Stock Appreciation
Right or Supplemental Bonus right granted under this Plan by a Participant, and
the exercise thereof by a person other than such Participant, on such terms and
conditions as the Committee in its sole discretion may determine. Any such
terms shall be set forth in the Option Agreement. In the event of a
Participant's death, the Stock Option or any Stock Appreciation Right or
Supplemental Bonus right may be exercised by the Personal Representative of the
Participant's estate or, if no Personal Representative has been appointed, by
the successor or successors in interest determined under the Participant's will
or under the applicable laws of descent and distribution. The terms of any
rights under this Plan in the hands of a
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<PAGE>
transferee or assignee shall be determined as if held by the Participant and
shall be of no greater extent or term than if the transfer or assignment had
not taken place.
XII. MERGER OR LIQUIDATION OF THE COMPANY
If the Company or its shareholders enter into an agreement to dispose of
all, or substantially all, of the assets or outstanding capital stock of the
Company by means of a sale or liquidation, or a merger or reorganization in
which the Company is not the surviving corporation, all Stock Options
outstanding under the Plan as of the day before the consummation of such sale,
liquidation, merger or reorganization, to the extent not exercised, shall for
all purposes under this Plan become exercisable in full as of such date even
though the dates of exercise established pursuant to Section 7.1 have not yet
occurred, unless the Board shall have prescribed other terms and conditions to
the exercise of the Stock Option, or otherwise modified the Stock Options.
XIII. AMENDMENT
The Board may from time to time alter, amend, suspend or discontinue the
Plan, including, where applicable, any modifications or amendments as it shall
deem advisable in order that ISOs will be classified as incentive stock options
under the Code, or in order to conform to any regulation or to any change in any
law or regulation applicable thereto; provided, however, that no such action
shall adversely affect the rights and obligations with respect to Stock Options
at any time outstanding under the Plan; and provided further that no such action
shall, without the approval of the shareholders of the Company, (i) increase the
maximum number of shares of Common Stock that may be made subject to Stock
Options (unless necessary to effect the adjustments required by Section 6.2), or
(ii) materially modify the requirements as to eligibility for participation in
the Plan.
XIV. REGISTRATION OF OPTIONED SHARES
The Stock Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), or unless, in
the opinion of counsel to the Company, the proposed purchase of such optioned
shares would be exempt from the registration requirements of the 1933 Act and
from the registration or qualification requirements of applicable state
securities laws.
XV. WITHHOLDING TAXES
The Company or Participating Subsidiary may take such steps as it may deem
necessary or appropriate for the withholding of any taxes (including the
withholding of shares of Common Stock otherwise issuable which appropriate Fair
Market Value) which the Company or the Participating Subsidiary is required by
any law or regulation or any governmental authority, whether federal, state or
local, domestic or foreign, to withhold in connection with any Stock Option,
Stock Appreciation Right or Supplemental Bonus, including, but not limited to,
the withholding of all or any portion of any payment or the withholding of
issuance of shares of Common Stock to be issued upon the exercise of any Stock
Option or Stock Appreciation Right or upon payment of any Supplemental Bonus,
until the Participant reimburses the Company or Participating Subsidiary for the
amount the Company or Participating Subsidiary is required to withhold with
respect to such taxes, or canceling any portion of
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<PAGE>
such payment or issuance in an amount sufficient to reimburse itself for the
amount it is required to so withhold.
XVI. BROKERAGE ARRANGEMENTS
The Committee, in its discretion, may enter into arrangements with one or
more banks, brokers or other financial institutions to facilitate the
disposition of shares acquired upon exercise of Stock Options, Stock
Appreciation Rights or Supplemental Bonuses, including, without limitation,
arrangements for the simultaneous exercise of Stock Option, Stock Appreciation
Rights or Supplemental Bonuses, and sale of the shares acquired upon such
exercise.
XVII. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of this
Plan to shareholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Participating Subsidiary now has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
XVIII. EFFECTIVE DATE
This Plan was adopted by the Board of Directors and became effective on
June 25, 1992 and was approved by the Company's shareholders on May 14, 1993.
No Stock Options shall be granted subsequent to ten years after the effective
date of the Plan. Stock Options outstanding subsequent to ten years after the
effective date of the Plan shall continue to be governed by the provisions of
the Plan.
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EXHIBIT 99.2
COLORADO MEDTECH, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
1) PURPOSE
This Employee Qualified Stock Purchase Plan (the "Plan") is intended to
serve as an incentive and to encourage stock ownership by all eligible employees
of Colorado MEDtech, Inc. (the "Company") and participating subsidiaries (as
defined in Section 17 hereof) so that they may share in the fortunes of the
Company by acquiring or increasing their proprietary interest in the Company.
The Plan is designed to encourage eligible employees to remain in the employ of
the Company. It is intended that options issued pursuant to the Plan shall
constitute options issued pursuant to an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").
2) ELIGIBLE EMPLOYEES
All employees of the Company or any of its participating subsidiaries who
have completed six (6) months of employment prior to the beginning of any
Payment Period (as hereinafter defined) with the Company or any of its
participating subsidiaries ("Eligible Employees") shall be eligible to receive
options under the Plan to Purchase the Company's Common Stock, no par value (the
"Stock"). In no event may an employee be granted an option if such employee,
immediately after the option is granted, owns stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of
the Company or of its parent corporation or subsidiary corporation, as the terms
"parent corporation" and "subsidiary corporation" are defined in Section 424 (d)
of the Code shall apply and all stock which the employee may purchase under
outstanding options (notwithstanding that such options may not be presently
exercisable) shall be treated as stock owned by the employee.
For purposes of this Article 2, the term "employee" shall not include an
employee whose customary employment by the Company or participating subsidiary
is twenty (20) hours or less per week or is for not more than five (5) months in
any calendar year.
3) STOCK SUBJECT TO THE PLAN
The stock subject to the options issued under the Plan shall be shares of
the Company's authorized but unissued shares of Stock or shares of Stock
reacquired by the Company. The aggregate number of shares which may be issued
pursuant to the Plan is 240,000 subject to increase or decrease as provided
herein by reason of stock split-ups, reclassifications, stock dividends, changes
in par value and the like. The maximum number of shares available during each
annual Payment Period shall not exceed 80,000 shares.
4) PAYMENT PERIODS AND STOCK OPTIONS
The annual period, January 1 to December 31 is a payment period during
which payroll deductions will be accumulated under the Plan ("Payment Periods").
The Plan will be implemented in three (3) annual Payment Periods beginning
January 1, 1997. Each Payment Period includes only regular pay days falling
within it.
One time each year, on the first business day of each Payment Period, the
Company will grant to each eligible Employee who has elected to participate in
the Plan (a "Participant") an option to
<PAGE>
purchase on the last day of such Payment Period, at the Option Price
hereinafter provided, such number of full shares of the Stock reserved for
the purposes of the Plan as his/her accumulated payroll deductions on the
last day of such Payment Period will pay for at such Option Price, provided
that such employee remains eligible to participate in the Plan throughout
such Payment Period. If the Payment Period terminates on a Saturday, Sunday
or legal holiday, then the last day of the Payment Period shall be the last
business day prior to December 31. The Option Price for each Payment Period
shall be the lesser of (i) 85% of the fair market value (as hereinafter
defined) of the Stock on the first business day of the Payment Period; or
(ii) 85% of the fair market value of the Stock on the last day of the Payment
Period, in either case rounded up to avoid fractions other than 1/8, 1/4, 1/2
and 3/4. In the event of an increase or decrease in the number of outstanding
shares of Stock through stock split-ups, reclassifications, stock dividends,
changes in par value and the like, an appropriate adjustment shall be made in
the number of shares and Option Price per share provided for under the Plan,
either by a proportionate increase in the number of shares and a
proportionate decrease in the Option Price per share, or by a proportionate
decrease in the number of shares and proportionate increase in the Option
Price per share, as may be required to enable an Eligible Employee who is
then a Participant in the Plan as to whom an option is exercised on the last
day of any then current Payment Period to acquire such number of full shares
as his/her accumulated payroll deduction on such date will pay for at the
adjusted Option Price. The determination of what constitutes an "appropriate
adjustment" shall be made by the Board of Directors, whose determination
thereof shall be final.
For purposes of this Plan the term "fair market value" means, if the Stock
is listed on a national securities exchange, the average of the high and low
prices of the Stock on such exchange or if the Stock is traded in the over-the-
counter securities market, the mean between the closing bid and asked prices of
the Stock.
No employee shall be granted an option which permits his/her rights to
purchase Stock under the Plan and any other employee stock purchase plans of the
Company or any parent or subsidiary corporations to accrue at a rate which
exceeds $25,000 in fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding at
any time. A right to purchase Stock under the Plan "accrues" on the last day of
the Payment Period. The purpose of the limitation in the preceding sentence is
to comply with Section 423(b)(8) of the Code.
5) EXERCISE OF OPTION
Each Participant who fails to withdraw from participation in the Plan on or
prior to the last business day of a Payment Period shall be deemed to have
exercised his/her option on such date and shall be deemed to have purchased from
the Company such number of full shares of Stock reserved for the purpose of the
Plan as his/her accumulated payroll deductions on such date will pay for at such
Option Price. If a Participant is not an employee on the last day of a Payment
Period, he/she shall not be entitled to exercise his/her option.
6) UNUSED PAYROLL DEDUCTIONS
Only full shares of Stock may be purchased. Any balance remaining in a
Participant's account after a purchase will be reported to the employee and will
be carried in the employee's account towards the purchase of additional shares
in the next Payment Period.
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<PAGE>
7) AUTHORIZATION FOR ENTERING PLAN
An Eligible Employee may elect to participate in the Plan by completing,
signing and delivering to the Company's Human Resources Manager an
authorization:
(a) stating the amount to be deducted regularly from his/her pay;
(b) authorizing the purchase of Stock for him/her in each Payment Period
in accordance with the terms of the Plan; and
(c) specifying the exact name in which stock purchased for him/her is to
be issued as provided under Article 11 hereof.
Such Authorization must be received by the Human Resources Manager at
least ten (10) days before the beginning date of a Payment Period to be
effective for that Payment Period.
Unless a Participant files a new Authorization or withdraws from the Plan,
his/her deductions and purchases under the Authorization he/she has on file
under the Plan will continue as long as the Plan remains in effect.
The Company will accumulate and hold for the Participant's account the
amounts deducted from his/her pay. Interest earned, if any, will be credited to
the Participant's account for the purchase of additional shares.
8) MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS
An employee may authorize payroll deductions or make lump sum contributions
in any even dollar amount up to, but not more than, ten percent (10%) of his/her
regular base pay; provided, however, that the minimum deduction in respect of
any payroll period shall be Five Dollars ($5.00) (or such lesser amount as the
Board shall establish).
9) CHANGE IN PAYROLL DEDUCTIONS; LUMP SUM CONTRIBUTION
Deductions may be increased or decreased only once in a Payment Period. In
addition, an employee may make one lump sum contribution to the Plan at any time
in each Payment Period, which contribution shall be treated as, and deemed to
be, solely for purposes of the Plan, a payroll deduction. A new Authorization
will be required and must be received by the Human Resources Manager at least
ten (10) days before the end of the payroll period for which it is to become
effective.
10) WITHDRAWAL FROM THE PLAN
A participant may withdraw from the Plan in whole but not in part, at any
time prior to the fifteenth (15th) calendar date prior to the end of each
Payment Period or, if such day is not a business day, then the next succeeding
business day, by delivering a Withdrawal Notice to the Human Resources Manager,
in which event the Company will promptly refund the entire balance of his
deductions not theretofore used to purchase Stock under the Plan.
3
<PAGE>
A Participant who has withdrawn from the Plan shall be treated as an
employee who has never elected to participate in the Plan. To re-enter the Plan
a new Authorization must be filed at least ten (10) days before the beginning
date of a Payment Period, which Authorization will not become effective before
the beginning of the next Payment Period.
11) ISSUANCE OF STOCK
Certificates for Stock issued to Participants will be delivered as soon as
practicable after each Payment Period.
Stock purchased under the Plan will be issued only in the name of the
Participant, or if his/her Authorization so specified, in the name of the
Participant and another person of legal age as joint tenants with rights of
survivorship.
12) NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan may not be transferred to, assigned to,
or availed of by, any other person. Any option granted to an employee under
this Plan may be exercised only by him/her during his lifetime.
13) TERMINATION OF EMPLOYEE'S RIGHTS
An employee's rights to participate in, and a participant's rights under,
the plan will terminate when he/she ceases to be an employee because of
retirement, resignation, layoff, discharge, death, change of status, or for any
other reason. A Withdrawal Notice will be considered as having been received
from a Participant on the day his/her employment ceases, and all payroll
deductions not used to purchase Stock will be refunded to him/her.
If a Participant's payroll deductions are interrupted by any legal process,
a Withdrawal Notice will be considered as having been received from him/her on
the day the interruption occurs.
14) TERMINATION AND AMENDMENTS TO PLAN
The Plan may be terminated at any time by the Company's Board of Directors.
It will terminate in any case when all or substantially all the unissued shares
of Stock reserved for the purposes of the Plan have been purchased. If at any
time shares of Stock reserved for the purposes of the Plan remain available for
purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to their options and the Plan shall terminate. Upon such termination
or any other termination of the Plan, all payroll deductions not used to
purchase Stock will be refunded.
The Board of Directors also reserves the right to amend the Plan from time
to time, in any respect; provided, however, that no amendment shall be effective
without prior approval of the shareholders entitled to vote thereon, which would
(a) except as provided in Articles 3 and 4, increase the number of shares of
Stock to be offered under the Plan or (b) change the class of employees eligible
to participate in the Plan. Further, no amendment shall be made without prior
approval of the shareholders of the Company if such amendment would cause the
Plan to no longer comply with Rule 16b-3 under the Securities Exchange Act of
1934 or with Section 423 of the Internal Revenue Code.
4
<PAGE>
15) LIMITATIONS ON SALE OF STOCK PURCHASED UNDER THE PLAN
Each Participant who is subject to Rule 16(a) promulgated under the
Securities Exchange Act of 1934, will agree upon entering the Plan to hold the
Stock for a period of six (6) months after its acquisition. Because of certain
federal tax law requirements, each Participant will agree upon entering the
Plan, promptly to give the Company notice of any Stock disposed of within two
(2) years after the date of the first day of the Payment Period during which the
Stock was purchased under the Plan showing the number of such shares disposed
of. The employee assumes the risk of any fluctuations in the price of such
Stock.
16) COMPANY'S PAYMENT OF EXPENSES RELATED TO PLAN
The Company will bear all costs of administering and carrying out the Plan.
17) PARTICIPATING SUBSIDIARIES
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Board of Directors to participate in the
Plan. The Board of Directors shall have the power to make such designation
before or after the plan is approved by the stockholders.
18) ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company or
by a committee composed solely of two or more directors (the "Committee") each
of whom is a Non-Employee Director. A "Non-Employee Director" is a person who
satisfies the definition of a "non-employee director" set forth in Rule 16b-3,
as in effect from time to time, under the Securities Exchange Act of 1934, as
amended. The Board of Directors may from time to time, remove members from, or
add members to, the Committee. Vacancies on the Committee, however caused,
shall be filled by the Board of Directors. The Committee shall select one of
its members as Chairman, and shall hold meetings at such times and places as it
may determine. Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.
The interpretation and construction of any provision of the Plan and
adoption of rules and regulations for administering the Plan will be made by the
Committee, subject, however, at all times to the final jurisdiction which shall
rest in the Board. Determinations made by the Committee and approved by the
Board with respect to any matter or provision contained in the Plan will be
final, conclusive and binding upon the Company and upon all Participants, their
heirs or legal representatives. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it. No member of the
Committee shall be eligible to participate in the Plan while serving as a member
of the Committee.
19) OPTIONEES NOT STOCKHOLDERS
Neither the granting of an option to an employee nor the deductions from
his/her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been purchased by a certificate representing
such shares has been issued to him/her.
5
<PAGE>
20) GOVERNMENTAL REGULATION
The Company's obligation to sell and deliver shares of the Stock under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such stock.
21) EFFECTIVENESS OF THE PLAN
The Plan shall become effective September 27, 1996, the date of its
adoption by the Board of Directors, subject to the approval of the holders of a
majority of the securities of the Company entitled to vote, which approval must
occur within the period beginning twelve (12) months before the ending twelve
(12) months after the date the Plan is adopted by the Board of Directors.
Anything to the contrary notwithstanding, no Stock may be issued under the Plan
until such shareholder approval is obtained.
6
<PAGE>
EXHIBIT 99.3
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of January ____, 1994,
between Colorado MEDtech, Inc., a Colorado corporation (the "Company"), and
_____________________________________________________________ ("Employee").
WHEREAS, the Company, as an incentive to Employee and to increase
Employee's proprietary interest in the Company, desires to make available to
Employee a nonstatutory option to purchase shares of the Common Stock of the
Company;
NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
parties agree as follows:
l. GRANT OF OPTION. This option is granted pursuant to, and is subject
to the terms and conditions of a subscription letter from Employee to the
Company, dated January ____, 1994. Pursuant to such letter, the Company hereby
grants to Employee the right and option (hereinafter referred to as "the
option") to purchase ___________________________ shares of the Company's Common
Stock ("Shares"). Subject to these provisions, each portion of the vested
option shall be exercisable for five (5) years after the date of this Agreement.
The purchase price to be paid for such Common Shares upon exercise of the option
shall be $________ per share, which represents the average of the closing bid
and ask prices of the Common Stock as reported by NASDAQ for the five trading
days prior to receipt of subscription, payable in cash upon subscription.
2. VESTING. One-twelfth (1/12) of the option shall become vested on
February 1, 1994, and may be exercised immediately. The unvested portion of the
option shall vest one-twelfth (1/12) per month, as of the first day of each of
the eleven (11) months after February 1994, commencing March 1, 1994, SUBJECT,
as of each of such vesting dates, to the continued employment by the Company of
Employee, and PROVIDED, that, in the event Employee is terminated by the Company
without cause (where cause means reasonably justifiable termination, based on
performance factors) the unvested portion of this option, if any, shall
immediately vest.
3. METHOD OF EXERCISING OPTION. The option may be exercised, in whole at
any time or in part from time to time, by giving to the Company notice in
writing to that effect. Within thirty (30) days after the receipt by the
Company of notice of exercise of the option and upon due satisfaction of all
conditions pertaining to the option as set forth in this Agreement, the Company
shall cause certificates for the number of Shares with respect to which the
option is exercised to be issued in the name of Employee, or Employee's
executors, administrators, or other legal representatives, heirs, legatees, next
of kin, or distributees, and to be delivered to Employee or Employee's
executors, administrators, or other legal representatives, heirs, legatees, next
of kin, or distributees. Payment of the purchase price for the shares with
respect to which the option is exercised shall be made to the Company upon the
delivery of such stock, together with revenue stamps or checks in an amount
sufficient to pay any stock transfer taxes required on such delivery. The
Company shall give the person or persons entitled to the same
<PAGE>
at least five (5) days' notice of the time and place for delivery and for the
payment of such purchase price.
4. CONDITIONS OF OPTION. The option herein granted to Employee shall not
be transferable by Employee other than by will or the laws of descent and
distribution, without the Company's written consent.
5. REPRESENTATION AS TO INVESTMENT. The exercise of such option and the
delivery of the Shares subject to the option will be contingent upon the Company
being furnished by Employee, Employee's legal representatives, or other persons
entitled to exercise such option with a statement in writing, in substantially
the form attached as Exhibit A hereto, that at the time of such exercise it is
Employee's or their intention to acquire the Shares being purchased solely for
investment purposes and not with a view to distribution.
6. REGISTRATION RIGHTS. Employee shall have registration rights with
respect to Shares acquired upon exercise of this option under a Registration
Rights Agreement in the form of Exhibit B attached hereto.
7. NOTICES. Any notice to be given by Employee as required by this
Agreement shall be sent to the Company at its principal executive offices and
any notice from the Company to Employee shall be sent to Employee at Employee's
address as it appears on the Company's books and records. Either party may
change the address to which notices are to be sent by informing the other party
in writing of the new address.
8. RESTRICTION AGAINST ASSIGNMENT. Except as otherwise expressly
provided above, Employee agrees on behalf of Employee and of Employee's
executors and administrators, heirs, legatees, distributees, and any other
person or persons claiming any benefits under Employee by virtue of this
Agreement, that this Agreement and the rights, interests, and benefits under it
shall not be assigned, transferred, pledged, or hypothecated in any way by
Employee or any executor, administrator, heir, legatee, distributee, or other
person claiming under Employee by virtue of this Agreement. Such rights,
interest, or benefits shall not be subject to execution, attachment, or similar
process. Any attempted assignment, transfer, pledge or hypothecation, or other
disposition of this Agreement or of such rights, interests, and benefits
contrary to the preceding provisions, or the levy of any attachment or similar
process thereupon, shall be null and void and without effect.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its corporate name by its duly authorized corporate officers, and Employee has
hereunto set Employee's hand, as of the day and year first above written.
ATTEST: COLORADO MEDTECH, INC.
By: By:
-------------------------------- ---------------------------------
Bruce L. Arfmann, John V. Atanasoff, President
Secretary
EMPLOYEE
------------------------------------
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EXHIBIT 99.4
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR
THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933 OR RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
COLORADO MEDTECH, INC.
WARRANT TO PURCHASE COMMON STOCK
Issued:
---------------------
Effective Date:
----------------
This certifies that, for value received, ______________________ ("the
Holder") is entitled to subscribe for and purchase up to ____________ shares of
fully paid and nonassessable Common Stock of Colorado MEDtech, Inc., a Colorado
corporation, (the "Company"), at a price of $______ per share (the "Warrant
Price"), subject to the following vesting schedule: This Warrant may be
exercised in the amounts of up to [50%] shares after June 30, [NEXT FISCAL
YEAR END], and an additional [50%] shares after June 30, [SUBSEQUENT FISCAL
YEAR END], subject, in each instance, to the Holder's continued service on
the Board of Directors of the Company at the time of such vesting date.
1. TERM OF WARRANT.
The purchase right represented by this Warrant is exercisable, in
whole or in part, and from time to time. In any event, the Warrant shall
terminate on [5 YEARS] and, accordingly, may not be exercised after that date.
2. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT.
Subject to paragraph 1 hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by check, of an amount equal to the then applicable
Warrant Price per share multiplied by the number of shares then being purchased.
In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be delivered to the
holder hereof within a reasonable time and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the
<PAGE>
shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the holder hereof within such reasonable
time.
3. STOCK FULLY PAID.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
The kind of securities purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events as follows:
(a) RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with
or into another corporation, other than a merger with another corporation in
which the Company is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), the Company, or such successor or purchasing corporation, as the
case may be, shall execute a new Warrant, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and procure upon such
exercise, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change,
consolidation, or merger by a holder of one share of Preferred Stock. Such new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Paragraph 4. The
provisions of this subparagraph (a) shall similarly apply to successive
reclassifications, changes, consolidations and mergers.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Common Stock, the Warrant Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
(c) STOCK DIVIDENDS. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend with respect to Common Stock
payable in, or make any other distribution with respect to Common Stock (except
any distribution specifically provided for in the foregoing subparagraph (a) or
(b)) of, Common Stock, then the Warrant Price shall be adjusted, from and after
the date of determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price
<PAGE>
in effect immediately prior to such date of determination by a fraction (a)
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
(d) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in the
Warrant Price, the number of shares of Common Stock purchasable hereunder shall
be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately thereafter.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall make a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the holder of this Warrant at the address
specified in Paragraph 8(c) hereof, or at any address provided to the Company in
writing by the holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with
any exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor upon the basis of the Warrant Price then in effect.
7. COMPLIANCE WITH SECURITIES ACT; NON-TRANSFERABILITY OF
WARRANT; DISPOSITION OF SHARES OF COMMON STOCK.
The holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the shares of Common Stock to be issued upon exercise hereof are
being acquired for investment and that it will not offer, sell or otherwise
dispose of this Warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). Upon exercise of this Warrant,
the holder hereof shall, if requested by the Company, confirm in writing, in a
form satisfactory to the Company, that the shares of Common Stock so purchased
are being acquired for investment and not with a view toward distribution or
resale. This Warrant and all shares of Common Stock issued upon exercise of
this Warrant (unless registered under the Act) shall be stamped or imprinted
with a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. NO SALE OR DISPOSITION MAY BE EFFECTED
-3-
<PAGE>
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933 OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION THAT SUCH REGISTRATION IS NOT REQUIRED."
8. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No holder of the Warrant or Warrants
shall be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company or,
in the case of mutilation, on surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor.
(c) NOTICE. Any notice given to either party under this Agreement
shall be deemed to be given three (3) days after mailing, postage prepaid,
addressed to such party at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions in this
Warrant.
-4-
<PAGE>
(e) GOVERNING LAW. This Warrant shall be governed by and construed
under the laws of the State of Colorado.
Date:
-------------------------
COLORADO MEDTECH, INC.
By:
-----------------------------------
John V. Atanasoff II, President
-5-
<PAGE>
EXHIBIT 99.5
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of January 30, 1995, between
Colorado MEDtech, Inc., a Colorado corporation (the "Company"), and Spectrum
Consultants, a California corporation ("Consultant").
WHEREAS, the Company, as an incentive to Consultant and to increase
Consultant's proprietary interest in the Company, desires to make available to
Consultant a nonstatutory option to purchase shares of the Common Stock of the
Company;
NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
parties agree as follows:
l. GRANT OF OPTION. This option is granted effective January 30, 1995.
The Company hereby grants to Consultant the right and option (hereinafter
referred to as "the option") to purchase 10,000 shares of the Company's Common
Stock ("Shares"). The option shall be exercisable for three (3) years after the
date of this Agreement. The purchase price to be paid for such Common Shares
upon exercise of the option shall be $1.04 per share, which represents the
average of the closing bid and ask prices of the Common Stock as reported by
NASDAQ for the five trading days prior to date of grant, payable in cash.
2. METHOD OF EXERCISING OPTION. The option may be exercised, in whole at
any time or in part from time to time, by giving to the Company notice in
writing to that effect. Within thirty (30) days after the receipt by the
Company of notice of exercise of the option and upon due satisfaction of all
conditions pertaining to the option as set forth in this Agreement, the Company
shall cause certificates for the number of Shares with respect to which the
option is exercised to be issued in the name of Consultant, or Consultant's
executors, administrators, or other legal representatives, heirs, legatees, next
of kin, or distributees, and to be delivered to Consultant or Consultant's
executors, administrators, or other legal representatives, heirs, legatees, next
of kin, or distributees. Payment of the purchase price for the shares with
respect to which the option is exercised shall be made to the Company upon the
delivery of such stock, together with revenue stamps or checks in an amount
sufficient to pay any stock transfer taxes required on such delivery. The
Company shall give the person or persons entitled to the same at least five (5)
days' notice of the time and place for delivery and for the payment of such
purchase price.
3. CONDITIONS OF OPTION. The option herein granted to Consultant shall
not be transferable by Consultant other than by will or the laws of descent and
distribution, without the Company's written consent.
4. REPRESENTATION AS TO INVESTMENT. The exercise of such option and the
delivery of the Shares subject to the option will be contingent upon the Company
being furnished by Consultant, Consultant's legal representatives, or other
persons entitled to exercise such option with a statement in writing, in
substantially the form attached as Exhibit A hereto, that at the
<PAGE>
time of such exercise it is Consultant's or their intention to acquire the
Shares being purchased solely for investment purposes and not with a view to
distribution.
5. NOTICES. Any notice to be given by Consultant as required by this
Agreement shall be sent to the Company at its principal executive offices and
any notice from the Company to Consultant shall be sent to Consultant at
Consultant's address as it appears on the Company's books and records. Either
party may change the address to which notices are to be sent by informing the
other party in writing of the new address.
6. RESTRICTION AGAINST ASSIGNMENT. Except as otherwise expressly
provided above, Consultant agrees on behalf of Consultant and of Consultant's
executors and administrators, heirs, legatees, distributees, and any other
person or persons claiming any benefits under Consultant by virtue of this
Agreement, that this Agreement and the rights, interests, and benefits under it
shall not be assigned, transferred, pledged, or hypothecated in any way by
Consultant or any executor, administrator, heir, legatee, distributee, or other
person claiming under Consultant by virtue of this Agreement. Such rights,
interest, or benefits shall not be subject to execution, attachment, or similar
process. Any attempted assignment, transfer, pledge or hypothecation, or other
disposition of this Agreement or of such rights, interests, and benefits
contrary to the preceding provisions, or the levy of any attachment or similar
process thereupon, shall be null and void and without effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its corporate name by its duly authorized corporate officers, and Consultant has
hereunto set Consultant's hand, as of the day and year first above written.
ATTEST: COLORADO MEDTECH, INC.
By: By:
--------------------------- ------------------------------------
Bruce L. Arfmann, John V. Atanasoff, President
Secretary
CONSULTANT
---------------------------------------
George William Christiansen
President, Spectrum Consultants
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<PAGE>
EXHIBIT 99.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR
THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933 OR RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
COLORADO MEDTECH, INC.
WARRANT TO PURCHASE COMMON STOCK
Issued: November 18, 1993
Effective Date: November 20, 1993
This certifies that, for value received, CBJ PARTNERSHIP, a Colorado
general partnership ("the Holder") is entitled to subscribe for and purchase up
to 100,000 shares of fully paid and nonassessable Common Stock of Colorado
MEDtech, Inc., a Colorado corporation, (the "Company"), 25,000 shares of which
shall be vested and may be exercised from the Effective Date of this Warrant at
$1.50 per share. The remaining 75,000 shares of stock for which this Warrant
may be exercised shall vest and may be exercised on and after the following
dates (or the first business day after such dates): the second tranche of
25,000 shares: November 20, 1994; the third tranche of 25,000 shares: November
20, 1995; and the remaining tranche of 25,000 shares: November 20, 1996;
SUBJECT, in each instance, to the continued service by Chrisman, Bynum &
Johnson, P.C. as primary legal counsel to the Company at the time of such
vesting dates, and PROVIDED, that, in the event Chrisman, Bynum & Johnson, P.C.
no longer serves as Company's primary legal counsel due to termination by the
Company without cause (where cause means material negligence in legal services
provided) the unvested portion of this Warrant, if any, shall immediately vest.
The price per share of each share of Stock which may be purchased by exercise of
this Warrant (the "Warrant Price") shall be the average of the bid and asked
prices of the Company's Common Stock as quoted by NASDAQ (or any successor
quoting agency or service which quotes the Company's Common Stock) as of the
vesting date of each of the four tranches of this Warrant set forth above.
1. TERM OF WARRANT.
The purchase right represented by this Warrant is exercisable, in
whole or in part, and from time to time, subject to the vesting schedule set
forth above. In any event, the
<PAGE>
Warrant shall terminate on November 20, 1998 and, accordingly, may not be
exercised after that date.
2. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT.
Subject to paragraph 1 hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
Exhibit 1 duly executed) at the principal office of the Company and by the
payment to the Company, by check, of an amount equal to the then applicable
Warrant Price per share multiplied by the number of shares then being purchased.
In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be delivered to the
holder hereof within a reasonable time and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be issued to the holder hereof within such reasonable time.
3. STOCK FULLY PAID.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
The kind of securities purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events as follows:
(a) RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with
or into another corporation, other than a merger with another corporation in
which the Company is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), the Company, or such successor or purchasing corporation, as the
case may be, shall execute a new Warrant, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and procure upon such
exercise, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change,
consolidation, or merger by a holder of one share of Preferred Stock. Such new
Warrant shall provide for adjustments which shall be
-2-
<PAGE>
as nearly equivalent as may be practicable to the adjustments provided for in
this Paragraph 4. The provisions of this subparagraph (a) shall similarly
apply to successive reclassifications, changes, consolidations and mergers.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Common Stock, the Warrant Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
(c) STOCK DIVIDENDS. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend with respect to Common Stock
payable in, or make any other distribution with respect to Common Stock (except
any distribution specifically provided for in the foregoing subparagraph (a) or
(b)) of, Common Stock, then the Warrant Price shall be adjusted, from and after
the date of determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price in
effect immediately prior to such date of determination by a fraction (a) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
(d) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in the
Warrant Price, the number of shares of Common Stock purchasable hereunder shall
be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately thereafter.
5. NOTICE OF ADJUSTMENTS.
Whenever any Warrant Price shall be adjusted pursuant to Paragraph 4
hereof, the Company shall make a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price or Prices after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the holder of this Warrant at the address
specified in Paragraph 8(c) hereof, or at any address provided to the Company in
writing by the holder of this Warrant.
6. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in connection with
any exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor upon the basis of the Warrant Price then in effect.
-3-
<PAGE>
7. COMPLIANCE WITH SECURITIES ACT; NON-TRANSFERABILITY OF
WARRANT; DISPOSITION OF SHARES OF COMMON STOCK.
The holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the shares of Common Stock to be issued upon exercise hereof are
being acquired for investment and that it will not offer, sell or otherwise
dispose of this Warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). Upon exercise of this Warrant,
the holder hereof shall, if requested by the Company, confirm in writing, in a
form satisfactory to the Company, that the shares of Common Stock so purchased
are being acquired for investment and not with a view toward distribution or
resale. This Warrant and all shares of Common Stock issued upon exercise of
this Warrant (unless registered under the Act) shall be stamped or imprinted
with a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR
THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933 OR RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
REGISTRATION IS NOT REQUIRED."
8. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No holder of the Warrant or Warrants
shall be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant or Warrants shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
(b) REPLACEMENT. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of any indemnity
agreement or bond reasonably satisfactory in form and amount to the Company or,
in the case of mutilation, on surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor.
-4-
<PAGE>
(c) NOTICE. Any notice given to either party under this Agreement
shall be deemed to be given three (3) days after mailing, postage prepaid,
addressed to such party at the address as such party may provide to the other.
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions in this
Warrant.
(e) GOVERNING LAW. This Warrant shall be governed by and construed
under the laws of the State of Colorado.
Date: November 18, 1993.
COLORADO MEDTECH, INC.
By:
----------------------------------
John V. Atanasoff, President
-5-
