As filed with the Securities and Exchange Commission on May 22, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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AMERICAN PACIFIC CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 59-6490478
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3770 HOWARD HUGHES PARKWAY, 89109
SUITE 300 (Zip Code)
LAS VEGAS, NEVADA
(Address of principal executive offices)
1997 STOCK OPTION PLAN
AND OPTIONS GRANTED TO CERTAIN
EXECUTIVE OFFICERS AND DIRECTORS
(Full Title of the Plan)
DAVID N. KEYS
EXECUTIVE VICE PRESIDENT
AMERICAN PACIFIC CORPORATION
3770 HOWARD HUGHES PARKWAY, SUITE 300
LAS VEGAS, NEVADA 89109
(Name and Address of Agent for Service)
(702) 735-2200
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
VICTOR M. ROSENZWEIG, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 753-7200
Approximate date of proposed sales pursuant to the plan:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per share price fee
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Common Stock,
<S> <C> <C> <C> <C>
$.10 par value 325,000 shares(1) $9.9375(4) $3,229,687.50(4) $ 952.76
-------------------------------------------------------------------------------------------------------------
95,000 shares(1) $ 7.00(2) $ 665,000 $1,961.75
-------------------------------------------------------------------------------------------------------------
180,000 shares(1) $7.125(3) $1,282,500 $ 378.34
- ------------------------------------------------------------------------------------------------------------------------------------
Total................. 600,000 shares $5,177,187.50 $3,292.85
====================================================================================================================================
</TABLE>
<PAGE>
(1) There are also registered hereby such indeterminate number of shares of
Common Stock as may become issuable by reason of the operation of the
anti-dilution provisions of the 1997 Stock Option Plan (the "Plan") of the
Company and of the Option Agreements with certain Executive Officers and
Directors.
2) Represents the average price per share of Common Stock to be issued upon the
exercise of options held by certain Directors of the Company.
(3) Represents the average price per share of Common Stock to be issued upon the
exercise of options held by certain Executive Officers of the Company.
(4) Pursuant to Rules 457(g) and (h), the offering price for such 325,000 shares
is estimated solely for the purpose of determining the registration fee and is
based on the average of the high and low prices of the Company's Common Stock
($9.9375) as reported by The Nasdaq Stock Market, Inc. on May 20, 1998.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference and made a
part hereof:
(a) The Annual Report of American Pacific Corporation (the
"Company") on Form 10-K and Form 10-K/A for the fiscal year ended
September 30, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended December 31, 1997 and March 31, 1998, and the
Company's Current Reports on Form 8-K filed on October 15, 1997,
February 19, 1998 and March 27, 1998.
(c) The description of the Company's securities contained in
the Company's Registration Statement on Form 8-A filed December 28,
1992.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the issuance of the Shares
offered hereby have been passed upon for the Company by Messrs. Olshan Grundman
Frome & Rosenzweig LLP, New York, New York 10022. Victor M. Rosenzweig, a member
of such firm, is a Director of the Company and holds shares of Common Stock and
options to purchase Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The General Corporation Law of the State of Delaware (the "DGCL")
permits indemnification of directors, employees and agents of corporations under
certain conditions and subject to certain limitations. The section of Delaware
law pertaining to indemnification is set forth below in full. Pursuant to the
DGCL, the Company has included provisions in its Restated Certificate of
Incorporation, as amended, (A) to provide that the Company shall indemnify its
directors and officers to the full extent permitted by the DGCL and any other
laws of Delaware as from time to time in effect and (B) to limit the personal
liability of a director to the Company for monetary damages for breach of
fiduciary duty as a director; except that liability is not eliminated for (i)
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) unlawful payment of dividends or stock
purchases or redemptions pursuant to Section 174 of the DGCL, or (iv) any
transaction from which the director derived an improper personal benefit.
The Company's by-laws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of
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<PAGE>
the fact that he is or was a director, officer, employee or an agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of (or in any other capacity) another corporation,
partnership, joint venture, trust or other enterprise, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the defense or
settlement of such action, suit or proceeding, to the extent and in the manner
substantially the same as set forth in and permitted by the DGCL. Such
indemnification (other than as ordered by a court) shall be made by the Company
only upon a determination that indemnification is proper in the circumstances
because the individual met the applicable standard of conduct. Advances for such
indemnification may be made pending such determination. Such determination shall
be made by a majority vote of a quorum consisting of disinterested directors, or
by independent legal counsel or by the stockholders. Such right of
indemnification is not to be deemed exclusive of any other rights to which such
director, officer, employee or agent is entitled and shall inure to the benefit
of the heirs, executors and administrators of each such person.
The Company also maintains a directors and officers insurance and
company reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Company for such loss for which the Company has lawfully
indemnified the directors and officers. The policy contains various exclusions,
no one of which relates to the offering hereunder.
Section 145 of the DGCL provides as follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
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(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition or such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation
as authorized in this section. Such expenses incurred by other
employees and agents may be paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any such excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
reasonably believed to be in the interest of the participants and
beneficiaries of any employee benefit plan shall be deemed
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<PAGE>
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
* 4.1 - American Pacific Corporation 1997 Stock Option Plan
(the "Plan").
* 4.2 - Form of Option Agreement under the Plan.
* 4.3 - Stock Option Agreement dated July 8, 1997, between
the Company and David N. Keys.
* 4.4 - Stock Option Agreement dated July 8, 1997, between
the Company and John R. Gibson.
* 4.5 - Form of Stock Option Agreement between the Company
and certain Directors.
* 5 - Opinion of Olshan Grundman Frome & Rosenzweig LLP.
*23.1 - Consent of Deloitte & Touche LLP, independent
auditors.
*23.2 - Consent of Olshan Grundman Frome & Rosenzweig LLP
(included in its opinion filed as Exhibit 5).
*24 - Powers of Attorney (included on page 8).
-----------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment
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<PAGE>
thereof) which, individually or in the
aggregate, represent a fundamental change in
the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above
do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement;
(2) That, for the purposes of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered that remain unsold at the termination of
the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act of
1933 and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on this 22nd day of May,
1998.
AMERICAN PACIFIC CORPORATION
(Registrant)
By:/S/ JOHN R. GIBSON
-----------------------------------------
John R. Gibson, President and Chief
Executive Officer
POWER OF ATTORNEYS AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
directors of American Pacific Corporation hereby constitutes and appoints John
R. Gibson and David N. Keys and each of them singly, as true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him in his name in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and to prepare any and
all exhibits thereto, and other documents in connection therewith, and to make
any applicable state securities law or blue sky filings, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite or necessary to be done to enable American
Pacific Corporation to comply with the provisions of the Securities Act of 1933,
as amended, and all requirements of the Securities and Exchange Commission, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE
/S/ JOHN R. GIBSON President, Chief Executive Officer (Principal
- -------------------------- Executive Officer) and Director
(John R. Gibson)
/S/ DAVID N. KEYS Executive Vice President, Chief Financial
- -------------------------- Officer (Principal Financial and Principal
(David N. Keys) Accounting Officer), Treasurer, Secretary and
Director
/S/ FRED D. GIBSON, JR. Director
- -------------------------
(Fred D. Gibson, Jr.)
/S/ EUGENE A. CAFIERO Director
- -------------------------
(Eugene A. Cafiero)
/S/ THOMAS A. TURNER Director
- -------------------------
(Thomas A. Turner)
/S/ JAN H. LOEB Director
- -------------------------
(Jan H. Loeb)
/S/ NORVAL F. POHL Director
- -------------------------
(Norval F. Pohl)
/S/ C. KEITH ROOKER Director
- -------------------------
(C. Keith Rooker)
/S/ JANE L. WILLIAMS Director
- -------------------------
(Jane L. Williams)
/S/ BERLYN D. MILLER Director
- -------------------------
(Berlyn D. Miller)
/S/ VICTOR M. ROSENZWEIG Director
- ------------------------
(Victor M. Rosenzweig)
/S/ DEAN M. WILLARD Director
- -------------------------
(Dean M. Willard)
-8-
AMERICAN PACIFIC CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This 1997 Stock Option Plan (the "Plan") is intended as an incentive, to
retain in the employ of and as consultants and advisors to AMERICAN PACIFIC
CORPORATION, a Delaware corporation with its principal office at 3770 Howard
Hughes Parkway, Las Vegas, Nevada 89109 (the "Company") and any Subsidiary of
the Company, within the meaning of Section 424(f) of the United States Internal
Revenue Code of 1986, as amended (the "Code"), persons of training, experience
and ability, to attract new employees, directors, advisors and consultants whose
services are considered valuable, to encourage the sense of proprietorship and
to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries.
It is further intended that certain options granted pursuant to the Plan
shall constitute incentive stock options within the meaning of Section 422 of
the Code (the "Incentive Options") while certain other options granted pursuant
to the Plan shall be nonqualified stock options (the "Nonqualified Options").
Incentive Options and Nonqualified Options are hereinafter referred to
collectively as "Options."
The Company intends that the Plan meet the requirements of Rule 16b-3
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section 16
(b) of the Exchange Act. Further, the Plan is intended to satisfy the
performance-based compensation exception to the limitation on the Company's tax
deductions imposed by Section 162(m) of the code ("Section 162(m)"). In all
cases, the terms, provisions, conditions and limitations of the Plan shall be
construed and interpreted consistent with the Company's intent as stated in this
Section 1.
2. ADMINISTRATION OF THE PLAN.
The Board of Directors of the Company (the "Board") shall appoint and
maintain as administrator of the Plan a Committee (the "Committee") consisting
of two or more directors that are "Non-Employee Directors" (as such term is
defined in Rule 16b-3) and "Outside Directors"
1
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(as such term is defined in Section 162 (m)), which shall serve at the pleasure
of the Board. The Committee, subject to Sections 3 and 5 hereof, shall have full
power and authority to designate recipients of Options, to determine the terms
and conditions of respective Option agreements (which need not be identical) and
to interpret the provisions and supervise the administration of the Plan. The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall interpret the
Plan and all Options granted under the Plan, shall make such rules as it deems
necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any inconsistency
in the Plan or in any Options granted under the Plan in the manner and to the
extent that the Committee deems desirable to carry into effect the Plan or any
Options. The act or determination of a majority of the Committee shall be the
act or determination of the Committee and any decision reduced to writing and
signed by all of the members of the Committee shall he fully effective as if it
had been made by a majority at a meeting duly held. Subject to the provisions of
the Plan, any action taken or determination made by the Committee pursuant to
this and the other Sections of the Plan shall he conclusive on all parties.
In the event that for any reason the Committee is unable to act or if the
Committee at the time of any grant, award or other acquisition under the Plan of
Options or Stock as hereinafter defined does not consist of two or more Non-
Employee Directors, or if there shall he no such Committee, then the Plan shall
be administered by the Board and any such grant, award or other acquisition may
be approved or ratified in any other manner contemplated by subparagraph (d) of
Rule 16b-3; provided, however, that options granted to the Company' s Chief
Executive officer or to any of the Company's other four most highly compensated
officers that are intended to qualify as performance-based compensation under
Section 162(m) may only be granted by the Committee.
3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as recipients of options
(the "Optionees") shall include employees, officers and directors of, and
consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and the
Subsidiaries. In selecting Optionees, and in determining the number Of shares to
be covered by each Option granted to Optionees, the Committee may consider the
office or position held by the Optionee or the Optionee's relationship to the
Company, the Optionee's degree of responsibility for and contribution to the
growth and success of the Company or any Subsidiary, the Optionee's length of
service, age, promotions, potential and any
2
<PAGE>
other factors that the Committee may consider relevant. An Optionee who has been
granted an Option hereunder may he granted an additional Option or Options, if
the Committee shall so determine.
4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total of 325,000
shares of the Company's Common Stock, $0.10 par value per share (the "Stock"),
shall be subject to the Plan. The maximum number of shares of Stock that may be
subject to options granted under the Plan to any individual in any calendar year
shall not exceed 100,000, and the method of counting such shares shall conform
to any requirements applicable to performance-based compensation under Section
162 (m). The shares of Stock subject to the Plan shall consist of unissued
shares or previously issued shares held by any Subsidiary of the Company, and
such amount of shares of Stock shall be and is hereby reserved for such purpose.
Any of such shares of Stock that may remain unsold and that are not subject to
outstanding Options at the termination of the Plan shall cease to be reserved
for the purposes of the Plan, but until termination of the Plan the Company
shall at all times reserve a sufficient number of shares of Stock to meet the
requirements of the Plan. Should any Option expire or be cancelled prior to its
exercise in full or should the number of shares of Stock to be delivered upon
the exercise in full of an Option be reduced for any reason, the shares of Stock
theretofore subject to such Option may be subject to future Options under the
Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Options granted under the Plan shall be subject to the following conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The purchase price of each share of Stock
purchasable under an Incentive Option shall be determined by the Committee at
the time of grant, but shall not be less than 100% of the Fair Market Value (as
defined below) of such share of Stock on the date the option is granted;
provided, however, that with respect to an Optionee who, at the time such
Incentive Option is granted, owns (within the meaning of Section 424 (d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or of any Subsidiary, the purchase price per share of Stock shall
be at least 110% of the Fair Market Value per share of Stock on the date of
grant. The purchase price of each share of Stock purchasable under a
Nonqualified option shall not be less than 100% of the Fair Market Value of such
share of Stock on the date the Option is granted; provided, however, that if an
Option granted to the Company's Chief Executive Officer or to any of the
Company's other four most highly compensated officers is intended to qualify as
performance-based compensation under Section
3
<PAGE>
162(m), the exercise price of such Option shall not be less than 100% of the
Fair Market Value of such share of Stock on the date the Option is granted. The
exercise price for each Option shall be subject to adjustment as provided in
Section 7 below. Fair Market Value means the closing price of publicly traded
shares of Stock on the principal securities exchange on which shares of Stock
are listed (if the shares of Stock are so listed), or on the NASDAQ Stock Market
(if the shares of Stock are regularly quoted on the NASDAQ Stock Market), or, if
not so listed or regularly quoted, the mean between the closing bid and asked
prices of publicly traded shares of Stock in the over-the-counter market, or, if
such bid and asked prices shall not be available, as reported by any nationally
recognized quotation service selected by the Company, or as determined by the
Committee in a manner consistent with the provisions of the Code. Anything in
this Section 5(a) to the contrary notwithstanding, in no event shall the
purchase price of a share of Stock be less than the minimum price permitted
under the rules and policies of the securities exchange or automated quotation
system on which the shares of Stock are listed.
(b) OPTION TERM. The term of each Option shall be fixed by the
Committee, but no Option shall he exercisable more than 10 years after the date
such Option is granted; provided, however, that the term of an Incentive Option
granted to an Optionee who, at the time such Incentive Option is granted owns
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary
shall not exceed five years.
(c) EXERCISABILITY. Subject to Section 5(j) hereof, options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at the time of grant.
(d) METHOD OF EXERCISE. Options to the extent then exercisable may be
exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price, in cash, by
check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of Stock owned by the Optionee
(based on the Fair Market Value of the Stock on the trading day before the
Option is exercised). An optionee shall have the right to dividends and other
rights of a stockholder with respect to shares of Stock purchased upon exercise
of an Option after (i) the Optionee has given written notice of exercise and has
paid in full for such shares and (ii) becomes a stockholder of record with
respect thereto.
(e) NON-TRANSFERABILITY OF OPTIONS. Options are not transferable and
may be exercised solely by the Optionee during his lifetime or after his death
by the person or persons entitled thereto under his will or the laws of descent
and distribution. Any attempt to transfer, assign, pledge or otherwise dispose
of, or to subject to execution, attachment or similar process,
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any Option contrary to the provisions hereof shall be void and ineffective and
shall give no right to the purported transferee.
(f) TERMINATION BY DEATH. Unless otherwise determined by the Committee
at grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year after the date of such death or until the expiration of the
stated term of such Option as provided under the Plan, whichever period is
shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of total and permanent
disability, any Option held by such Optionee may thereafter be exercised, to the
extent it was exercisable at the time of termination due to Disability (or on
such accelerated basis as the Committee shall determine at or after grant), but
may not be exercised after three months after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the optionee Dies
within such three-month period, any unexercised Option held by such Optionee
shall thereafter be exercisable to the extent to which it was exercisable at the
time of death for a period of one year after the date of such death or for the
stated term of such Option, whichever period is shorter.
(h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of Normal or Early Retirement (as
such terms are defined below), any Option held by such Optionee may thereafter
be exercised to the extent it was exercisable at the time of such Retirement (or
on such accelerated basis as the Committee shall determine at or after grant),
but may not be exercised after three months after the date of such termination
of employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such three-month period, any unexercised Option held by such Optionee
shall thereafter be exercisable, to the extent to which it was exercisable at
the time of death, for a period of one year after the date of such death or for
the stated term of such Option, whichever period is shorter.
For purposes of this paragraph (h), Normal Retirement shall mean retirement
from active employment with the Company or any subsidiary on or after the normal
retirement date specified in the applicable Company or Subsidiary pension plan
or if no such pension plan, age 65. Early Retirement shall mean retirement from
active employment with the Company or any Subsidiary
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pursuant to the early retirement provisions of the applicable Company or
Subsidiary pension plan or if no such pension plan, age 55.
(i) OTHER TERMINATION. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option shall thereupon terminate, except that the portion
of any Option that was exercisable on the date of such termination of employment
may he exercised for the lesser of three months after the date of termination or
the balance of such Option's term if the Optionee's employment or service with
the Company or any Subsidiary is terminated by the Company or such Subsidiary
without cause (the determination as to whether termination was for cause to be
made by the Committee). The transfer of an Optionee from the employ of the
Company to a Subsidiary, or vice versa, or from one Subsidiary to another, shall
not be deemed to constitute a termination of employment for purposes of the
Plan.
(j) LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate Fair Market
Value, determined as of the date the Incentive Option is granted, of Stock for
which Incentive Options are exercisable for the first time by any optionee
during any calendar year under the Plan (and/or any other stock option plans of
the Company or any Subsidiary) shall not exceed $100,000.
(k) TRANSFER OF INCENTIVE OPTION SHARES. The stock option agreement
evidencing any Incentive Options granted under this Plan shall provide that if
the Optionee makes a disposition, within the meaning of Section 424(c) of the
Code and regulations promulgated thereunder, of any share or shares of Stock
issued to him upon exercise of an Incentive Option granted under the Plan within
the two-year period commencing on the day after the date of the grant of such
Incentive Option or within a one-year period commencing on the day after the
date of transfer of the share or shares to him pursuant to the exercise of such
Incentive Option, he shall, within 10 days after such disposition, notify the
Company thereof and immediately deliver to the Company any amount of United
States federal income tax withholding required by law.
6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after December 14,
2007, but Options theretofore granted may extend beyond that date.
7. CAPITAL CHANGE OF THE COMPANY.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares reserved for issuance
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under the Plan and in the number and option price of shares subject to
outstanding Options granted under the Plan, to the end that after such event
each Optionee's proportionate interest shall be maintained as immediately before
the occurrence of such event.
8. PURCHASE FOR INVESTMENT.
Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may he required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
9. TAXES.
The company may make such provisions as it may deem appropriate, consistent
with applicable law, in connection with any Options granted under the Plan with
respect to the withholding of any taxes or any other tax matters.
10. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on December 15, 1997, provided however that the
Plan shall subsequently be approved by majority vote of the Company's
stockholders within one year of the date thereof.
11. AMENDMENT AND TERMINATION.
The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made that would impair the rights of any Optionee under any
Option theretofore granted without his consent, and except that no amendment
shall be made which, without the approval of the stockholders of the Company
would:
(a) materially increase the number of shares that may be issued under
the Plan, except as is provided in Section 7;
(b) materially increase the benefits accruing to the Optionee's under
the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
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(d) decrease the exercise price of an Incentive Option to less than
100% of the Fair Market Value per share of Stock on the date of grant thereof or
the exercise price of a Nonqualified Option to less than 100% of the Fair Market
Value per share of Stock on the date of grant thereof; or
(e) extend the term of any Option beyond that provided for in Section
5(b).
The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent. The Committee may also substitute new Options
for previously granted Options, including options granted under other plans
applicable to the participant and previously granted Options having higher
option prices, upon such terms as the Committee may deem appropriate.
12. GOVERNMENT REGULATIONS.
The Plan, and the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies, national securities exchanges and automated
quotation systems as may be required.
13. GENERAL PROVISIONS.
(a) CERTIFICATES. All certificates for shares of Stock delivered under
the Plan shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, or other securities
commission having jurisdiction, any applicable Federal or state securities law,
any stock exchange or automated quotation system upon which the Stock is then
listed or traded and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions.
(b) EMPLOYMENT MATTERS. The adoption of the Plan shall not confer upon
any Optionee of the Company or any Subsidiary any right to continued employment
or, in the case of an optionee who is a director, continued service as a
director, with the Company or a Subsidiary, as the case may be, nor shall it
interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of any of its employees, the service of any of its
directors or the retention of any of its consultants or advisors at any time.
(c) LIMITATION OF LIABILITY. No member of the Board or the Committee,
or any officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with
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respect to the Plan, and all members of the Board or the Committee and each and
any officer or employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation.
(d) REGISTRATION OF STOCK. Notwithstanding any other provision in the
Plan, no Option may be exercised unless and until the Stock to be issued upon
the exercise thereof has been registered under the Securities Act and applicable
state securities laws, or are, in the opinion of counsel to the Company, exempt
from such registration in the United States. The Company shall not be under any
obligation to register under applicable federal or state securities laws any
Stock to be issued upon the exercise of an Option granted hereunder in order to
permit the exercise of an Option and the issuance and sale of the Stock subject
to such Option however, the Company may in its sole discretion register such
Stock at such time as the Company shall determine. If the Company chooses to
comply with such an exemption from registration, the Stock issued under the Plan
may, at the direction of the Committee, bear an appropriate restrictive legend
restricting the transfer or pledge of the Stock represented thereby, and the
Committee may also give appropriate stop transfer instructions to the Company's
transfer agents.
9
AMERICAN PACIFIC CORPORATION
1997 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into effective as of
the "Day" day of "Month," "Year," by and between American Pacific Corporation, a
Delaware corporation (the "Company"), and "Name," of "City," "State" (the
"Optionee").
RECITALS:
A. The Company has adopted the American Pacific Corporation 1997 Stock
Option Plan (the "Plan").
B. The Optionee is an individual to whom the Company has decided to
grant Options to purchase shares of the Common Stock of the Company pursuant to
the Plan.
C. The Company and the Optionee now desire to set forth the terms and
conditions pursuant to which the Option shall be granted to the Optionee, and
certain terms and conditions that will govern the issuance, holding and exercise
of such Option, subject in all respects to the terms and conditions of the Plan.
PROVISIONS:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties to this Option Agreement agree as follows:
1. NUMBER OF SHARES SUBJECT TO OPTION. The Company hereby grants to the
Optionee, upon the terms and conditions set forth in this Option Agreement and
in the Plan, "Stock_Type" (the "Option") to purchase "NoShares" shares of the
Common Stock of the Company.
2. EXERCISE PRICE. The price for which the Option hereby granted to the
Optionee may be exercised shall be $"ExercisePrice" 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 the Option Agreement.
<PAGE>
3. TIME FOR EXERCISE. The Option hereby granted to the Optionee shall
be exercisable at the following times:
With respect to One-half of the shares of Common Stock (the "Shares")
subject to the Option, the Option shall be exercisable on or after the date
of this Option Agreement;
With respect to the balance of the Shares, the Option shall be
exercisable on or after "Date2"; and
The Option shall be exercisable for a period of five years after the Option
first becomes exercisable in accordance with the foregoing provisions of this
Section 3, unless the period of exercise is sooner terminated in accordance with
the provisions of this Option Agreement or of the Plan. The Optionee shall have
no right to exercise any such Option except during the times provided above.
4. GOVERNING PLAN DOCUMENT. This Option Agreement incorporates by
reference all of the terms and conditions of the Plan as presently existing and
as hereafter amended; provided, however, that no such amendment shall adversely
affect the rights of any Optionee in and to any Option previously granted,
except as presently provided by the Plan, or except as may be required by
applicable law. The Optionee expressly acknowledges and agrees that the terms
and provisions of this Option Agreement are subject in all respects to the
provisions of the Plan; that the terms and provisions of this Option Agreement
in no way limit or modify any term or provision of the Plan; and that in case of
any conflict between the provisions of the Plan and the terms and provisions of
this Option Agreement, the provisions of the Plan shall control and shall bind
the parties hereto. The Optionee also hereby expressly acknowledges, agrees and
represents as follows:
(a) The Optionee has received of a copy of the Plan and represents that
he is familiar with the provisions of the Plan, and that he enters into this
Option Agreement subject to all of the provisions of the Plan.
(b) The Optionee is familiar with Section 5(d) of the Plan document,
relating to the procedure for exercise of Options, and represents that he
understands and agrees that all Options are exercisable only strictly in
accordance with Section 5(d) and all other provisions of the Plan document.
(c) The Optionee understands that the Optionee's use of Common Stock of
the Company owned by such Optionee to pay the Exercise Price of an Option, to
the extent permitted by Section 5(d) of the Plan document, could have adverse
tax consequences to the Optionee, and that the Company recommends that the
Optionee consult with a knowledgeable tax advisor before paying the Exercise
Price of an Option with Company Common Stock.
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<PAGE>
5. EXERCISE OF OPTION. In order to exercise the Option, the Optionee
shall deliver a written notice of exercise to the Company at its principal
business office. The notice shall specify the number of Shares with respect to
which the Option is being exercised, and shall be accompanied by payment in full
in the form of cash or check of the Exercise Price. In lieu of paying the total
purchase price in the form of cash or check, the Optionee may, with the approval
of the Committee, pay all or any portion of the Exercise Price with shares of
Common Stock of the Company owned by the Optionee. For this purpose, shares of
Company Common Stock shall be valued by the Committee at their value as of the
date on which the Optionee gives notice of exercise of an Option to the Company
(the "Value"). The Committee's determination of the Value of the Common Stock of
the Company shall be binding upon all persons having any interest in the shares
or in the Options exercised therewith. If an Optionee pays the Exercise Price of
an Option using Common Stock, the notice of exercise shall be accompanied by the
certificates representing the shares of Company Common Stock surrendered in
payment of the Exercise Price, duly and properly endorsed for transfer to the
Company.
6. REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of
any Option granted pursuant to the Plan, the Company may require the person
exercising such Option to make any representations and 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
representations and warranties that the shares of the Company's Common Stock
being acquired through the exercise of the Option are being acquired only for
investment and without any present intention or view to sell or distribute any
such shares. The Optionee hereby represents and warrants as follows:
(a) The Optionee understands that unless at the time of the exercise of
the Option a registration statement under the Securities Act of 1933, as amended
(the "Act"), is in effect as to such Shares, any Shares purchased by the
optionee upon the exercise of the Option shall be acquired for investment and
not for sale or distribution, and if the Company so requests, upon any exercise
of the Option, in whole or in part, the Optionee will execute and deliver to the
Company a certificate to such effect. The Company shall not be obligated to
issue any Shares pursuant to the option if, in the opinion of counsel to the
Company, the Shares to be so issued are required to be registered or otherwise
qualified under the Act or under any other applicable statute, regulation or
ordinance affecting the sale of securities, unless and until such Shares have
been so registered or otherwise qualified.
(b) The Optionee understands that under existing law, unless at the
time of the exercise of the Option, a registration statement under the Act is in
effect as to Shares so issuable (i) any Shares purchased by the optionee upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be
3
<PAGE>
made only in accordance with the terms and conditions of that Rule (which, under
certain circumstances, restrict the number of shares which may be sold and the
manner in which shares may be sold); (iii) certificates for Shares to be issued
to the Optionee hereunder shall bear a legend to the effect that the Shares have
not been registered under the Act and that the Shares may not be sold,
hypothecated or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; (iv) the
Company will place an appropriate "stop transfer" order with its transfer agent
with respect to such Shares; and (v) the Company has undertaken no obligation to
register the Shares or to include the Shares in any registration statement which
may be filed by it subsequent to the issuance of the Shares to the Optionee. In
addition, the optionee understands and acknowledges that the Company has no
obligation to the optionee to furnish information necessary to enable the
optionee to make sales under Rule 144.
7. RESTRICTIONS ON TRANSFERS AND ENCUMBRANCES. During the lifetime of
an Optionee, the Option may not be sold, pledged, assigned, hypothecated,
encumbered or transferred 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 during the Optionee's lifetime only by
the Optionee or his legal representative. To the extent that the Option is
exercisable after the date of the Optionee's death, it may be exercised only by
the person or persons to whom the Optionee's rights under the Option have passed
by will or by applicable laws of descent and distribution.
8. OPTIONEE RIGHTS. No provision of this Option Agreement or of the
Plan document shall be deemed to give to any Employee or Director of the Company
or of any subsidiary of the Company (a "Subsidiary Corporation") or to any other
individual, any right to be retained in the service of the Company or of any
Subsidiary Corporation, or to interfere in any way with the right of the Company
or of the Subsidiary Corporations at any time to discharge any employee, to
discontinue using the services of any individual, or to remove any Director.
9. WITHHOLDING OF TAXES. The Optionee authorizes the Company to
withhold, in accordance with applicable laws and regulations, from any
compensation or other amount payable to an Optionee, all federal, state and
other taxes attributable to taxable income realized by the Optionee as a result
of the grant or exercise of any Option.
10. ACCEPTANCE OF TERMS. The Optionee hereby accepts and adopts each
and every provision of the Plan document, whether or not any such provision is
similar in scope or effect to any term or provision of this Option Agreement,
and whether or not any provision of such document is set forth, described or
referenced in this Option Agreement.
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11. 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 an 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.
12. 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 provision hereof.
13. CAPITALIZED TERMS. Capitalized terms that are used in this Option
Agreement that are not specifically defined herein shall have the meanings set
forth in the Plan document.
14. 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.
15. APPLICABLE LAW. This Option Agreement shall be construed in
accordance with and shall be governed by the laws of the State of Nevada.
16. BINDING EFFECT. This Option Agreement shall be binding upon each
Optionee and upon such Optionee's heirs, executors, administrators, successors,
legal representatives and assigns.
17. CREDITORS. None of the provisions of this Option Agreement shall be
for the benefit of or shall be enforceable by any creditor of any Optionee.
18. 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 document 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.
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IN WITNESS WHEREOF, the Company and the Optionee have executed this
Option Agreement this ________ day of ____________________, 1998.
"Company"
AMERICAN PACIFIC CORPORATION,
a Delaware corporation
By
---------------------------------
John R. Gibson
President
Attest:
- ---------------------
David N. Keys
Secretary
"Optionee"
--------------------------------------
"Name"
Address: "Street"
"City," "State" "PostalCode"
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into effective as of
the 8/th/ day of July, 1997, by and between American Pacific Corporation, a
Delaware corporation (the "Company"), and David N. Keys, of Las Vegas, Nevada
(the "Optionee").
RECITALS:
A. The Optionee is serving as Chief Financial Officer of the Company.
The Company desires to encourage the ownership of its Common Stock by the
Optionee, and to provide an incentive for the Optionee 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
by giving suitable recognition, in the form of compensation, to his 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
As used in this Option Agreement, the following terms shall have the
indicated meanings:
1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean the
Board of Directors of the Company.
<PAGE>
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 Optionee from satisfactorily performing his
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.
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.
2
<PAGE>
ARTICLE II
ADMINISTRATION
2.01 COMMITTEE. Subject to the terms of the Plan, 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 a
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 Chairman of the Committee shall be
the Chairman of the Board of Directors. The Committee 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, 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
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 Eighty Thousand (80,000) shares of the Common Stock of
the Company.
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3.02 EXERCISE PRICE. The price for which each Option hereby granted to
the Optionee may be exercised shall be $7.125 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 exercisable at the following times:
With respect to Twenty Thousand (20,000) shares of common stock, the
Option shall be exercisable on or after the date of this Option Agreement;
With respect to an additional Twenty Thousand (20,000) shares of
common stock, the Option shall be exercisable on or after one year after
the date of this Option Agreement.
With respect to a third Twenty Thousand (20,000) shares of common
stock, the Option shall be exercisable on or after two years after the date
of this Agreement.
With respect to the final Twenty Thousand (20,000) shares of common
stock, the Option shall be exercisable on or after three years after the
date of this Option Agreement.
The Option granted hereunder shall be exercisable for a period of five years
after such Option first becomes exercisable in accordance with the foregoing
provisions of this Section 3.03, 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. During the lifetime of
the Optionee, the Option granted hereunder may not be sold, pledged, assigned,
hypothecated, encumbered or transferred 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 during an Optionee's
lifetime only by the Optionee or by the Optionee's legal representative. Any
Option that has not expired as of the date of the Optionee's death may be
exercised after the Optionee's death only by the person or persons to whom the
Optionee's interest in the Option have passed by will, by the terms of a family
trust agreement or other like instrument or by applicable laws of descent and
distribution.
3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the
Optionee dies or becomes Disabled while in, or within ninety days after ceasing
to be a Director of the Company, the Optionee shall be treated for all purposes
of this Agreement as continuing in the service of the Company throughout the
period ending on the date as of which the last Option granted to the Optionee
hereunder would have expired under the provisions of this Article III but for
the Optionee's death or Disability.
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3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option
granted hereunder only if the Optionee has remained continuously in the service
of the Company or as a Director since the date on which the Option sought to be
exercised was granted to such Optionee, through a date that is not more than two
years prior to the date on which the Option is sought to be exercised. The
provisions of this Section shall not prevent the individual or entity to whom an
Option has passed by will or by applicable laws of descent and distribution
after the death of an Optionee from exercising the Option within the period of
time during which the Option is otherwise exercisable under the provisions of
this Option Agreement, if the Option was exercisable under all provisions of
this Agreement (including the provisions of this Section 3.06) by the Optionee
as of the date of the Optionee's death.
ARTICLE IV
PROCEDURE FOR EXERCISE
4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV,
the Option granted hereunder shall be exercisable 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
exercisable, whether or not such Option was exercisable 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 exercisable 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
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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.
ARTICLE V
RESTRICTIONS AND ADDITIONAL PROVISIONS
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
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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 Director. 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 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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<PAGE>
ARTICLE VI
MISCELLANEOUS PROVISIONS
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 heirs, executors, administrators, 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 /s/ John R. Gibson
-------------------------------
John R. Gibson
President
Attest:
/s/ C. Keith Rooker
- -----------------------------
C. Keith Rooker
Secretary
"Optionee"
/s/ David N. Keys
---------------------------------
David N. Keys
Address: 1824 Glenview Drive
Las Vegas, NV 89134
9
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into effective as of
the 8/th/ day of July, 1997, by and between American Pacific Corporation, a
Delaware corporation (the "Company"), and John R. Gibson, of Las Vegas, Nevada
(the "Optionee").
RECITALS:
A. The Optionee is serving as President and Chief Executive Officer of
the Company. The Company desires to encourage the ownership of its Common Stock
by the Optionee, and to provide an incentive for the Optionee 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 by giving suitable recognition, in the form of compensation, to his
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
As used in this Option Agreement, the following terms shall have the
indicated meanings:
1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean the
Board of Directors of the Company.
<PAGE>
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 Optionee from satisfactorily performing his
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.
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.
2
<PAGE>
ARTICLE II
ADMINISTRATION
2.01 COMMITTEE. Subject to the terms of the Plan, 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 a
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 Chairman of the Committee shall be
the Chairman of the Board of Directors. The Committee 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, 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
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 One Hundred Thousand (100,000) shares of the Common Stock
of the Company.
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<PAGE>
3.02 EXERCISE PRICE. The price for which each Option hereby granted to
the Optionee may be exercised shall be $7.125 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 exercisable at the following times:
With respect to Twenty-five Thousand (25,000) shares of common stock,
the Option shall be exercisable on or after the date of this Option
Agreement;
With respect to an additional Twenty-five Thousand (25,000) shares of
common stock, the Option shall be exercisable on or after one year after
the date of this Option Agreement.
With respect to a third Twenty-five Thousand (25,000) shares of common
stock, the Option shall be exercisable on or after two years after the date
of this Agreement.
With respect to the final Twenty-five Thousand (25,000) shares of
common stock, the Option shall be exercisable on or after three years after
the date of this Option Agreement.
The Option granted hereunder shall be exercisable for a period of five years
after such Option first becomes exercisable in accordance with the foregoing
provisions of this Section 3.03, 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. During the lifetime of
the Optionee, the Option granted hereunder may not be sold, pledged, assigned,
hypothecated, encumbered or transferred 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 during an Optionee's
lifetime only by the Optionee or by the Optionee's legal representative. Any
Option that has not expired as of the date of the Optionee's death may be
exercised after the Optionee's death only by the person or persons to whom the
Optionee's interest in the Option have passed by will, by the terms of a family
trust agreement or other like instrument or by applicable laws of descent and
distribution.
3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the
Optionee dies or becomes Disabled while in, or within ninety days after ceasing
to be a Director of the Company, the Optionee shall be treated for all purposes
of this Agreement as continuing in the service of the Company throughout the
period ending on the date as of which the last Option granted to the Optionee
hereunder would have expired under the provisions of this Article III but for
the Optionee's death or Disability.
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<PAGE>
3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option
granted hereunder only if the Optionee has remained continuously in the service
of the Company or as a Director since the date on which the Option sought to be
exercised was granted to such Optionee, through a date that is not more than two
years prior to the date on which the Option is sought to be exercised. The
provisions of this Section shall not prevent the individual or entity to whom an
Option has passed by will or by applicable laws of descent and distribution
after the death of an Optionee from exercising the Option within the period of
time during which the Option is otherwise exercisable under the provisions of
this Option Agreement, if the Option was exercisable under all provisions of
this Agreement (including the provisions of this Section 3.06) by the Optionee
as of the date of the Optionee's death.
ARTICLE IV
PROCEDURE FOR EXERCISE
4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV,
the Option granted hereunder shall be exercisable 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
exercisable, whether or not such Option was exercisable 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 exercisable 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
5
<PAGE>
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.
ARTICLE V
RESTRICTIONS AND ADDITIONAL PROVISIONS
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
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<PAGE>
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 Director. 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 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.
7
<PAGE>
ARTICLE VI
MISCELLANEOUS PROVISIONS
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 heirs, executors, administrators, 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.
8
<PAGE>
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 /s/ John R. Gibson
------------------------------------
John R. Gibson
President
Attest:
/s/ C. Keith Rooker
- ----------------------------
C. Keith Rooker
Secretary
"Optionee"
/s/ John R. Gibson
------------------------------------
John R. Gibson
Address: 7409 Doe Avenue
Las Vegas, NV 89117
9
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into effective as of
the 21/st/ day of May, 1997, by and between American Pacific Corporation, a
Delaware corporation (the "Company"), and (INSERT NAME & ADDRESS OF DIRECTOR)
(the "Optionee").
RECITALS:
A. The Optionee is serving as a Director of the Company. The Company
desires to encourage the ownership of its Common Stock by the Optionee, and to
provide an incentive for the Optionee 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 by giving
suitable recognition, in the form of compensation, to his 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
As used in this Option Agreement, the following terms shall have the
indicated meanings:
1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean 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 Optionee from satisfactorily performing his
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.
<PAGE>
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
2.01 COMMITTEE. Subject to the terms of the Plan, 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 a
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 Chairman of the Committee shall be
the Chairman of the Board of Directors. The Committee 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
<PAGE>
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, 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
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 Fifteen Thousand (15,000) 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 $7.00 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 exercisable at the following times:
With respect to (INSERT NUMBER OF SHARES) (####) shares of common
stock, the Option shall be exercisable on or after the date of this Option
Agreement;
With respect to the remaining (INSERT NUMBER OF SHARES) (####) shares
of common stock, the Option shall be exercisable on or after one year after
the date of this Option Agreement.
The Option granted hereunder shall be exercisable for a period of five years
after such Option first becomes exercisable in accordance with the foregoing
provisions of this Section 3.03, 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. During the lifetime of
the Optionee, the Option granted hereunder may not be sold, pledged, assigned,
hypothecated, encumbered or transferred in any manner, either voluntarily or
involuntarily, by operation of law or otherwise, except to family members or
trusts for such family members, affiliates of the Optionee or by will or by
applicable laws of descent and distribution, and may be exercised during an
Optionee's lifetime only by the Optionee, a permitted transferee or by the
Optionee's legal representative. Any Option that has not expired as of the date
of the Optionee's death may be exercised after the Optionee's death only by the
person or persons to whom the Optionee's interest in the Option have passed by
will, by the terms of a family trust agreement or other like instrument or by
applicable laws of descent and distribution.
3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the
Optionee dies or becomes Disabled while in, or within ninety days after ceasing
to be a Director of the Company, the Optionee shall be treated for all purposes
of this Agreement as continuing in the service of the Company throughout the
period ending on the date as of which the last Option granted to the Optionee
hereunder would have expired under the provisions of this Article III but for
the Optionee's death or Disability.
3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option
granted hereunder only if the Optionee has remained continuously in the service
of the Company or as a Director since the date on which the Option sought to be
exercised was granted to such Optionee, through a date that is not more than two
years prior to the date on which the Option is sought to be exercised. The
provisions of this Section shall not prevent the individual or entity to whom an
Option has passed by will or by applicable laws of descent and distribution
after the death of an
3
<PAGE>
Optionee from exercising the Option within the period of time during which the
Option is otherwise exercisable under the provisions of this Option Agreement,
if the Option was exercisable under all provisions of this Agreement (including
the provisions of this Section 3.06) by the Optionee as of the date of the
Optionee's death.
ARTICLE IV
PROCEDURE FOR EXERCISE
4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV,
the Option granted hereunder shall be exercisable 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
exercisable, whether or not such Option was exercisable 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 exercisable 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. In lieu of cash, the purchase price
may be satisfied by the delivery of common stock of the Company (in proper form
for transfer and accompanied by all requisite stock transfer stamps or cash in
lieu thereof) owned by the Optionee for at least six months prior to such
delivery and having a fair market value equal to the exercise price applicable
to that portion of the Option being exercised. The fair market value of the
common stock so delivered shall be the value of such common stock determined in
accordance with Section 1.11 hereof on the date of delivery. 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
4
<PAGE>
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.
ARTICLE V
RESTRICTIONS AND ADDITIONAL PROVISIONS
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 Director. 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 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.
5
<PAGE>
It is understood however that upon stockholder approval of this Option as
contemplated in Section 6.08 hereof, the Company will file a registration
statement with the Securities and Exchange Commission registering the common
stock issuable pursuant to this Option on Form S-8.
ARTICLE VI
MISCELLANEOUS PROVISIONS
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 heirs, executors, administrators, 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 STOCKHOLDER APPROVAL. This Option Agreement is subject to
approval and ratification by the stockholders of the Company, together with
similar Option Agreements granted to non-management Directors on the date
hereof.
6
<PAGE>
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
------------------------------------
Fred D. Gibson, Jr.
President
Attest:
- -------------------------------
C. Keith Rooker
Secretary
"Optionee"
--------------------------------------
--------------------------------------
Address:
-----------------------------
-----------------------------
7
May 22, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: American Pacific Corporation -
Registration Statement On Form S-8
----------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
(the "Registration Statement"), filed on the date hereof with the Securities and
Exchange Commission by American Pacific Corporation, a Delaware corporation (the
"Company"). The Registration Statement relates to an aggregate of 600,000 shares
(the "Shares") of common stock, par value $.10 per share (the "Common Stock"),
of the Company to be issued and sold by the Company in accordance with its 1997
Stock Option Plan (the "Plan") and certain option agreements between the Company
and executive officers and directors parties thereto (the "Option Agreements").
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and By-laws of the Company, each as amended to date, minutes of
meetings of the Board of Directors and stockholders of the Company, the Plan,
the Option Agreements and such other documents, instruments and certificates of
officers and representatives of the Company and public officials, and we have
made such examination of law, as we have deemed appropriate as the basis for the
opinion hereinafter expressed. In making such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to original documents of documents submitted to
us as certified or photostatic copies.
<PAGE>
Securities and Exchange Commission
May 22, 1998
Page -2-
Based upon the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the terms and conditions set
forth in the Plan and the Option Agreements, will be duly and validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
We advise you that Victor M. Rosenzweig, a member of this
firm, is a Director of the Company and holds shares of Common Stock and options
to purchase Common Stock of the Company.
Very truly yours,
/S/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
------------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
American Pacific Corporation on Form S-8 of our report dated November 14, 1997,
appearing in the Annual Report on Form 10-K of American Pacific Corporation for
the year ended September 30, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
May 20, 1998
