SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-B
REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS
Filed Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
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PACIFIC AEROSPACE & ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1744587
(State of incorporation) (I.R.S. Employer
Identification Number)
434 Olds Station Road, Wenatchee, Washington 98801
(Address of Registrant's principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
and
Common Stock Purchase Warrants
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ITEM 1. GENERAL INFORMATION
(a) PACIFIC AEROSPACE & ELECTRONICS, INC., a Washington corporation
(the "Company") was incorporated under the laws of the State of Washington
on September 20, 1996.
(b) The Company's fiscal year ends May 31.
ITEM 2. TRANSACTION OF SUCCESSION
(a) PCT Holdings, Inc., a Nevada corporation ("PCTH"), is the
Company's sole predecessor. PCTH's common stock, $.001 par value, was
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on May 16, 1995. The common stock purchase
warrants included in the units sold by PCTH in its July 1996 public
offering (the "PCTH Warrants"), and registered with the Securities and
Exchange Commission (the "Commission") on Form SB-2 under Registration
Number 333-5011 (the "Registration Statement"), were registered under
Section 12(g) of the Exchange Act effective as of July 15, 1996.
(b) The Company succeeded to the business of PCTH as the result of the
merger of PCTH into the Company (the "Merger"), which was effective at
11:59 p.m. PST, on November 30, 1996. Prior to the Merger, the Company was
a wholly owned subsidiary of PCTH, which had been formed by PCTH for the
purpose of effecting the Merger. The Merger was effected for the sole
purpose of changing PCTH's state of incorporation from Nevada to
Washington. The Merger was approved by the shareholders of PCTH at its 1996
annual meeting of shareholders, for which proxies were solicited pursuant
to Section 14(a) of the Exchange Act.
Upon consummation of the Merger and without any action on the part of
the holders thereof:
(1) each outstanding share of PCTH's common stock, par value
$.001 per share, automatically converted into one share of the Company's
common stock, par value $.001 per share (the "Common Stock");
(2) each of the PCTH Warrants automatically converted into a
warrant to purchase one share of the Company's Common Stock (the
"Warrants") on the same terms provided for in the PCTH Warrants immediately
prior to the Merger; and
(3) all other outstanding warrants and options to acquire PCTH's
common stock automatically converted into warrants and options to acquire
an equivalent number of shares of the Company's Common Stock on identical
terms and conditions.
A more complete description of the Merger is contained in the
definitive Proxy Statement of PCTH, dated September 20, 1996, a copy of
which was filed with the Commission on September 20, 1996.
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ITEM 3. SECURITIES TO BE REGISTERED
The Company seeks to register its 100,000,000 authorized shares of
Common Stock, and the Warrants. As of the close of business on January 31,
1997, there were 9,742,609 shares of Common Stock issued and outstanding,
and 2,250,000 Warrants issued and outstanding, none of which were held by
or for the account of the Company.
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
Common Stock
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock, $.001 par value per share. As of
January 31, 1997, there were outstanding 9,742,609 shares of Common Stock,
each of which is fully paid and nonassessable. Each outstanding share of
Common Stock is entitled to participate equally in dividends as and when
declared by the Company's Board of Directors, out of funds legally
available therefor, and is entitled to participate equally in any
distribution of net assets made to the Company's shareholders in
liquidation of the Company after payment to all creditors thereof. There
are no preemptive rights or rights to convert Common Stock into any other
securities. The holders of the Common Stock are entitled to one vote for
each share held of record on all matters voted upon by the Company's
shareholders and may not cumulate votes for the election of directors.
Thus, the owners of a majority of the outstanding shares of Common Stock
may elect all of the directors of the Company, and the owners of the
balance of the outstanding shares of the Common Stock would not be able to
elect any directors of the Company.
Warrants
Each Warrant entitles the holder to purchase one share of Common Stock
at a price of $4.6875 per share, subject to certain adjustments including,
if the Company's audited fiscal 1997 net income does not exceed $1.5
million, a one-time downward adjustment of the exercise price to (a)
$3.90625 per share if such net income is $800,000 to $1.5 million, (b)
$3.125 per share if such net income is $500,000 to $799,000, and (c)
$2.34375 per share if such net income is less than $500,000. (Solely for
the purpose of determining whether a downward adjustment to the exercise
price of the Warrants will be made based on fiscal 1997 net income, any
expense relating to the vesting of any performance-based options or
warrants held by employees (including any amortization of capitalized
patent costs relating to such warrants or options) will be excluded in
determining fiscal 1997 net income.)
The Warrants are exercisable, subject to certain conditions, at any
time until July 15, 2001, unless earlier redeemed. Outstanding Warrants are
redeemable by the Company at $.25 per Warrant, upon at least 30 days prior
written notice to the registered holders, if the closing bid price (as
defined in the Warrant Agreement described below) per share of Common Stock
for the 20 consecutive trading days immediately preceding the date notice
of redemption is given equals or exceeds 200% of the then-current exercise
price of the Warrants. If the Company gives notice of its intention to
redeem, a holder must either exercise his or her Warrant before the date
specified in the redemption notice or accept the redemption price.
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The Warrants were issued in registered form under a Warrant Agreement
(the "Warrant Agreement") between the Company and Interwest Transfer Co.,
Inc., as warrant agent (the "Warrant Agent"). The shares of Common Stock
underlying the Warrants, when issued upon exercise of a Warrant, will be
fully paid and nonassessable, and the Company will pay any transfer tax
incurred as a result of the issuance of Common Stock to the holder upon its
exercise.
A Warrant may be exercised upon surrender of the Warrant certificate
on or before the expiration date of the Warrant at the offices of the
Warrant Agent, with the form of "Election To Purchase" on the reverse side
of the Warrant certificate completed and executed as indicated, accompanied
by payment of the exercise price (by certified or bank check payable to the
order of the Company or wire transfer of good funds) for the number of
shares with respect to which the Warrant is being exercised.
For a holder to exercise the Warrants, there must be a current
registration statement in effect with the Commission and qualification in
effect under applicable state securities laws (or applicable exemptions
from state qualification requirements) with respect to the issuance of
shares or other securities underlying the Warrants. The Company has agreed
to use all commercially reasonable efforts to cause a registration
statement with respect to such securities under the Securities Act of 1933,
as amended, to be filed and to become and remain effective in anticipation
of and prior to the exercise of the Warrants and to take such other actions
under the laws of various states as may be required to cause the sale of
Common Stock (or other securities) issuable upon exercise of Warrants to be
lawful. If a current registration statement is not in effect at the time a
Warrant is exercised, the Company may at its option redeem the Warrant by
paying to the holder cash equal to the difference between the market price
of the Common Stock on the exercise date and the exercise price of the
Warrant. The Company will not be required to honor the exercise of Warrants
if, in the opinion of the Company's Board of Directors upon advice of
counsel, the sale of securities upon exercise would be unlawful.
The Warrants contain provisions that protect the holders against
dilution by adjustment of the number of shares that may be purchased by the
holders. Such adjustment will occur in the event, among others, that the
Company makes certain distributions to holders of its Common Stock. The
Company is not required to issue fractional shares upon the exercise of a
Warrant. The holder of a Warrant will not possess any rights as a
shareholder of the Company until such holder exercises the Warrant. The
foregoing discussion of certain terms and provisions of the Warrants is
qualified in its entirety by reference to the detailed provisions of the
Warrant Agreement, which has been incorporated by reference as an exhibit
to this Form 8-B.
Other Material Rights of Common or Preferred Stockholders
Preferred Stock. The Company's Articles of Incorporation authorize the
issuance of 5,000,000 shares of preferred stock, par value $.001 per share
(the "Preferred Stock"). As of January 31, 1997, no shares of Preferred
Stock have been issued or are outstanding. The Company's Board of Directors
has the authority to issue shares of Preferred Stock in one or more series,
up to the maximum of 5,000,000 shares, and to fix the powers, designations,
preferences and relative, participating, optional or other rights of any
series of preferred stock, including dividend rights, conversion rights,
voting rights, redemption terms, liquidation preferences, sinking fund
terms and the number of shares constituting any series,
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without shareholder approval, except in certain limited circumstances. The
issuance of Preferred Stock in certain circumstances may have the effect of
diluting or limiting the present voting or other rights of holders of
Common Stock, delaying, deferring or preventing a change of control of the
Company, or discouraging bids for the Common Stock at a premium over the
market price of the Common Stock.
Other Warrants. As of January 31, 1997, the Company had outstanding
warrants to purchase 497,500 shares of Common Stock issued to certain
officers, directors, employees and capital sources of the Company. In
addition, the underwriters of the public offering made pursuant to the
Registration Statement hold warrants to purchase 225,000 of the units
offered in such offering (the "Underwriters' Warrants"). The Company has
reserved sufficient shares of Common Stock for issuance upon exercise of
such warrants (including the Warrants issuable upon exercise of the
Underwriters' Warrants).
Stock Options. The Company has adopted an Amended and Restated Stock
Incentive Plan under which the Company may grant options to purchase up to
2,000,000 shares of Common Stock to its employees and certain other
specified persons. As of January 31, 1997, the Company had outstanding
under this plan options to purchase up to 1,110,283 shares of Common Stock.
Registration Rights. The Underwriters' Warrants provide certain rights
with respect to the registration under the Securities Act of the 450,000
shares issuable upon exercise thereof (including the Warrants included
therein). In addition, as of January 31, 1997, the holders of 587,083
shares of Common Stock and warrants to purchase 337,500 shares of Common
Stock (collectively, the "Registrable Shares"), or their transferees, are
entitled to certain rights with respect to the registration of such shares
under the Securities Act.
Anti-Takeover Laws
The Company, as a public company that is incorporated under Washington
law, is subject to Washington's "Significant Business Transactions Statute"
(Chapter 23B.19 of the Washington Business Corporation Act), which may have
the effect of delaying or deterring a hostile takeover of the Company. The
statute prohibits, subject to certain exceptions, a corporation from
entering into any "significant business transactions" with an "Acquiring
Person" (defined generally as a person who or an affiliated group that
beneficially owns 10% or more of the outstanding voting securities of a
corporation) for a period of five years after such person or affiliated
group becomes an Acquiring Person unless the transaction or share
acquisition made by the Acquiring Person is approved prior to the share
acquisition by a majority of the target corporation's directors. In
addition, this statute prohibits a corporation subject thereto from
entering into a significant business transaction with an Acquiring Person
unless the consideration to be received by the corporation's shareholders
in connection with the proposed transaction satisfies the "fair price"
provisions set forth in the statute.
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ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
No financial statements are required to be filed with this
registration statement because the capital structure and balance sheet of
cession were the Company immediately after the succession were
substantially the same as those of PCTH.
(b) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger between PCT Holdings, Inc. and
Pacific Aerospace & Electronics, Inc. dated November 25, 1996.
(12)
3.1 Articles of Incorporation of Pacific Aerospace & Electronics,
Inc., as filed on September 20, 1996, with the Secretary of State
of the State of Washington. (12)
3.2 Articles of Merger of PCT Holdings, Inc. into Pacific Aerospace &
Electronics, Inc. filed with the Nevada Secretary of State
effective as of 11:59 p.m. PST on November 30, 1996. (12)
3.3 Articles of Merger of PCT Holdings, Inc. with and into Pacific
Aerospace & Electronics, Inc. filed with the Washington Secretary
of State effective as of 11:59 p.m. PST on November 30, 1996.
(12)
3.4 Bylaws of Pacific Aerospace & Electronics, Inc. (12)
4.1 Form of specimen certificate for the Common Stock.(12)
4.2 Form of specimen certificate for the Warrants.(12)
4.3 Warrant Agreement between Interwest Transfer Co., Inc. and PCT
Holdings, Inc. dated July 1, 1996.(11)
4.4 Purchase Warrant to Paulson Investment Company, Inc. dated July
15, 1996.(11)
4.5 Registration Rights Agreement, dated December 1, 1995, between
PCT Holdings, Inc., a Nevada corporation, and Stephen L. Morel
and Mark Morel.(6)
4.6 Registration Rights Agreement, dated November 30, 1995, between
PCT Holdings, Inc., a Nevada corporation, Seismic Safety
Products, Inc., a Florida corporation, and certain of its
shareholders.(6)
4.7 Agreement and Plan of Merger, dated February 28, 1995, among PCT
Holdings, Inc., Ceramic Devices, Inc., a Washington corporation,
and Ceramic Devices, Inc., a California corporation.(1)
4.8 Common Stock Purchase Warrant from PCT Holdings, Inc. to UTCO
Associates, Ltd. dated May 22, 1996.(2)
4.9 Purchase Warrant to Cohig & Associates, Inc. dated July 15,
1996.(11)
10.1 Loan and Security Agreement, dated April 24, 1995, between
Silicon Valley Bank and PCT Holdings, Inc., Ceramic Devices,
Inc., Cashmere Manufacturing Co., Inc., and Pacific Coast
Technologies, Inc.(4)
10.2 Employment Agreement, dated as of January 1, 1995, between PCT
Holdings, Inc. and Donald A. Wright.(4)
10.3 Amendment to Employment Agreement, dated March 1, 1996, between
PCT Holdings, Inc. and Donald A. Wright.(7)
10.4 Employment Agreement, dated as of June 1, 1996, between PCT
Holdings, Inc. and Donald A. Wright.(7)
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10.5 Common Stock Purchase Warrant from PCT Holdings, Inc. to Donald
A. Wright dated as of February 17, 1995.(7)
10.6 Common Stock Purchase Warrant from PCT Holdings, Inc. to Nick A.
Gerde dated as of February 17, 1995.(7)
10.7 Amended and Restated Stock Incentive Plan.(12)
10.8 Independent Director Stock Plan.(13)
10.9 Common Stock Purchase Warrant from PCT Holdings, Inc. to Robert
L. Smith dated as of May 22, 1996.(7)
10.10 Amended and Restated Promissory Note from PCT Holdings, Inc. to
Robert L. Smith dated as of May 22, 1996.(7)
10.11 Promissory Note from PCT Holdings, Inc. to UTCO Associates, Ltd.
dated as of May 22, 1996.(7)
10.12 Security Agreement between PCT Holdings, Inc. and UTCO
Associates, Ltd. dated as of May 22, 1996.(8)
10.13 Asset Purchase Agreement, dated October 27, 1995, between PCT
Holdings, Inc., a Nevada corporation, Seismic Safety Products,
Inc., a Washington corporation, PCT Holdings, Inc., a Washington
corporation, Seismic Safety Products, Inc., a Florida
corporation, and certain of its affiliates.(5)
10.14 Patent Purchase Agreement, dated October 27, 1995, between PCT
Holdings, Inc., a Washington corporation, Seismic Safety
Products, Inc., a Washington corporation, and James C. McGill.(5)
10.15 Patent Purchase Agreement, dated October 24, 1995, between PCT
Holdings, Inc., a Washington corporation, Seismic Safety
Products, Inc., a Washington corporation, and James C. McGill and
Antonio F. Fernandez.(5)
10.16 Agreement and Plan of Merger, dated November 30, 1995, between
PCT Holdings, Inc., a Nevada corporation, Morel Acquisition
Corporation, Morel Industries, Inc., Stephen L. Morel, and Mark
Morel.(6)
10.17 Stock Purchase Agreement, dated May 19, 1994, between Cashmere
Manufacturing Co., Inc., Herman L. Jones, John M. Eder, Fred R.
Paquette, Dan A. Paquette and PCT Holdings, Inc.(4)
10.18 Exchange Agreement, dated May 31, 1994, between PCT Holdings,
Inc. and its shareholders.(4)
10.19 Letter Agreement, dated January 3, 1995, between PCT Holdings,
Inc. and Lysys Ltd.(4)
10.20 Agreement and Plan of Merger, dated February 15, 1995, between
PCT Holdings, Inc., a Nevada corporation, PCT Merger Corporation,
a Washington corporation, and PCT Holdings, Inc., a Washington
corporation.(4)
10.21 Agreement and Plan of Merger, dated February 28, 1995, between
PCT Holdings, Inc., Ceramic Devices, Inc., a Washington
corporation, and Ceramic Devices, Inc., a California
corporation.(4)
10.22 Promissory Note, dated May 10, 1995, in the principal amount of
$200,000, from PCT Holdings, Inc. to William H. Payne, Ivan G.
Sarda, Elinor A. Walters and Katrina A. Knowles.(4)
10.23 Security Agreement, dated May 10, 1995, between Ceramic Devices,
Inc., and William H. Payne, Ivan G. Sarda, Elinor A. Walters and
Katrina A. Knowles.(4)
10.24 Intellectual Property Acquisition and License Agreement, dated
June 1, 1994, between Pacific Coast Technologies, Inc. and James
C. Kyle.(4)
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10.25 Promissory Note, dated June 1, 1994, in the principal amount of
$400,000, from Pacific Coast Technologies, Inc. to James C. Kyle
and Carol A. Kyle.(4)
10.26 Promissory Note Extension, dated January 1, 1995, in the
principal amount of $387,800, from Pacific Coast Technologies,
Inc. to James C. Kyle and Carol A. Kyle.(4)
10.27 Lease Agreement, dated February 1, 1993, between the Port of
Chelan County and Pacific Coast Technologies, Inc.(4)
10.28 Addendum to Lease Agreement with Pacific Coast Technologies,
Inc., dated April 22, 1993, between the Port of Chelan County and
Pacific Coast Technologies, Inc.(4)
10.29 Standard Industrial Lease, dated April 20, 1994, between The
Manufacturers Life Insurance Company and Ceramic Devices, Inc.,
for certain real property situated at 8170 Ronson Road, San
Diego, California.(4)
10.30 Standard Industrial Lease, dated April 20, 1994, between The
Manufacturers Life Insurance Company and Ceramic Devices, Inc.,
for certain real property situated at 8145 Ronson Road, San
Diego, California.(4)
10.31 Employment and Non-Competition Agreement, dated May 31, 1994,
between PCT Holdings, Inc. and Herman L. "Jack" Jones.(4)
10.32 Employment Agreement, dated January 1, 1995, between PCT
Holdings, Inc. and Nick A. Gerde.(6)
10.33 Amended Employment Agreement, dated March 1, 1996, between PCT
Holdings, Inc. and Nick A. Gerde.(7)
10.34 Employment Agreement, dated December 1, 1995, between Morel
Industries, Inc. and Stephen L. Morel.(5)
10.35 Revised and Restated Promissory Note, dated May 17, 1996, from
Morel Industries, Inc. to Richard and Jacquelyn Doane.(8)
10.36 Guaranty, dated January 24, 1996, from PCT Holdings, Inc. to
Richard and Jacquelyn Doane.(7)
10.37 Confirmation of Guaranty, dated May 17, 1996, from PCT Holdings,
Inc. to Richard and Jacquelyn Doane.(8)
10.38 Promissory Note, dated March 15, 1996, from Cashmere
Manufacturing Co., Inc. to Cashmere Valley Bank, Inc.(8)
10.39 Commercial Guaranty, dated March 3, 1993, from Herman L. "Jack"
Jones to Cashmere Valley Bank.(8)
10.40 Amended and Restated Agreement, dated May 30, 1996, between
Herman L. "Jack" Jones, John Eder and Cashmere Manufacturing Co.,
Inc.(9)
10.41 Renewal Promissory Note from Herman L. "Jack" Jones to PCT
Holdings, Inc. dated March 15, 1996.(9)
10.42 Lease Agreement between the Port of Chelan County and Cashmere
Manufacturing Co., Inc. dated November 4, 1994.(8)
10.43 Building Construction Agreement between the Port of Chelan County
and Cashmere Manufacturing Co., Inc. dated November 4, 1994.(8)
10.44 General Terms Agreement No. PLR-950 Relating to Boeing Model
Aircraft between Cashmere Manufacturing Co., Inc. and Boeing
Commercial Airplane Group, effective as of February 5, 1990, as
amended.(8)
10.45 Special Business Provisions No. L-890821-8140N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
December 18, 1992.(8)(10)
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10.46 Special Business Provisions No. L-500660-8134N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
December 31, 1991.(8)(10)
10.47 Special Business Provisions No. L-435579-8180N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
August 11, 1994.(8)(10)
10.48 Special Business Provisions No. PLR-950A between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 5, 1990.(8)(10)
10.49 Administrative Agreement No. L-435579-8180N between Cashmere
Manufacturing Co., Inc. and Boeing Commercial Airplane Group
effective as of August 11, 1994.(8)
10.50 Special Business Provisions No. POP-65311-0047 between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 26, 1996.(8)(10)
10.51 General Terms Agreement No. BCA-65311-0044 between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 26, 1996.(8)
10.52 Extension and Modification of Promissory Note, dated April 1996,
between PCT Holdings, Inc. and William H. Payne, Ivan G. Sarda,
the Waldal Family Trust and Katrina Knowles.(8)
10.53 Consent to Offering and Additional Indebtedness, dated June 7,
1996, between PCT Holdings, Inc. and William N. Payne, Ivan G.
Sarda, the Waldal Family Trust and Katrina Knowles.(9)
10.54 Loan Modification Agreement, dated July 26, 1996, between Silicon
Valley Bank and PCT Holdings, Inc., Ceramic Devices, Inc.,
Cashmere Manufacturing Co., Inc., Pacific Coast Technologies,
Inc. and Seismic Safety Products, Inc.(11)
16.1 Letter from accountant regarding a change of accountants.(3)
21.1 List of Subsidiaries.(7)
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(1) Incorporated by reference to PCTH's Current Report on Form 8-K filed
on March 1, 1995.
(2) Incorporated by reference to PCTH's Registration Statement on Form 8-A
filed on May 16, 1995.
(3) Incorporated by reference to PCTH's Current Report on Form 8-K/A filed
on June 22, 1995.
(4) Incorporated by reference to PCTH's Annual Report on Form 10-KSB filed
on August 29, 1995.
(5) Incorporated by reference to PCTH's Quarterly Report on Form 10-QSB
for the quarterly period ended November 30, 1995.
(6) Incorporated by reference to PCTH's Current Report on Form 8-K filed
on December 18, 1995.
(7) Incorporated by reference to PCTH's Registration Statement on Form
SB-2 filed on May 31, 1996.
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(8) Incorporated by reference to Amendment No. 1 to PCTH's Registration
Statement on Form SB-2 filed on June 19, 1996.
(9) Incorporated by reference to Amendment No. 2 to PCTH's Registration
Statement on Form SB-2 filed on July 12, 1996.
(10) Subject to confidential treatment. Omitted confidential information
was filed separately with the Commission.
(11) Incorporated by reference to PCTH's Annual Report on Form 10-KSB filed
on August 23, 1996.
(12) Incorporated by reference to the Company's Current Report on Form 8-K
filed on December 12, 1996.
(13) Submitted with this Form 8-B.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
PACIFIC AEROSPACE & ELECTRONICS, INC.
By DONALD A. WRIGHT
----------------------------------------
Donald A. Wright
Chief Executive Officer and President
Date: January 31, 1997
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INDEX TO EXHIBITS
Exhibit
Number Description
2.1 Agreement and Plan of Merger between PCT Holdings, Inc. and
Pacific Aerospace & Electronics, Inc. dated November 25, 1996.
(12)
3.1 Articles of Incorporation of Pacific Aerospace & Electronics,
Inc., as filed on September 20, 1996, with the Secretary of State
of the State of Washington. (12)
3.2 Articles of Merger of PCT Holdings, Inc. into Pacific Aerospace &
Electronics, Inc. filed with the Nevada Secretary of State
effective as of 11:59 p.m. PST on November 30, 1996. (12)
3.3 Articles of Merger of PCT Holdings, Inc. with and into Pacific
Aerospace & Electronics, Inc. filed with the Washington Secretary
of State effective as of 11:59 p.m. PST on November 30, 1996.
(12)
3.4 Bylaws of Pacific Aerospace & Electronics, Inc. (12)
4.1 Form of specimen certificate for the Common Stock.(12)
4.2 Form of specimen certificate for the Warrants.(12)
4.3 Warrant Agreement between Interwest Transfer Co., Inc. and PCT
Holdings, Inc. dated July 1, 1996.(11)
4.4 Purchase Warrant to Paulson Investment Company, Inc. dated July
15, 1996.(11)
4.5 Registration Rights Agreement, dated December 1, 1995, between
PCT Holdings, Inc., a Nevada corporation, and Stephen L. Morel
and Mark Morel.(6)
4.6 Registration Rights Agreement, dated November 30, 1995, between
PCT Holdings, Inc., a Nevada corporation, Seismic Safety
Products, Inc., a Florida corporation, and certain of its
shareholders.(6)
4.7 Agreement and Plan of Merger, dated February 28, 1995, among PCT
Holdings, Inc., Ceramic Devices, Inc., a Washington corporation,
and Ceramic Devices, Inc., a California corporation.(1)
4.8 Common Stock Purchase Warrant from PCT Holdings, Inc. to UTCO
Associates, Ltd. dated May 22, 1996.(2)
4.9 Purchase Warrant to Cohig & Associates, Inc. dated July 15,
1996.(11)
10.1 Loan and Security Agreement, dated April 24, 1995, between
Silicon Valley Bank and PCT Holdings, Inc., Ceramic Devices,
Inc., Cashmere Manufacturing Co., Inc., and Pacific Coast
Technologies, Inc.(4)
10.2 Employment Agreement, dated as of January 1, 1995, between PCT
Holdings, Inc. and Donald A. Wright.(4)
10.3 Amendment to Employment Agreement, dated March 1, 1996, between
PCT Holdings, Inc. and Donald A. Wright.(7)
10.4 Employment Agreement, dated as of June 1, 1996, between PCT
Holdings, Inc. and Donald A. Wright.(7)
10.5 Common Stock Purchase Warrant from PCT Holdings, Inc. to Donald
A. Wright dated as of February 17, 1995.(7)
10.6 Common Stock Purchase Warrant from PCT Holdings, Inc. to Nick A.
Gerde dated as of February 17, 1995.(7)
10.7 Amended and Restated Stock Incentive Plan.(12)
10.8 Independent Director Stock Plan.(13)
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10.9 Common Stock Purchase Warrant from PCT Holdings, Inc. to Robert
L. Smith dated as of May 22, 1996.(7)
10.10 Amended and Restated Promissory Note from PCT Holdings, Inc. to
Robert L. Smith dated as of May 22, 1996.(7)
10.11 Promissory Note from PCT Holdings, Inc. to UTCO Associates, Ltd.
dated as of May 22, 1996.(7)
10.12 Security Agreement between PCT Holdings, Inc. and UTCO
Associates, Ltd. dated as of May 22, 1996.(8)
10.13 Asset Purchase Agreement, dated October 27, 1995, between PCT
Holdings, Inc., a Nevada corporation, Seismic Safety Products,
Inc., a Washington corporation, PCT Holdings, Inc., a Washington
corporation, Seismic Safety Products, Inc., a Florida
corporation, and certain of its affiliates.(5)
10.14 Patent Purchase Agreement, dated October 27, 1995, between PCT
Holdings, Inc., a Washington corporation, Seismic Safety
Products, Inc., a Washington corporation, and James C. McGill.(5)
10.15 Patent Purchase Agreement, dated October 24, 1995, between PCT
Holdings, Inc., a Washington corporation, Seismic Safety
Products, Inc., a Washington corporation, and James C. McGill and
Antonio F. Fernandez.(5)
10.16 Agreement and Plan of Merger, dated November 30, 1995, between
PCT Holdings, Inc., a Nevada corporation, Morel Acquisition
Corporation, Morel Industries, Inc., Stephen L. Morel, and Mark
Morel.(6)
10.17 Stock Purchase Agreement, dated May 19, 1994, between Cashmere
Manufacturing Co., Inc., Herman L. Jones, John M. Eder, Fred R.
Paquette, Dan A. Paquette and PCT Holdings, Inc.(4)
10.18 Exchange Agreement, dated May 31, 1994, between PCT Holdings,
Inc. and its shareholders.(4)
10.19 Letter Agreement, dated January 3, 1995, between PCT Holdings,
Inc. and Lysys Ltd.(4)
10.20 Agreement and Plan of Merger, dated February 15, 1995, between
PCT Holdings, Inc., a Nevada corporation, PCT Merger Corporation,
a Washington corporation, and PCT Holdings, Inc., a Washington
corporation.(4)
10.21 Agreement and Plan of Merger, dated February 28, 1995, between
PCT Holdings, Inc., Ceramic Devices, Inc., a Washington
corporation, and Ceramic Devices, Inc., a California
corporation.(4)
10.22 Promissory Note, dated May 10, 1995, in the principal amount of
$200,000, from PCT Holdings, Inc. to William H. Payne, Ivan G.
Sarda, Elinor A. Walters and Katrina A. Knowles.(4)
10.23 Security Agreement, dated May 10, 1995, between Ceramic Devices,
Inc., and William H. Payne, Ivan G. Sarda, Elinor A. Walters and
Katrina A. Knowles.(4)
10.24 Intellectual Property Acquisition and License Agreement, dated
June 1, 1994, between Pacific Coast Technologies, Inc. and James
C. Kyle.(4)
10.25 Promissory Note, dated June 1, 1994, in the principal amount of
$400,000, from Pacific Coast Technologies, Inc. to James C. Kyle
and Carol A. Kyle.(4)
10.26 Promissory Note Extension, dated January 1, 1995, in the
principal amount of $387,800, from Pacific Coast Technologies,
Inc. to James C. Kyle and Carol A. Kyle.(4)
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10.27 Lease Agreement, dated February 1, 1993, between the Port of
Chelan County and Pacific Coast Technologies, Inc.(4)
10.28 Addendum to Lease Agreement with Pacific Coast Technologies,
Inc., dated April 22, 1993, between the Port of Chelan County and
Pacific Coast Technologies, Inc.(4)
10.29 Standard Industrial Lease, dated April 20, 1994, between The
Manufacturers Life Insurance Company and Ceramic Devices, Inc.,
for certain real property situated at 8170 Ronson Road, San
Diego, California.(4)
10.30 Standard Industrial Lease, dated April 20, 1994, between The
Manufacturers Life Insurance Company and Ceramic Devices, Inc.,
for certain real property situated at 8145 Ronson Road, San
Diego, California.(4)
10.31 Employment and Non-Competition Agreement, dated May 31, 1994,
between PCT Holdings, Inc. and Herman L. "Jack" Jones.(4)
10.32 Employment Agreement, dated January 1, 1995, between PCT
Holdings, Inc. and Nick A. Gerde.(6)
10.33 Amended Employment Agreement, dated March 1, 1996, between PCT
Holdings, Inc. and Nick A. Gerde.(7)
10.34 Employment Agreement, dated December 1, 1995, between Morel
Industries, Inc. and Stephen L. Morel.(5)
10.35 Revised and Restated Promissory Note, dated May 17, 1996, from
Morel Industries, Inc. to Richard and Jacquelyn Doane.(8)
10.36 Guaranty, dated January 24, 1996, from PCT Holdings, Inc. to
Richard and Jacquelyn Doane.(7)
10.37 Confirmation of Guaranty, dated May 17, 1996, from PCT Holdings,
Inc. to Richard and Jacquelyn Doane.(8)
10.38 Promissory Note, dated March 15, 1996, from Cashmere
Manufacturing Co., Inc. to Cashmere Valley Bank, Inc.(8)
10.39 Commercial Guaranty, dated March 3, 1993, from Herman L. "Jack"
Jones to Cashmere Valley Bank.(8)
10.40 Amended and Restated Agreement, dated May 30, 1996, between
Herman L. "Jack" Jones, John Eder and Cashmere Manufacturing Co.,
Inc.(9)
10.41 Renewal Promissory Note from Herman L. "Jack" Jones to PCT
Holdings, Inc. dated March 15, 1996.(9)
10.42 Lease Agreement between the Port of Chelan County and Cashmere
Manufacturing Co., Inc. dated November 4, 1994.(8)
10.43 Building Construction Agreement between the Port of Chelan County
and Cashmere Manufacturing Co., Inc. dated November 4, 1994.(8)
10.44 General Terms Agreement No. PLR-950 Relating to Boeing Model
Aircraft between Cashmere Manufacturing Co., Inc. and Boeing
Commercial Airplane Group, effective as of February 5, 1990, as
amended.(8)
10.45 Special Business Provisions No. L-890821-8140N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
December 18, 1992.(8)(10)
10.46 Special Business Provisions No. L-500660-8134N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
December 31, 1991.(8)(10)
10.47 Special Business Provisions No. L-435579-8180N between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
August 11, 1994.(8)(10)
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10.48 Special Business Provisions No. PLR-950A between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 5, 1990.(8)(10)
10.49 Administrative Agreement No. L-435579-8180N between Cashmere
Manufacturing Co., Inc. and Boeing Commercial Airplane Group
effective as of August 11, 1994.(8)
10.50 Special Business Provisions No. POP-65311-0047 between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 26, 1996.(8)(10)
10.51 General Terms Agreement No. BCA-65311-0044 between The Boeing
Company and Cashmere Manufacturing Co., Inc. effective as of
February 26, 1996.(8)
10.52 Extension and Modification of Promissory Note, dated April 1996,
between PCT Holdings, Inc. and William H. Payne, Ivan G. Sarda,
the Waldal Family Trust and Katrina Knowles.(8)
10.53 Consent to Offering and Additional Indebtedness, dated June 7,
1996, between PCT Holdings, Inc. and William N. Payne, Ivan G.
Sarda, the Waldal Family Trust and Katrina Knowles.(9)
10.54 Loan Modification Agreement, dated July 26, 1996, between Silicon
Valley Bank and PCT Holdings, Inc., Ceramic Devices, Inc.,
Cashmere Manufacturing Co., Inc., Pacific Coast Technologies,
Inc. and Seismic Safety Products, Inc.(11)
16.1 Letter from accountant regarding a change of accountants.(3)
21.1 List of Subsidiaries.(7)
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(1) Incorporated by reference to PCTH's Current Report on Form 8-K filed
on March 1, 1995.
(2) Incorporated by reference to PCTH's Registration Statement on Form 8-A
filed on May 16, 1995.
(3) Incorporated by reference to PCTH's Current Report on Form 8-K/A filed
on June 22, 1995.
(4) Incorporated by reference to PCTH's Annual Report on Form 10-KSB filed
on August 29, 1995.
(5) Incorporated by reference to PCTH's Quarterly Report on Form 10-QSB
for the quarterly period ended November 30, 1995.
(6) Incorporated by reference to PCTH's Current Report on Form 8-K filed
on December 18, 1995.
(7) Incorporated by reference to PCTH's Registration Statement on Form
SB-2 filed on May 31, 1996.
(8) Incorporated by reference to Amendment No. 1 to PCTH's Registration
Statement on Form SB-2 filed on June 19, 1996.
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<PAGE>
(9) Incorporated by reference to Amendment No. 2 to PCTH's Registration
Statement on Form SB-2 filed on July 12, 1996.
(10) Subject to confidential treatment. Omitted confidential information
was filed separately with the Commission.
(11) Incorporated by reference to PCTH's Annual Report on Form 10-KSB filed
on August 23, 1996.
(12) Incorporated by reference to the Company's Current Report on Form 8-K
filed on December 12, 1996.
(13) Submitted with this Form 8-B.
16
Exhibit 10.8
PACIFIC AEROSPACE & ELECTRONICS, INC.
INDEPENDENT DIRECTOR STOCK PLAN
1. Purpose. The purposes of this Independent Director Stock Plan are to
attract, reward, and retain the best available personnel to serve as
directors of Pacific Aerospace & Electronics, Inc., a Washington
corporation (the "Company"), and to provide added incentive to the
non-employee directors of the Company to serve as Directors by increasing
the ownership interest of non-employee directors of the Company.
2. Definitions. As used herein, the following definitions shall apply:
2.1 "Award" means an Initial Award and/or an Annual Award, as defined
in Section 5.3 and 5.4, respectively.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Common Stock" means the common stock of the Company, par value
$.001 per Share.
2.5 "Company" means Pacific Aerospace & Electronics, Inc., a
Washington corporation.
2.6 "Director" means a member of the Board.
2.7 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.8 "Fair Market Value" means the value of a share of Common Stock
determined as follows:
(a) if the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers,
Inc., Automated Quotation System ("NASDAQ"), the closing sales price for
such stock (or the closing bid, if no sales were reported, then as quoted
on such system or exchange (or the exchange with the greatest volume of
trading in Common Stock) on the last market trading day before the day of
determination) as reported in The Wall Street Journal or such other source
as the Board deems reliable;
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(b) if the Common Stock is quoted on the NASDAQ (but not on the
National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, then the mean
between the high and low asked prices for the Common Stock on the last
market trading day before the date of determination, as reported in The
Wall Street Journal or such other source as the Board deems reliable; or
(c) in the absence of an established market for the Common Stock,
then as determined in good faith by the Board.
2.9 "Independent Director" means a Director who is not an employee of
the Company or any Parent or Subsidiary thereof. The payment of a
Director's fee by the Company shall not be sufficient in and of itself to
constitute employment by the Company.
2.10 "Parent" means a parent corporation, whether now or hereafter
existing, as defined in Section 425(e) of the Code.
2.11 "Plan" means this Independent Director Stock Plan.
2.12 "Plan Administrator" means the administrator of this Plan as
described in Section 4.1.
2.13 "Share" means a share of Common Stock.
2.14 "Subsidiary" means a subsidiary corporation, whether now or
hereafter existing, as defined in Section 425(f) of the Code.
3. Shares Subject to this Plan. Subject to Section 8 of this Plan, the
total number of Shares that may be awarded as bonuses under this Plan shall
not exceed 100,000 Shares, as such Shares were constituted on the effective
date of this Plan. If any Share awarded under this Plan is forfeited
pursuant to Section 6.1 or 6.2, such Share shall again be available for
purposes of this Plan.
4. Administration of this Plan.
4.1 Administration. Except as otherwise required herein, this Plan
shall be administered by the Board or, if the Board shall authorize a
committee to administer this Plan, by such committee to the extent so
authorized; provided, however, that only the Board may suspend, amend or
terminate this Plan as provided in Section 9. No Director shall vote on any
action by the Board with respect to any matter relating to an award held by
such Director. The administrator of this Plan is referred to as the "Plan
Administrator."
4.2 Powers of the Plan Administrator. Subject to the specific
provisions of this Plan, the Plan Administrator shall have the authority,
in its discretion: (i) to determine, on review of relevant information and
in accordance with Section 2.8 of this Plan, the Fair Market Value of the
Common Stock; (ii) to interpret this Plan; (iii) to prescribe, amend, and
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rescind rules and regulations relating to this Plan; (iv) to authorize any
person to execute on behalf of the Company any instrument required to
effectuate the award of Shares previously granted hereunder; and (v) to
make all other determinations deemed necessary or advisable to administer
this Plan. The interpretation and construction by the Plan Administrator of
any terms or provisions of this Plan, any Shares issued hereunder, or of
any rule or regulation promulgated in connection herewith, and all actions
taken by the Plan Administrator, shall be conclusive and binding on all
interested parties.
4.3 Limited Liability. No member of the Board or the Plan
Administrator or officer of the Company shall be liable for any action or
inaction of the entity or body, or another person or, except in
circumstances involving bad faith, of himself or herself.
4.4 Exchange Act. At any time that the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, the Board
and the Plan Administrator shall administer this Plan in accordance with
Rule 16b-3 adopted under the Exchange Act, as such rule may be amended from
time to time, and Shares awarded to Independent Directors shall be subject
to the applicable provisions of Rule 16b-3 or any successor thereto and to
such additional conditions or restrictions as may be required to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect
to Plan transactions.
5. Award of Shares.
5.1 Eligibility. Shares may be awarded pursuant to this Plan only to
Independent Directors. All awards hereunder shall be made automatically in
accordance with the terms set forth in this Section 5. No person shall have
any discretion to select which Independent Directors shall be awarded
Shares or to determine the number of Shares to be awarded to Independent
Directors. Employee directors who cease to be employees of the Company or
any Parent or Subsidiary of the Company but who continue as directors shall
become eligible for Awards pursuant to this Plan, as if they were newly
elected directors, as of the date they cease to be employees.
5.2 Shareholder Approval of Plan. No Awards may be made under this
Plan unless and until shareholder approval of this Plan has been obtained
in accordance with Section 12 hereof.
5.3 Initial Award. Any Independent Director who is elected by the
shareholders at the meeting at which this Plan is first approved by the
shareholders shall receive 500 Shares (the "Initial Award") upon
shareholder approval of this Plan. Thereafter, each Independent Director
shall receive an Initial Award upon such Independent Director's first
election or appointment to the Board, whether by the shareholders of the
Company or by the Board to fill a vacancy.
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<PAGE>
5.4 Annual Award. Each Independent Director also shall be awarded
additional Shares (the "Annual Award"), in an amount determined in
accordance with the formula set forth below, on an annual basis, each time
he or she is elected to the Board (or, if Directors are elected to serve
terms longer than one year, as of the date of each annual shareholders'
meeting during that term). The number of Shares awarded in the Annual Award
shall be equivalent to the result of $5000 divided by the Fair Market Value
of a Share on the Award date, rounded to the nearest 100 Shares.
Notwithstanding the foregoing, the Annual Award made to any Independent
Director elected or appointed to the Board at any time other than at the
annual meeting of shareholders shall be equivalent to the product of such
result (before rounding) multiplied by a fraction whose numerator is the
number of days between the date of election or appointment to the Board and
the next annual meeting of shareholders, and whose denominator is 365,
which product shall be rounded to the nearest 100 Shares.
5.5 Other Fees. The Plan Administrator may also authorize the issuance
of Shares under this Plan in lieu of any cash payment of fees payable to
non-employee Directors, under directors' compensation programs adopted by
the Board with respect to services provided by Independent Directors on
committees or as chairs of committees or officers of the Company; provided
that such issuance would not impede the purposes of this Plan or the
qualification of the Plan for the maximum exemption from Section 16 of the
Exchange Act. The number of Shares issued pursuant to this Section 5.5, if
any, in lieu of any particular fee shall be the cash amount of the fee
divided by the Fair Market Value of a Share on the date the fee is earned.
5.6 Limitations. If any Award granted under this Plan would cause the
number of Shares issued pursuant to this Plan to exceed the maximum
aggregate number permitted hereunder, then each such automatic Award shall
be for that number of Shares determined by dividing the total number of
Shares remaining available for issuance by the number of Independent
Directors eligible for grant of an Award on the Award date. Thereafter, no
further Awards shall be made until such time, if any, as additional Shares
become available under this Plan through action of the shareholders to
increase the number of Shares that may be issued under this Plan or through
forfeiture of Shares previously awarded hereunder.
6. Vesting and Forfeiture.
6.1 Vesting. Shares issued pursuant to an Initial Award shall be fully
vested upon the date of the Award. Shares issued pursuant to an Annual
Award shall vest in full on the first anniversary following the date of the
Annual Award if the Independent Director has attended at least 75% of the
regularly scheduled meetings of the Board, in person or by telephone,
during that year. If an Independent Director does not attend at least 75%
of the regularly scheduled meetings of the Board between the date of award
of an Annual Award and the first anniversary thereof, the Shares issued
pursuant to that Annual Award shall automatically expire and be forfeited
without having vested. The foregoing vesting requirement may be waived or
modified prior to the first anniversary date of any Annual Award by
unanimous vote of the Board of Directors.
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6.2 Termination of Status as a Director. If a Director ceases to be an
Independent Director for any reason other than death or disability before
his or her last Annual Award vests, the Shares issued pursuant to that
Annual Award shall be forfeited.
6.3 Disability of Director. Notwithstanding Sections 6.1 or 6.2 above,
if an Independent Director is unable to continue his service as a Director
as a result of his or her permanent and total disability (as defined in
Section 22(e)(3) of the Code), unvested shares of such Independent Director
shall become immediately vested.
6.4 Death of Director. In the event of the death of an Independent
Director, unvested shares of such Independent Director shall become vested
as of the date of death.
6.5 Certificates. Immediately following each Award date, the Company
will deliver to the Plan Administrator certificates in the name of the
Award recipients representing the Shares awarded to each recipient on that
Award date. In the case of an Initial Award, the Plan Administrator shall
promptly deliver each certificate to the relevant Independent Director. In
the case of an Annual Award, each Independent Director shall deposit with
the Plan Administrator, or a designee of the Plan Administrator, blank
stock powers, duly executed and otherwise in form satisfactory to the Plan
Administrator, for such Independent Director's certificate. The Plan
Administrator shall hold the certificates representing unvested Shares and
the stock powers related thereto until the Shares have been vested in
accordance with Section 6.1. Any certificates representing Annual Awards
that fail to vest shall be returned to the Company for immediate
cancellation, and the affected Director or former Director shall execute
any documents reasonably necessary to facilitate the cancellation. Any
certificates covering vested Shares shall be delivered to the relevant
Independent Director as soon as practicable after the Shares vest. Any
Certificates representing Shares held by the Plan Administrator for an
Independent Director who has died shall be delivered as soon as practicable
to the participant's beneficiary previously designated to the Plan
Administrator in writing by the Director, or if no such designation exists,
to the Director's estate.
6.6 Status Before Full Vesting.
6.6.1 Each recipient of Awards shall be a shareholder of record
with respect to all Shares awarded, whether or not vested, and shall be
entitled to all of the rights of such a holder, except that the Share
certificates for Annual Awards shall be held by the Plan Administrator
until delivered in accordance with Section 6.5.
6.6.2 Any dividend checks or communications to shareholders
received by the Plan Administrator with respect to a certificate held by
the Plan Administrator shall promptly be transmitted to the Independent
Director whose name is on the certificate.
6.6.3 No Independent Director may transfer any interest in
unvested shares to any person other than the Company.
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7. Effect of Merger, Sale of Assets, Liquidation or Dissolution. In the
event of a merger, consolidation or plan of exchange to which the Company
is a party and in which the Company is not the survivor, or a sale of all
or substantially all of the Company's assets, any unvested Shares shall
vest automatically upon the closing of such transaction.
8. Securities Regulations.
Shares shall not be issued under this Plan unless the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, any applicable state
securities laws, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, applicable laws of
foreign countries and other jurisdictions and the requirements of any
quotation service or stock exchange on which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company
with respect to such compliance, including the availability of an exemption
from registration for the issuance and sale of any Shares hereunder. The
inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary
for the lawful issuance and sale of any Shares hereunder or the
unavailability of an exemption from registration for the issuance and sale
of any Shares hereunder shall relieve the Company of any liability with
respect of the nonissuance or sale of such Shares as to which such
requisite authority shall not have been obtained.
In connection with the issuance of Shares under this Plan, the Company
may require recipients to represent and warrant at the time of issuance
that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any relevant
provision of the aforementioned laws. The Company may place a stop-transfer
order against any Shares on the official stock books and records of the
Company, and a legend may be stamped on stock certificates to the effect
that the Shares may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation. The Company also may require such other action or agreement by
Award recipients as may from time to time be necessary to comply with
federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF SHARES ISSUED PURSUANT TO THIS PLAN.
9. Amendment and Termination.
9.1 Plan. The Board may at any time suspend, amend or terminate this
Plan, provided that the approval of the Company's shareholders is necessary
within twelve months before or after the adoption by the Board of Directors
of any amendment that will:
9.1.1 increase the number of Shares that are to be reserved for
issuance under this Plan;
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9.1.2 permit Awards to a class of persons other than those now
permitted to receive Awards under this Plan; or
9.1.3 require shareholder approval under applicable law,
including Section 16(b) of the Exchange Act.
9.2 Limitations. Notwithstanding the foregoing, the provisions set
forth in Sections 2 and 5 of this Plan (and any additional Sections of this
Plan that affect terms required to be specified in this Plan by Rule 16b-3)
shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act, or
the rules thereunder.
9.3 Automatic Termination. Unless sooner terminated by the Board, this
Plan shall terminate ten years from the date on which this Plan is adopted
by the Board. No Award may be made after such termination or during any
suspension of this Plan. The amendment or termination of this Plan shall
not, without the consent of any Independent Director who then has unvested
Shares, alter or impair any rights or obligations with respect to such
Shares theretofore granted under this Plan.
10. Miscellaneous.
10.1 Status as a Director. Nothing in this Plan or in any Award
granted pursuant to this Plan shall confer on any person any right to
continue as a Director of the Company or to interfere in any way with the
right of the Company to terminate his or her relationship with the Company
at any time.
10.2 Reservation of Shares. The Company, during the term of this Plan,
at all times will reserve and keep available such number of Shares as shall
be sufficient to satisfy the requirements of this Plan.
11. Effectiveness of This Plan. This Plan shall become effective on
adoption by the Board so long as it is approved by the Company's
shareholders any time within twelve months after the adoption of this Plan.
No Award shall be made under this Plan, however, until this Plan is
approved by the shareholders.
Adopted by the Board of Directors on October 27, 1995, and approved by the
Shareholders on November 28, 1995.
Name changed to Pacific Aerospace & Electronics, Inc. pursuant to Merger on
November 30, 1996.
Amended by unanimous Board Consent dated December 31, 1996, to add the
final sentence of Section 6.1.
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