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EXHIBIT 10.3
NONSTATUTORY STOCK OPTION AGREEMENT
This Non-Statutory Stock Option Agreement (this "Agreement") is made as
of the 15th day of September, 1998, by and between AIRPORT SYSTEMS
INTERNATIONAL, INC., a Kansas corporation (the "Company"), and XXXXXX X. XXXXXX,
a member of the Board of Directors (a "Director") of the Company ("Optionee").
9. BACKGROUND. In order to attract and retain qualified individuals to
serve on the Board of Directors of the Company (the "Board") and to promote the
success of the Company's business, the Company has decided to grant non-employee
directors of the Company options to purchase shares of common stock of the
Company ("Common Stock").
10. GRANT OF OPTION. The Company hereby grants to Optionee an option
(the "Option") to purchase up to an aggregate of 5,000 Shares of Common Stock of
the Company (the "Option Shares"), with the Option to be fully vested and
exercisable as to any or all of the Option Shares as of the date first set forth
above; provided, however, that the Option is subject to the terms of the Stock
Transfer Restriction Agreement for Exercise of Stock Option attached hereto as
Exhibit A ("Stock Restriction Agreement"), the provisions of which are
incorporated herein by reference and the terms of which shall control in the
event of any conflict with the terms hereof. The Option hereby granted is a
nonstatutory stock option not intended to qualify as an incentive stock option
within the meaning of Section 422A of the Code. For purposes of this Agreement,
"Share" shall mean a share of Common Stock, as adjusted in accordance with
Section 8.
11. VESTING OF SHARES. The Option is fully vested and shall be
exercisable immediately.
12. EXERCISE OF OPTION.
(a) NOTICE OF EXERCISE. An Option shall be deemed to be exercised when
Optionee or other authorized person gives to the Company written notice of such
exercise, and full payment for the Option Shares with respect to which the
Option is exercised has been received by the Company. As a condition to the
exercise of an Option, the Company will require the Optionee to execute a Stock
Restriction Agreement.
(b) ISSUANCE OF STOCK CERTIFICATE. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Option
Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Option Shares, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificates promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 8.
(c) Exercise of an Option in any manner shall result in a decrease in
the number of Option Shares that thereafter may be available for sale under the
Option, by the number of Option Shares as to which the Option is exercised.
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13. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the Option Shares
to be issued pursuant to exercise of the Option shall be three and one quarter
dollars ($3.25), which is equal to the closing price per share of the Common
Stock on the date hereof as listed on the NASDAQ National Market System, as
reported in The Wall Street Journal.
(b) FORM OF CONSIDERATION. The consideration to be paid for the Option
Shares to be issued upon exercise of the Option, including the method of
payment, may consist entirely of cash, check, other shares of Common Stock
having a fair market value on the date of surrender equal to the aggregate
exercise price of the Option Shares as to which the Option shall be exercised,
or any combination of such methods of payment, or such other consideration and
method of payment for the issuance of Option Shares to the extent permitted
under the laws of the state of Kansas.
(c) FAIR MARKET VALUE. The fair market value of any shares of Common
Stock delivered to the Company as payment of the purchase price upon exercise of
an Option shall be determined by the Board in its discretion; provided, however,
that where there is a public market for the Common Stock, the fair market value
per share of Common Stock shall be the mean of the bid and asked prices (or the
closing price per share if the Common Stock is listed on the NASDAQ National
Market System) of the Common Stock on the date of exercise, as reported in The
Wall Street Journal (or, if not so reported, as otherwise reported by the NASDAQ
System); or, if the Common Stock is listed on a stock exchange, the fair market
value per share shall be the closing price on such exchange on the date of
exercise of the Option, as reported in The Wall Street Journal.
14. TERM OF OPTION.
(a) GENERAL RULE. Except as provided in Section 6(b), Section 6(c) or
Section 6(d) hereof, the term of the Option granted pursuant to Section 2 hereof
shall be ten (10) years from the date hereof.
(b) TERMINATION OF STATUS AS A DIRECTOR. In the event of termination of
Optionee's continuous status as a Director, Optionee may, but only within ninety
(90) days after such event of termination of an Optionee's continuous status as
a Director (but in no event later than the date of expiration of the term of the
Option) exercise the Option to the extent that he was entitled to exercise it at
the date of such termination. To the extent that he was not entitled to exercise
the Option at the date of such termination, or if he does not exercise the
Option within the time specified herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding the provision of Section
6(b), in the event of termination of Optionee's continuous status as a Director
as a result of his total and permanent disability (as defined in Section
22(e)(3) of the Internal Revenue Code), he may, but only within twelve (12)
months from the date of termination (but in no event later than the date of
expiration of the term of the Option), exercise the Option to the extent he was
entitled to exercise it at the date of such termination. To the extent that he
was not entitled to exercise the
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Option at the date of termination, or if he does not exercise the Option within
the time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of Optionee:
(i) and at the time of his death he is a Director of the
Company and shall have been in continuous status as a Director since
the date of grant of the Option, the Option may be exercised, at any
time within nine (9) months following the date of death (but in no
event later than the date of expiration of the term of the Option) by
the Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance; or
(ii) which occurs within (3) months after the termination of
Optionee's continuous status as a Director, the Option may be
exercised, at any time within nine (9) months following the date of
death (but in no event later than the date of expiration of the term of
the Option) by Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance.
For purposes of this Section 6, "continuous status as a Director" means
the absence of any interruption or termination of service as a Director.
Continuous status as a Director shall not be considered interrupted in the case
of sick leave, military leave, or any other leave of absence, provided that such
leave is for a period of not more than 180 days.
15. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of Optionee, only by Optionee.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by the
Option, as well as the price per share of Common Stock covered by the Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been effected without receipt of consideration. Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option.
(b) DISSOLUTION, LIQUIDATION AND MERGER. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the
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consummation of such proposed action, unless otherwise provided by the Board.
The Board may, in the exercise of its sole discretion in such instances, declare
that any Option shall terminate as of a date fixed by the Board and give
Optionee the right to exercise his Option as to all or any part of the Common
Stock subject to the Option. The Board shall give written notice to Optionee of
the pendency of the sale of substantially all of the assets of the Company, a
merger involving the Company or the dissolution or liquidation of the Company,
not less than ten days prior to such transaction.
9. CONDITIONS UPON ISSUANCE OF OPTION SHARES.
(a) COMPLIANCE WITH APPLICABLE LAW. Option Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Option Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Common Stock may then be listed, and shall be further
subject to the reasonable approval of counsel for the Company with respect to
such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Option Shares are being
purchased only for investment and without any present intention to sell or
distribute such Option Shares if, in the reasonable opinion of counsel for the
Company, such a representation is required by any of the aforementioned relevant
provisions of law.
(c) PAYMENT OR WITHHOLDING OF TAXES. As a condition to the issuance of
Option Shares, the Optionee shall (a) remit to the Company at the time of any
exercise of the Option any taxes required to be withheld by the Company under
federal, state or local laws as a result of the exercise of the Option, and/or
(b) instruct the Company to withhold in accordance with applicable law from any
compensation payable to the Optionee the taxes required to be held by the
Company under federal, state or local laws result of the exercise of the Option.
The determination of the amount of any such withholding shall be made by the
Company in its sole discretion.
(d) STOCK RESTRICTION AGREEMENT. All Option Shares issued pursuant to
the exercise of the Option shall be subject to the terms and provisions of the
Stock Restriction Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OPTIONEE
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Name: Xxxxxx X. Xxxxxx
AIRPORT SYSTEMS INTERNATIONAL, INC.
A KANSAS CORPORATION
By:
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Xxxxx X. Xxxxx, President
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