EXHIBIT 10.9.5
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 1355 Terrell Mill Road, Suite 200, Marietta, Georgia 30067
(hereinafter called the "Corporation"), and MICHAEL PATE (hereinafter called
the "Optionee").
The Corporation has adopted a 1996 Stock Option Plan (the "Plan") to be
used to award options to purchase shares of its common stock to certain
employees, consultants, and other persons who perform substantial services
for the Corporation or any of its subsidiaries or affiliates, as determined
by the Board of Directors of the Corporation (the "Board") or a special
committee of the Board (the "Committee"). The Board or Committee has
authorized the awarding of an option under the Plan to the Optionee. The
options issued under the Plan may in some cases be entitled to favorable tax
treatment afforded to "incentive stock options" under Sections 421 and 422 of
the Internal Revenue Code (such an option being hereinafter sometimes
referred to as an "Incentive Stock Option"). Wherever the context so
requires, the "Corporation" shall be deemed to refer to any or all of the
Corporation's subsidiaries or affiliates.
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 15,000 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 granted herein shall constitute an Incentive Stock
Option.
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).
(b) EXERCISE OF OPTION. No portion of the Option shall be
exercisable prior to the consummation of an initial public offering of Common
Stock of the Corporation (an "IPO") and thereafter shall be exercisable only
as follows:
(i) At any time after the IPO, the Option may be exercised to
the extent of one-fourth of the aggregate number of shares of Common Stock.
(ii) At any time after the expiration of the next three
successive anniversaries of the IPO, the first such date being one year
after the date of the IPO, the Option may be exercised to the extent of an
additional one-fourth of the aggregate number of shares originally covered
by the Option, and the Option may also be exercised to the extent to which
the right to exercise shall theretofore have accrued and not been
exercised.
(iii) No portion of the Option shall be exercisable after the
tenth anniversary of the date of its grant, and after that date the Option
shall lapse with respect to any shares of Common Stock not theretofore
purchased.
(iv) The Option may not be exercised for less than one hundred
(100) shares of Common Stock at any one time, unless fewer than one hundred
(100) shares of Common Stock remain covered by the Option, in which event
the Option must be exercised for all such shares.
(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 by cash or certified or bank check. 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 EMPLOYMENT. If the Optionee's employment shall
be terminated by the Corporation or by the Optionee, with or without cause,
for whatever reason other than by death, the Optionee shall have the right
within three months after such termination to exercise the Option to the
extent the right to exercise the Option shall have accrued at the date of
such a termination of employment, except to the extent the Option shall have
been exercised or shall have expired. Any portion of the Option not
exercised within said three months shall lapse.
(f) DEATH OF OPTIONEE.
(i) If the Optionee shall die, the Option shall lapse and
neither the Optionee nor the Optionee's heirs or legal representatives
shall have any further rights under this Agreement relating to any Option
with respect to which the right to exercise shall not have accrued prior to
the date of the Optionee's death.
(ii) If the Optionee shall die while employed by the Corporation,
or within the three-month period specified in Section 3(e) hereof, 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 to exercise the Option to the extent the right to exercise
the Option shall have accrued at the date of death, 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.
4. Shares of Common Stock issued upon the exercise of any portion of
the Option granted under this Agreement shall be transferable only pursuant
to an effective registration or exemption from registration under the
Securities Act of 1933, as amended. 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.
5. The Optionee acknowledges that special rules must be complied with
in order to ensure that the Option remains eligible for favorable tax
treatment accorded Incentive Stock Options under Section 421 of the Internal
Revenue Code, and that the Optionee, in addition to conferring with
appropriate representatives of the Corporation, may wish to consult with his
or her personal tax adviser.
6. 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.
7. 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, 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 shall require the Corporation to sell a fractional
share; and the total substitution or adjustment with respect to this Option
shall be limited accordingly. 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.
8. 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.
9. 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.
10. This Agreement shall be interpreted according to the laws of the
State of Georgia.
11. 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.
12. 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/ Raymond Findley, Jr.
----------------------------------
Its President
Attest:
/s/ Richard J. Shea, Jr. /s/ Michael Pate
- ------------------------------- --------------------------------
Secretary Michael Pate
EXHIBIT A
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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,
-----------------------------------
Michael Pate