Exhibit 1.3
NEOMEDIA TECHNOLOGIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") made and entered into as
of the 12th day of March, 2002, between NEOMEDIA TECHNOLOGIES, INC. (hereinafter
the "Company"), and Xxxx Xxxxx (hereinafter "Optionee").
WHEREAS, the Company has employed or engaged Optionee and continues to
employ or engage Optionee as of this date; and
WHEREAS, the Company, as a further incentive to Optionee to devote his
best efforts on behalf of the Company and remain in the employ or engagement of
the Company, desires to grant an option to Optionee to purchase shares of the
Company's stock;
NOW, THEREFORE, in consideration of the services performed and to be
performed by Optionee, and subject to the terms and conditions recited herein,
the Company and Optionee hereby agree as follows:
1. Grant of Options. The Company hereby grants to Optionee, subject to
the terms and conditions set forth herein and in the Company's 1998 Stock Option
Plan (the "Plan") which is incorporated herein by reference, a Non-Qualified
Stock Option, as defined in the Plan ("Option"), to purchase 1,473,155 shares of
the authorized and unissued Common Stock of the Company.
2. Term of Options. This Option shall expire sixty (60) days from the
date of this Option Agreement, subject to earlier termination as provided in
Section 5 hereof.
3. Exercise Price. The exercise price for shares purchased pursuant to
this option shall be $0.17 per share. Such price may be paid as follows:
3.1 In United States dollars in cash, or by check, bank draft
or money order payable in United States dollars to the order of the
Company; or
3.2 By the delivery by the Optionee to the Company of whole
"mature" shares of Common Stock ("mature shares" being defined as those
having been owned and held by the Optionee for a period equal to or in
excess of six months) having an aggregate Fair Market Value on the date
of payment equal to the aggregate of the purchase price of Common Stock
as to which the Stock Option is then being exercised; or
3.3 By a combination of both 3.1 and 3.2 above.
The Options Committee of the Company ("Committee") may, in its discretion,
impose limitations, conditions and prohibitions on the use by an Optionee of
shares of Common Stock to pay the purchase price payable by such Optionee upon
the exercise of an Option.
4. Exercise, and Conditions to Exercise, of Options. This Option shall
be exercisable, in whole or in part, for the following respective number of
shares and on the following respective dates:
Exercise Date Options Exercisable
------------- -------------------
3/12/02 1,473,155 shares
(less than sign) 100%
(greater than sign)
01.4-1
Except as otherwise permitted hereunder, the Option may not be
exercised unless Optionee at the time of such exercise shall have been in
continuous employ of, or relationship with, the Company from the date hereof to
the date of exercise, subject to the other provisions herein.
Subject to the foregoing, the Option may be exercised from time to time
by written notice to the Company, stating the number of shares being purchased
and accompanied by payment in full of the purchase price for such shares. Any
certificate(s) for shares of outstanding Stock of the Company used to pay the
purchase price shall be accompanied by stock power(s) duly endorsed in blank by
the registered holder of the certificate(s), with signature guaranteed and in
the event less than the total shares represented by the certificates shall be
used to pay the purchase price, the certificate(s) shall also be accompanied by
instructions from Optionee to the Company's transfer agent with respect to
disposition of the balance of the shares covered thereby.
5. Termination of Employment or Other Relationship.
5.1 In the event Optionee's employment by, or relationship with,
the Company shall terminate for any reason other than those reasons specified in
Sections 5.2, 5.3, 5.4, 5.5 or 5.7 hereof while such Optionee holds Options
granted under the Plan, then such Options shall be treated as follows upon such
termination:
(a) if such Optionee shall have been continuously employed by, or
in the event of a consultant, shall have continued its
relationship with, the Company for a minimum of one year, then
all rights of any kind under any outstanding Option held by
such Optionee, which shall have not previously lapsed or
terminated shall be exercisable for a period of three (3)
months after such termination, but only to the extent such
Option had vested prior to or upon termination;
(b) if such Optionee shall have not been continuously employed by,
or in the event of a consultant, shall have continued its
relationship with, the Company for a minimum of one year, then
all rights of any kind under any outstanding Option held by
Optionee which shall have not previously lapsed or terminated
shall expire immediately.
5.2 If Optionee's employment by, or relationship with, the Company
or its Subsidiaries shall terminate as a result of such Optionee's total
disability, each Stock Option held by such Optionee (which has not previously
lapsed or terminated) shall be exercisable by such Optionee for a period of one
year after termination but only to the extent the Option is otherwise
exercisable during that period. For purposes of the foregoing sentence, "total
disability" shall mean permanent mental or physical disability as determined by
the Committee.
5.3 In the event of the death of Optionee, each Option held by such
Optionee (which has not previously lapsed or terminated) shall be exercisable by
the executor or administrator of the Optionee's estate or by the person or
persons to whom the deceased Optionee's rights thereunder shall have passed by
will or by the laws of descent or distribution, for a period of one year after
such Optionee's death but only to the extent the Option is otherwise exercisable
during that period.
5.4 In the case of an Optionee who is an employee of the Company, if
Optionee's employment by the Company shall terminate by reason of such
Optionee's retirement in accordance with Company policies, each Option held by
such Optionee at the date of termination (which has not previously lapsed or
terminated) shall be exercisable for a period of three (3) months after
termination, but only to the extent the Option is otherwise exercisable during
that period.
5.5 [intentionally deleted].
1.3-2
5.6 Notwithstanding the foregoing, if at any time after termination
Optionee engages in "detrimental activity" (as hereinafter defined), the
Committee in its discretion may cause the Optionee's right to exercise such
option to be forfeited. If an allegation of detrimental activity by Optionee is
made to the Committee, the exercisability of the Optionee's options will be
suspended for up to two months to permit the investigation of such allegation.
For purposes of this section, "detrimental activity" means activity that is
determined by the Committee in its sole and absolute discretion to be
detrimental to the interests of the Company or any of its subsidiaries,
including but not limited to situations where such Optionee: (1) divulges trade
secrets of the Company, proprietary data or other confidential information
relating to the Company or to the business of the Company and any subsidiaries,
(2) enters into employment with a competitor under circumstances suggesting that
such Optionee will be using unique or special knowledge gained as a Company
employee to compete with the Company, (3) is convicted by a court of competent
jurisdiction of any felony or a crime involving moral turpitude, (4) uses
information obtained during the course of his or her prior employment for his or
her own purposes, such as for the solicitation of business, (5) is determined to
have engaged (whether or not prior to termination due to retirement) in either
gross misconduct or criminal activity harmful to the Company, or (6) takes any
action that xxxxx the business interests, reputation, or goodwill of the Company
and/or its subsidiaries.
5.7 In the case of Options granted to a Nonemployee Director who
ceases to be a member of the Board of Directors, such Options then held by such
individual shall be exercisable within one year after such termination of
service.
5.8 It shall not be considered a termination of employment when a
Participant is on military or sick leave or such other type leave of absence
which is considered as continuing intact the employment relationship of the
Participant with the Company or any of its Subsidiaries. In case of such leave
of absence, the employment relationship shall be deemed to have continued until
the later of (i) the date when such leave shall have lasted ninety (90) days in
duration, or (ii) the date as of which the Participant's right to employment
shall have no longer been guaranteed either by statute or contract.
6. Assignability of Options. Options shall not be assignable or
otherwise transferable by the Optionee except by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code of 1986, as amended or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. Except as otherwise set
forth herein, the Options shall only be exercised by the Optionee.
Notwithstanding the foregoing, the Option may be transferred to a Permitted
Transferee (as defined below), subject to the following conditions:
(i) The Option may be exercised by the Permitted Transferee only
to the same extent as the Optionee would have been entitled to
exercise such Option and shall remain subject to all of the
terms and conditions that would apply to the Options under the
provisions of the Plan and the Agreement, as if the Optionee
had not transferred the Option to the Permitted Transferee.
Without limitation, the terms in the Option with respect to
vesting, or to the exercise of the Option upon termination of
employment, death or disability shall continue to be in effect
and shall be controlled by the status of the Optionee with the
Company, and not any Permitted Transferee.
(ii) Subsequent transfers of any transferred Option (or any part
thereof) including sale, assignment, pledge or other transfer
shall be prohibited except by will or the laws of descent and
distribution.
(iii) The Company shall no obligation to notify the Permitted
Transferee of the expiration or early termination of the
Option.
1.3-3
(iv) The Board of Directors or any Committee, may in its sole
discretion require as a condition of the transfer of the
Options that the Permitted Transferee execute an agreement
under which the Permitted Transferee would become a party to
the Option Agreement and be subject to all of the terms and
obligations thereunder. Any such transfer to Permitted
Transferee shall not be effective unless or until the Optionee
has furnished the Board of Directors or Committee with a
written notice or transfer, and such other agreements as
required by the Board or Committee.
For the purposes of the section, the term "Permitted Transferee" shall mean (a)
the spouse, children, stepchildren, grandchildren, siblings or parents of the
Optionee ("Immediate Family Members"); (b) a trust for the exclusive benefit of
such Immediate Family Members; (c) partnership, limited liability company or
other entity in which such Immediate Family Members, or Optionee and one or more
of such Immediate Family Members, are the only partners, members or equity
owners; or (d) a former spouse of the Optionee pursuant to a qualified domestic
relations order.
7. Reorganization and Recapitalization of the Company.
7.1 The existence of this Agreement and Options granted hereunder
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalization,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
7.2 Except as hereinafter provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services, either upon direct
sale or upon exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Common Stock subject to Stock
Options granted hereunder.
7.3 If, and whenever, prior to the delivery by the Company or a
subsidiary of all of the shares of Common Stock which are subject to the rights
granted hereunder, the Company shall effect a subdivision or consolidation of
shares or other capital readjustments, the payment of a stock dividend or other
increase or reduction of the number of shares of the Common Stock outstanding
without receiving compensation therefor in money, services or property, the
number of shares with respect to which Options granted hereunder may thereafter
be exercised shall:
(a) in the event of an increase in the number of outstanding
shares, be proportionately increased, and the cash
consideration (if any) payable per share shall be
proportionately reduced; and
(b) in the event of a reduction in the number of outstanding
shares, be proportionately reduced, and the cash consideration
(if any) payable per share shall be proportionately increased.
7.4 If the Company merges with one or more corporations, or
consolidates with one or more corporations and the Company shall be the
surviving corporation, thereafter, upon any exercise of Options granted
hereunder, the Optionee shall, at no additional cost (other than the option
price, if any) be entitled to receive (subject to any required action by
stockholders) in lieu of the number of shares as to which such Options shall
then be exercisable the number and class of shares of stock or other securities
to which the Optionee would have been entitled pursuant to the terms of the
agreement of merger or consolidation, if immediately prior to such merger or
consolidation the Optionee had been the holder of record of the number of shares
of Common Stock of the Company equal to the number of shares as to which such
Options shall be exercisable. Upon any reorganization, merger or consolidation
where the Company is not the surviving corporation or upon liquidation or
dissolution of the Company, all outstanding Options shall, unless provisions are
made in connection with such reorganization, merger or consolidation for the
assumption of such Options, be canceled by the Company as of the effective date
of any such reorganization, merger or consolidation. Prior to any such
cancellation, all vested Options may be exercised. Moreover, the Committee shall
have the right to make all outstanding Option vest and be exercisable
immediately, by giving notice to each holder thereof or his or her personal
representative of its intention to do so by permitting the exercise for a period
not to exceed (90) days from the date of such determination by the Committee.
Upon any liquidation or dissolution of the Company, all outstanding options
shall be cancelled.
1.3-4
8. General. Upon the effectiveness of the increase in the authorized
shares of Common Stock of the Company described above, the Company shall at all
times during the term of the Option reserve and keep available such number of
shares of Company Common Stock as will be sufficient to satisfy the requirements
of this Option, shall pay all original issue and transfer taxes with respect to
the issue and transfer of shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith, and will from time
to time use its best efforts to comply with all laws and regulations which, in
the opinion of the counsel for the Company shall be applicable thereto. Nothing
herein shall require the Company to register under the Securities Act of 1933,
as amended (the "Securities Act"), or any other Federal or state securities law,
any shares of Common Stock of the Company, these Option shares, or any right or
interest in any of them.
9. Miscellaneous Provisions.
9.1 Withholding. The Company's obligations under this Agreement
shall be subject to applicable federal, state and local tax withholding
requirements. Federal, state and local withholding tax due at the time of a
grant or upon the exercise of any Option may, in the discretion of the
Committee, be paid in shares of Common Stock already owned by the Optionee or
through the withholding of shares otherwise issuable to such Optionee, upon such
terms and conditions as the Committee shall determine. If the Optionee shall
fail to pay, or make arrangements satisfactory to the Committee for the payment,
to the Company of all such federal, state and local taxes required to be
withheld by the Company, then the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to such
Optionee an amount equal to any federal, state or local taxes of any kind
required to be withheld by the Company.
9.2 Compliance with Law and Approval of Regulatory Bodies. No Option
shall be exercisable and no shares will be delivered under the Agreement except
in compliance with all applicable federal and state laws and regulations
including, without limitation, compliance with all federal and state securities
laws and withholding tax requirements and with the rules of the NASDAQ Small Cap
Market and of all other domestic stock exchanges on which the Common Stock may
be listed. Any share certificate issued to evidence shares for which an Option
is exercised may bear legends and statements the Committee shall deem advisable
to assure compliance with federal and state laws and regulations. No Option
shall be exercisable and no shares will be delivered under the Agreement, until
the Company has obtained consent or approval from regulatory bodies, federal or
state, having jurisdiction over such matters as the Committee may deem
advisable. In the case of the exercise of an Option by a person or estate
acquiring the right to exercise the Option as a result of the death of the
Optionee, the Committee may require reasonable evidence as to the ownership of
the Option and may require consents and releases of taxing authorities that it
may deem advisable.
9.3 No Right to Employment. Neither the adoption of the Plan nor its
operation, nor any document describing or referring to the Plan, or any part
thereof, nor the granting of any Options hereunder, shall confer upon any
Optionee under the Plan any right to continue in the employ of the Company or
any Subsidiary, or shall in any way affect the right and power of the Company or
any Subsidiary to terminate the employment of any Optionee at any time with or
without assigning a reason therefore, to the same extent as might have been done
if the Agreement had not been executed.
1.3-5
9.4 Exclusion from Pension Computations. By acceptance of a grant of
an Option, the Optionee shall be deemed to agree that any income realized upon
the receipt or exercise thereof or upon the disposition of the shares received
upon exercise will not be taken into account as "base remuneration", "wages",
"salary" or "compensation" in determining the amount of any contribution to or
payment or any other benefit under any pension, retirement, incentive,
profit-sharing or deferred compensation plan of the Company or any Subsidiary.
9.5 Abandonment of Options. Optionee may at any time abandon an
Option prior to its expiration date. The abandonment shall be evidenced in
writing, in such form as the Committee may from time to time prescribe. Optionee
shall have no further rights with respect to any Option so abandoned.
9.6 Severability as to Rule 16b-3. If any of the terms or provisions
of the Plan conflict with the requirements of Rule 16b-3, then such terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of Rule 16b-3.
9.7 Interpretation of the Agreement. Headings are given to the
Sections of the Agreement solely as a convenience to facilitate reference. Such
headings, numbering and paragraphing shall not in any case be deemed in any way
material or relevant to the construction of the Agreement or any provision
hereof. The use of the masculine gender shall also include within its meaning
the feminine. The use of the singular shall also include within its meaning the
plural and vice versa.
9.8 Use of Proceeds. Funds received by the Company upon the exercise
of Options shall be used for the general corporate purposes of the Company.
9.9 Construction of Agreement. The place of administration of the
Agreement shall be in the State of Florida, and the validity, construction,
interpretation, administration and effect of the Agreement and of its rules and
regulations, and rights relating to the Agreement, shall be determined solely in
accordance with the laws of the State of Florida.
9.10 No Fractional Shares. In no event shall the Company be required
to issue fractional shares upon the exercise of this Option, and in lieu thereof
may issue numbers of shares rounded up or down to the nearest whole share.
9.11 Receipt of Information. Optionee acknowledges that he has
received the most recent annual report on Form 10-KSB and the most recently
filed quarterly report(s) on Form 10-QSB. Optionee acknowledges that no
statement, representation or warranty concerning the Company has been made to
him except as set forth in the foregoing or in reports filed by the Company with
the Securities and Exchange Commission and that he will not rely, in connection
with the Option granted hereby or the purchase of any shares pursuant to the
Option, on any information except in such documents or other written documents
provided to him by the Company.
[Continued on next page]
1.3-6
9.12 No Acceleration of Vesting. The Options granted pursuant to
this Agreement shall not be subject to any Optionee right of accelerated vesting
whether granted by contract, resolution or otherwise, to Optionee prior to the
date of this Agreement. Optionee understands and agrees, that by signing this
Agreement and accepting the Options granted hereunder, and notwithstanding any
prior right to acceleration of vesting granted or afforded Optionee, the Options
granted hereunder shall not be subject to acceleration of vesting unless such
right is duly granted to Optionee subsequent to the date of this Agreement. By
signing this Agreement, Optionee specifically agrees to this provision as a
condition to grant of the Options hereunder and this Agreement serves to amend
any prior right to acceleration of vesting, but only with regard to the Options
granted hereunder. Nothing in this provision or Agreement shall serve to affect
any rights of acceleration of vesting, if applicable, that may have attached to
Options granted to Optionee prior to the date of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Vice President and CFO
---------------------------------------------
Xxxxxxx X. Xxxxxx, Vice President and CFO
ATTEST:
/s/ Xxxxxxx X. Xxxxx, Secretary
-------------------------------
Xxxxxxx X. Xxxxx, Secretary
OPTIONEE:
/s/ Xxxx Xxxxx
-------------------------------------------------
Type Name: Xxxx Xxxxx
1.3-7
