Exhibit 4.1
STOCK OPTION AGREEMENT
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AGREEMENT made the 25th day of February, 1999, between Aeroflex Incorporated,
a Delaware corporation, (hereinafter called the "Company") and ___________,
residing at _________________________________________ (hereinafter called the
"Optionee").
W I T N E S S E T H:
Whereas, the Company and United Technologies Corporation entered into a Stock
Purchase Agreement dated as of February 25, 1999, pursuant to which the Company
has acquired (the "Acquisition") all of the outstanding Common Stock of UTMC
Microelectronic Systems Inc.("UTMC"); and
Whereas, the Optionee is currently an employee of UTMC, and the Company is
desirous of inducing or encouraging the Optionee to continue to remain in the
employ of UTMC after the Acquisition by offering the Optionee certain incentives
or rewards to do so; and
Whereas, the Board of Directors of the Company has determined that Optionee
is eligible for, and should be granted an option as hereinbelow provided, and
Optionee desires to have such option;
Now, Therefore, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Grant and Exercise of Option. The Company hereby grants to Optionee an
option to purchase a total of _________(_____)shares of the authorized and
unissued Common Stock of the Company, having a par value of $.10 per share, at
the price of $11.625 per share, upon and subject to the following terms and
conditions:
(a) The within option may be exercised on or before February 24,
2009 (the "Expiration Date") and, within such period, only at the following
times and in the following amounts:
(i) After the expiration of one (1) year from the
date of this Agreement, the option may be exercised to the extent
of not more than FIFTY (50%) PERCENT of the shares granted in
Paragraph 1 hereof; and
(ii) After the expiration of two (2) years from the
date of this Agreement, the option may be exercised to the extent
of not more than ONE HUNDRED (100%) PERCENT of the shares granted
in Paragraph 1 hereof.
(b) The right to exercise set forth in Paragraph 1(a)(i), and (ii)
shall be accelerated providing for immediate exercise, in the event of a change
in control of the Company.
(1) For purposes of this Agreement, a change in control of the
Company, or in any person directly or indirectly controlling the Company, shall
mean:
(i) a change in control as such term is presently
defined in Regulation 240.12b-2 under the Securities and Exchange Act of
1934; or
(ii) if any "person" (as such term is used in Section
13(d) and 14(d) of the Exchange Act) other than the Company or any
"person" who on the date of this Agreement is a director or officer of
the Company, becomes the "beneficial owner" (as defined in Rule 13(d)-3
under the Exchange Act) directly or indirectly, of securities of the
Company representing ten (10%) percent of the voting power of the
Company's then outstanding securities; or
(iii) if during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors, cease for any reason to
constitute at least a majority thereof, unless the election of each
director who is not a director at the beginning of such period has been
approved in advance by directors representing at least two-third (2/3)
of the directors then in office who were directors at the beginning of
the period.
(2) Notwithstanding the foregoing, this paragraph shall have no
applicability to any change of control as defined hereunder in the event that:
(i) a majority of the Board of Directors in office
immediately prior to the event or events resulting in the change of
control determine that such change is in the best interests of the
Company; or
(ii) a majority of the Board of Directors in office
immediately prior to the event or events resulting in the change of
control determine that such change is not in the best interests of the
Company; and thereafter Employee cooperates, assists or acts, directly
or indirectly, on behalf of or in connection with the party seeking to
acquire control of the Company; it being expressly understood and agreed
that in the event the within option is not exercised on or before the
Expiration Date, as to any part or all of the shares which may be
purchased under the option, the right to purchase such shares shall
completely lapse;
(c) Each exercise of the within option shall be by delivery to the
Company, at its then principal office (attention of the Secretary) of written
notice stating the number of shares to be purchased, accompanied by payment in
full of the option price of such shares. The option price shall be payable in
United States dollars in cash or by certified check, bank draft, postal or
express money order; provided, however, that in lieu of payment in full in cash,
the Optionee may, with the approval of the Board of Directors, exercise his
option by tendering to the Company shares of the Company's Common Stock owned by
him and having a fair market value (as determined by the Board of Directors in
its absolute discretion) equal to the cash exercise price (or the balance
thereof) applicable to his option.
(d) In the event of each exercise of the within option, the Company
shall deliver to the Optionee, personally or at the Optionee's designated
address, as soon as practicable, a certificate made out to the Optionee for the
number of shares being purchased.
2. Non-Transferability of Option. The option granted under this
Agreement shall not be transferred otherwise than by will or the laws of descent
and distribution and shall be exercisable during Optionee's lifetime only by the
Optionee. No option granted hereunder shall be subject to execution, attachment,
pledge, hypothecation, or other process.
3. Death, Retirement and Termination of Employment. Any Option, the
period of which has not expired, shall terminate at the time of death of the
Optionee, or at the time of retirement or termination for any reason of such
person's employment or service with UTMC, including service as a consultant, and
no share of Common Stock may thereafter be delivered pursuant to such Option,
except that:
(a) Upon retirement or termination of employment or service (other
than by death, disability, or termination for cause), an Optionee may within two
(2) months after the date of such retirement or termination, purchase all or
part of the shares with respect to which such Optionee is entitled to exercise
such option, in accordance herewith, but in no event after the Expiration Date;
(b) Upon the termination of employment or service for cause, this
Option shall terminate. For purposes of this Section, "cause" shall mean (i)
willful disregard of duties and/or gross insubordination, (ii) habitual absence
from employment, or (iii) the commission of fraud, misrepresentation or
embezzlement;
(c) Upon the "disability" of any Optionee, the Optionee may within
three (3) years after the date of such termination of employment, but in no
event after the Expiration Date, purchase all or part of the shares with respect
to which such Optionee is entitled to exercise such Option in accordance
herewith. For purposes of this section, the term "disability" shall mean a
physical or mental disability as defined in Section 105 of the Internal Revenue
Code of 1986, as amended; and
(d) Upon the death of the Optionee during his employment, the
person or persons to whom such Optionee's rights under the Option are
transferred by will or the laws of descent and distribution may, within two (2)
years after the date of such Optionee's death, but in no event after the
Expiration Date, purchase all or any part of the shares with respect to which
the Option was exercisable on the date of termination of employment or service
in accordance herewith.
4. Dilution and Other Adjustments. In the event that there is any change
in the stock subject to the within option through merger, consolidation or
reorganization, or in the event of any dividend in stock of the same class to
holders of issued and outstanding stock of the same class, or the issuance to
the holders of such stock of rights to subscribe to stock of the same class, or
in the event of any split, combination or exchange of stock or other change in
the capital structure of the Company, the Board of Directors of the Company
shall make such adjustments in the within option as it may deem equitable to
prevent dilution or enlargement of the rights granted to the Optionee hereunder,
and such adjustments, when so made, shall be conclusive and binding on the
parties to this Agreement; and provided, further, that nothing herein shall be
construed as limiting or preventing the Company from exercising any right or
power to make or enter into adjustments, reclassifications, reorganizations, or
changes in its capital or business structure or to merge, consolidate or
dissolve or to sell or transfer all or any part of its business or assets.
5. Registration.
The Company shall cause a Registration Statement on Form S-8 covering
the Shares of the Common Stock of the Company issuable upon the exercise of the
Option granted hereunder to be filed with the Securities and Exchange Commission
and to become effective under the Securities Act of 1933, as amended, prior to
the first anniversary date of this Agreement; provided, however, that if the
Company is not permitted for any reason to register such Common Stock pursuant
to a Registration Statement on Form S-8, the Company shall use its best efforts
to cause a Registration Statement on Form S-3 covering the Common Stock to be
filed with the Securities and Exchange Commission and to become effective under
the Securities Act of 1933, as amended, prior to the first anniversary date of
this Agreement.
6. Requirements by Law.
(a) If any law, regulation of the Securities and Exchange
Commission, or any regulation of any other commission or agency having
jurisdiction shall require the Company or the Optionee to take any action with
respect to the shares of stock to be acquired upon the exercise of the within
option, then the date upon which the Company shall deliver or cause to be
delivered the certificate or certificates for the shares of stock shall be
postponed until full compliance has been made with all such requirements of law
or regulation.
(b) Neither the Optionee nor any person or persons referred to in
Paragraph 3 above, as the case may be, shall be, or shall be deemed to be, a
holder of any shares subject to the within option unless and until certificates
for such shares are delivered to him or them in accordance with this Agreement,
and no certificates may be delivered until the shares represented thereby are
paid in full.
7. Purchase for Investment. The Optionee represents, on behalf of
himself and the person or persons referred to in Paragraph 3 above, that any
shares of the Company purchased pursuant to this Agreement will be acquired in
good faith for investment and not for resale or distribution, and Optionee on
behalf of himself and said person or persons, agrees that each notice of the
exercise of the within option shall contain or be accompanied by a
representation in writing signed by him or said person or persons, as the case
may be, in form satisfactory to the Company, that the shares of the Company to
be purchased pursuant to such notice are being so acquired and will not be sold
except in compliance with applicable securities laws. The requirements of this
Paragraph 7 may be waived by the Company if the Company shall have received an
opinion of its counsel that such representation is not required.
8. Acknowledgment. Optionee represents that he has read and understands
the terms and conditions of this Agreement and agrees to be bound thereby.
In Witness Whereof, the parties hereto have duly executed this Agreement
as of the day and year first above written.
AEROFLEX INCORPORATED
By: ____________________________
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_______________, Optionee
