Exhibit 4.1
STOCK OPTION AGREEMENT
AGREEMENT made the 13th day of February, 1996, between Aeroflex
Incorporated, a Delaware corporation, (hereinafter called the "Company") and
___________, residing at ____________________________________________________
(hereinafter called the "Optionee").
W I T N E S S E T H:
Whereas, the Company, MIC Technology Corp. ("MIC"), and the Stockholders of
MIC entered into a Stock Purchase Agreement dated February 13, 1996, pursuant to
which the Company will acquire all of the outstanding Common Stock of the MIC
Stockholders (the "Acquisition"); and
Whereas, the Optionee is currently an employee of MIC, and the Company is
desirous of inducing or encouraging the Optionee to continue to remain in the
employ of MIC after the Acquisition is consummated by offering the Optionee
certain incentives or rewards to do so; and
Whereas, the Board of Directors of the Company has determined that Optionee
is eligible for, and should be granted, subject to the Closing of the
Acquisition as hereinafter provided, an option as hereinbelow provided, and
Optionee desires to have such option;
Now, Therefore, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Grant and Exercise of Option. The Company hereby grants to Optionee an
option to purchase a total of ________________________________ (_______) shares
of the authorized and unissued Common Stock of the Company, having a par value
of $.10 per share, at the price of $4.00 per share, upon and subject to the
following terms and conditions:
(a) The within option may be exercised on or before March 18, 2001 (the
"Expiration Date") and, within such period, only at the following times and in
the following amounts:
(i) After the expiration of one (1) year from the Effective Date
(as hereinafter defined) of this Agreement, the option may be
exercised to the extent of not more than THIRTY-THREE and ONE-THIRD
(33 1/3%) PERCENT of the shares granted in Paragraph 1 hereof;
(ii) After the expiration of two (2) years from the Effective Date
of this Agreement, the option may be exercised to the extent of not
more than SIXTY-SIX AND TWO-THIRD (66 2/3%) PERCENT of the shares
granted in Paragraph 1 hereof;
(iii) After the expiration of three (3) years from the Effective
Date of this Agreement, the option may be exercised for ONE HUNDRED
(100%) PERCENT of the shares granted in Paragraph 1 hereof;
(b) The right to exercise set forth in Paragraph 1(a)(i), (ii) and
(iii) shall be accelerated providing for immediate exercise, in the event of a
change in control of the Company.
(1) For purposes of this Agreement, a change in control of the
Company, or in any person directly or indirectly controlling the Company, shall
mean:
(i) a change in control as such term is presently defined in
Regulation 240.12b-2 under the Securities and Exchange Act of 1934; or
(ii) if any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act) other than the Company or any "person" who on
the date of this Agreement is a director or officer of the Company, becomes
the "beneficial owner" (as defined in Rule 13(d)-3 under the Exchange Act)
directly or indirectly, of securities of the Company representing ten (10%)
percent of the voting power of the Company's then outstanding securities;
or
(iii) if during any period of two (2) consecutive years during the
term of this Agreement, individuals who at the beginning of such period
constitute the Board of Directors, cease for any reason to constitute at
least a majority thereof, unless the election of each director who is not a
director at the beginning of such period has been approved in advance by
directors representing at least two-third (2/3) of the directors then in
office who were directors at the beginning of the period.
(2) Notwithstanding the foregoing, this paragraph shall have no
applicability to any change of control as defined hereunder in the event that:
(i) a majority of the Board of Directors in office immediately
prior to the event or events resulting in the change f control determine
that such change is in the best interests of the Company; or
(ii) a majority of the Board of Directors in office immediately
prior to the event or events resulting in the change of control determine
that such change is not in the best interests of the Company; and
thereafter Employee cooperates, assists or acts, directly or indirectly, on
behalf of or in connection with the party seeking to acquire control of the
Company; it being expressly understood and agreed that in the event the
within option is not exercised on or before the Expiration Date, as to any
part or all of the shares which may be purchased under the option, the
right to purchase such shares shall completely lapse;
(c) Each exercise of the within option shall be by delivery to the
Company, at its then principal office (attention of the Secretary) of written
notice stating the number of shares to be purchased, accompanied by payment in
full of the option price of such shares. The option price shall be payable in
United States dollars in cash or by certified check, bank draft, postal or
express money order; provided, however, that in lieu of payment in full in cash,
an optionee may, with the approval of the Board of Directors, exercise his
option by tendering to the Company shares of the Company's Common Stock owned by
him and having a fair market value (as determined by the Board of Directors in
its absolute discretion) equal to the cash exercise price (or the balance
thereof) applicable to his option.
(d) In the event of each exercise of the within option, the Company
shall deliver to the Optionee, personally or at the Optionee's designated
address, as soon as practicable, a certificate made out to the Optionee for the
number of shares being purchased.
2. Non-Transferability of Option. The option granted under this Agreement
shall not be transferred otherwise than by will or the laws of descent and
distribution and shall be exercisable during Optionee's lifetime only by the
Optionee. No option granted hereunder shall be subject to execution, attachment,
pledge, hypothecation, or other process.
3. Death, Retirement and Termination of Employment. Any Option, the period
of which has not expired, shall terminate at the time of death of the Optionee,
or at the time of retirement or termination for any reason of such person's
employment or service with MIC, and no share of Common Stock may thereafter be
delivered pursuant to such Option, except that:
(a) Upon retirement or termination of employment or service (other
than by death, disability, voluntary termination or termination for cause), an
Optionee may within two (2) months after the date of such retirement or
termination, purchase all or part of the shares with respect to which such
Optionee is entitled to exercise such option, in accordance herewith, but in no
event after the Expiration Date. For purposes of this Section, "cause" shall
mean (i) willful disregard of duties and/or gross insubordination, (ii) habitual
absence from employment, or (iii) the commission of fraud, misrepresentation or
embezzlement;
(b) Upon the "disability" of any Optionee, the Optionee may within
three (3) years after the date of such termination of employment, but in no
event after the Expiration Date, purchase all or part of the shares with respect
to which such Optionee is entitled to exercise such Option in accordance
herewith. For purposes of this section, the term "disability" shall mean a
physical or mental disability as defined in Section 105 of the Internal Revenue
Code of 1986, as amended; and
(c) Upon the death of the Optionee during his employment, the person
or persons to whom such Optionee's rights under the Option are transferred by
will or the laws of descent and distribution may, within two (2) years after the
date of such Optionee's death, but in no event after the Expiration Date,
purchase all or any part of the shares with respect to which the Option was
exercisable on the date of termination of employment or service in accordance
herewith.
4. Dilution and Other Adjustments. In the event that there is any change in
the stock subject to the within option through merger, consolidation or
reorganization, or in the event of any dividend in stock of the same class to
holders of issued and outstanding stock of the same class, or the issuance to
the holders of such stock of rights to subscribe to stock of the same class, or
in the event of any split, combination or exchange of stock or other change in
the capital structure of the Company, the Board of Directors of the Company
shall make such adjustments in the within option as it may deem equitable to
prevent dilution or enlargement of the rights granted to the Optionee hereunder,
and such adjustments, when so made, shall be conclusive and binding on the
parties to this Agreement; and provided, further, that nothing herein shall be
construed as limiting or preventing the Company from exercising any right or
power to make or enter into adjustments, reclassifications, reorganizations, or
changes in its capital or business structure or to merge, consolidate or
dissolve or to sell or transfer all or any part of its business or assets.
5. Registration.
The Company shall cause a Registration Statement on Form S-8 covering the
Shares of the Common Stock of the Company issuable upon the exercise of the
Option granted hereunder to be filed with the Securities and Exchange Commission
and to become effective under the Securities Act of 1933, as amended, prior to
the first anniversary date of this Agreement; provided, however, that if the
Company is not permitted for any reason to register such Common Stock pursuant
to a Registration Statement on Form S-8, the Company shall use its best efforts
to cause a Registration Statement on Form S-3 covering the Common Stock to be
filed with the Securities and Exchange Commission and to become effective under
the Securities Act of 1933, as amended, prior to the first anniversary date of
this Agreement.
6. Requirements by Law.
(a) If any law, regulation of the Securities and Exchange Commission,
or any regulation of any other commission or agency having jurisdiction shall
require the Company or the Optionee to take any action with respect to the
shares of stock to be acquired upon the exercise of the within option, then the
date upon which the Company shall deliver or cause to be delivered the
certificate or certificates for the shares of stock shall be postponed until
full compliance has been made with all such requirements of law or regulation.
(b) Neither the Optionee nor any person or persons referred to in
Paragraph 3 above, as the case may be, shall be, or shall be deemed to be, a
holder of any shares subject to the within option unless and until certificates
for such shares are delivered to him or them in accordance with this Agreement,
and no certificates may be delivered until the shares represented thereby are
paid in full.
7. Purchase for Investment. The Optionee represents, on behalf of himself
and the person or persons referred to in Paragraph 3 above, that any shares of
the Company purchased pursuant to this Agreement will be acquired in good faith
for investment and not for resale or distribution, and Optionee on behalf of
himself and said person or persons, agrees that each notice of the exercise of
the within option shall contain or be accompanied by a representation in writing
signed by him or said person or persons, as the case may be, in form
satisfactory to the Company, that the shares of the Company to be purchased
pursuant to such notice are being so acquired and will not be sold except in
compliance with applicable securities laws. The requirements of this Paragraph 6
may be waived by the Company if the Company shall have received an opinion of
its counsel that such representation is not required.
8. Acknowledgment. Optionee represents that he has read and understands the
terms and conditions of this Agreement and agrees to be bound thereby.
9. Effectiveness. Notwithstanding anything herein to the contrary, this
Agreement is conditioned, and only shall become effective upon, the actual
Closing of the Acquisition (the "Effective Date").
In Witness Whereof, the parties hereto have duly executed this Agreement as
of the day and year first above written.
AEROFLEX INCORPORATED
By: __________________________
--------------------------------
______________________, Optionee