AVIC GROUP INTERNATIONAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of September 6, 1996, by and
between Avic Group International, Inc., (the "Company"), and Xxxxxx X. Xxxx
("Optionee").
R E C I T A L S
Pursuant to the 1996 Stock Option Plan (the "Plan"), the Board of
Directors of the Company has authorized the granting to Optionee of an
incentive stock option to purchase the number of shares of Common Stock of
the Company specified in Paragraph 1 hereof, at the price specified therein,
such option to be for the term and upon the terms and conditions hereinafter
stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings
of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to
Optionee the option ("Option") to purchase, upon and subject to the terms and
conditions of the Plan, 10,000 shares of Common Stock of the Company at the
price of $1.50 per share.
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to
exercise on March 26, 1998, provided that Optionee is then employed by the
Company. In the event the Company terminates the employment of Optionee
other than for "cause," as defined in the Employment Agreement dated as of
March 27, 1996 (the "Employment Agreement"), all shares will become subject
to exercise. In addition, if the Optionee's employment is terminated within
twelve (12) months following any Change in Control either by the Company or
the Optionee all shares will become subject to exercise. For purposes of
this Agreement, a Change in Control shall mean: (a) any transfer or series
of transfers of capital stock of the Company, other than as a result of a
sale of capital stock of the Company pursuant to a public offering registered
under the Securities Act of 1933, as amended, as a result of which the
holders of capital stock of the Company prior to such transfer or transfers
become, collectively, the legal or beneficial holders of less than fifty
percent (50%) of the capital stock of the Company; (b) the
consummation of any merger or consolidation of the Company with another
corporation; provided, however, that no Change in Control shall be deemed to
have occurred if, immediately following such merger or consolidation, legal
or beneficial holders of capital stock of the Company prior to such merger or
consolidation shall own or control, directly or indirectly, through one or
more intermediaries, equity securities representing the power to vote or
direct the voting of more than fifty percent (50%) of the voting power of all
classes of equity securities entitled to vote in the election of directors of
the corporation resulting from such merger or consolidation; or (c) any
transfer of all or substantially all of the business and assets of the
Company to another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if the legal or beneficial holders of
capital stock of the Company prior to such transfer of control, retain
directly or indirectly through one or more intermediaries, the power to vote
or direct the voting of more than fifty percent (50%) of the voting power of
all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the
business and assets of the Company are transferred.
4. TAX WITHHOLDING. In the event that this Option shall lose its
qualification as an incentive stock option, as a condition to exercise of
this Option, the Company may require the Optionee to pay over to the Company
all applicable federal, state and local taxes which the Company is required
to withhold with respect to the exercise of this Option. At the discretion
of the Board of Directors and upon the request of the Optionee, the minimum
statutory withholding tax requirements may be satisfied by the withholding of
shares of Stock otherwise issuable to the Optionee upon the exercise of this
Option.
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, as defined in the Employment Agreement, or if Optionee
shall cease to be employed by the Company, Optionee's right to exercise the
Option will be limited as provided under Paragraph 3 hereof.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares
of common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of
another company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, or
similar transaction, an appropriate adjustment shall be made changing the
number or kind of shares and the exercise price per share allocated to any
Shares subject to the unexercised portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and
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distribution, and may be exercised only by Optionee during her lifetime and
after her death, by her personal representative or by the person entitled
thereto under her will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a stock certificate or stock
certificates to her upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to
continue to perform services for the Company or any Parent or Subsidiary, or
shall interfere with or restrict in any way the rights of the Company to
discharge or terminate any officer, director, employee, independent
contractor or consultant at any time for any reason whatsoever, with or
without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon her exercise of the Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to her, she will acquire the shares issuable
upon exercise of this Option for the purpose of investment and not with a
view to their resale or further distribution, and that upon such exercise
thereof she will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. The Company agrees that
it will use its best efforts to file a Registration Statement on Form S-8 or
other applicable form so as to enable Optionee to sell shares issued upon
exercise of this Option. Optionee agrees that any certificate issued upon
exercise of this Option may bear a legend indicating that their
transferability is restricted in accordance with applicable state and federal
securities law and with this Agreement. Any person or persons entitled to
exercise this Option shall, upon each exercise of the Option under
circumstances in which Optionee would be required to furnish such a written
statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at
the principal office of the Company at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, and all notices to Optionee shall be addressed to Optionee at
the address of Optionee on file with the Company or its Subsidiaries, or to
such other address as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States
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Postal Service. In lieu of giving notice by mail as aforesaid, written
notice under this Agreement may be given by personal delivery to Optionee or
to the Company (as the case may be).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of
any Shares acquired by exercise of this Option, she will first notify the
Company in writing of such proposed disposition and cooperate with the
Company in complying with all applicable requirements of law, which, in the
judgment of the Company, must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Its: Secretary
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OPTIONEE
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Address:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Social Security Number:
###-##-####
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