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EXHIBIT 10.05
FIRST AMENDMENT TO
FIREARMS TRAINING SYSTEMS, INC.
STOCK OPTION AGREEMENT
SERIES A
WHEREAS, Firearms Training Systems, Inc., a Delaware corporation (the
"Company"), has heretofore granted to the optionee named below (the "Optionee")
a non-qualified option to purchase from the Company shares of its Class A Common
Stock upon and subject to the terms and conditions of a Stock Option Agreement,
Series A dated September 18, 1996 (the "Agreement"); and
WHEREAS, the Company and the Optionee desire to amend the Agreement in
certain respects;
NOW, THEREFORE, the Agreement is amended effective as of May 8, 1998 in the
following respects:
1. Section 2.2(a) of the Agreement is amended to add two new sentences at
the end thereof to read as follows:
Notwithstanding the foregoing, if the Optionee's active employment ceases
in accordance with the Confidential Resignation Agreement (as hereinafter
defined), then (i) the Optionee's employment shall be deemed to have
terminated on October 31, 1998 for purposes of the preceding sentence, (ii)
such termination shall be deemed to be a termination by the Company other
than for Cause (as defined herein), provided the terms and conditions of
the Confidential Resignation Agreement are complied with and (iii) subject
to Section 2.5 below, the Option shall become exercisable with respect to
15,000 of the remaining shares of Stock subject to the Option (the
"Transition Shares") at the end of the Compliance Period (as defined in the
Confidential Resignation Agreement). For purposes of this Agreement,
"Confidential Resignation Agreement" means the resignation agreement
between the Company and the Optionee dated May 8, 1998.
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2. Section 2.2(e) of the Agreement is amended in its entirety to read as
follows:
(e) If the Optionee terminates employment with the Company for any
reason other than as described in subsection (b), (c) or (d) above, the
Option shall be exercisable only to the extent it is exercisable on the
effective date of the Optionee's termination of employment (except for the
Transition Shares, which shall remain exercisable as set forth in this
Agreement) and may thereafter be exercised by the Optionee or the
Optionee's Legal Representative until and including the latest to occur of
(i) the date that is 90 days after the effective date of the Optionee's
termination of employment (ii) the date on which the Optionee is determined
to be noncompliant with Paragraph 17 thereof, and (iii) if no violation of
Paragraph 17 of the Confidential Resignation Agreement occurs during the
Compliance Period, the date that is twelve months after the end of the
Compliance Period; provided that if the Optionee's employment is terminated
by the Company for Cause at any time, the Option shall terminate
automatically on the effective date of the Optionee's termination of
employment, and the Optionee shall be subject to the provisions of Section
2.5.
3. Section 2.5 of the Agreement is amended in the following respects:
(i) to insert the phrase "In the event of a determination of the Optionee's
noncompliance with the Confidential Resignation Agreement on account of the
Optionee's breach or failure to comply with his obligations thereunder as
described in Paragraph 17 thereof, or" at the beginning of subsection (a)
thereof,
(ii) to insert the phrase "the date of such determination of noncompliance
or" before the phrase "the date the Optionee engages in such activity" as it
appears twice in subsection (a) thereof, and before the phrase "the date on
which the Optionee engaged in such activity" as it appears in subsection (a)
thereof, and
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(iii) to add the parenthetical phrase "(or in the case of a breach of the
Confidential Resignation Agreement, the Chief Executive Officer)" after the word
"Committee" as it appears in subsection (b) thereof.
4. Section 3.5 of the Agreement is amended in the following respects:
(i) to substitute the phrase "there shall be substituted for each
share of Stock for which this Option is exercisable as of the date of the
Change in Control" for the phrase "all outstanding options shall
immediately be exercisable in full and there shall be substituted for each
share of Stock available under this Plan, whether or not then subject to an
outstanding option," as it appears in the first sentence of the first
paragraph thereof,
(ii) to substitute the phrase "the Option" for the phrase "each
option" as it appears in the second sentence of the first paragraph
thereof,
(iii) to add the phrase "for which the Option is exercisable as of the
date of occurrence of such Change in Control" after the phrase "a cash
payment from the Company in an amount equal to the number of shares of
Stock then subject to such option" as it appears in the second paragraph
thereof, and
(iv) to add a new paragraph at the end thereof to read as follows:
In the event of a Change in Control prior to the end of the
Compliance Period, the portion of the Option attributable to the
Transition Shares shall be deemed to be exercisable for purposes of
this Section 3.5 with respect to the number of shares determined by
multiplying 15,000 by a fraction, the numerator of which is the number
of whole and partial months between the date of the Optionee's
termination of employment and the date of the Change in Control, and
the denominator of which is 36. Furthermore, if such Change in Control
occurs prior to September 19, 1998, then this Option will be deemed,
for purposes of this
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Section 3.5, to be exercisable as of the date of such Change in
Control as to all those shares identified in the second sentence of
Section 2.2(a) above, subject to the provisions of Section 2.5 above.
This instrument may be executed in two counterparts, each of which
shall be deemed an original and both of which together shall constitute one
and the same instrument.
FIREARMS TRAINING SYSTEMS, INC.
By:/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President
Accepted this 8th day of May, 1998.
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
