10
OPTION NO. 95-ISO-
MILTOPE GROUP INC.
1995 Stock Option and Performance Award Plan
INCENTIVE STOCK OPTION
Granted To
JAMES MATTHEWS
Optionee
20,000 $3.188
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Number of Shares Price per Share (Fair Market
Value on Date of Grant)
DATE GRANTED: February 4, 1998 EXPIRATION DATE: February 3, 2008
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INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of this 4th day of February, 1998 between
MILTOPE GROUP INC., a Delaware corporation (hereinafter referred
to as the "Company"), and JAMES MATTHEWS, residing at 1568
Meriwether Circle, Montgomery, Alabama 36117
(hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires, in connection with the
employment of the Employee and in accordance with its 1995 Stock
Option and Performance Award Plan (the "Plan"), to provide the
Employee with an opportunity to acquire Common Stock, $.01 par
value (hereinafter referred to as "Common Stock"), of the Company
on favorable terms and thereby increase his proprietary interest
in the continued progress and success of the business of the
Company;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein set forth and other good and valuable
consideration, the Company and the Employee hereby agree as
follows:
1. Confirmation of Grant of Option. Pursuant to a
determination by the Stock Option Committee of the Board of
Directors of the Company authorized to administer the Plan, made
on February 4, 1998 (the "Date of Grant") the Company, subject to
the terms of the Plan and this Agreement, hereby confirms that
the Employee has been granted as a matter of separate inducement
and agreement, and in addition to and not in lieu of salary or
other compensation for services, the right to purchase
(hereinafter referred to as the "Option") an aggregate of 20,000
shares of Common Stock, subject to adjustment as provided in
Section 9 hereof (such shares, as adjusted, shall hereinafter be
referred to as the "Shares"). The Option is intended to qualify
as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Purchase Price. The purchase price of shares of Common
Stock covered by the Option will be $3.188 per share, being not
less than 100% of the Fair Market Value of a share of Common
Stock on the Date of Grant, subject to adjustment as provided in
Section 9 hereof.
3. Exercise of Option. The Option shall be exercisable on the
terms and conditions hereinafter set forth:
(a)
The Option shall become exercisable cumulatively as to
the following amounts of the number of the number of
Shares originally subject thereto (after giving effect
to any adjustment pursuant to Section 9 hereon), on the
dates indicated:
(i) as to 5,000 Shares on or after February 4,
1999;
(ii) as to 5,000 Shares on or after February 4,
2000;
(iii) as to 5,000 Shares on or after February
4, 2001; and
(iv) as to 5,000 Shares on or after February 4,
2002
(b) The Option may be exercised pursuant to the provisions of
this Section 3, by notice and payment to the Company as provided
in Sections 11 and 16 hereof.
4. Term of Option. The term of the Option shall be a period of
ten (10) years from the Date of Grand, subject to earlier
termination or cancellation as provided in this Agreement. This
Option, to the extent unexercised, shall expire at the end of the
term set forth in the immediately preceding sentence. The holder
of the Option shall not have any rights to dividends or any other
rights of a stockholder with respect to any shares of Common
Stock subject to the Option until such shares shall have been
issued to him (as evidenced by the appropriate entry on the books
of a duly authorized transfer agent of the Company) provided that
the date of issuance shall not be earlier than the Closing Date
(hereinafter defined with respect to such shares pursuant to
Section 11 hereof) upon purchase of such shares upon exercise of
the Option.
5. Non-transferability of Option. The Option shall not be
transferable otherwise than by will or by the laws of descent and
distribution or pursuant to a domestic relations order, and the
Option may be exercised during the lifetime of the Employee only
by him. More particularly, but without limiting the generality
of the foregoing, the Option may not be assigned, transferred
(except as provided in the next preceding sentence) or otherwise
disposed of, or pledged or hypothecated in any way, and shall not
be 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; 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 Parent or Subsidiary may have under this Agreement
or otherwise.
6. Exercise Upon Cessation of Employment. (a) If the Employee
at any time ceases to be an employee of the Company and of any
Parent or Subsidiary by reason of his discharge for Good Cause
the Option shall forthwith terminate and the Employee shall
forfeit all rights hereunder. If, however, the Employee for any
other reason (other than disability or death) ceases to be such
an employee, the Option may, subject to the provisions of
Sections 5 and 8 hereof, be exercised by the Employee to the same
extent the Employee would have been entitled under Section 3
hereof to exercise the Option on the day next preceding the date
of such cessation of employment, at any time within three (3)
months after such cessation of employment, at the end of which
period the Option to the extent not then exercised, shall
terminate and the Employee shall forfeit all rights hereunder,
even if the Employee subsequently returns to the employ of the
Company or any Parent or Subsidiary. In no event, however, may
the Option be exercised after the expiration of the term provided
in Section 4 hereof.
(b) The Option shall not be affected by any change of duties or
position of the Employee so long as he continues to be an
employee of the Company or any subsidiary thereof. If the
Employee is granted a temporary leave of absence, such leave of
absence shall be deemed a continuation of his employment by the
Company or any subsidiary thereof for the purpose of this
Agreement, but only if and so long as the employing corporation
consents thereto.
7. Exercise Upon Death or Disability. (a) If the Employee
dies while he is employed by the Company or by any Parent or
Subsidiary (or within three (3) months after his termination of
employment other than for Good Cause), and on or after the first
date upon which he would have been entitled to exercise the
Option under the provisions of Section 3 hereof, the Option may,
subject to the provisions of Sections 5 and 8 hereof, be
exercised with respect to the shares of Common Stock as to which
the deceased Employee had not exercised the Option at the time of
his death (and only to the extent the Option was exercisable at
the date of his death), by the estate of the Employee (or by the
person or persons who acquire the right to exercise the Option by
written designation of the Employee) at any time within the
period ending one (1) year after the death of the Employee, at
the end of which period the Option, to the extent not them
exercised, shall terminate and the estate or other beneficiaries
shall forfeit all rights hereunder. In no event, however, may
the Option be exercised after the expiration of the term provided
in Section 4 hereof.
(b) In the event that the employment of the Employee by the
Company and any Parent or Subsidiary is terminated by reason of
the Disability of the Employee on or after the first date upon
which he would have been entitled to exercise the Option under
the provisions of Section 3 hereof, the Option may, subject to
the provisions of Sections 5 and 8 hereof, be exercised with
respect to the shares of Common Stock as to which he had not
exercised the Option at the time of his Disability (and only to
the extent the Option was exercisable at the date of such
termination of employment) by the Employee at any time within the
period ending one (1) year after the date of such termination of
employment, at the end of which period the Option, to the extend
not then exercised, shall terminate and the Employee shall
forfeit all rights hereunder even if the Employee subsequently
returns to the employ of the Company or any Parent or Subsidiary.
In no event, however, may the Option be exercised after the
expiration of the term provided in Section 4 hereof.
8. Limitation of Exercisabililty. To the extent the aggregate
of the (a) Fair Market Value of Common Stock (determined as of
the date of this Agreement) subject to purchase under this Option
and (b) the fair market values (determined as of the appropriate
date(s) of grant) of all other shares of stock subject to
incentive stock options granted to the Employee by the Company or
any Parent or Subsidiary, which are exercisable for the first
time by any individual during any calendar year, exceed(s) one
hundred thousand dollars ($100,000), such excess shares of stock
shall not be deemed to be purchased pursuant to incentive stock
options. The terms of the immediately preceding sentence shall
be applied by taking options into account in the order in which
they are granted.
9. Adjustments. In the event there is any change in the Common
Stock of the Company by reason of any reorganization,
recapitalization, stock split, stock dividend or otherwise, there
shall be substituted for or added to each share of Common Stock
theretofore appropriated or thereafter subject, or which may
become subject, to this Option the number and kind of shares of
stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share
shall be exchanged, or to which each such share be entitled, as
the case may be, and the per share price thereof also shall be
appropriately adjusted; provided, however, that no such
adjustment shall be made so as to deem such modification,
extension or renewal of the Option as the issuance of a new
option under Section 424(h) of the Code, or so as to prevent the
Company or any other corporation or subsidiary thereof, if the
Employee shall become employed by such corporation by reason of
the transaction in respect of which such adjustment is made, from
being a corporation issuing or assuming the Option in a
transaction to which Section 424(a) of the Code applies.
10. Registration. The shares of Common Stock subject hereto and
issuable upon the exercise hereof may not be registered under the
Securities Act of 1933, as amended, and, if required upon the
request of counsel to the Company, the Employee will give a
representation as to his investment intent with respect to such
shares prior to their issuance as set forth in Section 11 hereof.
The Company may register or qualify the shares covered by
the Option for sale pursuant to the Securities Act of 1933,
as amended, at any time prior to or after the exercise in
whole or in part of the Option.
11. Method of Exercise of Option. (a) Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by
notice (in the manner set forth in Exhibit A hereto) and payment
to the Company in accordance with the procedure prescribed
herein. Each such notice shall:
(i) state the election to exercise the Option and the number of
Shares in respect of which it is being exercised;
(ii) 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;
(iii) be signed by the Employee or the person or persons
entitled to exercise the Option and, if the Option is being
exercised by any person or persons other than the Employee, be
accompanied by proof, satisfactory to counsel for the Company, of
the right of such person or persons to exercise the Option; and
(iv) be received by the Company on or before the date of the
expiration of this Option. In the event the date of expiration
of this Option falls on a day which is not a regular business day
at the Company's executive office in Hope Hull, Alabama, then
such written notice must be received at such office on or before
the last regular business day prior to such date of expiration.
(b) Upon receipt of such notice, the Company shall specify, by
written notice to the Employee or to the person or persons
exercising the Option, a date and time (such date and time being
herein called the "Closing Date") and place for payment of the
full purchase price of such Shares. The Closing Date shall not
be 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 Employee or the person or persons exercising the
Option or is required upon advice of counsel for the Company in
order to meet the requirements of Section 12 hereof.
(c) Payment of the purchase price of any shares of Common Stock,
in respect of which the Option shall be exercised, shall be made
by the Employee or such person or persons at the place specified
by the Company on or before the Closing Date by delivering to the
Company (i) a certified or bank cashier's check payable to the
order of the Company, or (ii) properly endorsed certificates of
shares of Common Stock (or certificates accompanied by an
appropriate stock power) with signature guaranties by a bank or
trust company or (iii) any combination of (i) and (ii).
(d) The Option shall 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 11 and the provisions of
Section 12 hereof shall have been complied with, in which event
the Option shall be deemed to have been exercised on the date the
notice of exercise of the Option was received by the Company.
Anything in this Agreement to the contrary notwithstanding, any
notice of exercise given pursuant to the provisions of this
Section 11 shall be void and of no effect if all the preceding
provisions of this Section 11 and the provisions of Section 1
shall not have been complied with.
(e) The certificate or certificates for shares of Common Stock
as to which the Option shall be exercised will be registered in
the name of the Employee (or in the name of the Employee's estate
or other beneficiary if the Option is exercised after the
Employee's death), or if the Option is exercised by the Employee
and if the Employee so requests in the notice exercising the
Option, will be registered in the name of the Employee and
another person jointly, with right of survivorship and will be
delivered on the Closing Date to the Employee at the place
specified for the closing, but only upon compliance with all of
the provisions of this Agreement.
(f) If the Employee fails to accept delivery of and pay for all
or any part of the number of Shares specified in such notice upon
tender or delivery thereof on the Closing Date, his right to
exercise the Option with respect to such undelivered Shares may
be terminated in the sold discretion of the Board of Directors of
the Company. The Option may be exercised only with respect to
full Shares.
(g) The Company shall not be required to issue or delivery any
certificate or certificates for shares of its Common Stock
purchased upon the exercise of any part of this Option prior to
the payment to the Company, upon its demand, of any amount
requested by the Company for the purpose of satisfying its
liability, if any, to withhold state or local income or earnings
tax or any other applicable tax or assessment (plus interest or
penalties thereon, if any, caused by a delay in making such
payment) incurred by reason of the exercise of this Option or the
transfer of shares thereupon. Such payment shall be made by the
Employee in cash or, with the consent of the Company, by
tendering to the Company shares of Common Stock equal in value to
the amount of the required withholding. In the alternative, the
Company may, at its option, satisfy such withholding requirements
by withholding from the shares of Common Stock to be delivered to
the Employee pursuant to an exercise of this Option a number of
shares of Common Stock equal in value to the amount of the
required withholding.
12. Approval of Counsel. The exercise of the Option and the
issuance and delivery of shares of Common Stock pursuant thereto
shall be subject to approval by the Company's counsel of all
legal matters in connection therewith, including compliance with
the requirements of the Securities Act of 1933, as amended, 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.
13. Resale of Common Stock. (a) If so requested by the Company,
upon any sale or transfer of the Common Stock purchased upon
exercise of the Option, the Employee shall deliver to the Company
an opinion of counsel satisfactory to the Company to the effect
that either (i) the Common Stock to be sold or transferred has
been registered under the Securities Act of 1933, as amended and
that there is in effect a current prospectus meeting the
requirements of Section 10(a) of said 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 said Act.
b) 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.
14. Reservation of Shares. The Company shall at all times
during the term of the Option reserve and keep available such
number of shares of the class of stock then subject to the Option
as will be sufficient to satisfy the requirements of this
Agreement.
15. Limitation of Action. The Employee 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 Parent or Subsidiary, on the
one hand, or against the Employee, on the other hand, shall,
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.
16. 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 or the Committee
shall be addressed to them at 500 Richardson Road South, Hope
Hull, Alabama 36043, Attn: Secretary. All notices to the
Employee shall be addressed to the Employee or such other person
or persons at the Employee'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.
17. Benefits of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor and assign of the
Company. All obligations imposed upon the Employee and all
rights granted to the Company under this Agreement shall be
binding upon the Employee's heirs, legal representatives and
successors.
18. Severability. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable,
such illegality or unenforceability shall not affect the validity
and enforceability of the remaining legal and enforceable
provisions hereof, which shall be construed as if such illegal or
unenforceable provision or provisions had not been inserted.
19. Governing Law. This Agreement will be construed and
governed in accordance with the laws of the State of New York.
20. Disposition of Shares. By accepting this Agreement, the
Employee agrees that in the event that he shall dispose (whether
by sale, exchange, gift, or any like transfer) of any shares of
Common Stock of the Company (to the extent such shares are deemed
to be purchased pursuant to an incentive stock option) acquired
by him pursuant hereto within two years of the date of grant of
this Option or within one year after the acquisition of such
shares pursuant hereto, he will notify the secretary of the
Company no later than 15 days from the date of such disposition
of the date or dates and the number of shares disposed of by him
and the consideration received, if any, and, upon notification
from the Company, promptly forward to the secretary of the
Company any amount requested by the Company for the purpose of
satisfying its liability, if any, to withhold federal, state or
local income or earnings tax or any other applicable tax or
assessment (plus interest or penalties thereon, if any, caused by
delay in making such payment) incurred by reason of such
disposition.
21. Acknowledge of Employee. The Employee represented and
agrees that as of the date of grant of this Option, he does not
own (within the meaning of Section 422(b)(6) of the Code) shares
possessing more than 10% of the total combined voting power of
all classes of shares of the Company or of any Parent or
Subsidiary.
22. Employment. Nothing contained in this Agreement shall be
construed as (a) a contract of employment between the Employee
and the Company or any Parent or Subsidiary, (b) as a right of
the Employee to be continued in the employ of the Company or any
Parent or Subsidiary, or (c) as a limitation of the right of the
Company or any Parent or Subsidiary to discharge the Employee at
any time, with or without cause.
23. Definitions. Unless otherwise defined herein, all
capitalized terms shall have the same definitions as set forth
under the Plan.
24. Incorporation of Terms of Plan. This agreement shall be
interpreted under, and subject to, all of the terms and
provisions of the Plan, which are incorporated herein by
reference.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its name by its President, its Chairman of the Board
or one of its Vice Presidents and its corporate seal to be
hereunto affixed and attested by its Secretary or one of its
Assistant Secretaries and the Employee has hereunto set his hand
all as of the date, month and year first above written.
MILTOPE GROUP INC.
By: /s/ George K. Webster
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Name: George K. Webster
Title: President and
Chief Executive Officer
/s/ James Matthews
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James Matthews
XXX-XX-XXXX
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Social Security Number
ATTEST:
/s/ James E. Matthews
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James E. Matthews, Secretary
EXHIBIT A
INCENTIVE STOCK OPTION EXERCISE FORM
Miltope Group Inc.
500 Richardson Road South
Hope Hull, Alabama 36043
Attention: Secretary
Dear Sirs:
Pursuant to the provisions of the Incentive Stock Option
Agreement dated as of February 4, 1998, whereby you have granted
to me an incentive stock option to purchase 20,000 shares of
Common Stock of Miltope Group Inc. (the "Company"), I hereby
notify you that I elect to exercise my option to purchase [
] of the shares covered by such option at the price specified
therein. In full payment of the price for the shares being
purchased hereby, I am delivering to you herewith (a) a certified
or bank cashier's check payable to the order of the Company if
the amount of $ ,* or (b) a certificate or certificates
for [ ] shares of Common Stock of the Company, and
which have a fair market value as of the date hereof of $
, and a certified bank cashier's check, payable to the order of
the Company, in the amount of $ .** Any such stock
certificate or certificates are endorsed, or accompanied by an
appropriate stock power, to the order of the Company, with my
signature guaranteed by a bank or trust company or by a member
firm of the New York Stock Exchange. [I hereby acknowledge that
I am purchasing these shares of Common Stock for investment
purposed only and not for resale.]
Very truly yours,
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[Address]
(For notices, reports, dividend
checks and other communications to
stockholders.)
* $ of this amount is the purchase price of the
shares, and the balance represents payment of withholding taxes
as follows: State $ and Local $ . No
withholding will be required in states and localities which
follow Federal tax law.
** $ of this amount is at least equal to the
current market value of one share of Common Stock of the Company,
and the balance represents payment of withholding taxes as
follows: State $ and Local $ . No
withholding will be required in states and localities which
follow Federal tax law.