1997 DIRECTOR STOCK OPTION PLAN
The purpose of this 1997 Director Stock Option Plan (the Plan) is to advance the
interest of ASTRONICS CORPORATION, a New York corporation (the Company), by encouraging the
efforts of directors of the Company who are not employees, by heightening the desire of such
persons to continue in their service and by assisting the Company to compete effectively with
other enterprises for new directors.
GRANTING OF OPTIONS
Subject to the terms and conditions of this Plan, the Company may issue options
(Options) to purchase up to one
hundred thousand (100,000) shares of its $.01 par value Common Stock (Shares) to persons
eligible to participate under Section 4.1 below. One hundred thousand (100,000) of the
Companys authorized but unissued shares of Common Stock are hereby reserved for issuance under
this Plan; provided, however, that treasury shares shall also be available for issuance under
this Plan at the Companys discretion. Any Share subject to an Option that terminates for any
reason other than exercise may be made subject to a subsequent Option.
Section 3.1 Effective Date.
This plan shall become effective upon its adoption by the Board of Directors. The Plan
shall be submitted to the
shareholders of the Company for their approval within twelve months of such adoption. No
Option shall be exercisable unless and until the shareholders of the Company have approved the
Section 3.2 Termination.
This Plan shall terminate when all of the Shares have been acquired through exercise of
Options or ten (10) years from the effective date as set forth in Section 3.1 above, unless
sooner terminated by the Board of Directors. Any Option outstanding under this Plan at the
time of its termination shall remain in effect in accordance with its terms and conditions and
those of this Plan.
Section 4.1 Eligible Directors.
Options may be granted to directors of the Company unless at the time of grant they are
also an officer or employee of the Company or any of its subsidiary corporations. As used in
this Plan, Participant means a director of the Company and includes a directors legal
representative if he or she is incompetent or deceased, or any other person who acquires the
legal right to exercise a Participants Options.
Section 5.1 Written Agreement.
Options shall be evidenced by a written Option Agreement that shall contain such terms and
conditions as this Plan requires and such additional provisions as the Committee, as defined in
Section 6.1, may deem necessary or appropriate in its sole discretion and that do not conflict
with the provisions of this Plan. Each Option Agreement shall be signed by the Participant and
an officer of the Company designated by the Committee. Options granted pursuant to this Plan
need not be identical, but each Option shall be subject to the terms and conditions set forth
in this Plan.
Section 5.2 Time of Grant.
Options shall be granted only during the thirty (30) day period commencing one week after
a press release announcing quarterly or annual results of operations of the Company.
Section 5.3 Price.
The purchase price of the Shares under each Option shall be as determined by the
Committee, but in no event less than the fair market value of the Shares optioned on the date
of granting. Fair market value shall be deemed to be:
||The closing price on the date of grant as reflected in reports of the automated
quotation service or national
securities exchange on which the price of the Shares is reported.
||In all cases where the Shares are selling ex-dividend on the date of grant, the amount of
the dividend shall
be added to the ex-dividend quotation to determine the fair market value of the Shares as
of the date of
||If the fair market value cannot be established under the provisions of (1) above,
then the fair market
value shall be that value determined in good faith by the Board of Directors based on a
consideration of the
following relevant factors: the Companys net worth, prospective earning power, its
capacity, the value of its underlying assets, and any other factors such as the goodwill
of the business,
the economic outlook in the industry, the Companys position in the industry and its
management, and the
value of securities of corporations engaged in the same or similar businesses which are
listed on a
national securities exchange. The weight to be accorded by comparisons or any other
factors considered by the Board of Directors in the determination of value will depend on
circumstances applying at the time. In every case, the determination of the Board of
Directors shall be
Section 5.4 Payment of Exercise Price; Taxes.
5.4.1. The exercise price of each Option shall be paid in full at the time of exercise by
cash or certified check or the exchange of Shares, or a combination of both such that the sum
of (a) the aggregate fair market value (as of the exercise date) of the Shares exchanged by the
Participant (as determined by the Committee), and (b) the cash paid, equals the total exercise
price of the Option.
5.4.2. If the exercise of an Option gives rise to an obligation of the Company to
withhold state or federal income or other taxes, or gives rise to any other tax liability of
the Company of any kind, the Participant shall tender the amount of such tax to the Company
along with the exercise price, unless the incidence of such tax cannot lawfully be placed on
Section 5.5 Exercise of Options.
Options shall be exercisable as provided in the Option Agreement. In no event shall
Options be exercised during the six (6) month period immediately following such grant.
Section 5.6 Duration of Option.
Each Option shall be exercisable for so long as the Participant is a director of the
Company and, to the extent that
the Option is exercisable on the date of termination of the Participants directorship, for
thirty (30) days thereafter, but
not longer than ten (10) years from the date the Option is granted. Nothing in this Plan
requires Options to be exercisable upon grant.
Section 5.7 Death or Disability.
If a Participant dies or is permanently and totally disabled (within the meaning of
section 22(e)(3) of the Internal
Revenue Code of 1986, as amended [Code"]) while serving as a director of the Company, the
thirty (30) day period specified in Section 5.6 above shall be one (1) year.
Section 5.8 Misconduct.
If a Participant is determined by the Committee to have committed an act of embezzlement,
fraud, dishonesty, deliberate or repeated disregard for the rules of the Company, unauthorized
disclosure of any of the trade secrets or confidential information of the Company, unfair
competition with the Company, inducement of any customer of the Company to breach a contract
with the Company, inducement of any principal for whom the Company acts as agent to terminate
that agency relationship or any culpable degree of negligence, then neither the Participant nor
the Participants estate shall be entitled to exercise any Option after termination of the
whether or not, after termination of such directorship, such Participant may receive payment
from the Company for services rendered prior to termination, services for the day on which
termination occurs, or other benefits.
Section 5.9 Transferability of Option.
Options shall be transferable only by will or the laws of descent and distribution.
Section 5.10 No Employment Agreement.
No Option Agreement, nor anything contained in this Plan, shall confer upon any
Participant any right to continue as a director of the Company nor limit in any way the right
of the Company, or the shareholders thereof, to terminate a Participants directorship at any
Section 5.11 Adjustments to Options.
Subject to the general limitations of this Plan, the Committee may make any adjustment in
the exercise price, term, or any other provision of an Option by cancelling an outstanding
Option and subsequently regranting the Option or by amendment or substitution of an outstanding
Option. Options that have been so amended, substituted, or regranted may have higher or lower
exercise prices, have longer or shorter terms, or be subject to different rights and
restrictions than prior Options. The Committee may also adjust the number of Options granted
to a Participant by cancelling outstanding Options or granting additional Options. Except for
amendments necessary to ensure compliance with any applicable state or federal law, no such
amendment shall impair a Participants rights and privileges pursuant to the grant of an Option
without the consent of the Participant.
Section 5.12 Form of Agreement.
The Committee shall adopt a form of Option Agreement to be used pursuant to this Plan and
may modify, add to, or delete from the form as it shall deem appropriate, subject to the
provisions set forth herein.
ADMINISTRATION AND AMENDMENT OF THE PLAN
Section 6.1 The Committee.
This Plan shall be administered by a committee (Committee) of at least two persons not
eligible to participate in the Plan and who are appointed by the Board of Directors and may or
may not be members of the Board. The Board of Directors shall fill vacancies on the Committee
and may from time to time remove members from, or add members to, the Committee, provided that
at all times the Committee shall have at least two members. The Committee shall act pursuant
to the written consent of a majority of its members or the majority vote of its members at any
Section 6.2 Committee Rights and Powers.
Subject to this Plan and to the supervision of the Board of Directors, the Committee shall
have the authority and discretion:
||to determine which of the Companys directors shall receive Options;
||to determine when Options shall be granted (subject to Section 5.2 above);
||to determine the terms and conditions of Options (which terms and conditions may
differ between Options);
||to interpret the Plan; and
||to take such action as is necessary or appropriate to the administration of the Plan.
All decisions, determinations, and interpretations of the Committee shall be final and
binding on all Participants (subject to review by the Board of Directors in its sole and
Section 6.3 Administration.
The Committee from time to time may adopt rules and regulations for implementing this
Plan, and it may from time to time suspend or terminate this Plan or make such changes and
additions hereto as it may deem desirable, without further action on the part of the Board of
Directors or the shareholders of the Company; provided, however, that unless the Companys
shareholders shall have first given their approval, then (a) the total number of Shares that
may be purchased under the Plan shall not be increased except as otherwise provided in this
Plan; (b) the description of the persons eligible to receive Options shall not be changed; and
(c) the minimum exercise price shall not be changed. The suspension, termination or amendment
of this Plan shall not, without the consent of the Participant, alter or impair any rights or
obligations under any Options theretofore granted under this Plan.
ADJUSTMENT OF AND CHANGES IN STOCK
Section 7.1 Changes in Stock; Stock Dividends.
If the Shares presently constituted are changed into or exchanged for a different number
or kind of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares, or otherwise), or if the number of Shares shall be increased through the
payment of a stock dividend or other distribution, then notwithstanding any other provision of
this Plan, there shall be substituted for or added to each Share subject to this Plan the
number and kind of shares of stock or other securities into which each outstanding Share shall
be entitled, as the case may be. Outstanding Options shall also be amended as to price and
other terms if necessary to reflect the foregoing events. If there shall be any other change
in the number or kind of the outstanding Shares, or of any stock or other securities into which
it shall have been exchanged, then if the Committee shall, in its sole discretion, determine
that such change equitably requires an adjustment in any Option theretofore granted or that may
be granted under this Plan, such adjustment shall be made in accordance with such
Section 7.2 Termination of Business.
Upon any merger of the Company with another corporation where the Company is not the
surviving corporation, dissolution or liquidation of the Company, sale of substantially all the
property of the company, or the acquisition of more than 80% of the voting power of the stock
of the Company by another corporation, then the Company shall have the right, at its option, to
do any of the following:
||provide for the continuance of this Plan and all outstanding Options granted
||permit the immediate exercise of all outstanding Options not otherwise immediately
||terminate all outstanding Options, whether exercisable or not, by paying each holder
an amount equal to the
aggregate current market price of Shares underlying the Options held by the holder less
exercise price of such Shares; or
||terminate this Plan and all Options granted hereunder after giving written notice to
all holders of
exercisable Options informing them of the Companys intention to terminate the Options and
holders a reasonable opportunity to exercise their exercisable Options.
Section 7.3 Fractional Shares.
No right to purchase fractional Shares shall result from any adjustment in Options
pursuant to this Article VII. In the case of any such adjustment, the Shares subject to
Options of each Participant shall be rounded down to the nearest whole Share. Notice of any
adjustment shall be given by the Company to each holder of Options that shall have been so
adjusted and such adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan.
BINDING ON HEIRS, SUCCESSORS AND ASSIGNS
Except as provided in Section 7.2 above, this Plan shall inure to the benefit of, and be
binding upon, each successor to the Company. All obligations imposed upon the Participants and
all rights granted to the Company under this Plan shall be binding upon each Participants
heirs, legal representatives, and successors. This Plan and the Option Agreements executed
between the Company and each Participant shall be the sole and exclusive source of any and all
rights that each Participant and his or her heirs, legal representatives, or successors may
have in respect to this Plan or any Options or Shares granted hereunder, whether to the
Participant or to any other person.
Options granted hereunder are not intended to be eligible for favorable tax treatment
under Section 422 of the Code. The Company does not hereby, nor by way of any Plan, document,
or otherwise, attempt to make any representation to any person, including the Participants,
with respect to the tax effect on such person of the grant or exercise of an Option or the
subsequent disposition of Shares obtained by the exercise of an Option pursuant to this Plan
or any other aspect of this Plan.
If there is any discrepancy between this Plan and any documents related to this Plan,
including any Option Agreement, this Plan shall govern. Nothing contained in this Plan shall
be construed to constitute, or be evidence of, any right in favor of any person to receive
Options hereunder or any obligation on the part of the Company to issue Options.