Execution Copy
InteliData Technologies Corporation
1991 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 24th day of February, 1998 (the "Reset
Date") by and between InteliData Technologies Corporation, a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx, Xx. ("Optionee").
WITNESSETH:
RECITALS
A. On August 1, 1994 (the "Grant Date"), Optionee was granted three options
under the US Order, Inc. 1991 Stock Option Plan (the "Plan") to purchase 600,000
shares, 225,000 shares and 25,000 shares of US Order, Inc. common stock (the
"1991 Options").
B. Pursuant to the Merger and Reorganization Agreement between US Order, Inc.
and Colonial Data Technologies Corporation, the 1991 Options became options to
purchase shares of InteliData Technologies Corporation common stock for the same
number of shares and on the same terms and conditions as the 1991 Options.
C. Optionee transferred his rights under the 1991 Options with respect to
125,000 shares to the Xxxx X. Xxxxxx, Xx. Irrevocable Trust dated April 21,
1995.
D. On February 24, 1998, the Compensation Committee of the Company's Board of
Directors agreed to amend the terms of the 1991 Options in several respects.
E. Optionee and the Company wish to amend the agreements evidencing the 1991
Options, to the extent held by Optionee, by this Agreement.
F. The 1991 Options, as originally granted and as amended herein, are not
intended to be incentive stock options under Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to the terms and conditions set forth in
this Agreement and the Plan, the Company granted to Optionee, as of the Grant
Date, a Nonqualified Stock Option (the "Option") to purchase up to 725,000
shares of the Company's common stock, $0.001 par value (the "Option Shares") at
an exercise price of $1.80 per share. This Option shall be immediately
exercisable, in whole or in part, with respect to 300,000 of the Option Shares.
This Option shall be exercisable, in whole or in part, with respect to the
remaining 425,000 Option Shares in accordance with Section 4 below. The Company
acknowledges and agrees that in the
event of any split-off, spin-off or similar corporation reorganization pursuant
to which any division, business or assets of the Company are distributed to its
shareholders, the number of Option Shares covered hereby shall be adjusted in
accordance with Section 3 of the Plan.
2. Option Term. The Option will expire at the close of business on
August 1, 2004 (the "Expiration Date"), unless sooner terminated in accordance
with the provisions of this Agreement or the Plan.
3. Option Nontransferable. The Option is not transferable or assignable
by Optionee other than by will or by the laws of descent and distribution
provided that Optionee may transfer the Option in whole or in part from time to
time, for no consideration, to Optionee's children, grandchildren, spouse, one
or more trusts for the benefit of such family members or one or more
partnerships in which such family members are the only partners (collectively,
"Permitted Transferees"). During the lifetime of Optionee, the Option shall be
exercisable only by Optionee or a Permitted Transferee.
4. Dates of Exercise. So long as Optionee continues to serve in his or
her current position or in a position within the Group that is of equal or
greater responsibility than the position held by Optionee as of the Grant Date,
or Optionee serves as a director of the Company or any successor entity
(including any successor by reason of a corporate reorganization, split-off,
spin-off or similar transaction) the Option will be exercisable as to 425,000
Option Shares within the specified term of the Option and pursuant to the
provisions of this Agreement, as follows:
(a) subject to the provisions of section (b) below, the Option
shall become exercisable as to 425,000 Option Shares on August 1, 2002;
(b) the Option as to 425,000 Option Shares shall become
exercisable prior to August 1, 2002 as to 100,000 Option Shares each time the
Company's stock trades at a price that is an increase of 25% over the preceding
eligibility level for twenty trading days, in the following amounts and on the
following conditions up to a maximum of 425,000 shares:
(i) the Option as to the first 100,000 of the
425,000 Option Shares shall become
exercisable on the 1st day following the
twentieth day on which the Company's stock
traded at or above $2.25;
(ii) the Option as to the second 100,000 of the
425,000 Option Shares shall become
exercisable on the 1st day following the
twentieth day on which the Company's stock
traded at or above $2.81;
(iii) the Option as to the third 100,000 of the
425,000 Option Shares shall become
exercisable on the 1st day following the
twentieth day on which the Company's stock
traded at or above $3.52;
(iv) the Option as to the fourth 100,000 of the
425,000 Option Shares shall become
exercisable on the 1st day following the
twentieth day on which the Company's stock
traded at or above $4.40;
(v) the Option as to the last 25,000 of the
425,000 Option Shares shall become
exercisable on the 1st day following the
twentieth day on which the Company's stock
traded at or above $5.49;
5. Termination of Employment.
(a) Should Optionee cease to be employed by the Company as its
President and Chief Executive Officer (other than by reason of termination for
Cause, as defined below), the Option will, solely to the extent that it is
exercisable immediately prior to the cessation of Optionee's employment by the
Company as President and Chief Executive Officer (subject to the immediate
vesting provisions of Section 8 below), remain exercisable until the Expiration
Date.
(b) Should Optionee be discharged for Cause by the Company or
any other member of the Group, or should Optionee cease to be an employee for
any reason following receipt of notice of the intent of the Company or any other
member of the Group to discharge Optionee for Cause, the term of the Option
shall immediately terminate (and the Option shall cease to be exercisable) upon
the earlier of such notice or cessation of employment.
6. Privilege of Stock Ownership. The holder of the Option will have
none of the rights of a shareholder with respect to the Option Shares until such
individual has exercised the Option and has been issued a stock certificate for
the Option Shares.
7. Manner of Exercising Option. In order to exercise the Option with
respect to all or any part of the Option Shares for which the Option is at the
time exercisable, Optionee or a Permitted Transferee (or in the case of exercise
after Optionee's death, Optionee's executor, administrator, heir or legatee, as
the case may be) must take the following actions:
(i) Provide the Company written notice of such exercise in
accordance with Section 16 hereof, specifying the
number of Option Shares with respect to which the
Option is being exercised;
(ii) Pay the aggregate exercise price for the purchased
shares in one or more of the following alternative
forms: (A) full payment, in cash or by check payable to
the Company's order, in the amount of the exercise
price for the Option Shares being purchased; (B) full
payment in shares of Common Stock (held for at least
six months if acquired pursuant to an option) and
having a Fair Market Value on the day of exercise (as
determined under the terms of the Plan) equal to the
exercise price for the Option Shares being purchased;
(C) a combination of such shares of Common Stock and
cash or check payable to the Company's order, equal in
the aggregate to the exercise price for the Option
Shares being purchased; or (D) delivery
of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan
proceeds to pay the exercise price; and
(iii) Furnish the Company with appropriate documentation
that the person (or persons) exercising the Option, if
other than Optionee, has the right to exercise the
Option.
8. Effect of a Change in Control.
(a) In the event of the termination of Optionee's employment
prior to the Expiration Date by the Company without Cause (as defined in Section
5(c) of the Employment Agreement dated August 11, 1997 between the Company and
Optionee (the "Employment Agreement") or by Optionee for Good Reason (as defined
in Section 5(e) of the Employment Agreement) within two (2) years prior to or
after a Change in Control (as defined in Section 8(b)), the Option shall become
immediately exercisable and the Option Shares issuable upon exercise of the
Option shall be subject to adjustment in accordance with Section 3 of the Plan
in the event of any changes affecting the Company's Common Stock, $.001 par
value per share, as a result of such Change in Control. Following a Change in
Control, Optionee shall have the right to cause the successor entity to the
Company to purchase all or any portion of the Option at the fair value thereof
on the date of termination, determined using the Black-Scholes option-pricing
model with the following weighted-average assumptions: dividend yield of 0%;
expected volatility equal to the beta for the Company's Common Stock, $.001 par
value per share, for the immediately preceding twelve month period; expected
life equal to the remaining term of the Option; and a risk-free interest rate
equal to the "prime rate" as set forth in the Money Rates section of the Wall
Street Journal as of the date of termination.
(b) For purposes of this Section 8, a "Change in Control"
shall be deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) any Person is or becomes the Beneficial Owner (as
defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), directly or
indirectly, of securities of the Company (not including
securities beneficially owned by such Person or any
securities acquired directly from the Company or any of
its affiliates) representing more than 50% of the
combined voting power of the Company's then outstanding
securities; or
(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other
than a director designated by a Person who has entered
into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of
this Section 8(b)) whose
election by the Board of nomination for election by the
Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other
corporation, other than (A) a merger or consolidation
which would result in the voting securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or being converted into voting securities
of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the
Company or any of its affiliates, at least 50% of the
combined voting power of the voting securities of the
Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B)
a merger or consolidation effected to implement a
recapitalization of the Company (or similar
transaction) in which no Person acquires more than 50%
of the combined voting power of the Company's then
outstanding securities; or
(iv) the shareholders of InteliData approve a plan of
complete liquidation of InteliData or an agreement for
the sale or disposition by InteliData of all or
substantially all of its assets.
For purposes of this Section, "Person" shall have the meaning given in
Section (3)(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof; however, a Person shall not include (i) the Company or any of
its subsidiaries or affiliates, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
Optionee's right to terminate Optionee's employment for Good Reason
shall not be affected by Optionee's incapacity due to physical or mental
illness. Optionee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
(c) In the event that any payment to Optionee under this
paragraph is subject to any federal or state excise tax, the Company shall pay
to Optionee an additional amount equal to any such excise tax imposed, pursuant
to the terms of the Employment Agreement.
(d) The Company shall pay to Optionee all reasonable legal
fees and expenses incurred by Optionee as a result of seeking in good faith
after a Change in Control to obtain or enforce any benefit or right provided by
this Agreement. Such payments shall be made within ten (10) business days after
delivery of Optionee's written request for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.
(e) Notwithstanding anything to the contrary set forth in this
Agreement, the provisions of this Section 8 shall not apply to Optionee if,
prior to the date on which a Change in Control (as defined in Section 8(b)
hereof) takes place: (A) this Option ceases to vest for any of the reasons set
forth in Section 5 hereof; or (B) Optionee ceases to serve in his or her current
position or ceases to serve in a position within the Group that is of equal or
greater responsibility than the position held by the Optionee as of the Grant
Date (as reasonably determined by the Committee). Otherwise, the provisions of
Section 8 hereof shall apply to Optionee.
9. Compliance with Laws and Regulations.
(a) The exercise of the Option and the issuance of Option
Shares upon such exercise is subject to compliance by the Company and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's common stock
may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of the Option, Optionee
will execute and deliver to the Company such representations in writing as may
be requested by the Company so that it may comply with the applicable
requirements of federal and state securities laws.
10. Liability of the Company.
(a) If the Option Shares exceed, as of the Grant Date, the
number of shares that may without shareholder approval be issued under the Plan,
then this Option will be void with respect to such excess shares unless
shareholder approval of an amendment sufficiently increasing the number of
shares issuable under the Plan is obtained in accordance with the provisions of
the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any common stock pursuant to the Option will relieve
the Company of any liability with respect to the non-issuance or sale of the
common stock as to which such approval is not obtained.
11. No Employment Contract. Except to the extent provided in the
Employment Agreement, neither the Company nor any of its subsidiaries is under
any obligation to continue the employment of Optionee for any period of specific
duration.
12. Withholding.
(a) To the extent federal, state and local income and
employment tax withholding requirements should apply to the exercise of this
Option, Optionee hereby agrees to make appropriate arrangements with the Company
for the satisfaction of such withholding requirements.
(b) Subject to approval of the Committee, any withholding
obligation arising from exercise of the Option may be satisfied by any of the
following means or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold from the Common Stock otherwise
issuable to Optionee as the result of the exercise of the Option, a number of
shares having a Fair Market Value, as of the date the withholding tax obligation
arises, less than or equal to the amount of the withholding tax obligation; or
(iii) delivering to the Company already owned and unencumbered shares of Common
Stock having a Fair Market Value, as of the date the withholding tax obligation
arises, less than or equal to the amount of the withholding tax obligation.
13. Other Restrictions. Upon any exercise of the Option, the Committee
may require Optionee to represent to and agree with the Company in writing that
the shares are being acquired without a view to distribution thereof. The
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer determined by the Committee
to be necessary or appropriate under applicable securities laws.
All certificates for shares of common stock delivered pursuant to
exercise of the Option shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the common stock is then listed, and any applicable federal
or state securities law, and the Committee may cause a legend or legends to be
put on any such certificate to make appropriate reference to such restrictions.
14. Definitions. Capitalized terms not otherwise defined herein shall
have the meaning ascribed to such terms in the Plan.
15. Headings. The headings of Sections herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any of the provisions of this Agreement.
16. Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement will be in writing and addressed to
the Company in care of its Secretary at 00000 Xxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000. Any notice required to be given or delivered to
Optionee will be in writing and addressed to Optionee at the address indicated
below Optionee's signature line on this Agreement. All notices will be deemed to
have been given or delivered upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
17. Construction. This Agreement and the Option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Committee with respect to any question or issue arising under the Plan or this
Agreement will be conclusive and binding on all persons having an interest in
the Option.
18. Governing Law. The interpretation, performance, and enforcement of
this Agreement will be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in duplicate on its behalf by its duly authorized officer and
Optionee has also executed this Agreement in duplicate, all as of the day and
year indicated above.
InteliData Technologies Corporation
By /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
Chairman of the Board
/s/ Xxxx X. Xxxxxx, Xx.
-------------------------------------
Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Address: 0000 Xxxxx Xxxx Xxxx
Xxxxx Xxxxx, XX 00000
