EXHIBIT 14
NON-STATUTORY STOCK OPTION AGREEMENT
THIS NON-STATUTORY STOCK OPTION AGREEMENT (this "Agreement") is made
January 24, 2003, between INFONOW CORPORATION, a Delaware corporation (the
"Company"), and XXXXXXX X. XXXXXXX (the "Optionee").
WHEREAS, Optionee is an important and valuable contributor to the Company
and the Company deems it to be in its interest and in the interest of its
shareholders to secure the services of Optionee for the Company or such of its
subsidiary companies as may be designated by the Company; and
WHEREAS, the Company, as an incentive to Optionee to join the Company or
its subsidiaries and to increase Optionee's proprietary interest in the Company,
desires to enter into this Agreement containing the terms and conditions
hereinafter set forth and to grant Optionee a non-statutory stock 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:
1. Grant of Option. In consideration of the foregoing, the Company hereby
grants to Optionee the right and option (the "Option") to purchase 30,000 shares
of the Company's Common Stock (the "Shares"). The Option shall vest and become
exercisable as follows:
(a) Subject to Section 7.4 of the Company's 1999 Stock Option Plan
(the "Plan"), the Option shall vest and become exercisable with
respect to 1/12th of the Shares subject hereto at January 24, 2003 and
1/12th of the shares subject hereto on the 24th of each month, in each
case subject to Optionee's continued employment.
(b) In addition, if Optionee is terminated in accordance with that
certain Employment Agreement between Company and Optionee of April 15,
2000 (the "Employment Agreement"), a portion equal to 50% of the
unvested Shares as of the date of termination shall vest immediately
and become exercisable.
In no event can Optionee vest in more Shares than the 30,000 Shares covered by
this Agreement. The Option shall terminate on the tenth anniversary of the date
hereof and, accordingly, may not be exercised after that date. The Option shall
terminate in accordance with Section 7.4 of the Plan upon the termination of
Optionee's employment, provided that if either (a) Optionee is terminated in
accordance with Section 3 of the Employment Agreement dated February 26, 2002,
or (b) the vesting of the Option is accelerated in accordance with Section 11.2
of the Plan, the Option shall remain exercisable after the termination of
Optionee's employment until the last day of the month following such termination
(but not later than the fifth anniversary of the date hereof). The purchase
price to be paid for such Shares upon exercise of the Option shall be $1.39 per
Share, being not less than 100% of Fair Market Value of the Shares on the date
of this Agreement required under the Plan. This Option is granted pursuant to,
and is subject to the terms and conditions of the Plan, a copy of which has been
furnished to Optionee and receipt of which Optionee hereby acknowledges.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Plan.
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 in substantially the form attached as Exhibit 1 hereto. Within 30
days after the receipt by it 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 Optionee, or his executors, administrators, or other legal
representatives, heirs, legatees, next of kin, or distributees, and to be
delivered to Optionee or his 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 days' notice of the
time and place for delivery and for the payment of such purchase price.
3. Conditions of Option. The Option is subject to the following
additional conditions:
(a) The Option herein granted to Optionee is not transferable by
Optionee during Optionee's lifetime, but may be transferred by will or
the laws of descent and distribution.
(b) The Option may be exercised by Optionee pursuant to the terms of
the Plan, but only to the extent that Optionee had the rights to
exercise such Option at the date of termination of the Optionee's
service to the Company.
4. Representation as to Investment. Unless the Option and the Shares are
registered pursuant to a then effective registration statement pursuant to
the Securities Act of 1933, as amended, and applicable state law, the
exercise of such Option and the delivery of the Shares subject to it will
be contingent upon the Company being furnished by Optionee, his legal
representatives or other persons entitled to exercise such Option, with a
statement in writing in substantially the form attached as Exhibit 2
hereto, that at the time of such exercise, it is his 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 Optionee as required by this
Agreement shall be sent to the Company at its principal executive offices
and any notice from the Company to Optionee shall be sent to Optionee at
his 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. Further Agreements. The undersigned agrees, in connection with the
issuance of the Shares, and thereafter from time to time as requested by
the Company, to execute any reasonable stockholders agreement as provided
in the Plan. The undersigned will, if requested by the Company in
connection with a public offering of the Company's securities, adhere to
reasonable lock-up arrangements between the Company and an underwriter
involved in such public offering.
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IN WITNESSES OF WHEREOF, the Company and the Optionee have executed this
Non-Statutory Stock Option Agreement as of the day and year first above written.
INFONOW CORPORATION
By: /s/ Xxxxxxx Winning
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Xxxxxxx Winning
Corporate Secretary
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
EXHIBIT 1
NOTICE OF EXERCISE
TO: INFONOW CORPORATION
1. The undersigned hereby elects to purchase shares of Common Stock of
INFONOW CORPORATION pursuant to the terms of the attached
Non-Statutory Stock Option Agreement, and tenders herewith payment of
the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as
is specified below:
(Name)
(Address)
Date:
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Optionee
EXHIBIT 2
INVESTMENT REPRESENTATION STATEMENT
TO: INFONOW CORPORATION
With respect to the shares of Common Stock (the "Shares") of INFONOW
CORPORATION (the "Company") which the undersigned (the "Purchaser") has
purchased from the Company today, the Purchaser hereby represents and
warrants as follows:
1. The Purchaser acknowledges that he has received no formal prospectus
or offering memorandum describing the business and operations of the
Company. He has, however, by virtue of his relationship with the
Company, been given access to all information that he believes is
material to his decision to purchase the Shares. The Purchaser has had
the opportunity to ask questions of, and receive answers from,
representatives of the Company concerning its business operations. Any
questions raised by the Purchaser have, been answered to his
satisfaction.
2. The Shares are being acquired by the Purchaser for his account, for
investment purposes only, and not with a view to the distribution or
resale thereof.
3. No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that
there is currently no market for the transfer of the Shares. The
Purchaser further acknowledges that, because the Shares have not been
registered under the Securities Act of 1933, and cannot be resold
unless they are subsequently registered under said Act or an exemption
from registration is available, the Purchaser must continue to bear
the economic risk of his investment in the Shares for an indefinite
period of time. The Company has not agreed or represented to the
Purchaser that the Shares will be purchased or redeemed from the
Purchaser at any time in the future. Further, there have been no
representations, promises, or agreements that the Shares will be
registered under the Securities Act of 1933 at any time in the future
or otherwise qualified for sale under the applicable securities laws.
The Purchaser further understands that a notation will be made on the
appropriate records of the Company and on the Stock Certificate
representing the Shares so that the transfer of Shares will not be
affected on those records without compliance with the restrictions
referred to above.
Date:
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Purchaser
