Document:

ex10-28.htm

Exhibit 10.28

 

LASERLOCK TECHNOLOGIES, INC.

NONQUALIFIED STOCK OPTION GRANT

This NONQUALIFIED STOCK OPTION GRANT AGREEMENT (this “Agreement”), dated as of November 21, 2012 (the “Date of Grant”), is delivered by LaserLock Technologies, Inc. (the “Company”) to Michael Sonnenreich (the “Grantee”).

 

RECITALS

 

WHEREAS, the Company maintains the LaserLock Technologies, Inc. 2003 Stock Option Plan (the “Plan”) which provides for the grant of options to purchase shares of common stock of the Company;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has decided to make a stock option grant to the Grantee;

 

WHEREAS, while the Company maintains the Plan, the grant described above is to be made outside of the Plan; and

 

WHEREAS, while this grant is made outside of the Plan, the material terms of the Plan are incorporated into this Agreement by reference.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

 

1.             Grant of Option.  Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Grantee a nonqualified stock option (the “Option”) to purchase 2,000,000 shares of common stock of the Company (“Shares”) at an exercise price of $0.05 per Share.  The Option shall become exercisable according to Paragraph 2 below.

 

2.             Exercisability of Option.  The Option shall become exercisable on the following dates, if the Grantee is providing service to the Company (including as a member of its Board of Directors) on the applicable date:

 

	
Date

 

	
Shares for Which the Option is

Exercisable

	
Date of Grant

	
 

1,000,000

 

	
 

November 21, 2013

 

	
 

1,000,000

 

  

  

  

 

The exercisability of the Option is cumulative, but shall not exceed 100% of the Shares subject to the Option.  If the foregoing schedule would produce fractional Shares, the number of Shares for which the Option becomes exercisable shall be rounded down to the nearest whole Share.

 

3.             Term of Option.

 

(a)           The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

 

(b)           The Option shall automatically terminate upon the happening of the first of the following events:

 

 (i)             The expiration of the 90-day period after the Grantee ceases to provide service to the Company if the termination is for any reason other than death or Cause (as defined in the Plan).

 

 (ii)            The expiration of the one-year period after the Grantee ceases to provide service to the Company if the Grantee dies while providing service to the Company or within 90 days after the Grantee ceases to so provide such services on account of a termination described in subparagraph (i) above.

 

 (iii)          The date on which the Grantee ceases to provide service to the Company for Cause.  In addition, notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause after the Grantee’s service terminates, the Option shall immediately terminate.

 

Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant.  Any portion of the Option that is not exercisable at the time the Grantee ceases to provide service to the Company shall immediately terminate.  For purposes of this paragraph (b), service to the Company as an employee, independent contractor or outside Board member shall constitute “service to the Company.”

 

4.             Exercise Procedures.

 

(a)           Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or all of the exercisable Option by giving the Company written notice of intent to exercise in the manner provided in this Agreement, specifying the number of Shares as to which the Option is to be exercised and the method of payment.  Payment of the exercise price shall be made in accordance with procedures established by the Board from time to time based on type of payment being made but, in any event, prior to issuance of the Shares.  The Grantee shall pay the exercise price (i) in cash, (ii) unless the Board determines otherwise, by delivering Shares owned by the Grantee and having a Fair Market Value (as defined in the Plan) on the date of exercise at least equal to the exercise price or by attestation (on a form prescribed by the Board) to ownership of Shares having a Fair Market Value on the date of exercise at least equal to the exercise price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) by surrender of all or any part of the vested Shares for the Option is exercisable to the Company for an appreciation distribution payable in shares of common stock with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the shares of common stock subject to the surrendered portion exceeds the aggregate exercise price payable for those shares, or (v) by such other method as the Board may approve.  The Board may impose from time to time such limitations as it deems appropriate on the use of Shares of the Company to exercise the Option.

 

  

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(b)           The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Board, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations.

 

(c)           All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable.  Subject to Board approval, the Grantee may elect to satisfy any tax withholding obligation of the Company with respect to the Option by having Shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.

 

5.             Change of Control.  The provisions of the Plan applicable to a Change of Control (as defined in the Plan) shall apply to the Option, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.

 

6.             Restrictions on Exercise.  Except as the Board may otherwise permit pursuant to the Plan, only the Grantee may exercise the Option during the Grantee’s lifetime and, after the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.

 

7.             Grant Subject to Plan Provisions.  This grant shall be interpreted in accordance with the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant and exercise of the Option are subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Board in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares, (c) changes in capitalization of the Company and (d) other requirements of applicable law.  The Board shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

 

8.             No Employment or Other Rights.  The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ or service of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment or service at any time. The right of the Company to terminate the Grantee’s employment or service at any time for any reason is specifically reserved.

 

  

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9.             No Stockholder Rights.  Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of a stockholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.

 

10.           Assignment and Transfers.  Except as the Board may otherwise permit pursuant to the Plan, the rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution.  In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and void.  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Company without the Grantee’s consent.

 

11.           Applicable Law.  The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to the conflicts of laws provisions thereof.

 

12.           Notice.  Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the President at the headquarters of the Company, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing.  Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

 

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.

	  	
LASERLOCK TECHNOLOGIES, INC.

	  
	  	  	  
	  	
By:  

	/s/ Norman A Gardner	  
	  	Name: Norman A. Gardner
	 	
Title: Chief Executive Officer

	  

 

I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement.  I hereby further agree that all the decisions and determinations of the Board shall be final and binding.

 

	  	
Grantee:  

	/s/ Michael Sonnenreich	  

 

 

[Signature Page to Option Agreement]EX-10.40

 Exhibit 10.40 
 SPLIT-DOLLAR AGREEMENT 
 THIS AGREEMENT, entered into this 28 day of January, 2013
by and between iPayment, Inc. (“The Employer”), a corporation organized and existing under the laws of the State of Delaware, and the Carl A. Grimstad 2013 Insurance Trust I, Dated January 25, 2013, J. Daniel
Schmidt, trustee (“The Trust”). 
 Witnesseth: 
 WHEREAS, Carl A. Grimstad (“The Employee”) renders competent and faithful services on behalf of The Employer and The Employer highly values the services, abilities
and accomplishments of The Employee; and 
 WHEREAS, The Employer desires to encourage The Employee to continue to render
faithful and high quality services to The Employer; and 
 WHEREAS, The Trust is the owner of Life Insurance Policy Number
213017769 (the “Policy”) insuring the life of the second to die of Carl and Jessica Grimstad (“The Insureds”) from MetLife (the “Insurance Company”): and 

WHEREAS, The Trust has assigned the Policy to The Employer as collateral for amounts to be loaned by The Employer under this
Agreement by an instrument of assignment (the “Collateral Assignment”) executed on March 4, 2013; and 

WHEREAS, The Employer is desirous of providing protection for the beneficiaries of The Insureds in the event of their untimely death, and
is willing to assist them in the payment of premiums on the Policy; and 
 WHEREAS, in exchange for the premium assistance of
The Employer, The Trust is willing to return the amounts advanced plus interest at the “Applicable Federal Rate” to The Employer, pursuant to the Collateral Assignment executed between The Trust (the
“Assignor”) and The Employer (the “Assignee”); and 
 WHEREAS, this Agreement is intended
to qualify as a Split Dollar Plan of the type described in Final Regulations issued September 11, 2003, effective September 17, 2003; and 
 NOW THEREFORE, for value received and in consideration of the mutual covenants and agreements contained herein, The Employer, for itself, its successors and assigns, and The
Trust for itself, and for its successors and assigns, agree as follows: 

 ARTICLE I 
 OWNERSHIP RIGHTS IN THE POLICY 
 A. If any individual Insured owns a majority
of the stock of The Employer, then The Trust, exclusively, shall have all of the ownership rights, options and privileges permitted by the Policy including the power to borrow against the policy value limited in amount such that
it will not impair The Employer’s interest in the Policy as described in Article I.B. below. The Employer shall be specifically prohibited from pledging the policy or withdrawing or borrowing its cash value. If no
individual Insured owns a majority of the stock of The Employer, then The Employer shall have the right to withdraw and/or borrow against its portion of the cash value. 
 B. In exchange for The Employer’s payment of its premium contributions under Article II of this Agreement, The Trust agrees that: 

 

	 	1	in the event of either of The Insureds’ death, The Employer will be paid an amount equal to the greater of (i) the cash value of The
Policy multiplied by the number of premiums that it pays divided by the total number of premiums paid or (ii) the sum of the premiums it has paid; or 

 

	 	2	in the event of any other termination of the Agreement during both of The Insureds’ lifetime, The Employer will be paid the net surrender
value of The Policy multiplied by the number of premiums that it pays divided by the total number of premiums paid. 

 At
that point, all other rights in the Policy shall belong to The Trust. 
 C. The Employer may not take any action with
respect to the Policy that will impair any right or interest of The Trust in the Policy. 
 ARTICLE II

 PREMIUM PAYMENT OPTIONS 
 A. The Employer shall contribute premiums under the Policy. The Employer may from time to time accelerate premium payments by paying them directly to the Insurance Company.
The Trust and/or The Employee are permitted to pay in an amount equal to the economic benefit as measured by Table 2001 and may pay additional premiums if it or they so choose. The Trust retains control of selecting the
Policy’s subaccounts, if any, if any Insured owns a majority of the stock of The Employer. If no Insured owns a majority of the stock of The Employer, then The Employer has the control of selecting the
Policy’s subaccounts, if any. 

 ARTICLE III 
 DIVISION OF DEATH PROCEEDS OF POLICY 
 In the event that either Insured shall die
while this Agreement is in force, The Employer shall be entitled to receive from the Policy proceeds an amount equal to The Employer’s interest in the Policy, as determined under Article I.B. of this
Agreement. The portion of the Policy proceeds that is in excess of the amount paid to The Employer shall be paid to the beneficiaries designated by The Trust in accordance with the terms of the Policy and
Collateral Assignment as reflected in the records of the Insurance Company. 
 ARTICLE IV 

TERMINATION OF AGREEMENT 

A. This Agreement may be terminated by The Trust at any time while both of The Insureds are living, through the delivery of
written notice of termination by the trustee to The Employer. 
 B. Upon termination of this Agreement by The Trust
while both of The Insureds are living, The Trust shall pay to The Employer in a timely fashion an amount equal to The Employer’s interest in the Policy, as determined under Article I.B. of this
Agreement in return for The Employer’s release of any claim to the Policy. 
 C. Upon division of death
proceeds of the Policy pursuant to Article III above, The Employer shall receive an amount equal to The Employer’s interest in the Policy, as determined under Article I.B. of this Agreement at which point this
Agreement shall terminate without further obligations on either party. 
 ARTICLE V 

AMENDMENT 
 This
Agreement may be amended at any time, and from time to time, by a written instrument signed by The Employer and The Trust. 
 ARTICLE VI 
 AGREEMENT BINDING UPON PARTIES 

This Agreement shall bind both The Employer, together with its successors and assigns, and The Trust, together with its successors
and assigns. 

 ARTICLE VII 
 INSURER NOT A PARTY TO AGREEMENT 
 The Insurance Company and any mutual fund shall
not be deemed a party to this Agreement. Payment or other performance of its contractual obligations in accordance with the Policy and the fund provisions shall fully discharge the Insurance Company and the mutual fund from any
and all liability. 
 ARTICLE VIII 
 CONFLICT BETWEEN COLLATERAL ASSIGNMENT AND AGREEMENT 
 In the event that there shall be any
conflict between this Agreement and the Collateral Assignment, the Collateral Assignment shall take precedence over this Agreement. 
 ARTICLE IX 
 GOVERNING LAW 

This Agreement set forth the entire agreement between the parties hereto, and any and all prior agreements are hereby superseded. The laws of the
State of New York shall govern this Agreement, without regard to any jurisdiction’s conflict of laws principles. 
 IN WITNESS
WHEREOF, the Parties hereto have set their hands on the day and year first hereinabove written. 
  

							
	 

	 		 	 

	  
	 		 		 	  

	 Carl A. Grimstad 2013 Insurance Trust I
 dated January 25, 2013
 J. Daniel Schmidt, trustee

(“The Trust”)
	 		 		 	Witness
				
	 iPayment, Inc.

(“The Employer”)
	 		 		 	

							
				
	By:	 	 

     
	 		 	 

		 	  
	 		 	  

	Name:	 	

	 		 	Witness
	Title:

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