Exhibit 10.40

 

MIRA LACOUS

 Optionee     

 

BIO-KEY INTERNATIONAL, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE

BIO-KEY INTERNATIONAL, INC.

2004 STOCK INCENTIVE PLAN

 

This Agreement is made as of the date set forth on Schedule A hereto (the “Grant
Date”) by and between Bio-key International, Inc., a Delaware corporation (the
“Corporation”), and the person named on Schedule A hereto (the “Optionee”).

 

WHEREAS, Optionee is an employee of the Corporation and the Corporation
considers it desirable and in its best interest that Optionee be given an
incentive to advance the interests of the Corporation by granting the Optionee
an option to purchase shares of common stock of the Corporation (the “Common
Stock”);

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
that as of the Grant Date, the Corporation hereby grants Optionee an option to
purchase from it, upon and subject to the terms and conditions set forth in the
Corporation’s 2004 Stock Incentive Plan, as amended from time to time (the
“Plan”), a copy of which is attached hereto, that number of shares of the
authorized and unissued Common Stock of the Corporation as is set forth on
Schedule A hereto.

 

1.     Terms of Stock Option. The option to purchase Common Stock granted hereby
(the “Option”) is subject to the terms, conditions, and covenants set forth in
the Plan as well as the following:

 

 

(a)

This Option shall constitute a Non-Qualified Stock Option which is not intended
to qualify under Section 422 of the Internal Revenue Code of 1986, as amended;

 

 

(b)

The per share exercise price for the shares subject to the Option is set forth
on Schedule A hereto;

 

 

(c)

The Option shall vest in accordance with the vesting schedule set forth on
Schedule A hereto; and

 

 

(d)

No portion of the Option may be exercised more than seven (7) years from the
Grant Date.

 

2.     Payment of Exercise Price. The Option may be exercised, in part or in
whole, only by written request to the Corporation accompanied by payment of the
exercise price in full either: (i) in cash for the shares with respect to which
it is exercised; (ii) if the shares underlying the option are registered under
the Securities Act, by delivering to the Corporation a notice of exercise with
an irrevocable direction to a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, to sell a sufficient portion of the shares and
deliver the sale proceeds directly to the Corporation to pay the exercise price;
or (iii) by delivering previously owned shares of Common Stock or a combination
of shares and cash having an aggregate Fair Market Value (as defined in the
Plan) equal to the exercise price of the shares being purchased; provided,
however, that shares of Common Stock delivered by the Optionee may be accepted
as full or partial payment of the exercise price for any exercise of the Option
hereunder only if the shares have been held by the Optionee for at least six (6)
months.

 

 
 

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3.     Miscellaneous.

 

 

(a)

This Agreement is binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.

 

 

(b)

This Agreement will be governed and interpreted in accordance with the laws of
the State of Delaware, and may be executed in more than one counterpart, each of
which shall constitute an original document.

 

 

(c)

No alterations, amendments, changes or additions to this agreement will be
binding upon the Corporation unless reduced to writing and signed by the
Corporation.

 

 

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In witness whereof, the parties have executed this Agreement as of the Grant
Date.

 

BIO KEY INTERNATIONAL, INC.

 

 

 

 

 

 

 

By:

 

 

Michael DePasquale

 

 

 

 

Title:

 Chief Executive Officer

 

 

 

 

     

OPTIONEE  

 

            MIRA LACOUS  

 

 
 

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Schedule A

 

 

 

1. Optionee: MIRA LACOUS

 

2. Grant Date: March 27, 2013

 

3. Number of Shares of Common Stock covered by the Option: 125,000

 

4. Exercise Price (which is not less than the Fair Market Value (as defined in
the Plan) of Common Stock on the Grant Date): $0.17

 

5. The Option shall vest in accordance with the following schedule:

 

 

(i)

41,666 shares shall vest on March 27, 2014; and

 

 

(ii)

41,666 shares shall vest on March 27, 2015; and

 

 

(iii)

41,667 shares shall vest on March 27, 2016

 

6. Expiration Date: March 26, 2020

 

 

 

 

 

 

Initials of Authorized  

Officer of BIO KEY INTERNATIONAL, INC.  

     

 

 

 

Optionee’s Initials