NeoMedia Technologies, Inc (NEOM)

[jonesieatl]

I for one can't figure it out.

Transaction Code: J

J Other acquisition or disposition (see above description of transaction).

Date Exercisable , Expiration Date , and price of derivative security all: N/A

Not Available?

Not Applicable?

Number of Derivative Securities owned after transaction: -0-

I recall Chip having two ways to get 20,000,000 options:

(i) Initial Option Grant. The Executive shall be granted on the Effective Date, an option to purchase 20,000,000 shares of the Company’s Common Stock (the “Initial Option”). The shares covered by the Initial Option, if immediately exercisable, would constitute one and one-tenth percent (1.1%) of the outstanding Common Stock of the Company on a fully diluted basis as of the date of grant. Except as otherwise provided herein, subject to the Executive’s remaining continuously employed by the Company as of each such date, the Initial Option shall vest and become exercisable with respect to twenty-five percent (25%) of the shares subject to the Initial Option the Initial Option’s date of grant, and shall become vested in equal monthly installments thereafter, such that the Initial Option is vested and exercisable with respect to one hundred percent (100%) of the shares subject to the Initial Option on the fourth year anniversary of the Initial Option’s date of grant.

and

(ii) Performance Option Grant. If, at the end of the Company’s 2007-2010 fiscal years, the Company has attained its agreed upon operating plan with respect to revenues and with respect to operating profit, the Executive shall be granted an option to purchase 5,000,000 shares per year (subject to appropriate capitalization adjustments) of the Company’s Common Stock (the “Performance Option”). The shares covered by the Performance Option, if immediately exercisable, would constitute one and one-tenth percent (1.1%) of the outstanding Common Stock of the Company on a fully diluted basis as of the date of grant. The Performance Option shall be granted within two (2) weeks of the Company’s filing of its Annual Report on Form 10-K for the applicable fiscal year, which shall include the Company’s annual audited financial statements for such fiscal year. For performance greater than or equal to 80% of the agreed upon performance objectives, options shall be granted on a pro rata basis (i.e. 40% of options for 80% of performance goals). The Performance Option shall be vested and exercisable as of its date of grant. For the portion of the Performance Option that relates to the Company’s fiscal 2007 year, the Executive will be granted 5,000,000 options, of which one half (½) shall be based upon the agreed upon operating plan with respect to revenue and operating profit, and one half (½) shall be guaranteed if the Executive shall be employed by the Company as of December 31, 2007.


Both of those would have taken 4 years before either of them could have generated options to buy 20,000,000 shares , so the two together would still have taken two years.

Was there another way for Chip to have some control over 20,000,000 shares , to either convert , or let expire , or anything else?

Just curious.

jonesie