EXHIBIT 4.2
AVIC GROUP INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of September 12, 1996 by and between AVIC Group
International, Inc., a Delaware corporation (the "Company"), and Xxxx & Xxxxx
Professional Corporation ("Optionee").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services rendered by Optionee as a
consultant to the Company, of a non-qualified 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 premises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the Board
of Directors, the Company hereby grants to Optionee the option ("Option") to
purchase 24,962 shares ("Option Shares") of Common Stock of the Company at the
price of $1.50 per share. The exercise price of the Option is intended to be
paid by the cancellation from the amount of $37,443 owing on a portion of
Optionee's xxxx for legal consulting services performed for the benefit of the
Company through the billing period ended July 31, 1996, as and when options are
exercised.
2. TERM. This Option shall expire on the day before the third
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. All 24,962 Option Shares shall be
immediately exercisable and shall thereafter remain subject to exercise for the
term specified in Paragraph 2 hereof, subject, however, to the provisions of
Paragraph 6 hereof.
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company stating the number of shares with respect to
which the Option is being exercised, upon written notice to the Company of
cancellation of indebtedness owing by the Company to Optionee for services
rendered by Optionee as a consultant to the Company. Not less than 100
shares may be purchased at any one time unless the number purchased is the
total number purchasable under such Option at the time. Only whole shares
may be purchased.
5. TAX WITHHOLDING. 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 Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Option shall not
terminate upon the termination of Optionee's services as a consultant to the
Company.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except to members, shareholders or employees of Optionee, or, if applicable,
by will or by the laws of descent and distribution, and may be exercised only
by Optionee during Optionee's lifetime and after Optionee's death, by
Optionee's representative or by the person entitled thereto under Optionee's
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 the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
9. NO RIGHT TO PERFORM SERVICES. Nothing in this Option shall confer
upon the Optionee any right to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate Optionee as an independent contractor or consultant at any time for
any reason whatsoever, with or without good cause.
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10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that,
upon Optionee's exercise of the Option in whole or part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to him, he 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 each exercise thereof
Optionee will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. Optionee agrees that any
certificates issued upon exercise of this Option may bear a legend indicating
that their transferability is restricted in accordance with applicable state or
federal securities law. Any person or persons entitled to exercise this Option
under the provisions of Paragraphs 5 and 6 hereof 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 Company
at the principal office of the Company at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Telecopier No. (000) 000-0000, and all notices to Optionee
shall be addressed to Optionee at the address and telecopier number of Optionee
on file with the Company, or to such other address and telecopier number 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 Postal Service and followed
by telecopier to the addressee. In lieu of giving notice by mail as aforesaid,
written notices 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 of transfer) of any
Shares acquired by exercise of this Option, Optionee 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.
13. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company has
merged or consolidated with one or more other corporations (and provided
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the Option does not thereby terminate pursuant to Section 2 hereof), then the
number and kind of shares then subject to the Option and the price to be paid
therefor shall be appropriately adjusted by the Board of Directors; PROVIDED,
HOWEVER, that in no event shall any such adjustment result in the Company's
being required to sell or issue any fractional shares. Any such adjustment
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to the
price of each Share or other unit of security covered by this Option.
14. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other provision
of this Option, upon the dissolution or liquidation of the Company, the
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or the sale of substantially all the assets of the Company or of more than 50%
of the then outstanding stock of the Company to another corporation or other
entity, the Option granted hereunder shall terminate; provided, however, that:
(i) each Option for which no option has been tendered by the surviving
corporation in accordance with all of the terms of provision (ii) immediately
below shall, within five days before the effective date of such dissolution or
liquidation, merger or consolidation or sale of assets in which the Company is
not the surviving corporation or sale of stock, become fully exercisable; or
(ii) in its sole and absolute discretion, the surviving corporation may, but
shall not be so obligated to, tender to any Optionee, an option to purchase
shares of the surviving corporation, and such new option or options shall
contain such terms and provisions as shall be required substantially to preserve
the rights and benefits of this Option.
15. INVALID PROVISIONS. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
("Company")
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
Chief Executive Officer
Social Security Number ("Optionee")
or Employer Identification XXXX & XXXXX
Number: PROFESSIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Professional Corporation
Address:
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No. (000) 000-0000
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