EXHIBIT 10.8.5
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of the 2nd day of February, 1998 by and
between AMERICAN CARD TECHNOLOGY, INC., a Delaware corporation, with a business
office at 0000 Xxxxxxx Xxxx Xxxx - Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000
(hereinafter called the "Corporation"), and XXXXXX XXXXXX (hereinafter called
the "Optionee").
The Corporation has adopted a 1996 Nonemployee Directors' Stock Option Plan
(the "Plan") to be used to award options to purchase shares of its common stock
to those directors of the Corporation who are not employees of the Corporation
or any of its subsidiaries. The Board of Directors of the Corporation (the
"Board") or a special committee of the Board (the "Committee") has authorized
the awarding of an option under the Plan to the Optionee. Wherever the context
so requires, the "Corporation" shall be deemed to refer to any or all of the
Corporation's subsidiaries.
NOW, THEREFORE, in consideration of the premises contained herein, it is
hereby agreed as follows:
1. The Corporation hereby grants to the Optionee as of the date of this
Agreement the right and option to purchase (hereinafter called the "Option") all
or any part of an aggregate of 2,500 shares of the Corporation's common stock,
with a par value of $.001 per share (hereinafter called the "Common Stock"), on
the terms and conditions herein set forth.
2. The Option shall not constitute an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
3. The Optionee's right to exercise the Option shall be subject to the
following terms and conditions:
(a) OPTION PRICE. The price per share with respect to the Option
shall be Twelve and 00/100 Dollars ($12.00) (the "Option Price").
(b) EXERCISE OF OPTION. Subject to the terms and conditions set
forth herein, this Option shall be exercisable, in whole or in part, at any
time and from time to time, during that period commencing on the date hereof
and ending at 5:00 p.m., eastern standard time, February 1, 2008 (after which
date this Option shall lapse with respect to any shares of Common Stock not
theretofore purchased).
(c) NOTICE OF EXERCISE; PAYMENT; SHAREHOLDERS' RIGHTS. The Optionee
shall exercise the Option by giving a written notice of exercise, in the form
attached to this Agreement as EXHIBIT A, to the President of the Corporation,
indicating the number of shares of Common Stock to be purchased, and tendering
payment in full (i) by cash or certified or bank check, (ii) by delivery of
shares of Common Stock then owned by the Optionee with a fair market value at
the time of exercise equal to the Option Price, or (iii) by a combination of (i)
and (ii). No shares shall be issued or delivered until full payment therefor
has been made. The Optionee shall have none of the rights of a shareholder, in
respect of the Common Stock, except with respect to shares actually issued to
the Optionee.
(d) NON-TRANSFERABILITY OF OPTION. The Option shall not be
transferable other than by will or by the laws of descent and distribution.
During the Optionee's lifetime, only the Optionee may exercise the Option.
(e) TERMINATION OF SERVICE AS A DIRECTOR. If the Optionee shall
cease to be a director of the Corporation for whatever reason other than by
death or disability, the Optionee shall have the right to exercise the
Option (except to the extent the Option shall have been exercised or shall have
expired) until the later to occur of (i) ninety (90) days after the date of
termination of service as a director, or (ii) six (6) months and ten (10) days
after the Optionee's last purchase or sale of shares of Common Stock prior to
the termination of Optionee's service as a director. Any portion of the Option
not exercised within said period shall lapse. Shares of Common Stock issued
upon such exercise shall be subject to the Corporation's right to repurchase the
Common Stock as provided in Section 5 hereof.
(f) DEATH OR DISABILITY OF OPTIONEE. If the Optionee shall die or
become disabled within the meaning of Section 22(e)(3) of the Code while still
serving as a director or prior to the termination of the Option pursuant to
Section 3(e) hereof, the Optionee or the executor or administrator of the estate
of the Optionee, or the person or persons to whom the Option shall have been
validly transferred by the executor or administrator pursuant to will or the
laws of descent and distribution, shall have the right within one year from the
date of the Optionee's death or disability to exercise the Option, except to the
extent the Option shall have been exercised or shall have expired. Any portion
of the Option not exercised within said one-year period shall lapse. Shares of
Common Stock issued upon such exercise shall be subject to the Corporation's
right to repurchase the Common Stock as provided in Section 5 hereof.
4. Shares of Common Stock issued upon the exercise of any portion of the
Option granted under this Agreement shall be subject to the following terms and
conditions:
(a) TRANSFERABILITY. The Common Stock shall be transferable only in
compliance with this Section 4 and only pursuant to an effective registration or
exemption from registration under the Securities Act of 1933, as amended. All
transfers, whether or not permitted by this section, shall be subject to all of
the provisions of this Agreement. Stock certificates representing shares of
Common Stock shall bear a legend in substantially the following form:
The shares of the Corporation's common stock represented by
this certificate have not been registered under the Securities
Act of 1933, as amended, and may not be transferred except
pursuant to an effective registration, or exemption from
registration, under said Act. In addition, such shares are
subject to a right of repurchase by the Corporation.
(b) REPURCHASE OF COMMON STOCK BY THE CORPORATION FOLLOWING
TERMINATION OF SERVICE AS A DIRECTOR OR BY EXERCISE OF RIGHT OF FIRST REFUSAL.
The Corporation shall have a right to repurchase, at the buy-back price set
forth below, any or all of the Common Stock issued upon the exercise of the
Option. Such right shall arise if the Optionee ceases to serve as a director of
the Corporation for any reason, if the Optionee becomes disabled, at the time of
the Optionee's death, or if the Optionee elects to dispose of any such shares of
Common Stock by sale, transfer or other disposition.
(i) REPURCHASE ON DEATH, DISABILITY, OR TERMINATION OF SERVICE
AS A DIRECTOR. In the event the Optionee dies, becomes disabled, or ceases
to serve as a director of the Corporation for any reason, the Corporation
shall, within thirty days immediately following the date on which the
Optionee's service as a director terminates, give to the Optionee or the
Optionee's legal representative, as the case may be, a signed notice in
writing, either delivered by hand, or mailed by registered or certified
mail, to the Optionee's last known address: (1) stating that the
Corporation has the first right to purchase the Common Stock; (2)
designating the number of shares of the Common Stock that the Optionee or
the Optionee's legal representative must sell to the Corporation; (3)
naming the buy-back price per share in cash at which the Optionee or the
Optionee's legal representative is obligated to sell such shares, as
determined herein; and (4) stating whether the Corporation elects to
exercise its right to repurchase the Common Stock.
(ii) REPURCHASE ON ATTEMPTED TRANSFER. In the event the Optionee
elects to dispose of any of the Common Stock, the Optionee shall give to
the President of the Corporation a signed notice in writing, either
delivered by hand, or mailed by registered or certified mail, to the
Corporation's principal office: (1) designating the number of shares of
the Common Stock to be disposed of; (2) stating the specific manner in
which the Optionee proposes to dispose of such shares if they are not
purchased by the Corporation pursuant to this Agreement; (3) specifying the
names and addresses of the persons to whom the Optionee desires to dispose
of such shares to the extent not so purchased by the Corporation;
(4) offering to sell such shares to the Corporation; (5) naming the price
per share in cash at which the Optionee is willing to sell such shares to
the Corporation, which price shall not be greater than the buy-back price
as determined herein; and (6) designating the Optionee's mailing address.
The Corporation shall have a period of thirty days after the receipt of the
notice within which to accept the Optionee's offer as contained in the
Optionee's notice. Acceptance shall be by notice in writing to that effect
hand delivered or mailed to the Optionee prior to the expiration date of
said thirty-day period to the mailing address designated in the Optionee's
notice. If the Corporation declines to accept such offer, the Optionee
shall have a period of forty-five (45) days within which to dispose of such
shares of Common Stock. Such forty-five (45) day period shall commence on
the date of receipt of the Corporation's written rejection of such offer
or, if the Corporation does not reject such offer in writing, on the
expiration of the thirty-day period within which the Corporation may accept
such offer.
(iii) BUY-BACK. The buy-back price per share for purposes of
this Section 4(b) shall be:
(1) the price per share offered in a bona fide offer to
purchase, or
(2) in the absence of a bona fide offer to purchase, the
fair market value per share as determined by the Board or the
Committee, which amount shall not be less than the price per share at
which shares of Common Stock were last sold by the Corporation other
than pursuant to the Plan.
(c) PROCEDURE FOR REPURCHASE. If any shares of the Common Stock are
subject to repurchase as provided in Section 4(b) hereof, and the Corporation
shall have exercised its right to repurchase, the Optionee or the Optionee's
legal representative shall immediately deliver to the Corporation the
certificates for the shares. The certificates shall be voided, and the shares
of the Common Stock represented by the certificates shall be thereafter treated
on the books of the Corporation as treasury shares. A person required to
deliver a certificate for the Common Stock under this section shall be deemed
irrevocably to have authorized the voiding of such certificate and the treatment
of such Common Stock as treasury shares (regardless whether the certificates are
in fact delivered) and irrevocably to have authorized the Board to terminate his
status as a shareholder in respect of such shares.
(d) PAYMENT FOR SHARES OF COMMON STOCK. The Corporation shall have
the right to pay the purchase price for any shares purchased pursuant to this
Section 4 over a one year period, in equal quarterly installments without
interest, or, in the case of a bona fide offer to purchase, in the manner and
over such period of time as provided for in such offer.
(e) PRICE ADJUSTMENT. In all cases the buy-back price per share
shall be adjusted to reflect previous capital changes, if any, as described in
Section 8 hereof. No offer to purchase shall be deemed "bona fide" unless made
by a third party unrelated to the Corporation or its shareholders with the
intention that such purchase be an investment in the Corporation and not with a
view to distribution or resale, nor shall any offer to purchase be deemed "bona
fide" if made by a competitor of the Corporation regardless of the offeror's
intention.
5. In the event the Optionee dies, becomes disabled, or ceases to serve
as a director of the Corporation and the Optionee has accrued but not exercised
rights to purchase shares of Common Stock, the following terms and conditions
shall apply.
(a) REPURCHASE ON TERMINATION OF SERVICE, DISABILITY, OR DEATH WITH
RESPECT TO OPTIONS ACCRUED BUT NOT EXERCISED. Upon termination of the
Optionee's service as a director, or upon the Optionee's death or disability
giving the Optionee, or the Optionee's legal representative, rights to exercise
the Option under either Section 3(e) or 3(f)(ii) hereof, the Corporation shall,
within thirty days immediately following the date on which the Corporation
learns of the Optionee's death, disability, or the date on which the Optionee's
service as a director terminates, give to the Optionee or the Optionee's legal
representative, as the case may be, a signed notice in writing, either delivered
by hand, or mailed by registered or certified mail, to the Optionee's last known
address: (i) stating that the Corporation has the first right to purchase the
Common Stock subject to the Option; (ii) designating the number of shares of the
Common Stock which the Optionee or the Optionee's legal representative has a
right to purchase under the Option and the option price per share under this
Agreement; (iii) naming the buy-back price per share in cash which the Optionee
or the Optionee's legal representative is obligated to sell the shares subject
to the Option, as determined herein; and (iv) stating whether the Corporation
will exercise its right to repurchase the Common Stock if the Optionee or the
Optionee's legal representative exercised the Option.
(b) SIMULTANEOUS EXERCISE OF OPTION AND REPURCHASE OF COMMON STOCK.
The Optionee or the Optionee's legal representative may exercise the Option
within the time period provided in Section 3(e) or Section 3(f)(ii) hereof, as
the case may be, by giving the Corporation notice of exercise of the Option
under Section 3(c) hereof. However, such notice need not be accompanied by
tender of payment if the Corporation has elected to exercise its right to
repurchase. Upon receipt of the notice of exercise from the Optionee or the
Optionee's legal representative within the applicable time period, the
Corporation shall pay the Optionee or the Optionee's legal representative for
each share an amount equal to the buy-back price per share less the option price
per share. If the Corporation does not exercise its right to repurchase under
Section 5(a) hereof, then this Section 5(b) shall be of no effect, and the
provisions for exercising the Option under Section 3(c) shall apply.
(c) COMBINING NOTICES. If the Optionee, or the Optionee's legal
representative, has both shares of Common Stock and a right to exercise the
Option as to additional shares of Common Stock, then the Corporation may deliver
one notice to the Optionee or the Optionee's legal representative to satisfy the
provisions of Section 4(b)(i) hereof and Section 5(a) hereof provided the
information required to be contained in each notice under such sections are
contained in the single notice.
6. Failure by the Corporation to exercise its rights to repurchase the
Common Stock upon termination of service as a director of the Optionee shall not
be a waiver of the Corporation's right to repurchase on a subsequent sale,
transfer or other disposition of Common Stock.
7. Subject to the restrictions of this Agreement, the Optionee shall have
all the rights of a shareholder in respect of the Common Stock issued hereunder,
beginning with the date of issuance of the Common Stock. The Common Stock shall
be fully paid and non-assessable.
8. The number and Option Price of shares of Common Stock subject to this
Option may be adjusted or substituted as follows:
(a) In the event that a dividend shall be declared upon the shares of
Common Stock payable in shares of Common Stock, the number of shares of Common
Stock then subject to this Option shall be adjusted by adding to each of such
shares the number of shares which would be distributable thereon if such shares
had been outstanding on the date fixed for determining the stockholders entitled
to receive such stock dividend. In the event that the outstanding shares of
Common Stock shall be changed into or exchanged for a different number or kind
of
shares of stock or other securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger, or consolidation, then there shall be substituted
for each share of Common Stock subject to this Option, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock shall be so changed or for which each such share shall be exchanged;
PROVIDED, HOWEVER, that in the event that such change or exchange results from a
merger or consolidation, and in the judgment of the Committee such substitution
cannot be effected or would be inappropriate, or if the Corporation shall sell
all or substantially all of its assets, the Corporation shall use reasonable
efforts to effect some other adjustment of this Option which the Committee, in
its sole discretion, shall deem equitable. In the event that there shall be any
change, other than as specified above in this Section 8(a), in the number or
kind of outstanding shares of Common Stock or of any stock or other securities
into which such shares of Common Stock shall have been changed or for which they
shall have been exchanged, then, if the Committee shall determine that such
change equitably requires an adjustment in the number or kind of shares then
subject to this Option, such adjustment shall be made by the Committee and shall
be effective and binding for all purposes of this Option. In the case of any
such substitution or adjustment as provided for in this paragraph, the Option
Price in this Option for each share covered hereby prior to such substitution or
adjustment will be the total option price for all shares of stock or other
securities which shall have been substituted for each such share or to which
such share shall have been adjusted pursuant to this Section 8. No adjustment
or substitution provided for in this Section 8(a) shall require the Corporation
to sell a fractional share; and the total substitution or adjustment with
respect to this Option shall be limited accordingly.
(b) Any of the foregoing adjustments or substitutions in the shares
subject to the Option shall not limit applicability of the restrictions
hereunder and such restrictions shall automatically apply to all Common Stock or
other securities issued by the Corporation and at any time held by the Optionee
by virtue of having exercised the Option.
9. The Optionee represents and agrees to represent and agree at the time
of the exercise of the Option that any and all Common Stock purchased pursuant
to the exercise of the Option will be purchased for investment and not with a
view to the distribution or resale thereof, and that the Common Stock will not
be sold except in accordance with the restrictions or limitations set forth in
this Agreement or as may be imposed by law.
10. The Corporation shall at all times during the term of the Option
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement.
11. If the Corporation registers any of its shares of common stock under
the Securities Act of 1933, as amended (the "Act"), the provisions of Section 4
and Section 5 hereof shall terminate on the day the registration statement
becomes effective. The Common Stock issued upon exercise of the Option shall
thereupon be free of any restriction imposed hereby, except for the restriction
requiring transfer pursuant to the Act if such registration does not include the
Common Stock, and neither the Corporation nor the Optionee shall have any
further rights or obligations under Section 4 or Section 5 hereof, except the
Corporation's obligation to complete payments, under Section 4(b) hereof, for
the Common Stock previously repurchased.
12. This Agreement shall be interpreted according to the laws of the State
of Georgia.
13. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration in accordance with the
Rules of the American Arbitration Association, and judgment upon the award
rendered may be entered in any Court having jurisdiction thereof.
14. This Agreement and the Plan which is hereby incorporated by reference
herein contain the entire agreement of the parties with respect to the Common
Stock. All prior agreements and understandings are merged herein. No amendment
or modification hereof shall be binding unless in writing and signed by the
party against whom enforcement is sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year as first above written.
Seal AMERICAN CARD TECHNOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxxx, Xx.
----------------------------
Its President
Attest:
/s/ Xxxxxxx X. Xxxx, Xx. /s/ Xxxxxx Xxxxxx
----------------------------- -----------------------------
Secretary Xxxxxx Xxxxxx
EXHIBIT A
______________________________________________________
Address of Person Exercising Option
_____________________
Date
American Card Technology, Inc.
0000 Xxxxxxx Xxxx Xxxx - Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Dear Sirs:
I hereby elect to exercise the Option to purchase shares of Common Stock of
the Corporation awarded to me on February 2, 1998.
A. The number of shares being purchased: ________ shares at $12.00 per
share.
B. I desire to follow Procedure 1 or Procedure 2, as indicated below:
[CHECK EITHER PROCEDURE 1 OR PROCEDURE 2 AND FILL IN BLANKS UNDER THAT
PROCEDURE ONLY].
_____ PROCEDURE 1: A certified or bank cashier's check payable to
the order of the Corporation in the amount of $_______________
[insert the full purchase price of the shares being purchased] is
attached.
The certificate or certificates should be mailed or
delivered to:
_____________________________________________
_____________________________________________
_____________________________________________
_____ PROCEDURE 2: Payment of $_______________, being the full
purchase price of the shares being purchased, is to be made by
certified or bank cashier's check payable to the order of the
Corporation at the office of the Corporation, 0000 Xxxxxxx Xxxx
Xxxx - Xxxxx 000, Xxxxxxxx, Xxxxxxx, against delivery of a
certificate or certificates representing such shares to me or my
representative, on the ______________ [here insert Fifth, Sixth,
Seventh, Eight, Ninth or Tenth] business day from the date of
this notice is received by the Corporation.
Please advise me of the exact date and time when payment and
delivery will take place.
I will [check one]
_____ appear personally to make payment and accept
delivery
_____ be represented by:
_____________________________________________
_____________________________________________
_____________________________________________
[here insert name and address of bank or other
representative authorized to act for you].
C. The certificate or certificates for the shares being purchased should
be registered and the name and address to be shown on the Corporation's stock
records should be as follows:
_____________________________________________
_____________________________________________
_____________________________________________
D. I represent and agree that the shares as to which I am hereby
exercising an option are being purchased for investment and not with a view to
the distribution or resale thereof, and the Common Stock will not be sold except
in accordance with the restrictions or limitations set forth in the Stock Option
Agreement or as may be imposed by law.
Sincerely yours,
______________________________
Xxxxxx Xxxxxx
AMENDMENT TO 1996 NONEMPLOYEE DIRECTORS'
STOCK OPTION PLAN
Adopted by the following resolution of the Board of Directors dated as of
February 2, 1998:
RESOLVED: that the Board of Directors, acting as the committee to
administer the American Card Technology, Inc. 1996 Nonemployee Directors'
Stock Option Plan (the "Directors' Plan"), amend the Directors' Plan as
follows:
(a) By deleting Paragraph 6(a) in its entirety and substituting the
following in lieu thereof:
"(a) an Option to purchase 2,500 shares of Common Stock will be
granted to each Participant on February 2, 1998
(b) By deleting the references to "1997" in Paragraph 6(c) and
substituting "1999" in lieu therefor.
(c) By deleting the first sentence of Paragraph 7(a) and substituting
the following in lieu therefor:
"The exercise price of each Director's Option shall be at least
one hundred percent (100%) of the fair market value of the shares
subject to such Option on the date of grant."
and the Directors' Plan is hereby so amended.
