Exhibit 99.2
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AVT Corporation
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: Xxxxx Xxxxxxxx Date of Grant: November 15, 2000
In accordance with the Employment Agreement dated as of October 26, 2000
(the "Employment Agreement"), the Board of Directors (the "Board") of AVT
Corporation (the "Company") is pleased to grant you a nonqualified stock option
for the purchase of 750,000 shares of the Company's Common Stock at an exercise
price of $5.94 per share. In addition to the terms set forth below, in all
respects not specified by the terms of this agreement or the Employment
Agreement this option shall be subject to the same terms and conditions as are
set forth in the Company's 1989 Restated Stock Option Plan, which is
incorporated herein by reference. In the event of any inconsistency between the
terms of the Employment Agreement and the terms of either this agreement or the
1989 Restated Stock Option Plan where the terms of the Employment Agreement are
more favorable to you, or in the event that any term of this agreement or the
1989 Restated Stock Option Plan purports to deny or limit any right granted to
you by the terms of the Employment Agreement, the terms of the Employment
Agreement shall control and any such other inconsistent, limiting or similar
provision shall have no force or effect.
Term: The term of the option is ten years from date of grant, unless sooner
terminated.
Vesting: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Vested and Exercisable Portion
Option is Vested and Exercisable of Total Option
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November 15, 2001 25%
Each month thereafter Add an additional 2.0833%
November 15, 2004 100%
Exercise: During your lifetime only you can exercise the option. The option may
be exercised by the personal representative of your estate, by the beneficiary
you have designated on forms prescribed by and filed with the Company, or the
beneficiary of your estate following your death. Subject to the vesting schedule
set forth above, the
option may be exercised in whole or in part at any time and from time to time;
provided, however, that no fewer than 100 shares (or the remaining shares then
purchasable under the option, if less than 100 shares) may be purchased upon any
exercise of this option and that only whole shares will be issued pursuant to
the exercise of the option. You may use the Notice of Exercise of Nonqualified
Stock Option in the form attached to this Agreement when you exercise the
option.
Payment for Shares: The option may be exercised by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
(b) Unless the Board in its sole discretion determines otherwise, shares
of the capital stock of the Company held by you for a period of at least six
months having a fair market value at the time of exercise, as determined in good
faith by the Board, equal to the exercise price; or
(c) A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
Withholding Taxes: As a condition to the exercise of the option, you
must make such arrangements as the Company may require for the satisfaction of
any federal, state or local withholding tax obligations that may arise in
connection with such exercise. The Company has the right to retain without
notice sufficient shares of stock to satisfy the withholding obligation. To the
extent permitted or required by the Company, you may satisfy the withholding
obligation by electing to have the Company or a related corporation withhold
from the shares to be issued upon exercise that number of shares having a fair
market value equal to the amount required to be withheld. If you are subject to
Section 16 of the Exchange Act you must comply with certain requirements in
order to make such election.
Termination: If your relationship with the Company ceases prior to
November 15, 2001 because you are terminated by the Company for any reason
(including due to death or "total disability" as that term is defined in the
Employment Agreement), the shares underlying the option that would otherwise
have vested on November 15, 2001 will be deemed vested on a pro-rata basis over
the first year of employment based on the number of full calendar months
actually served.
Transferability of Option: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws
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of descent and distribution and shall not be subject to execution, attachment or
similar process. This option is personal to you and is exercisable solely by
you. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of this option or of any right or privilege conferred hereby, contrary to the
provisions hereof; or the sale or levy or any attachment or similar process upon
the rights and privileges conferred hereby will be null and void.
Notwithstanding the foregoing, to the extent permitted by applicable law and
regulation, the Company, in its sole discretion, may permit you to (i) during
your lifetime, designate a person who may exercise the option after your death
by giving written notice of such designation to the Company (such designation
may be changed from time to time by you by giving written notice to the Company
revoking any earlier designation and making a new designation) or (ii) transfer
the option and the rights and privileges conferred hereby.
No Status as Shareholder: Neither you nor any party to whom your rights and
privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
Continuation of Relationship: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company, or to
interfere in any way with the right of the Company to terminate your employment
or other relationship with the Company at any time.
Adjustments Upon Changes in Capitalization:
The aggregate number and class of shares covered by this option and the
exercise price per share thereof (but not the total price), will all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Company resulting from a split-up or consolidation
of shares or any like capital adjustment, or the payment of any stock dividend.
(a) Effect of Liquidation or Reorganization
(1) Cash, Stock or Other Property for Stock. Except as provided in
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subsection (a)(2), upon a merger (other than a merger of the Company in which
the holders of shares of Common Stock immediately prior to the merger have the
same proportionate ownership of shares of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock,
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separation, reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company, as a result of which the
shareholders of the Company receive cash, stock or other property in exchange
for or in connection with their shares of Common Stock, this option will
terminate, but you will have the right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to exercise your option, at your election in whole or in part,
whether or not the vesting requirements set forth in this agreement have been
satisfied; provided that such acceleration will not occur if, in the opinion of
the Company's outside accountants, such acceleration would render unavailable
"pooling of interests" accounting treatment for any reorganization, merger or
consolidation of the Company for which pooling of interests accounting treatment
is sought by the Company.
(2) Conversion of Options on Stock for Stock Exchange. If the
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shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option may be converted into an option to purchase shares
of Exchange Stock unless the Company and the corporation issuing the Exchange
Stock, in their sole discretion, determine that any or all such options granted
hereunder shall not be converted into options to purchase shares of Exchange
Stock but instead shall terminate in accordance with the provisions of
subsection (a)(1) above. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment
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for any reorganization, merger or consolidation of the Company for which pooling
of interests accounting treatment is sought by the Company.
(b) Fractional Shares
In the event of any adjustment in the number of shares covered by this
option, any fractional shares resulting from such adjustment will be disregarded
and the option will cover only the number of full shares resulting from such
adjustment.
(c) Determination of Board to Be Final
All adjustments referred to herein will be made by the Board, and its
determination as to what adjustments will be made, and the extent thereof, will
be final, binding and conclusive.
Securities Regulation:
Shares will not be issued with respect to this option unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
complies with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER, but if the Company has filed or is filing a Registration Statement on
Form S-8 or any successor form for the registration of securities issued under
stock option or other employee benefit plans, the Company hereby undertakes to
include the shares issuable hereunder in any such registration.
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Should any of the Company's capital stock of the same class as the stock
subject to this option be listed on a national securities exchange, all shares
issued hereunder if not previously listed on such exchange will be authorized by
that exchange for listing thereon prior to the issuance thereof.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
AVT Corporation
By /s/ Xxxxxxx X. XxXxxxx
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Its Chairman
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ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of Washington, accept the nonqualified stock
option described herein. I have read and understand the Agreement.
Dated: 11/15/00
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###-##-#### /s/ Xxxxx Xxxxxxxx
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Taxpayer I.D. Number Xxxxx Xxxxxxxx
Address 16759 XX 00xx Xx.
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Xxxxxxxx, XX 00000
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