As filed with the Securities and Exchange Commission on June 14, 1999
File No. 33- __________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
Registration Statement
Under the Securities Act of 1933
NEOMEDIA TECHNOLOGIES, INC.
-----------------------------------
(Name of Registrant in its charter)
DELAWARE 36-3680347
------------------------------ -------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2201 SECOND STREET, SUITE 600
FORT MYERS, FLORIDA 33901
941-337-3434
-------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
NEOMEDIA TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
---------------------------
(Full Title of the Plan)
CHARLES W. FRITZ
2201 SECOND STREET, SUITE 600
FORT MYERS, FLORIDA 33901-3083
941-337-3434
941-337-3668 - FAX
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
SCOTT P. SLYKAS, ESQ. MARIANNE LEPERA, ESQ.
MERRICK & KLIMEK, P.C. NEOMEDIA TECHNOLOGIES, INC.
401 SOUTH LASALLE, SUITE 1302 2201 SECOND STREET
CHICAGO, ILLINOIS 60605 SUITE 600
(312) 294-6044 FORT MYERS, FLORIDA 33901
(312) 294-6045 FAX 941-337-3434
941-337-3668 FAX
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(3) FEE(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value 790,900 Shares $1.88 - $10.13 $4,220,428 $1,173.28
- ---------------------------------------------------------------------------------------------------------------
<FN>
(1) Represents the maximum number of shares of Common Stock to be issued by
the Company upon the exercise of (vested) options issued under the 1998
Stock Option Plan prior to May 20, 1999. In addition, pursuant to Rule
416(c) under the Securities Act of 1933, this Registration Statement
also covers an indeterminate amount of interests to be offered or sold
pursuant to the 1998 Stock Option Plan described herein.
(2) Represents the range of prices at which options issued under the 1998
Stock Option Plan may be exercised to acquire shares of the Company's
Common Stock, $1.88 being the minimum exercise price for options
currently issued under the 1998 Stock Option Plan, and $10.13, being
the maximum exercise price for options currently issued under the 1998
Stock Option Plan.
(3) Represents the maximum aggregate offering price for shares of Common
Stock subject to issuance under the Plan, calculated as follows: 12,000
options to purchase 1 share of Common Stock at an exercise price of
$1.88 per share; 30,500 options to purchase 1 share of Common Stock at
an exercise price of $2.00 per share; 64,000 options to purchase 1
share of Common Stock at an exercise price of $2.63 per share; 1,900
options to purchase 1 share of Common Stock at an exercise price of
$2.69 per share; 3,200 options to purchase 1 share of Common Stock at
an exercise price of $2.88 per share; 38,000 options to purchase 1
share of Common Stock at an exercise price of $2.91 per share; 106,400
options to purchase 1 share of Common Stock at an exercise price of
$3.41 per share; 2,000 options to purchase 1 share of Common Stock at
an exercise price of $3.53 per share; 164,600 options to purchase 1
share of Common Stock at an exercise price of $3.63 per share; 1,600
options to purchase 1 share of Common Stock at an exercise price of
$3.75 per share; 1,000 options to purchase 1 share of Common Stock at
an exercise price of $4.50 per share; 1,000 options to purchase 1 share
of Common Stock at an exercise price of $4.59 per share; 1,500 options
to purchase 1 share of Common Stock at an exercise price of $4.91 per
share; 400 options to purchase 1 share of Common Stock at an exercise
price of $5.00 per share; 12,000 options to purchase 1 share of Common
Stock at an exercise price of $5.50 per share; 234,000 options to
purchase 1 share of Common Stock at an exercise price of $7.31 per
share; 8,000 options to purchase 1 share of Common Stock at an exercise
price of $8.38 per share; 4,000 options to purchase 1 share of Common
Stock at an exercise price of $8.50 per share; 4,000 options to
purchase 1 share of Common Stock at an exercise price of $8.56 per
share; 800 options to purchase 1 share of Common Stock at an exercise
price of $9.03 per share; 80,000 options to purchase 1 share of Common
Stock at an exercise price of $9.19 per share; 4,000 options to
purchase 1 share of Common Stock at an exercise price of $9.25 per
share; 4,000 options to purchase 1 share of Common Stock at an exercise
price of $9.75 per share; and 12,000 options to purchase 1 share of
Common Stock at an exercise price $10.13 per share.
</FN>
</TABLE>
<PAGE>
PART I
Pursuant to the Note to Part I of Form S-8, information required under
Items 1 and 2 of Form S-8 is omitted as a part of this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission are hereby incorporated by reference:
(a) The Annual Report of the Company on Form 10-KSB for the fiscal year
ended December 31, 1998.
(b) The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1999.
(c) The description of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), which is contained in the Company's Registration
Statement on Form 8-A filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on November 18, 1996, including any amendment or
report filed with the Commission for the purpose of updating such description of
Common Stock.
(d) The Form 8-K filed on June 7, 1999 announcing that KPMG LLP will no
longer act as independent auditors of the Company.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Delaware General Corporation Law ("DGCL"), the Company
has included in its Certificate of Incorporation a provision to eliminate the
personal liability of its directors for monetary damages for breach or alleged
breach of their fiduciary duties as directors, except for liability (i) for any
breach of director's duty of loyalty to the Company or its stockholders, (ii)
for acts or omissions not in good faith or which involved intentional misconduct
or a knowing violation of law, (iii) in respect of certain unlawful dividend
payments or stock redemptions or repurchases, as provided in Section 174 of the
DGCL, or (iv) for any transaction from which the director derived an improper
personal benefit. The effect of this provision in the Company's Certificate of
Incorporation is to eliminate the rights of the Company and its stockholders
(through stockholders' derivative suits on behalf of the Company) to recover
monetary damages against a director for breach of the fiduciary duty of care as
a director except in the situations described in (i) through (iv) above. This
provision does not limit nor eliminate the rights of the Company or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care.
These provisions will not alter the liability of directors under federal
securities laws.
The Certificate of Incorporation and the by-laws of the Company provide
that the Company is required and permitted to indemnify its officers and
directors, employees and agents under certain circumstances. In addition, if
permitted by law, the Company is required to advance expenses to its officers
and directors as incurred in connection with proceedings against them in their
capacity as a director or officers for which they may be indemnified upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that such person is not
entitled to indemnification. At present, the Company is not aware of any pending
or threatened litigation or proceeding involving a director, officer, employee
or agent of the Company in which indemnification would be required or permitted.
In accordance with its agreement with the Representative, the Company has
obtained directors and officers liability insurance. The Company believes that
its charter provisions and indemnification agreements are necessary to attract
and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers of the Company pursuant to the
foregoing provisions or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission ("Commission"), such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
4 NeoMedia Technologies, Inc. 1998 Stock Option Plan.
5 Opinion of Merrick & Klimek, P.C.
23.1 Consent of KMPG LLP
23.2 Consent of Merrick & Klimek, P.C. (included in Exhibit 5
opinion letter).
24 Power of Attorney (included on signature page).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person
connected with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Myers, State of Florida, on June 10, 1999.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ CHARLES W. FRITZ
------------------------------------------------
Charles W. Fritz, President, Chief Executive
Officer and Chairman of the Board
THE PLAN
Pursuant to the requirement of the Securities Act of 1933, the
Committee which administers the 1998 Stock Option Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Myers, State of Florida on June 10, 1999.
PLAN:
NEOMEDIA TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
By: /s/ CHARLES W. FRITZ
------------------------------------------------
Charles W. Fritz, Chairman of the
Compensation Committee
POWER OF ATTORNEY
The undersigned officers and directors of NeoMedia Technologies, Inc.
hereby constitute and appoint Charles W. Fritz with power to act one without the
other, our true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for us and in our stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this Registration Statement and all documents relating thereto, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
<PAGE>
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing necessary or advisable to be done in and about the premises,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or his
or her substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ CHARLES W. FRITZ President, Chief Executive Officer,
- ------------------------ Chairman of the Board and Director 5/26/99
Charles W. Fritz
/s/ WILLIAM E. FRITZ Secretary and Director 5/26/99
- ------------------------
William E. Fritz
/s/ CHARLES T. JENSEN Chief Financial Officer,
- ------------------------ Treasurer and Director 5/26/99
Charles T. Jensen
/s/ ROBERT T. DURST, JR. Director 5/26/99
- ------------------------
Robert T. Durst, Jr.
/s/ A. HAYES BARCLAY Director 5/26/99
- ------------------------
A. Hayes Barclay
/s/ JAMES J. KEIL Director 5/26/99
- ------------------------
James J. Keil
/s/ PAUL REECE Director 5/26/99
- ------------------------
Paul Reece
/s/ JOHN A. LOPIANO Director 5/26/99
- ------------------------
John A. Lopiano
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
4 1998 Stock Option Plan
5 Opinion of Merrick & Klimek P.C.
23.1 Consent of Independent Accountants
EXHIBIT 4
NeoMedia Technologies, Inc.
Exhibit 4
NEOMEDIA TECHNOLOGIES, INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
This Stock Option Plan (the "Plan") is intended as an incentive to key
employees, consultants and directors of NeoMedia Technologies, Inc. (the
"Company") and its subsidiaries. The purpose of the Plan is to assist the
Company in retaining its employees with a high degree of training, experience
and ability, to attract new employees and consultants whose services are
considered unusually valuable and to provide stock ownership opportunities to
the members of the Board of Directors of the Company who are not employees of
the Company or a subsidiary ("Nonemployee Directors").
2. GENERAL PROVISIONS
2.1 Definitions
As used in the Plan:
(a) "Board of Directors" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, including any and
all amendments thereto.
(c) "Committee" means the options committee appointed by the Board of
Directors from time to time to administer the Plan pursuant to
Section 2.2.
(d) "Common Stock" means the Company's Common Stock, $.01 par value.
(e) "Participant" means a person to whom a Stock Option has been
granted under the Plan.
(f) "Rule 16b-3" means Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended from time to time, or any
successor rule.
<PAGE>
(g) "Stock Option" means an option granted under the Plan.
(h) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Stock Option, each of the
corporations other than the last corporation in the unbroken chain
owns 50% or more of the total voting power of all classes of stock
in one of the other corporations in such chain.
2.2 Administration of the Plan
(a) The Plan shall be administered by the Committee which shall at all
times consist of two (2) or more persons, each of whom shall be a
member of the Board of Directors. Each member of the Committee
shall be a disinterested person (as such term is defined in Rule
16b-3). The Board of Directors may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the Board of Directors. The
Committee shall select one of its members as Chairman, and shall
hold meetings at such times and places as it may determine.
(b) The Committee shall have the full power, subject to and within the
limits of the Plan, to: (i) interpret and administer the Plan, and
Stock Options granted under it; (ii) make and interpret rules and
regulations for the administration of the Plan and to make changes
in and revoke such rules and regulations (and in the exercise of
this power, shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission, or
inconsistency in the Plan or any agreement evidencing the grant of
any Stock Option in a manner and to the extent it shall deem
necessary to make the Plan fully effective); (iii) determine those
persons to whom Stock Options shall be granted and the number of
Stock Options to be granted to any person; (iv) determine the terms
of Stock Options granted under the Plan, consistent with the
provisions of the Plan; and (v) generally, exercise such powers and
perform such acts in connection with the Plan as are deemed
necessary or expedient to promote the best interests of the
Company. The interpretation and construction by the Committee of
any provision of the Plan or of any Stock Option shall be final,
binding and conclusive. Members of the Committee shall be subject
to any additional restrictions necessary to satisfy the
disinterested administration of the Plan as required in Rule 16b-3.
(c) The Committee may act only by a majority of its members then in
office; however, the Committee may authorize any one (1) or more of
its members or any officer of the Company to execute and deliver
documents on behalf of the Committee.
<PAGE>
(d) No member of the Committee shall be liable for any action taken or
omitted to be taken or for any determination made by him or her in
good faith with respect to the Plan, and the Company shall
indemnify and hold harmless each member of the Committee against
any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval
of the Committee) arising out of any act or omission in connection
with the administration or interpretation of the Plan, unless
arising out of such person's own fraud or bad faith.
2.3 Effective Date
The Plan shall become effective upon its adoption by the Board of
Directors, and Stock Options may be granted upon such adoption and from time to
time thereafter, subject, however, to approval of the Plan by affirmative vote
of the holders of a majority of the shares of the Common Stock present in person
or by proxy and entitled to vote at an annual meeting of the shareholders of the
Company or at a special meeting of the shareholders of the Company expressly
called for such purposes, or any adjournments thereof, within 12 months after
the adoption of the Plan by the Board of Directors. If the Plan is not approved
at such annual or special meeting or at any adjournments thereof, this Plan and
all Stock Options previously granted thereunder shall become null and void.
2.4 Duration
If approved by the shareholders of the Company, as provided in Section
2.3, unless sooner terminated by the Board of Directors, this Plan shall remain
in effect for a period of ten (10) years following its adoption by the Board of
Directors.
2.5 Shares Subject to the Plan
The maximum number of shares of Common Stock which may be subject to
Stock Options granted under the Plan shall be 8,000,000. The Stock Options shall
be subject to adjustment in accordance with Section 5, as appropriate, and
shares to be issued upon exercise of Stock Options may be either authorized and
unissued shares of Common Stock or authorized and issued shares of Common Stock
purchased or acquired by the Company for any purpose. If a Stock Option or
portion thereof shall expire or is terminated, canceled or surrendered for any
reason without being exercised in full, the unpurchased shares of Common Stock
which were subject to such Stock Option or portion thereof shall be available
for future grants of Stock Options under the Plan.
2.6 Amendments
The Plan may be suspended, terminated or reinstated, in whole or in
part, at any time by the Board of Directors, provided however, that without the
approval of NeoMedia's stockholders, no amendment shall be made which (i)
increases the maximum number of shares of Common Stock which may be subject to
stock options granted under
<PAGE>
the Plan, except for specified adjustment provisions, (ii) extends the term of
the Plan, (iii) increases the period during which a stock option may be
exercised beyond ten years from the date of the grant, (iv) materially increase
the benefits accruing to participants under the Plan, (v) materially modifies
the requirements as to eligibility for participation in the Plan, or (vi) will
cause stock options granted under the Plan to fail to meet the requirements of
Rule 16b-3. The Board of Directors may from time to time make such amendments to
the Plan as it may deem advisable. Except as otherwise provided herein,
termination or amendment of the Plan shall not, without the consent of a
Participant, affect such Participant's rights under any Stock Options previously
granted to such Participant.
2.7 Participants and Grants
Stock Options may be granted by the Committee to (i) directors,
officers and other full-time salaried employees of the Company and its
Subsidiaries with managerial, professional or supervisory responsibilities and
(ii) consultants and advisors who render bona fide services to the Company and
its Subsidiaries, in each case, where the Committee determines that such
officer, employee, consultant or advisor has the capacity to make a substantial
contribution to the success of the Company. The Committee may grant Stock
Options to purchase such number of shares of Common Stock (subject to the
limitations of Sections 2.5) as the Committee may, in its sole discretion,
determine. In granting Stock Options under the Plan, the Committee, on an
individual basis, may vary the number of Stock Options as between Participants
and may grant Stock Options to a Participant in such amounts as the Committee
may determine in its sole discretion.
3. STOCK OPTIONS
3.1 General
All Stock Options granted under the Plan shall be evidenced by written
agreements executed by the Company and the Participant to whom granted, which
agreement shall state the number of shares of Common Stock which may be
purchased upon the exercise thereof and shall contain such investment
representations and other terms and conditions as the Committee may from time to
time determine.
3.2 Price
The purchase price per share of Common Stock subject to a Stock Option
shall be determined by the Committee which may be less than the fair market
value on the date of grant.
<PAGE>
3.3 Period
The duration or term of each Stock Option granted under the Plan shall
be for such period as the Committee shall determine but in no event more than
ten (10) years from the date of grant thereof.
3.4 Exercise
Stock options may be exercisable at such time or times as the Committee
shall specify when granting the Stock Options subject to satisfaction of all
conditions for exercise recited herein and in the Option Agreement. Without
limiting the foregoing, the Stock Options may not be exercised unless the
Participant at the time of such exercise shall have been in continuous employ of
, or relationship with, the Company up to the date of exercise, subject to the
other provisions herein.
Once exercisable, a Stock Option shall be exercisable, in whole or in
part, by delivery of a written notice of exercise to the Secretary of the
Company at the principal office of the Company specifying the number of shares
of Common Stock as to which the Stock Option is then being exercised together
with payment of the full purchase price for the shares being purchased upon such
exercise. Until the shares of Common Stock as to which a Stock Option is
exercised are issued, the Participant shall have none of the rights of a
shareholder of the Company with respect to such shares.
3.5 Payment
The purchase price for shares of Common Stock as to which a Stock
Option has been exercised and any amount required to be withheld, as
contemplated by Section 6.1, may be paid:
(a) 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
(b) By the delivery by the Participant to the Company of whole
"mature" shares of Common Stock ("mature shares" being defined
as those having been owned and held by the Participant 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
(c) By a combination of both (a) and (b) above.
The Committee may, in its discretion, impose limitations, conditions and
prohibitions on the use by a Participant of shares of Common Stock to pay the
purchase price payable by such Participant upon the exercise of a Stock Option.
<PAGE>
3.6 Termination of Employment or Other Relationship
(a) In the event a Participant's employment by, or relationship
with, the Company shall terminate for any reason other than
those reasons specified in Sections 3.6(b), (c), (d), (e) or
(g) hereof while such Participant holds Stock Options granted
under the Plan, then all rights of any kind under any
outstanding Option held by such Participant which shall not
have previously lapsed or terminated shall expire immediately.
(b) If a Participant's employment by, or relationship with, the
Company or its Subsidiaries shall terminate as a result of
such Participant's total disability, each Stock Option held by
such Participant (which has not previously lapsed or
terminated) shall be exercisable by such Participant 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.
(c) In the event of the death of a Participant, each Stock Option
held by such Participant (which has not previously lapsed or
terminated) shall be exercisable by the executor or
administrator of the Participant's estate or by the person or
persons to whom the deceased Participant's rights thereunder
shall have passed by will or by the laws of descent or
distribution, for a period of one year after such
Participant's death but only to the extent the Option is
otherwise exercisable during that period.
(d) In the case of a Participant who is an employee of the
Company, if a Participant's employment by the Company shall
terminate by reason of such Participant's retirement in
accordance with Company policies, each Stock Option held by
such Participant 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.
(e) In the event the Company terminates the employment of a
Participant who at the time of such termination was an
officer of the Company and had been continuously employed by
the Company during the two (2) year period immediately
preceding such termination, for any reason except "good
cause" (hereafter defined) and except upon such Participant's
death, total disability or retirement in accordance with
Company policies, each Stock Option held by such Participant
(which has not previously lapsed or terminated and which has
been held by such Participant for more than six (6) months
prior to such termination) shall be exercisable for a period
of three (3) months after such termination, but only to the
extent the Option is otherwise exercisable during that
period. A termination for "good
<PAGE>
cause" shall be deemed to have occurred only if the
Participant in question (i) is terminated by written notice
for dishonesty, because of his conviction of a felony, or
because of his violation of any material provision of any
employment or other agreement, written or oral, with the
Company or any of its Subsidiaries, or (ii) shall voluntarily
resign or terminate his employment with the Company or any of
its Subsidiaries under or followed by such circumstances as
would constitute a breach of any material provision of any
employment or other agreement between him and the Company or
any of its Subsidiaries, or (iii) shall have committed an act
of dishonesty not discovered by the Company or any of its
Subsidiaries prior to the cessation of his employment with the
Company or any of its Subsidiaries, but which would have
resulted in his discharge if discovered prior to such date, or
(iv) shall, either before or after cessation of his employment
with the Company or any of its Subsidiaries, without the
written consent of the Company or any of its Subsidiaries, use
(except for the benefit of the Company or any of its
Subsidiaries) or disclose to any other person any confidential
information relating to the continuation or proposed
continuation of the business or any trade secrets of the
Company of any of its Subsidiaries obtained as a result of or
in connection with such employment.
(f) Notwithstanding the foregoing, if at any time after
termination a Participant engages in "detrimental activity"
(as hereinafter defined), the Committee in its discretion may
cause the Participant's right to exercise such option to be
forfeited. If an allegation of detrimental activity by a
Participant is made to the Committee, the exercisability of
the Participant'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 Participant: (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
Participant 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 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 harms the business interests, reputation, or
goodwill of the Company and/or its subsidiaries.
<PAGE>
(g) In the case of Stock Options granted to a nonemployee director
who ceases to be a member of the Board of Directors, such
Stock Options then held by such individual shall be
exercisable within one year after such termination of service.
3.7 Effect of Leaves of Absence
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.
4. ASSIGNABILITY OF STOCK OPTIONS
Stock Options granted under the Plan shall not be assignable or
otherwise transferable by the recipient except by will or the laws of intestate
succession, or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. Otherwise, Stock Options granted under this Plan shall be
exercisable during the lifetime of the Participant only by the Participant for
his or her individual account, and no purported assignment or transfer of such
Stock Options thereunder, whether voluntary or involuntary, by operation of law
or otherwise, shall vest in the purported assignee or transferee any interest or
right therein whatsoever but immediately upon any such purported assignment or
transfer, or any attempt to make the same, such Stock Options thereunder shall
terminate and become of no further effect.
5. REORGANIZATION AND RECAPITALIZATION OF THE COMPANY
(a) The existence of this Plan and Stock 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.
(b) 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
<PAGE>
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.
(c) 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 Stock Options or 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 subject to the Plan shall be proportionately
adjusted and the number of shares with respect to which Stock
Options granted hereunder may thereafter be exercised shall:
(i) 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
(ii) 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.
(d) 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 Stock Options granted hereunder, the Participant
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
Stock Options shall then be exercisable the number and class
of shares of stock or other securities to which the
Participant would have been entitled pursuant to the terms of
the agreement of merger or consolidation, if immediately prior
to such merger or consolidation the Participant 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
Stock Options shall be exercisable. Upon any reorganization,
merger or consolidation where the Company is not the surviving
corporation, the Committee shall have the right to make all
outstanding options vest and be exercisable immediately, by
giving notice to each holder thereof or his or her personal
representative and by permitting the exercise for a period not
to exceed ninety (90) days from the date of such determination
by the Committee. Upon liquidation or dissolution of the
Company, all outstanding options shall be cancelled.
<PAGE>
6. MISCELLANEOUS PROVISIONS
6.1 Withholding
The Company's obligations under this Plan 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
Stock Option may, in the discretion of the Committee, be paid in shares of
Common Stock already owned by the Participant or through the withholding of
shares otherwise issuable to such Participant, upon such terms and conditions as
the Committee shall determine. If the Participant 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 Participant an amount equal
to any federal, state or local taxes of any kind required to be withheld by the
Company.
6.2 Compliance with Law and Approval of Regulatory Bodies
No Stock Option shall be exercisable and no shares will be delivered
under the Plan 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 a Stock Option is exercised may bear legends and statements the Committee
shall deem advisable to assure compliance with federal and state laws and
regulations. No Stock Option shall be exercisable and no shares will be
delivered under the Plan, until the Company has obtained consent or approval
from regulatory bodies, federal or
<PAGE>
state, having jurisdiction over such matters as the Committee may deem
advisable. In the case of the exercise of a Stock Option by a person or estate
acquiring the right to exercise the Stock Option as a result of the death of the
Participant, the Committee may require reasonable evidence as to the ownership
of the Stock Option and may require consents and releases of taxing authorities
that it may deem advisable.
6.3 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 Stock Options hereunder, shall confer upon any Participant 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 Participant at any time with or without
assigning a reason therefore, to the same extent as might have been done if the
Plan had not been adopted.
6.4 Exclusion from Pension Computations
By acceptance of a grant of a Stock Option under the Plan, the
Participant 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.
6.5 Abandonment of Options
A Participant may at any time abandon a Stock 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. A Participant shall have no
further rights with respect to any Stock Option so abandoned.
6.6 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.
6.7 Interpretation of the Plan
Headings are given to the Sections of the Plan 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
Plan or any provision hereof. The use
<PAGE>
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.
6.8 Use of Proceeds
Funds received by the Company upon the exercise of Stock Options shall
be used for the general corporate purposes of the Company.
6.9 Construction of Plan
The place of administration of the Plan shall be in the State of
Florida, and the validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of
Florida.
EXHIBIT 5
NeoMedia Technologies, Inc.
Exhibit 5
May 26, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration Statement on Form S-8 Relating to the
NeoMedia Technologies, Inc. 1998 Stock Option Plan (the "Plan")
Ladies and Gentlemen:
As legal counsel for NeoMedia Technologies, Inc. a Delaware corporation
(the "Company"), we are rendering this opinion in connection with the
preparation and filing of a registration statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of 790,900 shares of Common Stock, $.01 par value (the
"Common Stock") subject to exercise under the NeoMedia Technologies, Inc. 1998
Stock Option Plan.
We have examined such instruments, documents and records as we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the shares of
Common Stock of the Company being registered pursuant to the Registration
Statement are duly authorized shares of Common Stock which, when sold, will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
This opinion is to be used only in connection with the Plan and the
issuance of the Common Stock while the Registration Statement is in effect.
Respectfully submitted,
/s/ Merrick & Klimek, P.C.
MERRICK & KLIMEK, P.C.
MK/cs
EXHIBIT 23.1
NeoMedia Technologies, Inc.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
NeoMedia Technologies, Inc:
We consent to the use of our report dated March 12,1999, which appears in the
Annual Report on Form 10-KSB of NeoMedia Technologies, Inc. (the "Company") for
the year ended December 31, 1998, which Annual Report is incorporated by
reference herein.
Our report contains an explanatory paragraph that states that the Company has
suffered recurring losses from operations, has a significant accumulated
deficit, and a working capital deficiency that raise substantial doubt about its
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG LLP
June 14, 1999
Miami, Florida
