STOCK OPTION AGREEMENT
AGREEMENT made as of this 17th day of September 1998
between MILTOPE GROUP INC., a Delaware corporation (the
"Company"), and WILLIAM L. DICKINSON residing at 2350 Woodley
Road, Montgomery, Alabama 36111 (the "Director").
WHEREAS, the Company desires, in connection with the
service of the Director on the Board of Directors of the Company,
to provide the Director with an opportunity to acquire Common
Stock, par value $.01 per share (the "Common Stock"), of the
Company on favorable terms;
NOW, THEREFORE, in consideration of the premises, the
mutual covenants herein set forth and other good and valuable
consideration, the Company and the Director hereby agree as
follows:
1. Confirmation of Grant of Option. Pursuant to a
determination by the Board of Directors of the Company made as of
September 17, 1998 (the "Date of Grant"), the Company hereby
confirms that the Director has been granted effective September
17, 1998 as a matter of separate inducement and agreement, and in
addition to and not in lieu of salary or other compensation for
services to be rendered by the Director, the right to purchase
(the "Option") 11,764 shares of Common Stock, $.01 par value, of
the Company (the "Shares"), subject to adjustment as provided in
Section 7 hereof.
2. Purchase Price. The purchase price per share of
the Shares will be $1.275 per share, subject to adjustment as
provided in Section 7 hereof.
3. Exercise of Option. The Option may be exercised
at any time during its term pursuant to the provisions of
Sections 9 and 14 hereof. Except as provided in Section 6
hereof, the Option can only be exercised while the Director is a
member of the Board of Directors of the Company or within one (1)
year after the termination of the Director's services as a
director of the Company.
4. Term of Option. The term of the Option shall be a
period of ten (10) years from the Date of Grant, subject to
earlier termination or cancellation as provided in this
Agreement. The Option may not be exercised after the expiration
of its term.
The holder of the option will not have any rights to
dividends or any other rights of a stockholder with respect to
any share subject to the Option until it has been issued to him
(as evidenced by the appropriate entry on the books of a duly
authorized transfer agent of the Company). The date of issuance
shall not be earlier than the Closing Date, as defined in Section
9 hereof.
5. Non-transferability of option. The Option is not
transferable otherwise than by will or by the laws of descent and
distribution and the Option may be exercised during the lifetime
of the Director only by him. More particularly, but without
limiting the generality of the foregoing, the Option may not be
assigned, transferred or otherwise disposed of, or pledged or
hypothecated in any way (voluntarily or involuntarily), and is
not subject to execution, attachment or other process. Any
assignment, transfer, pledge, hypothecation or other disposition
of the Option attempted contrary to the provisions of this
Agreement, or any levy of execution, attachment or other process
attempted upon the Option, will be null and void and without
effect. Any attempt to make any such assignment, transfer,
pledge, hypothecation or other disposition of the Option or any
attempt to make any such levy of execution, attachment or other
process will cause the Option to terminate immediately upon the
happening of any such event if the Board of Directors of the
Company, at any time, should, in its sole discretion, so elect,
by written notice to the Director or to the person then entitled
to exercise the Option; provided, however, that any such
termination of the Option under the foregoing provisions of this
Section 5 will not prejudice any rights or remedies which the
Company or any subsidiary thereof may have under this Agreement
or otherwise.
6. Exercise Upon Death. If the Director dies while
still a member of the Board of Directors of the Company or within
one (1) year after the Director's service as a director of the
Company has terminated, the Option may be exercised to the extent
the Director would have been entitled under Section 3 hereof to
exercise the Option on the day next preceding the date of his
death, by the estate of the deceased Director, or by any person
who acquired the right to exercise the Option by bequest or
inheritance or by reason of the death of the Director, at any
time within six (6) months after his death, at the end of which
period the Option shall terminate. Such period shall in no event
extend the date of exercise of the Option beyond the term thereof
as provided in Section 4.
7. Adjustments. In the event of a stock dividend,
stock split, share combination, exchange of shares,
recapitalization, merger, consolidation, acquisition or
disposition of property or shares, reorganization, liquidation or
other similar changes or transactions of or by the Company, the
Board of Directors of the Company will make (or will undertake to
have the Board of Directors of any corporation which merges with,
or acquires the stock or assets of, the Company make) an
adjustment of the number or class of shares then covered by the
Option, or of the purchase price per share of the Shares, or
both, as it in its sole discretion deems appropriate to give
proper effect to the event.
8. Registration. The Company may register or qualify
the Shares for sale pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), at any time prior to or after the
exercise in whole or in part of the Option.
9. Method of Exercise of Option. The Option is
exercisable by notice and payment to the Company in accordance
with the procedure prescribed herein. Each such notice will:
(a) State the election to exercise the Option and
the number of shares in respect of which it is being exercised;
(b) Contain a representation and agreement as to
investment intent, if required by counsel to the Company with
respect to such Shares, in form satisfactory to counsel for the
Company; and
(c) Be signed by the person entitled to exercise
the Option and, if the Option is being exercised by any person
other than the Director, be accompanied by proof, satisfactory to
counsel for the Company, of the right of that person to exercise
the Option.
Upon receipt of such notice, the Company will specify,
by written notice to the person exercising the Option, a date and
time (the "Closing Date") and place for payment of the full
purchase price of such Shares. The Closing Date will be not more
than fifteen days from the date the notice of exercise is
received by the Company unless another date is agreed upon by the
Company and the person exercising the Option or is required upon
advice of counsel for the Company in order to meet the
requirements of Section 10 hereof.
Payment of the purchase price will be made at the place
specified by the Company on or before the Closing Date by
delivering to the Company a certified or bank cashier's check
payable to the order of the Company. The Option will be deemed
to have been exercised with respect to any particular shares of
Common Stock if, and only if, the preceding provisions of this
Section 9 and the provisions of Section 10 hereof shall have been
complied with, in which event the Option will be deemed to have
been exercised on the Closing Date. Anything in this Agreement
to the contrary notwithstanding, any notice of exercise given
pursuant to the provisions of this Section 9 will be void and of
no effect if all the preceding provisions of this Section 9 and
the provisions of Section 10 have not been complied with. The
certificate(s) for shares of Common Stock as to which the Option
shall be exercised will be registered in the name of the person
exercising the Option (or, if the Option is exercised by the
Director and if the Director so requests in the notice exercising
the Option, will be registered in the name of the Director and
another person jointly, with right of survivorship) and will be
delivered on the Closing Date to the person exercising the Option
at the place specified for the closing, but only upon compliance
with all of the provisions of this Agreement. If the Director
fails to accept delivery of and pay for all or any part of the
number of shares specified in the notice upon tender or delivery
thereof on the Closing Date, his right to exercise the Option
with respect to those undelivered shares may be terminated in the
sole discretion of the Board of Directors of the Company. The
Option may be exercised only with respect to full shares.
10. Approval of Counsel. The exercise of the Option
and the issuance and delivery of shares of Common Stock pursuant
thereto is subject to approval by the Company's counsel of all
legal matters in connection therewith, including compliance with
the requirements of the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed.
11. Resale of Common Stock. Before any sale or
transfer of the Common Stock purchased upon exercise of the
Option, the Director will deliver to the Company an opinion of
counsel satisfactory to counsel for the Company to the effect
that either (i) the Common Stock to be sold or transferred has
been registered under the Securities Act and that there is in
effect a current prospectus meeting the requirements of
Subsection 10(a) of the Securities Act which is being or will be
delivered to the purchaser or transferee at or prior to the time
of delivery of the certificates evidencing the Common Stock to be
sold or transferred, or (ii) such Common Stock may then be sold
without violating Section 5 of the Securities Act.
The Common Stock issued upon exercise of the Option
shall bear the following legend if required by counsel for the
Company:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS THEY HAVE FIRST BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH
REGISTRATION IS NOT REQUIRED.
12. Reservation of Shares. The Company shall at all
times during the term of the Option reserve and keep available a
number of shares of the class of stock then subject to the Option
sufficient to satisfy the requirements of this Agreement.
13. Limitation of Action. The Director and the
Company each acknowledges that every right of action accruing to
him or it, as the case may be, and arising out of or in
connection with this Agreement against the Company or a
subsidiary thereof, on the one hand, or against the Director, on
the other hand, will, irrespective of the place where an action
may be brought, cease and be barred by the expiration of three
years from the date of the act or omission in respect of which
such right of action arises.
14. Notices. Each notice relating to this Agreement
shall be in writing and delivered in person or by certified mail
to the proper address. All notices to the Company will be
addressed to it at 500 Richardson Road, Hope Hull, Alabama 36043.
All notices to the Director or other person then entitled to
exercise the Option will be addressed to the Director or other
person at the Director's address above specified. Anyone to whom
a notice may be given under this Agreement may designate a new
address by notice to that effect.
15. Benefits of Agreement. This Agreement will inure
to the benefit of and be binding upon each successor and assign
of the Company. All obligations imposed upon the Director and
all rights granted to the Company under this Agreement will be
binding upon the Director's heirs, legal representatives and
successors.
16. Severability. In the event that any provision of
this Agreement shall be deemed to be illegal or unenforceable,
that illegality or unenforceability will not affect the validity
and enforceability of the remaining legal and enforceable
provisions hereof, which shall be construed as if the illegal or
unenforceable provision had not been inserted.
17. Governing Law. This Agreement will be construed
and governed in accordance with the laws of the State of Alabama.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed in its name by its President and its
corporate seal to be hereunto affixed and attested by its
Secretary and the Director has hereunto set his hand all as of
the day, month and year first above written.
ATTEST:
MILTOPE GROUP INC.
/s/ Edward F. Crowell By:/s/ James E. Matthews
- ------------------------------- -----------------------------
Edward F. Crowell, Secretary James E. Matthews,
President and Chief
Executive Officer
/s/ William L. Dickinson
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William L. Dickinson