AVIC GROUP INTERNATIONAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of October 23, 1996, by and
between Avic Group International, Inc., (the "Company"), and Xxxxx Xxxxx
("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
25% on each of the following dates: January 31, 1997, March 31, 1997, June 30,
1997 and September 30, 1997. 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. 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 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.
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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 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).
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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/ Xxxxxx X. Xxxxxx, Xx.
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Its:Charirman/Chief Executive Officer
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OPTIONEE
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Address:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Social Security Number:
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