Notice of Exercise of Stock Option - Critical Path Inc. and William McGlashan Jr.
CRITICAL PATH, INC. AMENDED AND RESTATED 1998 STOCK OPTION PLAN
NOTICE OF EXERCISE OF STOCK OPTION (EARLY EXERCISE)
OPTIONEE INFORMATION:
Name: William McGlashan, Jr. Social Security Number:
Address: _______________________________ Phone Number (Work): ___________
_______________________________ Phone Number (Home): ___________
OPTION INFORMATION:
Date of Grant: May 8, 2002
Type of Option: [X] Nonstatutory or
Total number of shares of Common Stock of [ ] Incentive
Critical Path, Inc. (the "Company")
covered by option: 1,000,000 shares Exercise Price per Share: $1.74
EXERCISE INFORMATION:
Number of shares of Common Stock of the Company for which option is being
exercised now: 1,000,000. (These shares are referred to below as the
"Purchased Shares.")
Total Exercise Price for the Purchased Shares: $1,740,000.
Form of payment enclosed [CHECK ALL THAT APPLY]:
[ ] Check for $________, [ ] Certificate(s) for _________ shares of the Common
made payable to Stock of the Company that I have owned for at
"Critical Path, Inc." least six months or have purchased in the open
market. (These shares will be valued as of the
date when this notice is received by the Company.)
[X] Full-recourse [ ] Attestation Form covering _________ shares of the
promissory note for Common Stock of the Company. (These shares will be
$1,740,000, payable valued as of the date this notice is received by
to "Critical Path, the Company.)
Inc."
Name(s) in which the Purchased Shares should be registered [YOU MUST CHECK ONE]:
[ ] In my name only My spouse's name (if applicable):
[ ] In the names of my spouse and myself as
community property
[ ] In the names of my spouse and myself as _________________________________
joint tenants with the right of
survivorship
The certificate for the Purchased ______________________________________
Shares should be sent to the following
address: ______________________________________
______________________________________
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ACKNOWLEDGMENTS:
1. I understand that all sales of Purchased Shares are subject to compliance
with the Company's policy on securities trades and the Restrictions on Resale
provision of the Option Agreement. I also understand that the Purchased
Shares and any proceeds from the sale of Purchased Shares may be subject to
Forfeiture pursuant to the terms of the Option Agreement.
2. I hereby acknowledge that I received and read a copy of the prospectus
describing the Company's AMENDED AND RESTATED 1998 STOCK OPTION PLAN and the
tax consequences of an exercise.
3. In the case of a nonstatutory option, I understand that I must recognize
ordinary income equal to the spread between the fair market value of the
Purchased Shares on the date of exercise and the exercise price. I further
understand that I am required to pay withholding taxes at the time of
exercising a nonstatutory option.
4. I acknowledge that the Purchased Shares may remain subject to the Company's
right of repurchase at the exercise price in accordance with the applicable
Option Agreement. I acknowledge that I am acquiring the Purchased Shares
subject to all other terms of the Option Agreement.
5. I acknowledge that I have received information regarding the federal income
tax consequences of an option exercise and the tax election under section
83(b) of the Internal Revenue Code. In the event that I choose to make a
section 83(b) election, I acknowledge that it is my responsibility--and not
the Company's responsibility--to file the election in a timely manner, even
if I ask the Company or its agents to make the filing on my behalf. I
acknowledge that the Company has encouraged me to consult my own adviser to
determine the tax consequences of acquiring the Purchased Shares at this
time.
SIGNATURE:
/s/ William McGlashan May 8, 2002
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SECTION 83(b) ELECTION
This statement is made under Section 83(b) of the Internal Revenue Code of 1986,
as amended, pursuant to Treasury Regulations Section 1.83-2.
(1) The taxpayer who performed the services is:
Name: William McGlashan, Jr.
Address: ______________________________________
______________________________________
Social Security No.:
(2) The property with respect to which the election is made is 1,000,000
shares of the common stock of Critical Path, Inc.
(3) The property was transferred on May 8, 2002.
(4) The taxable year for which the election is made is the calendar year
2002.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original
purchase price if for any reason taxpayer's service with the issuer
is terminated. The issuer's repurchase right lapses in a series of
installments over a 3-year period ending on May 8, 2005.
(6) The fair market value of such property at the time of transfer
(determined without regard to any restriction other than a
restriction which by its terms will never lapse) is $1.74 per share.
(7) The amount paid for such property is $1.74 per share.
(8) A copy of this statement was furnished to Critical Path, Inc. for
whom taxpayer rendered the services underlying the transfer of such
property.
(9) This statement is executed on May 8, 2002.
/s/ William McGlashan
______________________________________ ______________________________________
Signature of Spouse (if any) Signature of Taxpayer
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE CENTER WHERE THE
OPTIONEE FILES HIS OR HER FEDERAL INCOME TAX RETURNS AND MUST BE FILED WITHIN 30
DAYS AFTER THE DATE OF PURCHASE. THIS FILING SHOULD BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THE OPTIONEE MUST RETAIN TWO COPIES OF
THE COMPLETED FORM FOR FILING WITH HIS OR HER FEDERAL AND STATE TAX RETURNS FOR
THE CURRENT TAX YEAR AND AN ADDITIONAL COPY FOR HIS OR HER RECORDS.