EXHIBIT 10.8.1
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 1355 Terrell Mill Road - Suite 200, Marietta, Georgia
30067 (hereinafter called the "Corporation"), and LILLY BETER (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
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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.
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(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
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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.
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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/ Raymond Findley, Jr.
----------------------------------
Its President
Attest:
/s/ Richard J. Shea, Jr. /s/ Lilly Beter
- ------------------------------ ---------------------------------
Secretary Lilly Beter
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EXHIBIT A
______________________________________________________
Address of Person Exercising Option
_____________________
Date
American Card Technology, Inc.
1355 Terrell Mill Road - Suite 200
Marietta, Georgia 30067
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, 1355
Terrell Mill Road - Suite 200, Marietta, Georgia, 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,
______________________________
Lilly Beter
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.