Form 4: BIO-KEY Executive Granted 40,000 Restricted Shares

BIO-KEY International's Chief Legal Officer, James David Sullivan, was granted 40,000 restricted common shares under the company's 2023 Stock Incentive Plan.

Summary

• James David Sullivan, Chief Legal Officer and SVP Strategy & Compliance of BIO-KEY International, Inc. (BKYI), acquired 40,000 shares of common stock.
• The acquisition occurred on September 2, 2025, and was a grant of restricted stock with a transaction price of $0 per share.
• These restricted shares were granted under the Issuer's 2023 Stock Incentive Plan, as amended.
• The shares will vest in three equal annual installments on each of the next three anniversaries of the grant date, contingent on Mr. Sullivan's continued employment or service.
• Following this transaction, Mr. Sullivan beneficially owns 94,851 shares of common stock.
• Holdings do not include options to purchase an additional 174 shares.

Sentiment

Score: 7

Explanation: The grant of restricted stock to a key executive is generally a positive signal, indicating management alignment with shareholder interests and a commitment to long-term performance, although it does involve future dilution.

Positives

• The grant of restricted stock aligns the interests of a key executive, James David Sullivan, with those of shareholders, incentivizing long-term company performance.
• The stock incentive plan serves as a retention tool, encouraging continued employment and dedication from senior management.

Negatives

• The future vesting of these shares will result in a minor dilution of existing shareholder equity, though this is a standard component of executive compensation plans.

Risks

• The vesting of the restricted stock is subject to James David Sullivan's continued employment with or service to BIO-KEY International, Inc. through the applicable vesting dates.

Future Outlook

The restricted stock grant is designed to incentivize long-term performance and retention, with shares vesting in three equal annual installments over the next three years, contingent on continued employment.

Industry Context

This insider transaction reflects a common practice in the technology and cybersecurity industry, where restricted stock grants are used to compensate and retain key executives, aligning their financial interests with the long-term success of the company.

Comparison to Industry Standards

• Restricted stock grants are a standard component of executive compensation packages across various industries, including technology, to incentivize long-term performance and retention.
• Companies like Microsoft, Apple, and Google frequently utilize similar equity compensation structures for their senior leadership, often tied to multi-year vesting schedules to ensure sustained commitment.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for future minor dilution upon vesting of shares, but also increased alignment of executive interests with long-term shareholder value.
• Employees: Provides a strong incentive for the reporting person to remain with the company and contribute to its success, potentially fostering a more stable leadership team.

Next Steps

• The restricted shares will vest in three equal annual installments on the anniversaries of the grant date (September 2, 2026, 2027, and 2028), subject to continued employment.

Key Dates

Keywords

BIO-KEY International, BKYI, Restricted Stock Grant, Insider Transaction, Form 4, Executive Compensation, Stock Incentive Plan, Corporate Governance