APPENDIX B NON-PLAN STOCK OPTION AGREEMENT
EXHIBIT
10.5
APPENDIX
B
THIS
AGREEMENT, dated as of July 21, 2006, is made by and between PubliCARD, Inc.,
a
Pennsylvania corporation (the “Company”) and Xxxxxx X. Xxxxxxxx (the
“Optionee”).
WHEREAS,
pursuant to the letter agreement dated July 21, 2006 (the “Retention Agreement”)
between the Optionee and the Company, on the date hereof, the Optionee has
been
selected by the Board of Directors of the Company (the “Board”) to receive a
grant of stock options.
NOW,
THEREFORE, the Company and the Optionee agree as follows:
Definitions.
Any
capitalized term not defined herein shall have the meaning set forth in the
PubliCARD, Inc. 1999 Long Term Incentive Plan (the “Plan”).
Grant
of Option.
Grant;
Grant Date.
Subject to the terms and conditions hereof, the Company hereby grants to the
Optionee as of July 21, 2006 (the “Grant Date”) an option to purchase up to
1,043,425 Shares at an exercise price of $0.0279 per Share.
Adjustments
in Option.
In the event that the outstanding Shares subject to the Option are changed
into
or exchanged for a different number or kind of shares or securities of the
Company, or of another corporation, by reason of reorganization, merger or
other
subdivision, consolidation, recapitalization, reclassification, stock split,
issuance of warrants, stock dividend or combination of shares or similar event,
the Board shall make an appropriate and equitable adjustment in the Option
so
that the Optionee’s proportionate interest shall be maintained as before the
occurrence of such event.
Form
of Option.
The option is not intended to be an incentive stock option.
Term.
The Option shall expire on the 10th
anniversary of the Grant Date, unless terminated earlier in accordance with
this
Agreement.
Vesting.
The Option shall become vested and immediately exercisable upon the consummation
of the Initial Transaction (as defined in the Retention Agreement).
Exercise.
The Optionee shall exercise an Option in whole or in part at any time by
delivering written notice of such exercise to the Secretary of the Company
of
the number of Shares as to which the Option is being exercised, and enclosing
payment for the Shares with respect to which the Option is being exercised.
Such
payment shall be in cash or by check, or if approved by the Board, by the
delivery of Shares previously owned by the Optionee, duly endorsed for transfer
to the Company, with a Fair Market Value on the date of delivery equal to the
aggregate purchase price of the Shares with respect to which the Option is
being
exercised, or any combination of the foregoing approved by the Committee, in
its
sole discretion. Partial exercise shall be for whole Shares only and shall
not
be for less than one hundred (100) Shares unless the number of Shares purchased
constitutes the total number of Shares then remaining subject to the Option
or
the Committee permits such smaller exercise in its sole discretion.
Exercise
Following Termination of Engagement.
Notwithstanding the provisions of the Plan:
In
the event the Optionee’s engagement by the Company is terminated for cause or if
the Optionee voluntarily terminates such engagement, if the Option shall not
be
exercisable at such time, it shall be deemed to have terminated as of the day
preceding the date on which the Optionee’s engagement by the Company terminates.
In
all other cases, the Option shall be exercisable for the shorter of ninety
(90)
days following such termination of the Optionee’s engagement by the Company, or
the remainder of its original term, to the extent it had become or becomes
exercisable in accordance with Section 2(5).
Nontransferability.
The Option shall not be transferable other than by will or the laws of descent
and distribution, and no transfer so effected shall be effective to bind the
Company unless the Company has been furnished with written notice thereof and
a
copy of the will and/or such other evidence as the Board may deem necessary
to
establish the validity of the transfer and the acceptance by the transferee
or
transferees of the terms and conditions of the Option, provided, however, that,
in the discretion of the Board, Options may be transferred pursuant to a
Qualified Domestic Relations Order (within the meaning of the
Code).
Conditions
to Issuance of Stock Certificates.
The
Shares deliverable upon the exercise of the Option, or any portion thereof,
may
be either previously authorized but unissued Shares or issued Shares which
have
been reacquired by the Company. Such Shares shall be fully paid and
non-assessable. The stock certificates evidencing the Shares shall bear such
legends restricting transferability as the Committee deems necessary or
advisable.
The
Company shall not be required to issue or deliver any certificate or
certificates for Shares deliverable upon any exercise of the Option prior to
fulfillment of all of the following conditions:
The
completion of any registration or other qualification of such Shares under
any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, or the
obtaining of approval or other clearance from any state or federal governmental
agency which the Board shall, in its sole discretion, deem necessary or
advisable.
If
the Board, in its sole discretion, deems it necessary or advisable, the
execution by the Optionee of a written representation and agreement, in a form
satisfactory to the Board, in which the Optionee represents that the Shares
acquired by him upon exercise are being acquired for investment and not with
a
view to distribution thereof.
Rights
as Stockholder.
The Optionee shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any Shares purchasable upon the
exercise of the Option unless and until certificates representing such Shares
have been issued by the Company.
Miscellaneous.
Administration.
The Board shall have the power to interpret the Plan and this Agreement, and
to
adopt such rules for the administration, interpretation and application of
the
Plan and this Agreement as are consistent herewith and therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Board shall be final and binding upon the
Optionee, the Company, and all other interested persons.
No
Right to Continued Engagement.
Nothing in this Agreement shall confer upon the Optionee any right to continue
to be engaged by the Company or shall interfere with or restrict in any way
the
rights of the Company, which are hereby expressly reserved, to discharge the
Optionee at any time for any reason whatsoever, with or without
cause.
Entire
Agreement; Amendment.
This Agreement and the Retention Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof, and supersede
all
prior agreements and understandings between the parties with respect to such
subject matter. Any term or provision of this Agreement may be waived at any
time by the party which is entitled to the benefits thereof, and any term or
provision of this Agreement may be amended or supplemented at any time by the
mutual consent of the parties hereto, except that any waiver of any term or
condition, or any amendment, of this Agreement must be in writing.
Governing
Law.
The laws of the State of New York shall govern the interpretation, validity
and
performance of the terms of this Agreement regardless of the law that might
be
applied under principles of conflict of laws.
Successors.
This Agreement shall be binding upon and inure to the benefit of the successors,
assigns and heirs of the respective parties.
Notices.
All notices or other communications made or given in connection with this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by registered or certified mail, return receipt requested,
to those listed below at their following respective addresses or at such other
address as each may specify by notice to the others:
To
the Optionee:
Xxxxxx
X. Xxxxxxxx
00
Xxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
To
the Company:
PubliCARD,
Inc.
Xxx
Xxxxxxxxxxx Xxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Corporate secretary
Waiver.
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver thereof or deprive
that party of the right thereafter to insist upon strict adherence to that
term
or any other term of this Agreement.
Conflict
with the Plan.
The option evidenced by this Agreement is not issued pursuant to the Plan.
However, the parties have agreed to incorporate the provisions of the Plan
(other than the limitation as to the number of shares for which options may
be
granted) in this Agreement, and this Agreement shall be construed as if the
option evidenced hereby were granted under the Plan. In the event of any
conflict or inconsistency between the provisions of this Agreement and the
Plan,
except as otherwise provided in this Agreement, the provisions of the Plan
shall
control.
Titles;
Construction.
Titles
are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Agreement. The masculine pronoun shall
include the feminine and neuter and the singular shall include the plural,
when
the context so indicates.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
PubliCARD,
Inc.
By
/s/ Xxxxxxx X. XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: President
Name: Xxxxxxx X. XxXxxx
Title: President
OPTIONEE:
/s/
Xxxxxxx X. Xxxxxxxx
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