EXHIBIT 10.3
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (this "Agreement") is entered into
between National Air Corporation, a Nevada corporation (the "Company"), and
Xxxxxxxxx Xxxxxxxxx (the "Optionee") this 23/rd/ day of July, 1999. This
Agreement is in consideration of the Optionee's employment with the Company. In
consideration of the mutual promises and covenants made herein, the parties
hereby agree as follows:
1. GRANT OF OPTION. The Company grants to the Optionee an option (this
"Option") to purchase from the Company all or any part of a total of 20,000
shares (collectively, the "Option Shares) of the common stock, par value $0.001
per share, of the Company (the "Common Stock"), at a price of $.01 per share.
The Option is granted as of the date hereof.
2. CHARACTER OF OPTION. This Option is not an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
3. TERM. This Option will expire at the close of business, on July 19,
2004, (the "Option Termination Date").
4. CONDITIONS PRECEDENT. The Company will not issue or deliver any
certificate for Option Shares pursuant to the exercise of this Option prior to
fulfillment of all of the following conditions:
(a) The admission of the Option Shares to listing on all stock exchanges on
which the Common Stock is then listed, unless the Company determines in its sole
discretion that such listing is neither necessary nor advisable;
(b) The completion of any registration or other qualification of the sale
of the Option Shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body that the Company in its sole discretion deems necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any federal or
state governmental agency that the Company in its sole discretion determines to
be necessary or advisable.
5. VESTING. Subject to the provisions of this Agreement, the Option will
vest in its entirety upon execution of this Agreement (all of such fully vested
Option Shares being hereinafter referred to collectively as the "Vested
Shares"). The Optionee shall have the right to exercise this
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Option with respect to all Vested Shares at any time and from time to time until
the Option Termination Date, provided that this Option may not be exercised with
respect to any fractional shares.
6. PROCEDURE FOR EXERCISE. Exercise of this Option or a portion hereof
shall be effected by the Optionee's giving of written notice to the Company at
the offices of the Company located at 000 X. Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, and paying the purchase price prescribed in Section I above for the
Option Shares to be acquired pursuant to the exercise.
7. PAYMENT OF PURCHASE PRICE. The purchase price for any Option Shares
purchased will be paid at the time of exercise of this Option either (i) in
cash, (ii) by certified or cashier's check, or (iii) in any other form of valid
consideration, as permitted by the Company in its sole discretion at the time of
exercise.
8. ACCELERATION IN CERTAIN EVENTS. Notwithstanding any provision of this
Option Agreement to the contrary, the following provisions will apply:
(a) Mergers and Reorganizations. If the Company or its shareholders enter
into an agreement to dispose of all or substantially all of the assets of the
Company by means of a sale, merger or other reorganization, liquidation or
otherwise in a transaction in which the Company is not the surviving
corporation, this Option will become immediately exercisable with respect to the
full number of shares subject to this Option during the period commencing as of
the date of the agreement to dispose of all or substantially all of the assets
of the Company and ending when the disposition of assets contemplated by that
agreement is consummated; provided, however, that no Option will be immediately
exercisable under this Section on account of any agreement of merger or other
reorganization when the shareholders of the Company immediately before the
consummation of the transaction will own at least fifty percent of the total
combined voting power of all classes of stock entitled to vote of the surviving
entity immediately after the consummation of the transaction. This Option will
not become immediately exercisable if the transaction contemplated in the
agreement is a merger or reorganization in which the Company will survive.
(b) Change in Control. In the event of a change in control of the Company,
this Option will become immediately exercisable. The term "change in control"
for purposes of this Section refers to the acquisition after the effective date
of this Option Agreement of the beneficial ownership of 50% or more of the
outstanding voting securities of the Company by any person or by persons acting
as a group within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (other than an acquisition by (i) a
person or group meeting the requirements of clauses (i) and (ii) of Rule 13d-
1(b)(1) promulgated under the Exchange Act, or (ii) any employee pension benefit
plan (within the meaning of Section 3(2) of ERISA) of the Company or of its
Subsidiaries (as outlined in Section 424(f) of the Code), including a trust
established pursuant to such plan); provided, however, that no change in control
will be deemed to have occurred
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(i) if prior to the acquisition of, or offer to acquire, 50% or more of the
voting securities of the Company, the full Board of Directors of the Company has
adopted by not less than two-thirds vote a resolution specifically approving
such acquisition or offer or (ii) from (A) a transfer of the Company's voting
securities by any person who beneficially owns more than 50% of the Company's
outstanding voting securities on the effective date of this Option (an "Existing
Holder") to (i) a member of the Existing Holder's immediate family (within the
meaning of Rule 16a-1(e) of the Exchange Act) either during the Existing
Holder's lifetime or by will or the laws of descent and distribution; (ii) any
trust as to which an Existing Holder or a member (or members) of an Existing
Holder's immediate family (within the meaning of Rule 16a-l(e) of the Exchange
Act) is the beneficiary; (iii) any trust as to which an Existing Holder is the
settlor with sole power to revoke; (iv) any entity over which an Existing Holder
has the power, directly or indirectly, to direct or cause the direction of the
management and policies of the entity, whether through the ownership of voting
securities, by contract or otherwise; or (v) any charitable trust. foundation or
corporation under Section 501(c)(3) of the Code that is funded by an Existing
Holder, or any corporation or other entity all the voting securities of which
are owned by such a charitable trust, foundation or corporation; or (B) the
acquisition of voting securities of the Corporation by either (i) an Existing
Holder or (ii) a person, trust or other entity described in the foregoing
clauses (A)(i)-(v) of this clause (ii). The term "person" for purposes of this
Section refers to an individual or a corporation. partnership. trust,
association joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
9. TAX WITHHOLDING.
(a) Condition Precedent. The issuances of Option Shares pursuant to the
exercise of this Option are subject to the condition that if at any time the
Company determines, in its discretion, that the satisfaction of withholding tax
or other withholding liabilities under any federal, state or local law is
necessary or desirable as a condition of, or in connection with such issuances,
then the issuances will not be effective unless the withholding has been
effected or obtained in a manner acceptable to the Company.
(b) Manner of satisfying Withholding Obligation. When the Optionee is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with the purchase of Option Shares upon
exercise of this Option, such payment may be made (i) in cash, (ii) by check, or
(iii) in any other form of valid consideration, as permitted by the Company in
its discretion.
10. TRANSFERABILITY. This Option shall not be transferable other than
pursuant to a qualified domestic relations order, by will or by the laws of
descent and distribution.
11. ADJUSTMENT. If the outstanding Common Stock is increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
through merger, consolidation,
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combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment will be made in the number or kind of
shares purchasable under any unexercised portion of this Option. Any such
adjustment will be made without change in the aggregate purchase price
applicable to the unexercised portion of this Option, but with a corresponding
adjustment in the purchase price for each Option Share purchasable under this
Option. The foregoing adjustments and the manner of application of the foregoing
provisions will be determined solely by the Company, and any such adjustment may
provide for the elimination of fractional share interests.
12. AMENDMENT. This Agreement may be amended by an instrument in writing
signed by both the Company and the Optionee.
13. COMPLIANCE WITH SECURITIES LAWS. Option Shares will not be issued
unless the issuance and delivery of the Option Shares (and the exercise of this
Option, if applicable) compiles with all relevant provisions of federal and
state law, including, without limitation, the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder and the requirements
of any stock exchange upon which the Option Shares may then be listed, and will
be further subject to the approval of counsel for the Company with respect to
such compliance. The Optionee agrees to furnish evidence satisfactory to the
Company, including, without limitation, a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition or otherwise, and a representation that the Option Shares are
being acquired only for investment and without any present intention to sell or
distribute the Option Shares in violation of any federal or state law, rule or
regulation. Further, the Optionee consents to the imposition of a legend on the
certificate representing the Option Shares issued pursuant to the exercise of
this option restricting their transferability as required by law or by this
Section.
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14. MISCELLANEOUS. This Agreement will be construed and enforced in
accordance with the laws of the State of Texas, excluding any principle or
provision thereof that would require application of the laws of any other
jurisdiction, and will he binding upon and inure to the benefit of any successor
or assign of the Company and any executor, administrator, trustee, guarantor or
other legal representative of the Optionee.
THE COMPANY:
NATIONAL AIR CORPORATION
By: /s/Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, President
THE OPTIONEE:
/s/ Xxxxxxxxx Xxxxxxxxx
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Xxxxxxxxx Xxxxxxxxx
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