EXHIBIT 10.35
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into effective as of the
11th day of July, 1995, by and between American Pacific Corporation, a Delaware
corporation (the "Company"), and General Technical Services, Inc., an Oklahoma
corporation (the "Optionee").
RECITALS:
A. The Optionee or its present principal is serving as a Consultant to the
Company. The Company desires to encourage the ownership of its Common Stock by
the Optionee, and to provide an incentive for the Optionee and its principal to
assist in expanding and improving the growth, profitability and general
prosperity of the Company and of its Subsidiary Corporations, and to stimulate
the efforts of the Optionee and its principal by giving suitable recognition, in
the form of compensation, to their abilities and industry, which contribute
materially to the growth and profitability of the Company and of its Subsidiary
Corporations.
B. The Company has decided to grant to the Optionee the option to purchase
shares of the Common Stock of the Company.
C. The Company and the Optionee now desire to set forth the terms and
conditions upon which the Optionee shall have the Option to purchase shares of
the Common Stock of the Company, and certain terms and conditions that will
govern the issuance, holding and exercise of such Options.
PROVISIONS:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties to this Option Agreement agree as follows:
ARTICLE I
Definitions
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As used in this Option Agreement, the following terms shall have the
indicated meanings:
1.01 Board of Directors. Unless otherwise indicated, the term Board of
Directors shall mean the non-management members of the Board of Directors of the
Company.
1.02 Committee shall mean the Stock Option Committee of the Board of
Directors of the Company referred to in Article II of this Option Agreement.
1.03 Common Stock shall mean the Common Stock of the Company, par value ten
cents ($0.10) per share.
1.04 Company shall mean American Pacific Corporation, a Delaware
corporation.
1.05 Disability shall mean a physical or mental condition that, based upon
medical reports and other evidence satisfactory to the Committee, presumably
permanently prevents the present principal of the Optionee from satisfactorily
performing on behalf of the Optionee its usual duties for the Company.
1.06 Exercise Price shall mean the price for which an Option granted
hereunder may be exercised, as provided in Section 3.02 of this Option
Agreement.
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1.07 Option shall mean the right to purchase shares of the Common Stock
of the Company, granted pursuant to the provisions of this Option Agreement.
1.08 Option Agreement or Agreement shall mean this Stock Option
Agreement.
1.09 Optionee shall mean the Optionee identified above, to whom this
Option has been granted, upon the terms and conditions set forth in this Option
Agreement.
1.10 Subsidiary Corporations shall mean and include all corporations
that join with the Company in, or would be eligible to join with the Company in,
if timely and proper elections were made, the filing of a consolidated federal
income tax return, under the applicable provisions of the Internal Revenue Code
in effect from time to time.
1.11 Value of a share of the Common Stock of the Company shall mean the
closing price of a share of the Company's Common Stock, as reported on the
National Market System of the National Association of Securities Dealers, Inc.
If a reported closing price is not available for the date on which the Common
Stock is sought to be valued, the reported closing price for the next preceding
business day shall be used. If reported closing prices are not available for
either such date, the Value of a share of the Company's Common Stock shall be
the arithmetic mean of the bid and asked prices of the Company's Common Stock,
as published by the National Association of Securities Dealers, Inc., as of the
date on which the Company's Common Stock is sought to be valued, or if quoted
prices are not available as of such day, then the bid and asked prices as of the
next preceding business day shall be used. If the Value cannot be determined
under the preceding rules of this Section 1.11, the Value shall be the fair
market value of the Company's Common Stock, determined under the method selected
by the Committee. Unless modified by the Board of Directors, the Committee's
good-faith determination of the Value of a share of the Company's Common Stock
shall be conclusive, and shall be valid and binding upon all persons having any
interest in any Option granted hereunder.
ARTICLE II
Administration
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2.01 Committee. The Option granted pursuant to this Option Agreement
shall be administered by the Stock Option Committee of the Board of Directors of
the Company. If for any reason the Committee is not acting, the Board of
Directors shall act as the Committee. All determinations, decisions,
interpretations and other action made or taken with respect to the Option
granted hereunder by the Committee shall be final and binding upon all persons
having any interest in any Option granted pursuant hereto, unless otherwise
determined by the Board of Directors. The Board of Directors shall have the
power by appropriate action to reverse or modify any action taken by the
Committee.
2.02 Committee to Construe Agreement. The Committee shall administer the
Option granted pursuant hereto, and shall have all powers necessary for that
purpose, including but not limited to the power to interpret this Agreement and
the power to determine the rights hereunder of all persons. The Committee shall
maintain the records of the Company that relate to the Option granted pursuant
hereto, and shall have the power to adjust its records as necessary to correct
errors and rectify omissions, in the manner that the Committee believes will
best result in the equitable administration of the Option granted pursuant
hereto.
2.03 Organization of Committee. The Committee may elect a chairman, and
may adopt such rules as it deems desirable for the conduct of its affairs and
for the administration of the Option. The Committee may appoint agents, who need
not be members of the Committee, to whom it may delegate such powers as it deems
appropriate. The action of a majority of the members of the Committee shall be
the action of the Committee.
2.04 Indemnification of Committee Members. The Company shall defend,
indemnify and hold harmless each member of the Committee against any and all
claims, loss, damages, expense and liability arising from any actual or alleged
action or failure to act in connection with the administration of the Option
granted pursuant hereto,
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except when the same is judicially determined to be due to the gross negligence
or willful misconduct of such Committee member.
ARTICLE III
Terms and Conditions
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3.01 Number of Shares Subject to Option. The Company hereby grants to
the Optionee, upon the terms and conditions set forth in this Option Agreement,
the option to purchase Forty Thousand (40,000) shares of the Common Stock of the
Company.
3.02 Exercise Price. The price for which each Option hereby granted to
the Optionee may be exercised shall be $4.875 per share of the Common Stock of
the Company, which amount represents the Value of a share of the Common Stock on
the date of this Option Agreement.
3.03 Time for Exercise. The Option hereby granted to the Optionee shall
be exerciseable at the following times:
With respect to Ten Thousand (10,000) shares of Common Stock, the Option
shall be exerciseable from the date of this Option Agreement through and
including July 10, 2000, at which time such options will expire if not
theretofore exercised;
With respect to an additional Ten Thousand (10,000) shares of Common Stock,
the Option shall be exerciseable from July 11, 1996, through and including
July 10, 2001, at which time such options will expire if not theretofore
exercised;
With respect to an additional Ten Thousand (10,000) shares of Common Stock,
the Option shall be exerciseable from July 11, 1997, through and including
July 10, 2002, at which time such options will expire if not theretofore
exercised;
With respect to an additional Ten Thousand (10,000) shares of Common Stock,
the Option shall be exerciseable from July 11, 1998, through and including
July 10, 2003, at which time such options will expire if not theretofore
exercised;
Each annual increment of the Option granted hereunder shall be exerciseable
for the five-year period set forth above unless the period of exercise is sooner
terminated in accordance with the provisions of this Option Agreement. The
Optionee shall have no right whatsoever to exercise the Option except during the
times provided above.
3.04 Restrictions on Transfers and Encumbrance. The Option granted
hereunder may not be sold, pledged, assigned, hypothecated, encumbered or
transferred by the Optionee in any manner, either voluntarily or involuntarily,
by operation of law or otherwise, except by will or by applicable laws of
descent and distribution, and may be exercised only by the Optionee. In the
event there is any change in control of the Optionee other than as a result of
the death of the Optionee's present principal, the Option granted hereunder
shall thereupon terminate unless the Company shall have agreed in writing to
continue the Option notwithstanding such change in control.
3.05 Exercise After Termination of Consultancy. Except to the extent
theretofore exerciseable, the Option granted hereunder shall expire upon
termination for any reason of the services of the Optionee or its present
principal as a Consultant to the Company. To the extent the Option granted
hereunder is exerciseable at the date of such termination for any reason, the
Option granted hereunder shall in any event expire six (6) months following such
termination.
3.06 Exercise Related to Continuing Service. The Optionee may exercise
the Option granted hereunder only if the Optionee or the Optionee's present
principal has remained continuously in the service of the Company as a
Consultant (or in such other capacity as the parties may agree) since the date
on which the Option sought
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to be exercised was granted to such Optionee, through a date that is not more
than six (6) months prior to the date on which the Option is sought to be
exercised.
ARTICLE IV
Procedure for Exercise
----------------------
4.01 Time for Exercise. Subject to the provisions of this Article IV,
the Option granted hereunder shall be exerciseable only during the times
provided in this Option Agreement.
4.02 Exercise Upon Corporate Capital Transaction. In the event that the
Company, its shareholders, or both, enter into a written agreement to dispose of
all or substantially all of the assets or Common Stock of the Company by means
of a sale, merger, consolidation, reorganization, liquidation or similar
transaction (other than a reorganization, merger or consolidation effected
solely to change the Company's name or state of incorporation), the Option
issued pursuant to this Option Agreement shall become immediately exerciseable,
whether or not such Option was exerciseable prior to such event, during the
period of time beginning with the date on which the Company agrees in writing to
enter into such transaction, and ending on the earlier of the date the Option
would otherwise have expired or the date on which the transaction is
consummated. Upon the consummation of the transaction, any unexercised portion
of the Option issued hereunder shall terminate and cease to be effective. In the
event that the agreement to enter into any such transaction is terminated, all
unexercised portions of the Option shall revert to the status they had before
the Company agreed to enter into the transaction in question. Any exercise of
Option made before the agreement to enter into the transaction was terminated
shall remain effective after the termination of the agreement, notwithstanding
that the Option may have become exerciseable solely by reason of the Company
entering into the agreement.
4.03 Withholding of Taxes. The Optionee hereby agrees that the Company
may, if it elects to do so, withhold federal, state and other taxes attributable
to taxable income realized by the Optionee upon the exercise of Option from any
compensation or other payment payable to such Optionee by the Company.
4.04 Exercise. Subject to all other terms and provisions of this Option
Agreement, the Option granted hereunder shall be deemed to be exercised when
written notice of exercise has been given to the Company by the Optionee or
other person entitled to exercise the Option and full payment in cash or cash
equivalents for the shares of Common Stock with respect to which the Option is
exercised has been received by the Company. Until certificates have been issued
for the number of Shares represented by the exercise of the Option, the Optionee
shall have no right to vote, to receive dividends, or other right as a
stockholder with respect to shares of Common Stock purchased through the
exercise of the Option. Except as provided in Section 5.01 hereof, no
adjustments shall be made for dividends or other rights declared or paid with
respect to stock acquired through the exercise of the Option for which the
record date is prior to the date on which a stock certificate for such shares is
issued.
4.05 Exercise in Installments. Subject to Section 3.03, the Optionee may
exercise the Option in installments, but only in units of whole shares of the
Common Stock of the Company.
4.06 Issuance of Certificates. As soon as practicable after the Option
has been exercised in accordance with the provisions of this Option Agreement,
the Company shall, without transfer or issue tax or other charge to the
Optionee, deliver to the Optionee at the principal business office of the
Company, or at such other place as may be agreed, certificates representing the
number of shares of Common Stock as to which the Option has been exercised. The
Company may, however, postpone the time of delivery of certificates for such
period of time as the Company may determine to be necessary for it with
reasonable diligence to comply with any applicable listing requirements of any
national or regional securities exchange, of the National Association of
Securities Dealers, Inc., or with any law or regulation applicable to the
issuance or delivery of shares of the Company's Common Stock.
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ARTICLE V
Restrictions and Additional Provisions
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5.01 Adjustments Upon Changes in Capitalization. If the number of
outstanding shares of the Common Stock of the Company is increased or decreased,
or if the Common Stock of the Company underlying the Option granted pursuant to
the provisions of this Option Agreement is changed into or exchanged for a
different number or kind of shares or securities of the Company through a
reorganization, merger, recapitalization, reclassification, stock dividend,
stock split or reverse stock split, an appropriate and proportionate adjustment
shall be made by the Committee in the terms and conditions of the Options
granted pursuant hereto, including the Exercise Price of the Option; provided,
however, that no such adjustment need be made if, upon the advice of legal
counsel to the Company, the Committee determines that any such adjustment could
result in the recognition of federal taxable income by the Optionee, or by
holders of Common Stock or other securities of the Company.
5.02 Reservation of Shares of Common Stock. The Company shall, at all
times during the periods of time during which the Option may be exercised
hereunder, reserve and keep available for issuance to the Optionee a number of
shares of its Common Stock sufficient to satisfy all obligations of the Company
hereunder.
5.03 Restrictions on Issuance of Shares. The Company shall use its best
efforts to seek and to obtain from appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of shares of its Common
Stock as shall be sufficient to satisfy the obligations of the Company under
this Agreement. The inability of the Company to obtain authorization deemed to
be necessary by the Company's legal counsel to the lawful issuance and sale of
any shares of the Company's Common Stock shall relieve the Company of any
liability for the nonissuance or nonsale of any Common Stock as to which the
requisite approval or authorization shall not have been obtained.
5.04 Representations and Warranties. As a condition to the exercise of
the Option granted hereunder, the Committee may require the person exercising
the Option to make any representations or warranties to the Company that legal
counsel to the Company may determine to be required or advisable under any
applicable law or regulation, including without limitation a representation and
warranty that the shares of the Company's Common Stock being acquired are being
acquired only for investment and without any present intention or view to sell
or distribute any such shares.
5.05 Optionee Rights. No provision of this Agreement shall be deemed to
constitute a condition of the service or status of any Consultant. No provision
of this Option Agreement shall be deemed to give to the Optionee any right to be
retained in the service of the Company or of any Subsidiary Corporation in any
capacity (whether as an employee, Director, independent contractor, consultant,
or otherwise), or to interfere in any way with the right of the Company and its
Subsidiary Corporations at any time to remove any Director, or to discontinue
using the services of any individual. The Optionee shall have no right or
interest in any share of the Company's Common Stock prior to exercise of the
Option, except as provided in this Option Agreement.
5.06 Legends on Stock Certificates. Unless an appropriate registration
statement is on file and effective with appropriate federal, state and local
governmental authorities, each certificate representing Common Stock of the
Company issued pursuant to the exercise of the Option shall be endorsed on its
face with a legend similar to the following:
Neither the Option pursuant to which the shares represented by this
certificate are issued nor the shares represented hereby have been registered
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, or with any state securities agency. The transfer or sale of the shares
represented hereby without appropriate registration, or pursuant to an exemption
from registration, is unlawful.
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ARTICLE VI
Miscellaneous Provisions
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6.01 Notices
(a) All notices, demands or requests provided for or permitted to be
given pursuant hereto must be in writing. All notices, demands and requests
shall be deemed to have been properly given or served when deposited in the
United States mail, addressed to the individual or entity to whom notice is
given, postage prepaid and registered or certified with return receipt
requested, at the last known address of such individual or entity.
(b) By giving at least fifteen (15) days prior written notice, the
Company, a Subsidiary Corporation and the Optionee shall have the right from
time to time to change their addresses and to specify any other address within
the United States of America.
6.02 Titles and Captions. All Article and Section titles and captions in
this Option Agreement are for convenience or reference only, and shall not be
deemed part of this Option Agreement, and in no way define, limit, extend or
describe the scope or intent of any provisions hereof.
6.03 Pronouns and Plurals. Whenever the context may require, any pronoun
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
6.04 Applicable Law. This Option Agreement shall be construed in
accordance with and shall be governed by the laws of the State of Nevada.
6.05 Binding Effect. This Option Agreement shall be binding upon the
Optionee and upon the Optionee's successors, legal representatives, and assigns.
6.06 Creditors. None of the provisions of this Option Agreement shall be
for the benefit of or shall be enforceable by any creditor of the Optionee.
6.07 Severability. In the event that any condition, covenant or other
provision herein contained is held to be invalid or void by any court of
competent jurisdiction, the same shall be deemed severable from the remainder of
this Option Agreement and shall in no way affect any other covenant or condition
herein contained. If such condition, covenant or other provision shall be deemed
invalid due to its scope or breadth, such provision shall be deemed valid to the
extent of the scope or breadth permitted by law.
6.08 Plan Controls. This Option Agreement is subject to the terms and
provisions of the Plan, and in the event of an inconsistency herewith, the terms
of the plan shall control.
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IN WITNESS WHEREOF, the Company and the Optionee have executed this Option
Agreement as of the date first set forth above.
"Company"
AMERICAN PACIFIC CORPORATION,
a Delaware corporation
By
________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President
Attest:
__________________________
C. ▇▇▇▇▇ ▇▇▇▇▇▇
Secretary
"Optionee"
GENERAL TECHNICAL SERVICES, INC.,,
an Oklahoma corporation
By
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Its
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Address:
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