-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Am4bWV7s3k2JCoW2Hi4Av289WmE/4WTQn8PQPQgfOkNPBkb4GNNw323HNAn0irh7 gTOTD+m6UkFTsqoM4/QMdg== 0001016843-97-000407.txt : 19970623 0001016843-97-000407.hdr.sgml : 19970623 ACCESSION NUMBER: 0001016843-97-000407 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970620 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOMEDIA TECHNOLOGIES INC CENTRAL INDEX KEY: 0001022701 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 363680347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21743 FILM NUMBER: 97627387 BUSINESS ADDRESS: STREET 1: 280 WEST SHUMAN BLVD STREET 2: STE 100 CITY: NAPERVILLE STATE: IL ZIP: 60563 BUSINESS PHONE: 6303554404 MAIL ADDRESS: STREET 1: 280 WEST SHUMAN BLVD SUITE 100 CITY: NAPERVILLE STATE: IL ZIP: 60563 FORMER COMPANY: FORMER CONFORMED NAME: DEVSYS INC DATE OF NAME CHANGE: 19960911 10KSB/A 1 U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------------- FORM 10 - KSB/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) COMMISSION FILE NUMBER 0-21743 NEOMEDIA TECHNOLOGIES, INC. ---------------------------------------------- (Name of Small Business Issuer in Its Charter) DELAWARE 36-3680347 - ------------------------------- ------------------ (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 2201 SECOND STREET, SUITE 600, FORT MYERS, FLORIDA 33901 - -------------------------------------------------- --------- (Address of Principal Executive Offices) (Zip Code) Issuer's Telephone Number (Including Area Code) 941-337-3434 Securities Registered Under Section 12(b) of the Exchange Act: NONE Securities Registered Under Section 12(g) of the Exchange Act: TITLE OF EACH CLASS COMMON STOCK, PAR VALUE $.01 REDEEMABLE COMMON STOCK PURCHASE WARRANTS Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] [ ] No Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSM [ ] Issuer's consolidated revenue for its most recent fiscal year was $17,518,000. The aggregate market value of the voting stock held by non-affiliates of the issuer based on the price at which shares of common stock closed on March 14, 1997 was $12,500,944. As of March 14, 1997, there were outstanding 5,369,768 shares of the issuer's Common Stock and 3,130,938 warrants. Item 10 of Part III of the previously filed Form 10-KSB of NeoMedia Technologies, Inc. for the fiscal year ended December 31, 1996, is hereby deleted in its entirety and, in lieu thereof, the following is hereby inserted as Item 10 of Part III of such Form 10-KSB. PART III ITEM 10. EXECUTIVE COMPENSATION The following table sets forth certain information with respect to the compensation paid to (i) NeoMedia's Chief Executive Officer and (ii) each of NeoMedia's other executive officers who received aggregate cash compensation in excess of $100,000 for services rendered to NeoMedia (collectively, "the Named Executive Officers") during the years ended December 31, 1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION (1) ----------------------- SECURITIES UNDERLYING WARRANTS/ ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OPTIONS COMPENSATION - --------------------------- ---- ------- -------- ---------- ------------ Charles W. Fritz ............... 1996 $146,666 $ 36,667 260,000(3) $5,486(4) President ................... 1995 110,000 -0- ................... 1994 145,000 230,000 Charles T. Jensen .............. 1996 95,000 50,782 90,386(5) $3,780(4) Chief Financial Officer ..... 1995(6) 10,833 -0- Robert T. Durst, Jr............. 1996 104,994 22,967 153,657(5) $4,704(4) Chief Technical Officer - ------------------------ (1) In accordance with the rules of the Securities and Exchange Commission ("Commission"), other compensation in the form of perquisites and other personal benefits has been omitted in those instances where the aggregate amount of such perquisites and other personal benefits constituted less than the lesser of $50,000 or 10% of the total of annual salary and bonuses for the Named Executive Officer for such year. (2) The 1996 bonuses were paid in February, 1997, except $30,000 of the bonus to Mr. Jensen which was paid in August, 1996. The 1994 bonus was paid in December, 1994. (3) Represents a warrant, exercisable for a period of four years commencing November 25, 1997, to purchase up to 260,000 shares of common stock at an exercise price of $8.85. (4) Includes life insurance premiums and the corresponding income tax effects of these transactions. (5) Represents options granted under NeoMedia's Stock Option Plan. (6) Amounts cover the period from date of employment by NeoMedia in November, 1995 until December 31, 1995.
2 EMPLOYMENT AGREEMENTS NeoMedia has entered into five year employment agreements ending April 30, 2001, with each of Charles W. Fritz, its President and Chief Executive Officer and Charles T. Jensen, its Chief Financial Officer, Vice President and Treasurer, and with Robert T. Durst, Jr., its Chief Technical Officer and Vice- President of Technologies and Business Development, ending March 31, 2001. The employment agreements for Messrs. Fritz, Durst and Jensen provide for an annual salary of $170,000, $140,000 and $110,000, respectively, subject to annual review by the Board of Directors which may increase but not decrease, such salary, and participation in all benefits and plans available to executive employees of NeoMedia. Each employment agreement terminates upon the employee's death or retirement, and may be terminated by NeoMedia upon the employee's total disability, as defined in the agreement, or for cause which is defined, among other things, as the willful failure to perform duties, embezzlement or conviction of a felony. In addition, Messrs. Fritz, Durst and Jensen participate in a special insurance disability plan and receive life insurance benefits not generally offered to other employees and are entitled to certain severance benefits. These severance benefits vary depending upon the reason for termination and whether there has been a change in control of NeoMedia. If termination occurs by NeoMedia (except for cause or total disability) or by the employee for good reason, as defined in the employment agreement, the agreement provides that NeoMedia will pay to the terminated employee (i) his salary through the date of termination, (ii) any deferred and unpaid amounts due under NeoMedia's Incentive Plan for Management, (iii) any accrued deferred compensation, (iv) an amount equal to two times the sum of his annual base salary plus his highest incentive compensation for the last two years, (v) unpaid incentive compensation including a pro rata amount of contingent incentive compensation for uncompleted periods, (vi) in lieu of any stock options granted whether under NeoMedia's Stock Option Plan or otherwise (which are canceled upon the following payment) a cash amount equal to the aggregate spread between the exercise prices of all options held at such time by such terminated employee and the higher of the highest bid price of the common stock during the twelve months immediately preceding the date of termination, or the highest price per share of common stock actually paid in connection with any change in control (as defined in the employment agreement) of NeoMedia provided that such payments do not violate the provisions of any option or the Stock Option Plan or other plan then in effect, (vii) an amount equal to any taxes payable on these payments, (viii) all relocation expenses if he moves his principal residence more than 50 miles within one year from the date of termination, and (ix) all legal fees and expenses incurred as a result of the termination. In addition, unless termination is for cause, NeoMedia must continue to fund through the terminated employee's normal retirement age any key man insurance that is in effect on the date of termination, or make a lump sum payment necessary to continue to pay such premiums and, for a period of two years following termination, maintain in effect for the benefit of the terminated employee all employee benefit plans, programs or arrangements in effect immediately prior to the date of termination. If the terminated employee's continued participation under such plan and programs is not allowable, NeoMedia is obligated to provide him with similar benefits. Each employment agreement provides that services may be performed for companies, other entities and individuals whether or not affiliated with NeoMedia provided that the performance of such services does not prevent the employee from attending to the affairs of NeoMedia and such companies are not in competition with NeoMedia. The employment agreements of Messrs. Fritz and Durst contain provisions prohibiting their competing with NeoMedia both during and, depending upon the reason for such termination, for one year following the termination of their employment. INCENTIVE PLAN FOR MANAGEMENT Effective as of January 1, 1996, NeoMedia adopted an Annual Incentive Plan for Management ("Incentive Plan"), which provides for annual cash bonuses to eligible employees based upon the attainment 3 of certain corporate and individual performance goals during the year. The Incentive Plan is designed to provide additional incentive to NeoMedia's management to achieve these growth and profitability goals. Participation in the Incentive Plan is limited to those employees holding positions assigned to incentive eligible salary grades and whose participation is authorized by NeoMedia's Compensation Committee which administers the Incentive Plan, including determination of employees eligible for participation or exclusion. The Board of Directors can amend, modify or terminate the Incentive Plan for the next plan year at any time prior to the commencement of such next plan year on January 1. To be eligible for consideration for inclusion in the Incentive Plan, an employee must be on NeoMedia's payroll for the last three months of the year involved. Death, total and permanent disability or retirement are exceptions to such minimum employment, and awards in such cases are granted on a pro-rata basis. In addition, where employment is terminated due to job elimination, a pro rata award may be considered. Employees who voluntarily terminate their employment, or who are terminated by NeoMedia for unacceptable performance, prior to the end of the year are not eligible to participate in the Incentive Plan. All awards are subject to any governmental regulations in effect at the time of payment. Performance goals are determined for both NeoMedia's and the employee's performance during the year, and if performance goals are attained, eligible employees are entitled to an award based upon a specified percentage of their base salary. STOCK OPTION PLAN Effective as of February 1, 1996 (and amended and restated effective July 18, 1996 and further amended through November 18, 1996), NeoMedia adopted its 1996 Stock Option Plan ("Stock Option Plan"), the purpose of which is to retain the services of selected employees and attract new employees, consultants and directors by providing them with the opportunity to acquire a proprietary interest in NeoMedia and thus share in its growth and success. The Stock Option Plan provides for the granting of non-qualified stock options and "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and provides for the issuance of a maximum of 1,500,000 shares of common stock. Incentive stock options may be granted only to employees of NeoMedia or its subsidiaries. Stock options, other than incentive stock options, may be granted to any employee, officer, director or consultant. An employee may receive more than one grant of a stock option, including simultaneous grants of different forms of stock options. Options to purchase up to 3,000 shares of common stock are granted to non-employee directors on the date that such person first becomes a member of the Board of Directors. Non-employees currently serving as directors received such options to purchase 3,000 shares as of November 25, 1996. In addition, beginning with NeoMedia's first annual stockholder's meeting options to purchase up to an additional 1,000 shares of common stock will automatically be granted to each non-employee director as of the date of each annual meeting at which such person is re-elected or continues to serve as a director. The Stock Option Plan is currently administered by the Stock Option Committee of the Board of Directors The Stock Option Committee is currently composed of A. Hayes Barclay and James J. Keil and may not include an officer or employee of NeoMedia. No member of the Committee is eligible to receive stock options under the Stock Option Plan while serving on the Committee other than the automatic grant of options to non-employee directors. Subject to the provisions of the Stock Option Plan, the Committee has exclusive authority to interpret and administer the Stock Option Plan, to select the persons to whom stock options are granted, to determine the number of shares to be covered by each stock option and whether the option granted is an incentive stock option or a non-qualified stock option, to determine whether the shares covered by the option are restricted as to transferability and to determine the terms and 4 conditions upon which each stock option may be exercisable. No stock options under the Stock Option Plan can be granted after January 31, 1999, and the maximum term of an option is ten years from the date of its grant. Upon the occurrence of certain transactions, including a sale, transfer or other disposition resulting in Charles W. Fritz, William E. Fritz and their affiliates owning less than a specified percentage of the voting stock of NeoMedia or the execution of a definitive agreement for the sale of all or substantially all of NeoMedia's assets or its consolidation or merger where NeoMedia is not the surviving entity, each then outstanding option immediately becomes exercisable. Under certain circumstances, the shares of common stock issuable upon exercise of the options may be increased or decreased. The exercise price of each option is determined by the Committee and must be either the fair market value of each share subject to the option on the date the option is granted, or at such other price as the Committee determines, but not less than 100% of the fair market value on the date of the grant. In lieu of tendering a cash payment to satisfy the option price, the optionee may, in the Committee's discretion, satisfy all or a portion of such option price by delivering shares of NeoMedia's common stock. Such shares of common stock are valued at their fair market value at the time of exercise. Options under the Stock Option Plan are non-transferable other than by will, the laws of descent or distribution or pursuant to a qualified domestic relations order. Options may be exercised only during the lifetime of the optionee and, except as may otherwise be provided, only by such individual. The Committee, in its discretion, may provide that an option is exercisable in installments and at specified times, and, at any time after the granting of an option, may accelerate the installment exercise dates. Each grant of an option is confirmed by an agreement ("Stock Option Agreement") between NeoMedia and the optionee, which provides, among other things, that shares received upon exercise of the option cannot be sold, transferred or otherwise disposed of for at least six months from the date of the Stock Option Agreement, none of the outstanding options can be exercised by the optionee thereof unless such optionee has been in the continuous employ of NeoMedia to the date of exercise, subject to termination of employment, death and disability and gives NeoMedia the right, under certain circumstances, to suspend an optionee's right to exercise an option. For options granted prior to July 18, 1996, depending upon the circumstances of an optionee's termination of employment, such optionee's stock options may be exercisable following such termination for up to three months, which is extended to twelve months from the date of death if the optionee dies during such three month period. If the termination is due to death, the option is exercisable for twelve months following the date of death. If the optionee's employment with NeoMedia is terminated without the consent of NeoMedia (other than due to the optionee's death) or for cause, as determined by the Committee, then such optionee's right to exercise the then-outstanding stock options terminates immediately. Options granted subsequent to July 18, 1996, terminate on the earlier of an optionee's termination of employment for any reason or the expiration of the term of the option, although the Committee, in its sole discretion, may allow the option to be exercised for any period following such termination but no longer than the expiration of the term. If at any time after termination an optionee engages in "detrimental activity", as defined in the Stock Option Plan, the Committee, in its discretion, may cause the optionee's right to exercise the option to be forfeited. Options then exercisable held by a non-employee director when such person ceases being a director must be exercised within twelve months following the date such person is no longer serving as a director, unless such termination of service as a director is due to such person's death, permanent disability or retirement pursuant to a Company policy, in which case, such options are exercisable during their remaining terms. The employment agreements of Messrs. Fritz, Durst and Jensen each provide that upon termination of employment by NeoMedia, other than for cause, death or retirement, or by the employee for "Good Reason" as defined in the employment 5 agreement, any time following this offering, any options granted to the terminated employee are canceled and, in lieu thereof, such terminated employee is to receive a cash amount equal to the aggregate spread between the exercise prices of all options held at such time by such terminated employee and the higher of the highest bid price of the common stock during the twelve months immediately preceding the date of termination, or the highest price per share of common stock actually paid in connection with any change in control of NeoMedia (as defined), provided that such payments do not violate the provisions of any option or the Stock Option Plan or other plan then in effect. As of March 14, 1997, options to purchase an aggregate of 760,804 shares of common stock, at an exercise price of $.84, were granted and are outstanding under NeoMedia's Stock Option Plan, including options to Charles T. Jensen, its Chief Financial Officer, and to Robert T. Durst, Jr., its Vice-President of Technologies and Business Development, to purchase 90,386 and 153,657 shares of common stock, respectively. In addition, options to purchase an aggregate of 216,907 shares of common stock in a range of $5.50 to $6.19 per share have also been granted to employees, directors and consultants and are outstanding. Effective February 1, 1996 (and amended and restated effective July 18, 1996), DTM adopted a 1996 stock option plan providing for the issuance of a maximum of 400,000 shares of DTM common stock and identical in all other material respects to NeoMedia's Stock Option Plan. As a result of the Migration Merger, the DTM stock option plan is no longer in effect, no further options under the DTM stock option plan will be issued and holders of options to purchase shares of DTM common stock will, in lieu thereof, receive shares of NeoMedia's Common stock upon exercise of their options. As of the March 14, 1997, options to purchase 326,296 and 4,520 shares of common stock under the DTM stock option plan, at an exercise price of $.84 and $5.90 per share, respectively, have been granted and are outstanding. Following the Migration Merger, the aggregate number of shares of common stock issuable under NeoMedia's Stock Option Plan was not increased by the number of shares of stock issuable under the DTM stock option plan but remains at a maximum of 1,500,000 shares, including options granted under the DTM stock option plan. As of March 14, 1997, of the 1,500,000 options issuable under NeoMedia's Stock Option Plan, there are currently options granted to purchase an aggregate of 1,308,527 shares of common stock (including 330,816 options granted under the DTM stock option plan), and 183,021 options reserved for future issuance under the Stock Option Plan, and NeoMedia is obligated to grant 8,000 options in March 1997, as a result of the hiring of new employees. In consideration of loans made by him to it, NeoMedia has also granted to Charles W. Fritz a warrant to purchase up to 260,000 shares of common stock at an exercise price of $8.85. This warrant is exercisable for four years commencing November 25, 1997, and contains anti-dilution provisions. NeoMedia has agreed with Joseph Charles that except with respect to options granted as of November 25, 1996 and the grant of options under the Stock Option Plan, it will not issue any options until after November 25, 1997. In addition, grantees of options to purchase common stock who are eligible to resell the common stock issuable upon exercising the option under Rule 701 of the Securities Act have agreed (i) not to sell such common stock until after November 25, 1997 and (ii) following such period, to sell in accordance with the volume limitations of Rule 144(e)(1) of the Securities Act which limits the number of shares that may be sold by such person during any three month period to no more than the greater of (a) one percent of NeoMedia's then outstanding shares of common stock or (b) the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of notice of sale with the Commission, 6 or if no notice is required to be filed, the date of receipt by a broker to sell or the date of execution of the sale. The following presents certain information on stock options and warrants for the Named Executive Officers for the year ended December 31, 1996:
OPTION/WARRANT GRANTS IN 1996 NUMBER OF % OF TOTAL SECURITIES OPTIONS / UNDERLYING WARRANTS OPTIONS / GRANTED TO WARRANTS EMPLOYEES EXERCISE EXPIRATION NAME GRANTED IN 1996 PRICE DATE - ---- ----------- ----------- --------- ---------- Charles W. Fritz...................... 260,000 100.0% $8.85 11/25/01 Charles T. Jensen.................... 90,386 6.4% $ .84 02/01/06 Robert T. Durst, Jr.................. 153,657 10.8% $ .84 04/01/06
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES The following table sets forth options exercised by NeoMedia's Named Executive Officers during fiscal 1996, and the number and value of all unexercised options at fiscal year end. The value of "in-the-money" options refers to options having an exercise price which is less than the market price of NeoMedia's stock on December 31, 1996.
NUMBER OF VALUE OF UNEXERCISED UNEXERCISED IN- SECURITIES THE-MONEY UNDERLYING OPTIONS AT OPTIONS AT DECEMBER 31, DECEMBER 31, 1996 (BASED ON 1996 $4.785 PER SHARE) SHARES ACQUIRED VALUE # EXERCISABLE/ # EXERCISABLE/ NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE - ---- --------------- -------- -------------- ----------------- Charles W. Fritz -- -- 0/260,000 $0/$0 Charles T. Jensen -- -- 0/90,386 $0/$432,497 Robert T. Durst, Jr. -- -- 0/153,657 $0/$735,249
For the year ended December 31, 1996, there have not been any long term incentive plan awards made to a Named Executive Officer. 401(K) PLAN NeoMedia maintains a 401(k) Profit Sharing Plan and Trust (the "401(k) Plan"). All employees of NeoMedia who are 21 years of age and who have completed three months of service are eligible to 7 participate in the 401(k) Plan. The 401(k) Plan provides that each participant may make elective contributions of up to 20% of such participant's pre-tax salary (up to a statutorily prescribed annual limit, which is $9,500 for 1996) to the 401(k) Plan, although the percentage elected by certain highly compensated participants may be required to be lower. All amounts contributed to the 401(k) Plan by employee participants and earnings on these contributions are fully vested at all times. The 401(k) Plan also provides for matching and discretionary contributions by NeoMedia. To date, NeoMedia has not made any such contributions. 8 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Fort Myers, State of Florida, on the 20th day of June, 1997. NEOMEDIA TECHNOLOGIES, INC. Registrant By: /s/ CHARLES W. FRITZ --------------------------- Charles W. Fritz, President, Chief Executive Officer and Chairman of the Board In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on June 20, 1997. SIGNATURES TITLE /s/ CHARLES W. FRITZ President, Chief Executive Officer, ------------------------ Chairman of the Board and Director Charles W. Fritz /s/ WILLIAM E. FRITZ Secretary and Director ------------------------ William E. Fritz /s/ CHARLES T. JENSEN Chief Financial Officer, ------------------------ Treasurer and Director Charles T. Jensen /s/ ROBERT T. DURST, JR. Director ------------------------ Robert T. Durst, Jr. /s/ A. HAYES BARCLAY Director ------------------------ A. Hayes Barclay /s/ JAMES J. KEIL Director ------------------------ James J. Keil /s/ PAUL REECE Director ------------------------- Paul Reece 9 -----END PRIVACY-ENHANCED MESSAGE-----