UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)*
Aydin Corporation
____________________________________________________________
(Name of Issuer)
Common Stock, par value $1.00 per share
____________________________________________________________
(Title of Class of Securities)
054681 10 1
____________________________________________________________
(CUSIP Number)
I. Gary Bard, Aydin Corporation,
700 Dresher Road, P.O. Box 349, Horsham, PA 19044
(215) 658-4550
____________________________________________________________
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
Copy to:
John W. Kauffman, Esquire, Duane, Morris & Heckscher,
4200 One Liberty Place, Philadelphia, PA 19103-7396
____________________________________________________________
February 25, 1997
____________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box ___ .
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 8 Pages
SEC 1746(12-91)
<PAGE>
SCHEDULE 13D
CUSIP No. 054681 10 1 Page 2 of 8 Pages
____________________________________________________________
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
I. Gary Bard
###-##-####
____________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP (See Instructions)
(a) _______
(b) _______
____________________________________________________________
3 SEC USE ONLY
____________________________________________________________
4 SOURCE OF FUNDS (See Instructions)
OO
____________________________________________________________
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ___
________
____________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
____________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 (1)
BENEFICIALLY ____________________________________________
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ____________________________________________
PERSON 9 SOLE DISPOSITIVE POWER
WITH 25,000 (1)
____________________________________________
10 SHARED DISPOSITIVE POWER
-0-
____________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
626,927 (1)
____________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES (See Instructions)
N/A
____________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
12.2%
____________________________________________________________
14 TYPE OF REPORTING PERSON (See Instructions)
IN
____________________________________________________________
(1) See Item 5 of this Schedule 13D.
<PAGE>
CUSIP No. 054681 10 1 Page 3 of 8 Pages
SCHEDULE 13D
Item 1. Security and Issuer.
This 13D relates to the $1.00 par value common stock (the
"Common Stock") of Aydin Corporation ("Aydin"), a Delaware
corporation. The address of Aydin's principal office is 700
Dresher Road, P.O. Box 349, Horsham, PA 19044.
Item 2. Identity and Background.
(a) The name of the person filing this Schedule 13D is
I. Gary Bard (the "Reporting Person").
(b) The Reporting Person's business address is 700
Dresher Road, P.O. Box 349, Horsham, PA 19044.
(c) The Reporting Person's principal occupation is
Chairman of the Board, President and Chief Executive Officer
of Aydin Corporation, 700 Dresher Road, P.O. Box 349, Horsham,
PA 19044.
(d) The Reporting Person has not, during the last five
years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) The Reporting Person was not, during the last five
years, a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which Reporting Person was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
(f) The Reporting Person is a citizen of the United
States of America
Item 3. Source or Amount of Funds or Other Contribution.
On February 25, 1997, the Reporting Person was granted an
option (the "Option") to purchase from EA Industries, Inc.
("EA") 596,927 shares (the "Shares") of Common Stock of Aydin
at a purchase price of $11 per share (the "Option Agreement").
The Option may be exercised in full prior to 5:00 p.m.,
Eastern Standard Time, on March 19, 1997 (the "Expiration
Time"). The Option is assignable by the Reporting Person. If
the Option is exercised in full, (i) EA will transfer the
Shares to the Reporting Person and/or his assigns free and
clear of all pledges, claims, liens, encumbrances and other
security interests, (ii) EA will deliver an assignment to the
purchasers of the Shares of its rights under the Registration
Rights Agreement dated January 1997 between
<PAGE>
CUSIP No. 054681 10 1 Page 4 of 8 Pages
Aydin and EA and (iii) EA will deliver an irrevocable stock
power, which shall be coupled with an interest, to the
purchasers authorizing the purchasers to vote the Shares at
any meeting of stockholders of Aydin for which EA is deemed
the record holder with respect to the Shares.
The Option was granted in connection with a letter agreement
between EA and Aydin dated February 25, 1997 (the "Letter
Agreement"), pursuant to which EA agreed to grant the Option
to the Reporting Person. The Option was granted in response
to EA's request to Aydin that Aydin cause the Shares to be to
be registered for sale under the Securities Act of 1933
pursuant to demand registration rights granted to EA under a
Registration Rights Agreement dated January 1997 between EA
and Aydin.
Under the Letter Agreement, if the Reporting Person and/or
his assigns exercise the Option in full prior to the
Expiration Time, Aydin and EA have agreed that upon
consummation of the exercise of the Option: (i) Aydin will
issue to EA a warrant to purchase up to 200,000 shares (the
"Warrant Shares") of Aydin Common Stock (the "Warrant")
exercisable over a three-year period, of which 100,000 Warrant
Shares would be exercisable at a per share purchase price of
$12.10 and 100,000 Warrant Shares would be exercisable for a
per share purchase price of $13.20; (ii) Aydin will enter into
a new registration rights agreement (the "Warrant Registration
Rights Agreement") with EA with respect to the Warrant Shares,
(iii) EA will agree to serve as a consultant to Aydin during
the three-year term of the Warrant for the purpose of
providing such assistance to Aydin in soliciting customers
internationally and exploring strategic joint ventures as EA
and Aydin mutually deem appropriate in their reasonable
discretion; and (iv) Irwin L. Gross, Chairman of EA and a
director of Aydin, will resign as a director of Aydin. If the
Option is not exercised in full prior to the Expiration Time,
the foregoing provisions described in this paragraph will
become null and void.
Item 4. Purpose of Transaction.
The Reporting Person is filing this Schedule 13D to report
his acquisition of the Option to purchase the Shares, of which
he may be deemed the beneficial owner by virtue of the
provisions of Rule 13d-1(d)(1)(i), inasmuch as he has the
right to acquire beneficial ownership of the Shares within 60
days of February 25, 1997. The Reporting Person currently
intends to assign all or a portion of the Option to one or
more persons who will agree, as a condition to the assignment,
to exercise the Option or portion thereof assigned to such
person prior to the Expiration Time. The Reporting Person
will not receive any fee or other renumeration in connection
with any such assignment. Also, the Reporting Person may
borrow funds to pay a portion of the exercise price to EA,
which borrowing may involve a pledge of some of the Shares.
The identity of the assignees and any such lenders is not
known at the current time.
Other than (i) the matters described in Item 3 of this
Schedule 13D and the first paragraph of this Item 4 and (ii)
the Reporting Person's right to purchase of any shares of
Aydin Common Stock pursuant to employee stock options
described in Item 5 below, the Reporting Person
<PAGE>
CUSIP No. 054681 10 1 Page 5 of 8 Pages
currently does not have any plans and is currently not
considering any proposals which relate to or which would
result in:
(a) the acquisition by any person of additional securities
of Aydin, or the disposition of securities of Aydin;
(b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving Aydin or any
of its subsidiaries;
(c) a sale or transfer of a material amount of assets of
Aydin or any of its subsidiaries;
(d) any change in the present board of directors or manage-
ment of Aydin, other than the resignation of Mr. Gross if the
Option is exercised in full as more fully described in Item 3
of this Schedule 13D, including any plans or proposals to
change the number or term of directors or to fill any existing
vacancies on the board;
(e) any material change in the present capitalization or
dividend policy of Aydin;
(f) any other material change in Aydin's business or
corporate structure;
(g) changes in Aydin's Certificate of Incorporation, Bylaws
or instruments corresponding thereto or other actions which
may impede the acquisition or control of Aydin by any person,
however, the Reporting Person is aware that Aydin's Board of
Directors has from time to time considered adopting certain
changes that may be deemed to have the effect of impeding the
acquisition or control of Aydin;
(h) causing a class of securities of Aydin to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) a class of equity securities of Aydin becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person may be deemed the
beneficial owner of an aggregate of 626,927 shares, or 12.2%,
of the outstanding shares of Common Stock of Aydin, consisting
of the following:
(i) 25,000 shares owned individually by
the Reporting Person;
<PAGE>
CUSIP No. 054681 10 1 Page 6 of 8 Pages
(ii) 596,927 Shares that the Reporting
Person has the right to purchase pursuant to the Option; and
(iii) 5,000 shares that the Reporting Person
has the right to acquire pursuant to employee stock options
granted by Aydin at an exercise price of $10.56 per share.
The Reporting Person also has been granted employee stock
options to purchase 155,000 shares of Common Stock that are
not currently exercisable or exercisable within 60 days of the
date of this Schedule 13D.
(b) The Reporting Person currently has the sole
power to vote or to direct the vote and sole power to dispose
or to direct the disposition of 25,000 shares of Common Stock.
The Reporting Person has the sole power to dispose the Option
to purchase 596,927 Shares by assignment to one or more
persons, as described in Items 3 and 4 of this Schedule 13D.
The Reporting Person has the right to acquire voting or
dispositive power of up to 596,927 Shares purchasable under
the Option and up to 5,000 shares purchasable under the
employee stock option. The Reporting Person believes that EA
currently has sole voting and dispositive power with respect
to the Shares.
(c) The Reporting Person acquired the Option on
February 25, 1997 as described in Item 3 of this Schedule 13D.
(d) No other person has the right to receive or
the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Shares subject to the Option or
the other shares beneficially owned by the Reporting Person;
provided, however, that the Reporting Person believes that EA
currently has such right and power with respect to the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relation-
ships with Respect to Securities of the Issuer.
The Reporting Person is a party to the Option Agreement
dated February 25, 1997 between EA and the Report Person. The
Reporting Person hereby incorporates by reference the
description of the Option Agreement contained in Item 3 and
Item 4 of this Schedule 13D into this Item 6. The Reporting
Person also hereby incorporates by reference the description
of the Letter Agreement dated February 25, 1997 between EA and
Aydin set forth in Item 3 of this Schedule 13D. The Letter
Agreement also contains the forms of Warrant and Warrant
Registration Rights Agreement to be entered into by EA and
Aydin if the Option is exercised in full prior to the
Expiration Date, descriptions of which are also incorporated
by reference to Item 3 of this Schedule 13D.
<PAGE>
CUSIP No. 054681 10 1 Page 7 of 8 Pages
The Reporting Person has also been granted an employee
stock option by Aydin to purchase 5,000 shares of Aydin Common
Stock pursuant to a Non-Qualified Stock Option Agreement dated
as of October 28, 1994. The exercise price of this employee
stock option is $10.56 per share, and the option expires on
October 28, 2004.
Item 7. Material to be filed as Exhibits.
Exhibit No. Description
___________ ___________
1 Option Agreement dated as of February 25, 1997
between EA Industries, Inc. and I. Gary Bard and
assigns.
2 Letter Agreement dated February 25, 1997 between
EA Industries, Inc. and Aydin Corporation, with
appendices.
3 Registration Rights Agreement dated January 1997
between Aydin Corporation and EA Industries, Inc.
4 Individual Non-Qualified Stock Option Agreement
dated October 28, 1994 between Aydin Corporation
and I. Gary Bard.
5 Incentive Stock Option Agreement dated October 8,
1996 between Aydin Corporation and I. Gary Bard.
6 Non-Qualified Stock Option dated October 8, 1996
between Aydin Corporation and I. Gary Bard.
<PAGE>
CUSIP No. 054681 10 1 Page 8 of 8 Pages
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
March 7, 1997
/s/ I. Gary Bard
I. Gary Bard
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
___________ ___________
1 Option Agreement dated as of February 25, 1997
between EA Industries, Inc. and I. Gary Bard and
assigns.
2 Letter Agreement dated February 25, 1997 between
EA Industries, Inc. and Aydin Corporation, with
appendices.
3 Registration Rights Agreement dated January 1997
between Aydin Corporation and EA Industries, Inc.
4 Individual Non-Qualified Stock Option Agreement
dated October 28, 1994 between Aydin Corporation
and I. Gary Bard.
5 Incentive Stock Option Agreement dated October 8,
1996 between Aydin Corporation and I. Gary Bard.
6 Non-Qualified Stock Option dated October 8, 1996
between Aydin Corporation and I. Gary Bard.
<PAGE>
Exhibit 1
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE
"SECURITIES") WILL BE ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
HYPOTHECATED UNTIL SUCH SHARES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE SECURITIES LAWS,
OR IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
STOCK OPTION AGREEMENT
______________________
STOCK OPTION AGREEMENT dated February 25, 1997 executed
by EA INDUSTRIES, INC., a New Jersey corporation ("EA"), for
the benefit of I. GARY BARD and his assigns (collectively, the
"Optionee").
EA and the Optionee wish to set forth the terms and
conditions whereby the Optionee and/or the Optionee's assigns
will have the option to purchase shares of the $1.00 par value
common stock (the "Stock") of Aydin Corporation ("Aydin").
Accordingly, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound
hereby, EA and the Optionee hereby agree as follows:
1. Grant of the Option. Subject to the terms and
conditions set forth in this Agreement, EA grants to the
Optionee the option (the "Option") to purchase all of 596,927
shares of the Stock (the "Option Shares") for the purchase
price of $11.00 per Option Share.
2. Term of the Option. The Option granted hereunder
shall expire at 5:00 p.m., Eastern Standard Time on March 19,
1997 (the "Expiration Time").
3. Exercise of the Option. The Optionee may exercise
the Option with respect to all of the Option Shares at any
time prior to the Expiration Time by tendering to EA payment
in full of the purchase price for the Option Shares together
with written notice to EA of such exercise that states the
following:
(a) an acknowledgment that the Option Shares are
being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the
opinion of counsel reasonably satisfactory to Aydin, may be
made without violating the provisions of the Securities Act of
1933, as amended (the "Act"), or any other applicable
securities laws); and
(b) an acknowledgment that the Optionee understands
that the Option Shares are "restricted securities" within the
meaning of Rule 144 promulgated by the Securities and Exchange
Commission, that the Option Shares have not been registered
under the Act or any other applicable securities laws and must
be held indefinitely unless they are subsequently registered
under such Act and applicable laws or an exemption from
registration is available.
EA shall (i) transfer to the Optionee a stock certificate or
certificates representing the Option Shares, free and clear of
all pledges, claims, liens, encumbrances and other security
interests, immediately upon the actual receipt by EA of any
such written notice and payment of the purchase price (ii)
deliver an assignment to the Optionee of EA's rights under the
Registration Rights Agreement between Aydin and EA dated
January , 1997 and (ii) deliver an irrevocable stock power,
which shall be coupled with an interest, to the Optionee
authorizing the Optionee to vote the Option Shares then being
purchased at any meeting of stockholders of the Corporation
for which EA is deemed the record holder with respect to such
Option Shares.
4. Transfer of the Option. This Option and all rights
hereunder are assignable by the Optionee subject to compliance
with applicable federal and state securities laws.
5. Miscellaneous.
(a) Notices. All notices to EA provided for in
this Agreement shall be in writing and shall either be hand
delivered, sent by registered or certified mail, or delivered
by a nationally recognized overnight delivery service to the
following address (or such other address as may be designated
by notice duly given in the manner provided herein):
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Attention: President
Any such notice, including but not limited to notices and
tenders under Section 3 hereof, shall be deemed delivered (i)
when hand delivered or (ii) on the day deposited with the
nationally recognized overnight delivery service or in the
U.S. registered or certified mail, addressed as provided
above.
(b) Integration; Modification. This Agreement
constitutes the entire understanding and agreement between EA
and the Optionee regarding the subject matter hereof and
supersedes all prior negotiations and agreements, whether oral
or written, between EA and the Optionee with respect to the
subject matter of this Agreement. This Agreement may not be
modified except by a written agreement signed by the Optionee
and a duly authorized officer of EA.
(c) Severability. In the event of the invalidity
or unenforceability of any part or provisions of this
Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of any other part or
provision of this Agreement, and the remainder of this
Agreement shall continue in full force and effect in
accordance with its terms.
(d) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.
(e) Headings. The headings of paragraphs have been
included herein for convenience only and shall not be
considered in interpreting this Agreement.
(f) Binding Effect. This Agreement shall be
binding upon EA and shall inure to the benefit of EA and the
Optionee and their respective heirs, legal representatives,
successors and permitted assigns.
IN WITNESS WHEREOF, EA, by its duly authorized officer,
has executed this Agreement as of the date first above
written.
EA INDUSTRIES, INC.
By:/s/ Irwin L. Gross
Irwin L. Gross, President
Accepted and agreed to this
25th day of February, 1997
/s/ I. Gary Bard
I. Gary Bard
<PAGE>
EXHIBIT 2
AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
February 25, 1997
Irwin L. Gross, Chairman
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Dear Irv:
The purpose of this letter is to set forth the agreements
we have reached in connection with the October 9, 1996
termination of the merger negotiations between Aydin and EA,
the registration rights agreement entered into between Aydin
and EA dated January __, 1997 (the "Registration Rights
Agreement") and EA's January 27, 1997 request for registration
of 596,927 shares (the "Shares") of Aydin Common Stock
pursuant thereto. As you and I have discussed, Aydin does not
have the financial ability to repurchase the Shares as
permitted by Section 2 of the Registration Rights Agreement
before the expiration of the repurchase right and Aydin
believes that the interests of its stockholders would be best
protected if the Shares were not offered for sale in a non-
underwritten public offering at this time.
Accordingly, Aydin and EA have agreed as follows:
1. EA will grant I. Gary Bard and his assigns, an
option (the "Option") to purchase the Shares as set forth in
the form of Option Agreement attached hereto as Appendix A.
2. Upon the closing of the exercise of the Option,
Aydin will issue EA a warrant to purchase up to 200,000 shares
of Aydin Common Stock (the "Warrant") in the form of Warrant
attached hereto as Appendix B. The shares purchasable upon
exercise of the Warrant will be subject to a registration
rights agreement in the form attached hereto as Appendix C.
EA agrees to serve as a consultant to Aydin during the three-
year term of the Warrant for the purpose of providing such
assistance to Aydin in soliciting customers internationally
and exploring strategic joint ventures as EA and Aydin
mutually deem appropriate in their reasonable discretion.
3. If the Option is exercised in accordance with its
terms for the purchase of all of the Shares, Irwin L. Gross
will thereupon resign as a director of Aydin.
4. In the event that the Option is not exercised in
full, the provisions of paragraphs 2 and 3 hereof shall
terminate and be of no force or effect.
If the foregoing correctly sets forth the agreements
between Aydin and EA, please sign and return the enclosed copy
of this letter to me.
Sincerely,
/s/ I. Gary Bard
I. Gary Bard, President
Accepted and agreed to this
____ day of February, 1997
EA INDUSTRIES, INC.
By:/s/ Irwin L. Gross
Irwin L. Gross, Chairman
<PAGE>
APPENDIX A
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE
"SECURITIES") WILL BE ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
HYPOTHECATED UNTIL SUCH SHARES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE SECURITIES LAWS,
OR IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
STOCK OPTION AGREEMENT
______________________
STOCK OPTION AGREEMENT dated February 25, 1997 executed
by EA INDUSTRIES, INC., a New Jersey corporation ("EA"), for
the benefit of I. GARY BARD and his assigns (collectively, the
"Optionee").
EA and the Optionee wish to set forth the terms and
conditions whereby the Optionee and/or the Optionee's assigns
will have the option to purchase shares of the $1.00 par value
common stock (the "Stock") of Aydin Corporation ("Aydin").
Accordingly, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound
hereby, EA and the Optionee hereby agree as follows:
1. Grant of the Option. Subject to the terms and
conditions set forth in this Agreement, EA grants to the
Optionee the option (the "Option") to purchase all of 596,927
shares of the Stock (the "Option Shares") for the purchase
price of $11.00 per Option Share.
2. Term of the Option. The Option granted hereunder
shall expire at 5:00 p.m., Eastern Standard Time on March 19,
1997 (the "Expiration Time").
3. Exercise of the Option. The Optionee may exercise
the Option with respect to all of the Option Shares at any
time prior to the Expiration Time by tendering to EA payment
in full of the purchase price for the Option Shares together
with written notice to EA of such exercise that states the
following:
(a) an acknowledgment that the Option Shares are
being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the
opinion of counsel reasonably satisfactory to Aydin, may be
made without violating the provisions of the Securities Act of
1933, as amended (the "Act"), or any other applicable
securities laws); and
(b) an acknowledgment that the Optionee understands
that the Option Shares are "restricted securities" within the
meaning of Rule 144 promulgated by the Securities and Exchange
Commission, that the Option Shares have not been registered
under the Act or any other applicable securities laws and must
be held indefinitely unless they are subsequently registered
under such Act and applicable laws or an exemption from
registration is available.
EA shall (i) transfer to the Optionee a stock certificate or
certificates representing the Option Shares, free and clear of
all pledges, claims, liens, encumbrances and other security
interests, immediately upon the actual receipt by EA of any
such written notice and payment of the purchase price (ii)
deliver an assignment to the Optionee of EA's rights under the
Registration Rights Agreement between Aydin and EA dated
January , 1997 and (ii) deliver an irrevocable stock power,
which shall be coupled with an interest, to the Optionee
authorizing the Optionee to vote the Option Shares then being
purchased at any meeting of stockholders of the Corporation
for which EA is deemed the record holder with respect to such
Option Shares.
4. Transfer of the Option. This Option and all rights
hereunder are assignable by the Optionee subject to compliance
with applicable federal and state securities laws.
5. Miscellaneous.
(a) Notices. All notices to EA provided for in
this Agreement shall be in writing and shall either be hand
delivered, sent by registered or certified mail, or delivered
by a nationally recognized overnight delivery service to the
following address (or such other address as may be designated
by notice duly given in the manner provided herein):
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Attention: President
Any such notice, including but not limited to notices and
tenders under Section 3 hereof, shall be deemed delivered (i)
when hand delivered or (ii) on the day deposited with the
nationally recognized overnight delivery service or in the
U.S. registered or certified mail, addressed as provided
above.
(b) Integration; Modification. This Agreement
constitutes the entire understanding and agreement between EA
and the Optionee regarding the subject matter hereof and
supersedes all prior negotiations and agreements, whether oral
or written, between EA and the Optionee with respect to the
subject matter of this Agreement. This Agreement may not be
modified except by a written agreement signed by the Optionee
and a duly authorized officer of EA.
(c) Severability. In the event of the invalidity
or unenforceability of any part or provisions of this
Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of any other part or
provision of this Agreement, and the remainder of this
Agreement shall continue in full force and effect in
accordance with its terms.
(d) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.
(e) Headings. The headings of paragraphs have been
included herein for convenience only and shall not be
considered in interpreting this Agreement.
(f) Binding Effect. This Agreement shall be
binding upon EA and shall inure to the benefit of EA and the
Optionee and their respective heirs, legal representatives,
successors and permitted assigns.
IN WITNESS WHEREOF, EA, by its duly authorized officer,
has executed this Agreement as of the date first above
written.
EA INDUSTRIES, INC.
By:/s/ Irwin L. Gross
Irwin L. Gross, President
Accepted and agreed to this
25th day of February, 1997
/s/ I. Gary Bard
I. Gary Bard
<PAGE>
APPENDIX B
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE
"SECURITIES") WILL BE ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
HYPOTHECATED UNTIL SUCH SHARES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE SECURITIES LAWS,
OR IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
WARRANT
For the Purchase of up to
200,000 Shares of Common Stock, 1.00 Par Value,
of
Aydin Corporation
1. Issuance and Exercise of Warrant.
1.1. Issuance of Warrant. For value received, EA
Industries, Inc., a New Jersey corporation, or registered
assigns, (the "Warrant Holder"), is entitled to purchase from
Aydin Corporation, (the "Company"), a Delaware corporation, up
to 200,000 shares (the "Shares") of Common Stock, par value
$1.00 per share, of the Company, upon surrender of this
Warrant to the Company and upon payment of the Exercise Price
(as hereinafter defined), subject to the terms and conditions
set forth herein.
1.2. Exercise of Warrant; Expiration.
(a) Exercisability. This Warrant is exercisable in
whole or in part commencing on and after its date of issuance
and shall expire at 5:00 p.m., Philadelphia Time on [March ,
2000] (the "Expiration Date"); provided, however, that the
initial exercise of this Warrant shall be for the purchase of
at least 100,000 Shares, as such amount may be adjusted from
time to time pursuant to the provisions of Section 2 hereof.
(b) Exercise Price. The price for which the Shares
may be purchased upon the exercise of this warrant shall be as
follows: (i) 100,000 of the Shares shall be exercisable for
$12.10 per Share and (ii) 100,000 of the Shares shall be
exercisable for $13.20 per Share (each such price being
hereinafter referred to as the "Exercise Price").
1.3. Adjustments; Anti-Dilution Provisions.
1.4. Stock Split, Subdivision or Combination. If the
Company, at any time while this Warrant is outstanding, shall
split, subdivide or combine its Common Stock (by
reclassification or otherwise than by payment of a dividend in
the respective class), an appropriate and equitable adjustment
shall be made as of the effective date of such action in the
number of Shares as to which this Warrant, or portion thereof
then unexercised, shall be exercisable and in the Exercise
Price of such Shares in order to reflect such stock split,
subdivision or combination.
1.5. Asset or Capital Dividend. If the Company, at any
time while this Warrant is outstanding, shall make a
distribution of its assets to the holders of its Common Stock
and/or any class of stock convertible into or exchangeable for
its Common Stock as a dividend in liquidation or partial
liquidation or as a return of capital other than as a dividend
payable out of funds legally available for dividends under the
laws of the Commonwealth of Pennsylvania, the Warrant Holder
shall, upon exercise and payment of the Exercise Price for
each Share purchased hereunder within 14 business days after
notification of such distribution pursuant to Section 12
below, be entitled to receive, in addition to the number of
shares receivable thereupon, and without payment of any
additional consideration thereof, a sum equal to the amount of
such assets as would have been payable to such Warrant Holder
had such Warrant Holder been the holder of record of such
shares on the record date for such distribution; and an
appropriate provision therefor shall be made for the Warrant
Holder to be made a party to any such distribution.
1.6. Adjustments for Consolidation, Merger, Sale of
Assets, Reorganization or Reclassification. In the event the
Company, at any time or from time to time while this Warrant
is outstanding, (a) shall consolidate with or merge into any
other entity and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall
permit any other entity to consolidate with or merge into the
Company and the Company shall be the continuing or surviving
entity but, in connection with such consolidation or merger,
the Common Stock shall be changed into or exchanged for
capital stock or other securities or property of any other
equity, or (c) shall transfer all or substantially all of its
properties and assets to any other entity, or (d) shall effect
a capital reorganization or reclassification of the Common
Stock (other than one deemed to result in the issue of
additional shares of such class), then, and in each such
event, lawful provision shall be made so that the Warrant
Holder shall be entitled to receive upon the exercise hereof
at anytime after the consummation of such consolidation,
merger, transfer, reorganization or reclassification, in lieu
of the Shares issuable upon exercise of this Warrant prior to
such consummation, the capital stock and other securities and
property to which the Warrant Holder would have been entitled
upon such consummation if the Warrant Holder had exercised
this Warrant immediately prior thereto.
1.7. Certificate of Adjustment. The Company shall
promptly furnish or cause to be furnished to the Warrant
Holder a certificate setting forth each adjustment made
pursuant to this Section 2.
2. No Fractional Shares. No fractional Shares shall be
issued in connection with any exercise hereof, and if the
total number of Shares that remains unexercisable would result
in a fraction, such number of Shares shall be rounded to the
nearest whole Share.
3. No Shareholder Rights. This Warrant shall not
entitle the Warrant Holder to any of the rights of a
stockholder of the Company.
4. Reservation of Shares. The Company covenants that
the Shares issuable upon the exercise of this Warrant have
been duly authorized and reserved and, when issued and paid
for, will be validly issued, fully paid and non-assessable.
The issuance of this Warrant shall constitute full authority
to those officers of the Company who are charged with the duty
of executing stock certificates to execute and issue the
necessary certificates for Shares upon the exercise of this
Warrant.
5. Exercise of Warrant.
5.1. Manner of Exercise. To exercise this Warrant,
in whole or in part, the Warrant Holder shall deliver to the
Company, at its address specified in Section 12 below: (a) a
written notice in the form of Annex A hereto of such Warrant
Holder's election to exercise this Warrant, specifying the
number of Shares to be purchased and whether the purchase is
pursuant to clause (i) or clause (ii) of Section 1.2(b),(b) a
wire transfer or a certified or official bank check or checks
payable to the order of the Company in an amount equal to the
product of the applicable Exercise Price per Share and the
number of Shares to be purchased at such time pursuant to the
Warrant and such notice, and (c) the original copy of this
Warrant. Upon receipt of such items, the Company shall, as
promptly as practicable, and in any event within 20 days
thereafter, issue or cause to be issued and delivered to such
Warrant Holder a certificate or, if requested by the Warrant
Holder, multiple certificates representing the aggregate
number of full Shares issuable upon such exercise. This
Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been
issued, and such Warrant Holder or any other person so
designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the
date that said notice, together with said cash or check or
checks and this Warrant, are received by the Company as
aforesaid. If this Warrant shall have been exercised in part,
the Company shall, at the time of delivery of said certificate
or certificates, deliver to such Warrant Holder a new Warrant
evidencing the rights of such Warrant Holder to purchase the
unpurchased Shares, which new Warrant shall in all other
respects be identical to this Warrant.
5.2. Payment of Taxes and Expenses. All Shares
issuable upon the exercise of this Warrant shall be validly
issued, fully paid and non-assessable, and the Company shall
pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed in respect of, the
issue or delivery thereof, other than any federal, state or
local income tax or other tax based upon gross or net income,
owned by the Warrant Holder on account of such issuance or
delivery. The Company shall not be required, however, to pay
any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares
in any name other than that of the registered Warrant Holder,
and in such case the Company shall not be required to issue or
deliver any stock certificate until such tax or other charge
has been paid or it has been established to the Company's
reasonable satisfaction that no such tax or other charge is
due.
6. Registration Rights. The Shares issued upon exercise
of this Warrant shall be subject to the Registration Rights
Agreement dated , 1997 between the
Company and the Warrant Holder.
7. Agreement to Vote Shares. For as long as the Warrant
Holder and/or any of its affiliates remain the beneficial
owner of the Shares issued upon exercise of the Warrant, at
any meeting of stockholders of the Company at which directors
of the Company are to be elected, the Warrant Holder and each
such affiliate agree to vote any and all such Shares for the
election to the Board of those persons nominated by the
Company's Board of Directors. The Warrant Holder further
agrees that the Shares may not be transferred in a privately
negotiated transaction that has not been registered under the
Securities Act of 1933, unless the transferee shall have
agreed to be bound by the terms of this Section 8. The
Warrant Holder agrees to the placement of a restrictive legend
on the certificate(s) representing the Shares relating to this
restriction.
8. Replacement of Warrant. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of
any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of
such Warrant, the Company, at the expense of the Warrant
Holder, will execute and deliver, in lieu thereof, a new
Warrant.
9. Transfer of Warrant. This Warrant may be
transferred by the Warrant Holder subject to compliance with
applicable federal and state securities laws; provided,
however, that any transferee of this Warrant shall have agreed
in writing to assume and be bound by the obligations of the
Warrant Holder and/or its affiliates under the terms and
provisions of Section 8 of this Warrant.
10. Miscellaneous. This Warrant shall be governed by
the internal law, but not the law of conflicts, of the State
of Delaware. The headings in this Warrant are for purposes of
convenience and reference only and shall not be deemed to
constitute a part hereof. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
except by an instrument in writing signed by the Company and
the registered Warrant Holder. The invalidity or
unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
11. Notice Generally. Any notice, demand or delivery
pursuant to the provisions hereof shall be sufficiently given
or made if sent by registered or certified mail, postage
prepaid, or overnight delivery service, addressed to the
Warrant Holder at such Warrant Holder's last known address
appearing on the books of the Company, or, except as herein
otherwise expressly provided, to the Company at Aydin Corpora-
tion, 700 Dresher Road, P.O. Box 349, Horsham, PA 19044,
Attention: President, or such other address as shall have
been furnished to the party giving or making such notice,
demand or delivery.
<PAGE>
ISSUED THIS day of , 1997.
AYDIN CORPORATION
Attest:
_________________________ By:_______________________
Secretary I. Gary Bard, President
<PAGE>
ANNEX A
NOTICE OF EXERCISE
(To be Executed by
the Registered Warrant Holder
in Order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the
right to purchase from Aydin Corporation ( )
Shares covered by the Warrant dated March __, 1997 and issued
to EA Industries, Inc., according to the conditions thereof.
Check one:
___ Such exercise is being made pursuant to clause (i)
of Section 1.2(b), and the undersigned herewith
makes payment of the Exercise Price of such Shares
in full. Such payment is hereby tendered in the
form of $ by wire transfer or by
certified or bank check.
___ Such exercise is made pursuant to clause (ii) of
Section 1.2(b), and the undersigned herewith makes
payment of the Exercise Price of such Shares in
full. Such payment is hereby tendered in the form
of $ by wire transfer or by certified or
bank check.
The undersigned understands that the Shares being issued
hereunder have not been registered under the Securities Act of
1933 (the "Act") or any state securities laws and that such
Shares may not be sold, transferred, or assigned except: (i)
pursuant to an effective registration thereof under the Act;
or (ii) if in the opinion of counsel for the registered owner
thereof, which opinion is reasonably satisfactory to the
Company, the proposed sale, transfer or assignment may be
effected without such registration under the Act and will not
be in violation of applicable state securities laws.
Printed Name
of Registered
Dated: Warrant Holder:
Signature:
Address:
<PAGE>
APPENDIX C
REGISTRATION RIGHTS AGREEMENT
_____________________________
REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as
of _____________, 1997 between Aydin Corporation, a Delaware
corporation (the "Corporation") and EA Industries, Inc., a New
Jersey corporation (the "Warrant Holder").
RECITALS:
_________
WHEREAS, the Warrant Holder holds a warrant to purchase
from the Corporation 200,000 shares (the "Warrant Shares") of
Common Stock, $1.00 par value, of the Corporation; and
WHEREAS, the Warrant Holder has requested certain
registration rights to facilitate its disposition of the
Warrant Shares in a registered public offering and the
Corporation has agreed to grant the Warrant Holder certain
registration rights as set forth in this Agreement in order to
facilitate the orderly distribution of the Warrant Shares;
NOW, THEREFORE, in consideration of the premises and
covenants set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time
administering the Securities Act.
"Common Stock" shall mean the Corporation's $1.00
par value Common Stock.
"Person" shall mean and include an individual, a
corporation, a partnership, a trust, an unincorporated
organization and a government or any department, agency or
political subdivision thereof.
"Restricted Common Stock" shall mean shares of
Common Stock constituting Restricted Securities.
"Restricted Securities" shall mean the Warrant
Shares, including any shares of Common Stock or other
securities convertible into or exchangeable for Common Stock
or received as a stock dividend or other distribution in
respect to any of the foregoing, held by the Warrant Holder or
its successors and assigns evidenced by certificates bearing a
restrictive legend prohibiting transfer of such Restricted
Securities unless the transfer of the Restricted Securities
evidenced thereby is registered under the Securities Act or
the transfer complies with an exemption from such registration
(a "Restrictive Legend").
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"Transfer" shall include any disposition of any
shares of Restricted Securities or of any interest therein
which would constitute a sale thereof within the meaning of
the Securities Act.
2. Required Registration. If at any time the Corpo-
ration shall be requested in writing by one or more holders of
not less than 100,000 shares of Restricted Common Stock in the
aggregate, to effect the registration under the Securities Act
of not less than an aggregate of 100,000 shares of Restricted
Common Stock, such request shall be deemed an offer (the
"Offer") to sell to the Corporation or its assigns for cash
all of the shares of Restricted Common Stock for which
registration is requested (the "Offered Securities") at a
price equal to the average of the daily "market price" (as
hereinafter defined) per share of the Common Stock for the ten
consecutive trading days immediately preceding the date of
receipt of such request by the Corporation. The "market
price" for each trading day shall be the last reported sale
price regular way of the Common Stock on the Composite Tape of
the New York Stock Exchange on each such trading day upon
which such a sale shall have been effected, or if no sale
takes place on any such day on such exchange, the average of
the closing bid and asked prices on such day as officially
quoted on such exchange. The Offer shall remain open for a
period of ten calendar days immediately following the date of
receipt by the Corporation of the registration request (the
"Offer Period"). To accept the Offer, the Corporation or its
assigns must give written notice (the "Notice of Acceptance")
to the requesting holder prior to the end of the Offer Period
of the Corporation's intention to accept the Offer. The
Corporation shall purchase from the requesting holder(s), and
the requesting holder(s) shall sell to the Corporation, upon
the terms of the Offer, the Offered Securities pursuant to the
Notice of Acceptance within ten business days after the date
that the Notice of Acceptance is received by the requesting
holder(s). If the Corporation does not accept the Offer prior
to the expiration of the Offer Period, the Corporation shall
promptly give written notice of such proposed registration to
all other holders of Restricted Securities, including the
Warrant Holder, and thereupon the Corporation shall promptly
use its best efforts to effect the registration under the
Securities Act of the shares of Restricted Common Stock that
the Corporation has been requested to register by any holder
in any response received by the Corporation within 30 days
after the date of the written notice by the Corporation;
provided, however, that the Corporation shall not be obligated
to effect any registration under the Securities Act except in
accordance with the following provisions:
(a) The Corporation shall not be obligated to file
any registration statement with respect to Restricted Common
Stock if in the opinion of counsel satisfactory to the Cor-
poration and the holder of such securities the proposed
transfer may be effected without registration under the
Securities Act, and any certificate evidencing the shares so
to be transferred need not bear a Restrictive Legend.
(b) The Corporation shall not be obligated to
effect any registration except at the request of the holder or
holders of Restricted Common Stock who shall request registra-
tion of Restricted Common Stock then owned or obtainable by
them representing in the aggregate not less than 100,000
shares of outstanding Restricted Common Stock.
(c) The Corporation shall not be obligated to file
and cause to become effective (i) more than two registration
statements in which shares of Restricted Common Stock are reg-
istered under the Securities Act pursuant to this Section 2,
or (ii) any registration statement within three months after
the effective date of any other registration statement filed
by the Corporation relating to any public offering of
securities of the Corporation for cash for the Corporation's
own account.
3. Incidental Registration. If the Corporation at any
time proposes for any reason to register any of its Common
Stock under the Securities Act in connection with a proposed
offering to the general public, the Corporation shall at such
time promptly give written notice to all holders of Restricted
Common Stock of its intention to do so, and, upon the written
request, received by the Corporation within 30 days after the
date of any such notice, of the holders of any Restricted
Common Stock to register any shares of Restricted Common
Stock, the Corporation shall use its best efforts to cause all
such shares of Restricted Common Stock the holders of which
shall have so requested registration thereof to be registered
under the Securities Act promptly upon receipt of the written
request of such holders for such registration, all to the
extent necessary to permit the sale or other disposition by
the prospective seller or sellers of the shares of Restricted
Common Stock so registered. In the event that the proposed
registration by the Corporation is, in whole or in part, an
underwritten public offering of securities of the Corporation,
any request pursuant to this Section 3 to register shares of
Restricted Common Stock may specify that such shares are to be
included in the underwriting on the same terms and conditions
as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration; provided,
however, that if the managing underwriter determines and
advises the holders thereof in writing that the inclusion of
all shares of the Restricted Common Stock and other Common
Stock of the Corporation entitled to be included in the
registration ("Other Registrable Stock") originally covered by
a request for registration would interfere with the successful
marketing of such securities, the number of shares of Re-
stricted Common Stock and Other Registrable Stock that may, in
the sole discretion of the managing underwriter, be included
in the underwritten public offering on behalf of the holders
thereof, if any, shall be allocated: first, to the Warrant
Holder, second to the holders of the Restricted Common Stock
in proportion, as nearly as practicable, to the respective
number of shares of Restricted Common Stock which they had
requested to be included in such underwritten public offering
and, thereafter, among the holders of the Other Registrable
Securities in proportion, as nearly as practicable, to the
respective number of shares of Other Registrable Stock which
they had requested to be included in such underwritten public
offering.
4. Preparation and Filing. If and whenever the
Corporation is under an obligation pursuant to the provisions
of this Agreement to use its best efforts to effect the reg-
istration of any shares of Restricted Common Stock, the
Corporation shall, as expeditiously as practicable:
(a) prepare and file with the Commission a
registration statement with respect to such shares (on
Commission Form S-3 to the extent the Corporation is eligible
to use Form S-3) and use its best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the Commission such
amendments and supplements to such registration statements and
the prospectus used in connection therewith as may be neces-
sary to keep such registration statement effective for at
least six months (two years to the extent such registration
statement was prepared and filed on Form S-3) and to comply
with the provisions of the Securities Act with respect to the
sale or other disposition of all shares of Restricted Common
Stock covered by such registration statement;
(c) furnish to each seller such number of copies of
a summary prospectus or other prospectus, including a prelimi-
nary prospectus, in conformity with the requirements of the
Securities Act and such other documents as such seller may
reasonably request in order to facilitate the public sale or
other disposition of such shares of Restricted Common Stock;
(d) use its best efforts to register or qualify the
shares of Restricted Common Stock covered by such registration
statement under the securities or blue sky laws of such juris-
dictions as each such seller shall reasonably request and do
any and all other acts or things that may be necessary or
advisable to enable such seller to consummate the public sale
or other disposition in such jurisdictions of such shares;
(e) notify each seller of shares of Restricted
Common Stock covered by such registration statement, at any
time when a prospectus relating thereto is required to be
delivered under the Securities Act within the appropriate
period mentioned in clause (b) of this Section 4, of the
happening of any event as a result of which the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing and, at the request
of any such seller, prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(f) file, on a timely basis, all reports and other
documents required to be filed by it pursuant to the
Securities Exchange Act of 1934.
5. Expenses. The Corporation shall pay all expenses
incurred in complying with Sections 2, 3 and 4 hereof,
including, without limitation, all registration and filing
fees, fees and expenses of complying with securities and blue
sky laws, printing expenses, and fees and disbursements of the
Corporation's counsel; provided, however, that all
underwriting discounts and selling commissions applicable to
the Restricted Common Stock covered by any such registration
shall be borne by the respective sellers thereof, in propor-
tion to the respective number of shares of Restricted Common
Stock sold by each of them.
6. Holdback Agreements.
(a) The Warrant Holder and each other holder of
Restricted Common Stock agrees not to effect any public sale
or distribution of equity securities of the Corporation, or
any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during
the 90-day period beginning on the effective date of any
underwritten registration effected by the Corporation (except
as part of such underwritten registration), unless the manag-
ing underwriter otherwise agrees.
(b) The Corporation agrees not to effect any public
sale or distribution of equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and during the 90-
day period beginning on the effective date of any underwritten
registration pursuant to a registration statement in which any
shares of Restricted Common Stock are included, unless the
managing underwriters otherwise agrees.
7. Cooperation of Holders of Restricted Securities.
Each prospective seller of shares of Restricted Common Stock
registered or to be registered under any registration
hereunder shall furnish to the Corporation such information
and execute such documents regarding the shares held by such
seller and the intended method of disposition thereof as the
Corporation shall reasonably request and as shall be required
in connection with the registration or qualification to be
made by the Corporation.
8. Indemnification. In the event of any registration
of any shares of Restricted Common Stock under the Securities
Act pursuant to this Agreement or registration or qualifi-
cation of any shares of Restricted Common Stock pursuant to
Section 4(d) hereof, the Corporation shall indemnify and hold
harmless the seller of such shares, each underwriter of such
shares, if any, each broker or any other person acting on
behalf of such seller and each other person, if any, who
controls any of the foregoing persons, within the meaning of
the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing
persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabili-
ties (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a
material fact contained in any registration statement under
which such shares were registered under the Securities Act,
any preliminary prospectus contained therein, or any amendment
or supplement thereto, or any document incident to regis-
tration or qualification of any shares of Restricted Common
Stock pursuant to Section 4(d) hereof, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading or, with respect to
any prospectus, necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, or any violation by the Corporation of the
Securities Act or state securities or blue sky laws applicable
to the Corporation and relating to action or inaction required
of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws;
and shall reimburse each person indemnified hereunder for all
legal or other expenses reasonably and as incurred by him or
it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however,
that the Corporation shall not be liable in any such case to
the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement or any document
incident to registration or qualification of any Restricted
Common Stock pursuant to Section 4(d) hereof in reliance upon
and in conformity with written information furnished to the
Corporation through an instrument duly executed by such seller
or underwriter specifically for use in the preparation there-
of.
Before shares of Restricted Common Stock held by any
prospective seller shall be included in any registration
pursuant to this Agreement, such prospective seller and any
underwriter acting on its behalf shall have agreed to
indemnify and hold harmless the Corporation, each director of
the Corporation, each officer of the Corporation who shall
sign such registration statement and any person who controls
the Corporation within the meaning of the Securities Act with
respect to any material statement or omission from such
registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission was made in reliance
upon and in conformity with written information furnished to
the Corporation through an instrument duly executed by such
seller or underwriter specifically for use in the preparation
of such registration statement, preliminary prospectus, final
prospectus or amendment or supplement.
Promptly after receipt by a person indemnified hereunder
of notice of the commencement of any action involving a claim
referred to in either of the preceding paragraphs of this
Section 8, such indemnified person will, if a claim in respect
thereof is made against any indemnifying person, give written
notice to the latter of the commencement of such action, the
failure of which shall not relieve the indemnifying party of
any liability hereunder unless the failure to give such notice
prejudiced the indemnifying party. In case any such action is
brought against an indemnified person, the indemnifying person
will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying person similarly
notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified person, and after
notice from the indemnifying person to such indemnified person
of its election so to assume the defense thereof, the
indemnifying person shall be responsible for any legal or
other expenses subsequently incurred by the latter in
connection with the defense thereof.
9. Restrictions on Future Agreements to Register
Shares. Without the prior written consent of the holders of
at least 60% of the voting power of the outstanding Restricted
Common Stock, the Corporation agrees not to enter into any
other agreement that grants the holder of any of the
Corporation's securities the right to require the Corporation
to cause such securities to be registered under the Securities
Act.
10. Notices. Any notice provided for in this Agreement
must be in writing and must be mailed by certified mail,
return receipt requested, or sent via overnight delivery
service, to the recipient at the address indicated below:
To the Corporation:
Aydin Corporation
700 Dresher Road
Horsham, PA 19044
Attention: I. Gary Bard, Chairman,
President and Chief Executive Officer
with a copy to:
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
Attention: Frederick W. Dreher, Esq.
To the Warrant Holder:
EA Industries, Inc.
185 Monmouth Parkway
West Long Branch, NJ 07764
Attention: President
with a copy to:
Mesirov Gelman Jaffe Cramer & Jamieson
1735 Market Street
Philadelphia, PA 19103
Attention: Richard P. Jaffe, Esq.
or to such other address or to the attention of such other
person as the recipient party shall have specified by prior
written notice to the sending party. Any notice under this
Agreement shall be deemed to have been given when received by
the party to whom it is addressed.
11. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any
other jurisdiction, but this Agreement shall be reformed, con-
strued and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained
herein.
12. Counterparts. This Agreement may be executed on
separate counterparts, each of which is deemed to be an
original and all of which taken together shall constitute one
and the same agreement.
13. Successors and Assigns. This Agreement is intended
to bind and inure to the benefit of and be enforceable by each
of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
14. Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement
shall be governed by the internal law, and not the law of con-
flicts, of the State of Delaware.
15. Supersedes Other Agreements. If this Agreement
shall conflict in any respect with all or any portion of any
other agreement or instrument to which any party hereto is a
party, the provisions of this Agreement shall supersede such
conflicting agreement or instrument or portion thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AYDIN CORPORATION
By:_________________________
I. Gary Bard,
Chairman, President and
Chief Executive Officer
EA INDUSTRIES, INC.
By:_________________________
<PAGE>
EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
_____________________________
REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as
of January , 1997 between Aydin Corporation, a Delaware cor-
poration (the "Corporation") and EA Industries, Inc., a New
Jersey corporation (the "Stockholder").
RECITALS:
_________
WHEREAS, the Stockholder holds 596,927 shares (the
"Shares") of Common Stock of the Corporation which the
Stockholder purchased in January 1996 in connection with the
Stockholder's intention to propose a business combination
transaction between the Corporation and the Stockholder;
WHEREAS, the Corporation and the Stockholder conducted
negotiations regarding a possible business combination until
October 8, 1996 on which date the Corporation and the
Stockholder terminated their negotiations; and
WHEREAS, the Stockholder has requested certain registration
rights to facilitate its disposition of the Shares in a
registered public offering and the Corporation has agreed to
grant the Stockholder certain registration rights as set forth
in this Agreement in order to facilitate the orderly
distribution of the Shares;
NOW, THEREFORE, in consideration of the premises and
covenants set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time
administering the Securities Act.
"Common Stock" shall mean the Corporation's $1.00 par
value Common Stock.
"Person" shall mean and include an individual, a
corporation, a partnership, a trust, an unincorporated
organization and a government or any department, agency or
political subdivision thereof.
"Restricted Common Stock" shall mean shares of Common
Stock constituting Restricted Securities.
"Restricted Securities" shall mean the Shares, including
any shares of Common Stock or other securities convertible
into or exchangeable for Common Stock or received as a stock
dividend or other distribution in respect to any of the
foregoing, held by the Stockholder or its successors and
assigns evidenced by certificates bearing a restrictive legend
prohibiting transfer of such Restricted Securities unless the
transfer of the Restricted Securities evidenced thereby is
registered under the Securities Act or the transfer complies
with an exemption from such registration (a "Restrictive
Legend").
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Transfer" shall include any disposition of any shares
of Restricted Securities or of any interest therein which
would constitute a sale thereof within the meaning of the
Securities Act.
2. Required Registration. If at any time the Corporation
shall be requested in writing by the Stockholder, or any
holder of not less than 250,000 shares of Restricted Common
Stock, to effect the registration under the Securities Act of
not less than an aggregate of 250,000 shares of Restricted
Common Stock, such request shall be deemed an offer (the
"Offer") to sell to the Corporation or its assigns for cash
all of the shares of Restricted Common Stock for which
registration is requested (the "Offered Securities") at a
price equal to the average of the daily "market price" (as
hereinafter defined) per share of the Common Stock for the ten
consecutive trading days immediately preceding the date of
receipt of such request by the Corporation. The "market
price" for each trading day shall be the last reported sale
price regular way of the Common Stock on the Composite Tape of
the New York Stock Exchange on each such trading day upon
which such a sale shall have been effected, or if no sale
takes place on any such day on such exchange, the average of
the closing bid and asked prices on such day as officially
quoted on such exchange. The Offer shall remain open for a
period of ten calendar days immediately following the date of
receipt by the Corporation of the registration request (the
"Offer Period"). To accept the Offer, the Corporation or its
assigns must give written notice (the "Notice of Acceptance")
to the requesting holder prior to the end of the Offer Period
of the Corporation's intention to accept the Offer. The
Corporation shall purchase from the requesting holder(s), and
the requesting holder(s) shall sell to the Corporation, upon
the terms of the Offer, the Offered Securities pursuant to the
Notice of Acceptance within ten business days after the date
that the Notice of Acceptance is received by the requesting
holder(s). If the Corporation does not accept the Offer prior
to the expiration of the Offer Period, the Corporation shall
promptly give written notice of such proposed registration to
all other holders of Restricted Securities, including the
Stockholder, and thereupon the Corporation shall promptly use
its best efforts to effect the registration under the Securi-
ties Act of the shares of Restricted Common Stock that the
Corporation has been requested to register by any holder in
any response received by the Corporation within 30 days after
the date of the written notice by the Corporation; provided,
however, that the Corporation shall not be obligated to effect
any registration under the Securities Act except in accordance
with the following provisions:
(a) The Corporation shall not be obligated to file any
registration statement with respect to Restricted Common Stock
if in the opinion of counsel satisfactory to the Corporation
and the holder of such securities the proposed transfer may be
effected without registration under the Securities Act, and
any certificate evidencing the shares so to be transferred
need not bear a Restrictive Legend.
(b) The Corporation shall not be obligated to effect
any registration except at the request of the holder or
holders of Restricted Common Stock who shall request registra-
tion of Restricted Common Stock then owned or obtainable by
them representing in the aggregate not less than 250,000
shares of outstanding Restricted Common Stock.
(c) The Corporation shall not be obligated to file and
cause to become effective (i) more than two registration
statements in which shares of Restricted Common Stock are reg-
istered under the Securities Act pursuant to this Section 2 at
the request of the Stockholder, or (ii) any registration
statement within three months after the effective date of any
other registration statement filed by the Corporation relating
to any public offering of securities of the Corporation for
cash for the Corporation's own account.
3. Incidental Registration. If the Corporation at any
time proposes for any reason to register any of its Common
Stock under the Securities Act in connection with a proposed
offering to the general public, the Corporation shall at such
time promptly give written notice to all holders of Restricted
Common Stock of its intention to do so, and, upon the written
request, received by the Corporation within 30 days after the
date of any such notice, of the holders of any Restricted
Common Stock to register any shares of Restricted Common
Stock, the Corporation shall use its best efforts to cause all
such shares of Restricted Common Stock the holders of which
shall have so requested registration thereof to be registered
under the Securities Act promptly upon receipt of the written
request of such holders for such registration, all to the
extent necessary to permit the sale or other disposition by
the prospective seller or sellers of the shares of Restricted
Common Stock so registered. In the event that the proposed
registration by the Corporation is, in whole or in part, an
underwritten public offering of securities of the Corporation,
any request pursuant to this Section 3 to register shares of
Restricted Common Stock may specify that such shares are to be
included in the underwriting on the same terms and conditions
as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration; provided,
however, that if the managing underwriter determines and
advises the holders thereof in writing that the inclusion of
all shares of the Restricted Common Stock and other Common
Stock of the Corporation entitled to be included in the
registration ("Other Registrable Stock") originally covered by
a request for registration would interfere with the successful
marketing of such securities, the number of shares of Re-
stricted Common Stock and Other Registrable Stock that may, in
the sole discretion of the managing underwriter, be included
in the underwritten public offering on behalf of the holders
thereof, if any, shall be allocated: first, to the
Stockholder, second to the holders of the Restricted Common
Stock in proportion, as nearly as practicable, to the respec-
tive number of shares of Restricted Common Stock which they
had requested to be included in such underwritten public
offering and, thereafter, among the holders of the Other
Registrable Securities in proportion, as nearly as practi-
cable, to the respective number of shares of Other Registrable
Stock which they had requested to be included in such
underwritten public offering.
4. Preparation and Filing. If and whenever the Corpora-
tion is under an obligation pursuant to the provisions of this
Agreement to use its best efforts to effect the registration
of any shares of Restricted Common Stock, the Corporation
shall, as expeditiously as practicable:
(a) prepare and file with the Commission a
registration statement with respect to such shares (on
Commission Form S-3 to the extent the Corporation is eligible
to use Form S-3) and use its best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the Commission such
amendments and supplements to such registration statements and
the prospectus used in connection therewith as may be neces-
sary to keep such registration statement effective for at
least six months (two years to the extent such registration
statement was prepared and filed on Form S-3) and to comply
with the provisions of the Securities Act with respect to the
sale or other disposition of all shares of Restricted Common
Stock covered by such registration statement;
(c) furnish to each seller such number of copies of a
summary prospectus or other prospectus, including a prelimi-
nary prospectus, in conformity with the requirements of the
Securities Act and such other documents as such seller may
reasonably request in order to facilitate the public sale or
other disposition of such shares of Restricted Common Stock;
(d) use its best efforts to register or qualify the
shares of Restricted Common Stock covered by such registration
statement under the securities or blue sky laws of such juris-
dictions as each such seller shall reasonably request and do
any and all other acts or things that may be necessary or
advisable to enable such seller to consummate the public sale
or other disposition in such jurisdictions of such shares;
(e) notify each seller of shares of Restricted Common
Stock covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered
under the Securities Act within the appropriate period men-
tioned in clause (b) of this Section 4, of the happening of
any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances then existing and, at the request of any such
seller, prepare and furnish to such seller a reasonable number
of copies of a supplement to or an amendment of such prospec-
tus as may be necessary so that, as thereafter delivered to
the purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(f) file, on a timely basis, all reports and other
documents required to be filed by it pursuant to the
Securities Exchange Act of 1934.
5. Expenses. The Corporation shall pay all expenses
incurred in complying with Sections 2, 3 and 4 hereof,
including, without limitation, all registration and filing
fees, fees and expenses of complying with securities and blue
sky laws, printing expenses, and fees and disbursements of the
Corporation's counsel; provided, however, that all
underwriting discounts and selling commissions applicable to
the Restricted Common Stock covered by any such registration
shall be borne by the respective sellers thereof, in propor-
tion to the respective number of shares of Restricted Common
Stock sold by each of them.
6. Holdback Agreements.
(a) EA and each other holder of Restricted Common
Stock agrees not to effect any public sale or distribution of
equity securities of the Corporation, or any securities con-
vertible into or exchangeable or exercisable for such
securities, during the seven days prior to and during the 90-
day period beginning on the effective date of any underwritten
registration effected by the Corporation (except as part of
such underwritten registration), unless the managing
underwriter otherwise agrees.
(b) The Corporation agrees not to effect any public
sale or distribution of equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and during the 90-
day period beginning on the effective date of any underwritten
registration pursuant to a registration statement in which any
shares of Restricted Common Stock are included, unless the
managing underwriters otherwise agrees.
7. Cooperation of Holders of Restricted Securities. Each
prospective seller of shares of Restricted Common Stock regis-
tered or to be registered under any registration hereunder
shall furnish to the Corporation such information and execute
such documents regarding the shares held by such seller and
the intended method of disposition thereof as the Corporation
shall reasonably request and as shall be required in
connection with the registration or qualification to be made
by the Corporation.
8. Indemnification. In the event of any registration of
any shares of Restricted Common Stock under the Securities Act
pursuant to this Agreement or registration or qualification of
any shares of Restricted Common Stock pursuant to Section 4(d)
hereof, the Corporation shall indemnify and hold harmless the
seller of such shares, each underwriter of such shares, if
any, each broker or any other person acting on behalf of such
seller and each other person, if any, who controls any of the
foregoing persons, within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or
several, to which any of the foregoing persons may become
subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
registration statement under which such shares were registered
under the Securities Act, any preliminary prospectus contained
therein, or any amendment or supplement thereto, or any
document incident to registration or qualification of any
shares of Restricted Common Stock pursuant to Section 4(d)
hereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading or, with respect to any prospectus, necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading, or any violation
by the Corporation of the Securities Act or state securities
or blue sky laws applicable to the Corporation and relating to
action or inaction required of the Corporation in connection
with such registration or qualification under such state
securities or blue sky laws; and shall reimburse each person
indemnified hereunder for all legal or other expenses rea-
sonably and as incurred by him or it in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Corporation
shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in said registration
statement, said preliminary prospectus or said prospectus or
said amendment or supplement or any document incident to
registration or qualification of any Restricted Common Stock
pursuant to Section 4(d) hereof in reliance upon and in
conformity with written information furnished to the Corpora-
tion through an instrument duly executed by such seller or
underwriter specifically for use in the preparation thereof.
Before shares of Restricted Common Stock held by any
prospective seller shall be included in any registration
pursuant to this Agreement, such prospective seller and any
underwriter acting on its behalf shall have agreed to
indemnify and hold harmless the Corporation, each director of
the Corporation, each officer of the Corporation who shall
sign such registration statement and any person who controls
the Corporation within the meaning of the Securities Act with
respect to any material statement or omission from such
registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission was made in reliance
upon and in conformity with written information furnished to
the Corporation through an instrument duly executed by such
seller or underwriter specifically for use in the preparation
of such registration statement, preliminary prospectus, final
prospectus or amendment or supplement.
Promptly after receipt by a person indemnified hereunder of
notice of the commencement of any action involving a claim
referred to in either of the preceding paragraphs of this
Section 8, such indemnified person will, if a claim in respect
thereof is made against any indemnifying person, give written
notice to the latter of the commencement of such action, the
failure of which shall not relieve the indemnifying party of
any liability hereunder unless the failure to give such notice
prejudiced the indemnifying party. In case any such action is
brought against an indemnified person, the indemnifying person
will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying person similarly
notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified person, and after
notice from the indemnifying person to such indemnified person
of its election so to assume the defense thereof, the
indemnifying person shall be responsible for any legal or
other expenses subsequently incurred by the latter in
connection with the defense thereof.
9. Restrictions on Future Agreements to Register Shares.
Without the prior written consent of the holders of at least
60% of the voting power of the outstanding Restricted Common
Stock, the Corporation agrees not to enter into any other
agreement that grants the holder of any of the Corporation's
securities the right to require the Corporation to cause such
securities to be registered under the Securities Act.
10. Notices. Any notice provided for in this Agreement
must be in writing and must be mailed by certified mail,
return receipt requested, or sent via overnight delivery
service, to the recipient at the address indicated below:
To the Corporation:
Aydin Corporation
700 Dresher Road
Horsham, PA 19044
Attention: I. Gary Bard, Chairman,
President and Chief Executive Officer
with a copy to:
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
Attention: Frederick W. Dreher, Esq.
To the Stockholder:
EA Industries, Inc.
185 Monmouth Parkway
West Long Branch, NJ 07764
Attention: President
with a copy to:
Mesirov Gelman Jaffe Cramer & Jamieson
1735 Market Street
Philadelphia, PA 19103
Attention: Richard P. Jaffe, Esq.
or to such other address or to the attention of such other
person as the recipient party shall have specified by prior
written notice to the sending party. Any notice under this
Agreement shall be deemed to have been given when received by
the party to whom it is addressed.
11. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any
other jurisdiction, but this Agreement shall be reformed, con-
strued and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained
herein.
12. Counterparts. This Agreement may be executed on
separate counterparts, each of which is deemed to be an
original and all of which taken together shall constitute one
and the same agreement.
13. Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by each of
the parties hereto and their respective heirs, personal
representatives, successors and assigns.
14. Choice of Law. All questions concerning the construc-
tion, validity and interpretation of this Agreement shall be
governed by the internal law, and not the law of conflicts, of
the State of Delaware.
15. Supersedes Other Agreements. If this Agreement shall
conflict in any respect with all or any portion of any other
agreement or instrument to which any party hereto is a party,
the provisions of this Agreement shall supersede such con-
flicting agreement or instrument or portion thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AYDIN CORPORATION
By: /s/ I. Gary Bard
I. Gary Bard,
Chairman, President and
Chief Executive Officer
EA INDUSTRIES, INC.
By: /s/ Irwin L. Gross
<PAGE>
EXHIBIT 4
AYDIN CORPORATION
INDIVIDUAL NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made on October 28, 1994 between AYDIN
CORPORATION and its subsidiaries (hereinafter called the
"Company") and (hereinafter called "Optionee").
The Board of Directors of the Company has determined that
it is to the advantage and interest of the Company and its
stockholders to grant the option provided for herein to the
Optionee for their services to the Company and as an incentive
for increased effort in the future, and in consideration of
the mutual covenants herein contained, the parties hereto
agree as follows:
1. Shares Optioned; Time of Exercise; Option Price.
The Company grants to Optionee the right and option to on the
terms and conditions hereinafter set forth, all part of an
aggregate of 10,000 shares of the Company's authorized but
unissued common stock (par value $1.00) at the purchase price
of $10.56 per share, exercisable at the time and for the
number of shares indicated hereafter.
A. On or after October 28, 1995, to and including
October 29, 1999 2,500 shares.
B. On or after October 28, 1996, to and including
October 28, 1999 2500 shares.
C. On or after October 28, 1997, to and including
October 28, 1999, 2,500 shares.
D. On or after October 28, 1998, to and including
October 28, 1999 2,500 shares.
2. Payment for Delivery of Stock.
The option granted hereunder shall be exercisable by Optionee
from time to time (as hereinabove provided), by delivery of
written notice specifying therein the number of shares which
he has elected to purchase and the payment to the Company of
the purchase price of the shares which Optionee shall then
elect to purchase. Payment is acceptable if it is made either:
(i) in cash (including check, bank draft, or money order); or
(ii) by delivering Company Common Stock ("Stock") already
owned by Optionee; or (iii) by a combination of cash and
Stock. The fair market value of Stock so delivered shall be
the mean of the high and the low prices on the principal
Exchange upon which the Stock is traded on the trading day
immediately preceding the date of exercise.
3. Necessity of Affiliation When Option is Exercised.
The option granted hereby and all rights hereunder to the
extent such rights shall not have been exercised, shall
terminate and become null and void if the Optionee ceases to
be affiliated with the Company (whether by resignation,
retirement, dismissal, disability or otherwise), except that
(a) in the event of the termination of such affiliation for
any reason other than the death of the Optionee, the Optionee
may at any time within a period of thirty (30) days thereafter
exercise the option granted hereby to the extent such option
was exercisable by Optionee on the date of the termination of
such affiliation, and (b) in the event of the death of the
Optionee while affiliated with the Company, the options
granted hereby which would have become exercisable by the
Optionee at time of death may be exercised immediately or any
time within three (3) months after such death by the person or
persons to whom the Optionee's rights under the option granted
hereby shall pass by will or by the applicable laws of descent
and distribution; provided, however, that in no event may the
option granted hereby be exercised to any extent by anyone
after the terminal date specified in Section 1 of this
Agreement. As used herein, the term "affiliation" includes,
but is not limited to employee or director.
4. Nonassignability of Options.
Except as otherwise provided in Section 3 of this Agreement,
the option granted hereunder and the rights and privileges
conferred hereby shall be exercisable only by the Optionee and
shall not be transferable or be assignable, either voluntarily
or by operation of law, by Optionee, in whole or in part, and
if the Optionee shall attempt to make any such transfer or
assignment of the option granted hereunder, or any of the
rights and privileges conferred, such attempt to transfer or
assign shall be void and of no affect, and the Company shall
have the right to terminate this Agreement as of the date of
such purported transfer or assignment.
5. Termination of Optionee.
If Optionee is an employee or non-employee Director of the
Company, subject to the terms of any employment contract or
other arrangement to the contrary, the Company shall have the
right to terminate or change the terms of employment of the
Optionee at any time for any reason whatsoever. A leave of
absence or an interruption in service (including an
interruption during military service) authorized or approved
by the Company shall not be deemed a termination of employment
for the purpose of this Section 5.
6. Compliance with Governmental and Other Regulations.
This option shall not be exercisable in whole or in part, and
the Company shall not be obligated to sell any shares of stock
pursuant to the exercise of this option, (a) until this option
has been approved by the shareholders of the Company, and (b)
if such exercise and sale would, in the opinion of counsel for
the Company, require registration of such shares under the
Securities Act of 1933 (or other Federal or State statues
having similar requirements), as it may be in effect at that
time, and the Company shall at such time not desire to so
register such shares. If at any time the Board of Directors of
the Company shall determine in its discretion that the listing
or qualifications of the shares of stock subject to this
option on any securities exchange or under any applicable law,
or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in
connection with the issue of shares pursuant to the exercise
hereof, this option may not be exercised in whole or in part
unless such listing, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Company's Board of Directors.
7. Acquisition for Investment; Notification of
Disposition.
By accepting this option, Optionee agrees for himself, his
heirs, and legates that any and all shares purchased hereunder
shall be acquired for investment and not for distribution, and
upon the issuance of any or all of the shares subject to the
option granted hereunder, Optionee, his heirs or legates
receiving such shares, shall deliver to the Company a
representation in writing that such shares are being acquired
in good faith for investment and not for distribution. The
Company, at its sole discretion, may take all reasonable steps
(including the affixing of an appropriate legend on
certificates embodying the shares) to assure itself against
any sale or distribution by Optionee not in compliance with
the Federal or State securities laws. In the event that the
Optionee at any time contemplates the disposition (whether by
sale, exchange, gift or other form of transfer) of any shares
of stock acquired pursuant to the exercise of the option
granted hereby, Optionee will first notify the Company of such
proposed disposition and will thereafter cooperate with the
Company in complying with all the applicable requirements of
law which, in the opinion of the Company, must be satisfied
prior to the making of such disposition. In the event that the
Optionee disposes (whether by sale, exchange, gift or any
other transfer) of any shares of stock acquired pursuant to
the exercise of the option granted hereby, within one (1) year
after the transfer of such shares to him upon his exercise of
such option, he will notify the Company in writing within
thirty (30) days after such disposition.
8. Adjustments
In the event that the shares of stock subject to the option
granted hereby shall be changed into or exchanged for a
different number of kinds of shares of stock or other
securities of the Company, or of another corporation (whether
by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or
otherwise) or if the number of such shares of stock shall be
increased through the payment of a stock
dividend, then there shall be substituted for or added to each
share of stock of the Company theretofore or thereafter
subject to this option the number and kind of shares of stock
or other securities into which each outstanding share of stock
of the Company shall be so changed, or for which each such
share shall be exchanged, or to which each such shall be
entitled, as the case may be. This option shall also be
appropriately amended as to price and any other terms as may
be necessary to reflect the foregoing events. In the event
there shall be any other change in the number or kinds of the
outstanding shares of stock of the Company subject to this
option, or of any stock for which it shall have been
exchanged, then if the Company's Board of Directors shall, in
its sole discretion, determine that such change equitably
requires an adjustment in this option, such adjustments shall
be made in accordance with such determination. No fractional
shares will be issued as a result of any adjustment in this
option pursuant to this Section 8, nor shall any cash payment
be made in lieu thereof. To the extent possible, any
fractional shares resulting from such adjustment will be
aggregated and the resulting whole shares added to any shares
remaining to be purchased under this option. Notice of any
adjustment shall be given by the Company to the Optionee and
such adjustment (whether or not such notice is given) shall be
final, effective, binding and conclusive for all purposes
hereof.
The Board of Directors shall have the power, in the event of
any merger or consolidation of the Company with or into any
other corporation or company, to amend this option to permit
the exercise of this option prior to the effectiveness of any
such merger or consolidation and to terminate this option as
of such effectiveness. If the Board of Directors of the
Company shall exercise such power, this option shall be deemed
to have been amended to permit the exercise hereof in whole or
in part by the Optionee at any time or from time to time as
determined by the Board of Directors prior to the
effectiveness of such merger or consolidation, and this option
shall be deemed to terminate upon such effectiveness.
9. Rights of Optionee in Stock.
Neither the Optionee nor his executor, administrator, heirs or
legatees shall be or have any rights or privileges of a
shareholder of the Company in respect to the shares issuable
upon exercise of the option granted hereunder, unless and
until certificates representing such shares shall have been
issued and delivered.
10. Notices
Any notice to be given under the terms of this Agreement shall
be addressed to the Company at 700 Dresher Road, P.O. Box 349,
Horsham, PA 19044, and any notice to be given to the Optionee
shall be addressed to him at the address given beneath his
signature hereto, or at such other address as either party may
hereafter designate in writing to the other. Any such notice
shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid and
deposited (first class postage prepaid) in post office or
branch post office regularly maintained by the United States
Government.
11. Effect of Agreement; Execution.
This Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Company.
IN WITNESS WHEREOF, the Company has caused these presents
to be executed on its behalf by its Chairman, to be sealed by
its Corporate seal, attested by its Secretary, and Optionee
has hereunto set his hand the day and year first above written
which is the time of granting of the option hereunder.
ATTESTED: AYDIN CORPORATION
/s/ R. A. Clancy By /s/ Ayhan Hakimoglu
Robert A. Clancy Ayhan Hakimoglu
Secretary Chairman
(SEAL)
/s/ I. Gary Bard
Optionee's signature
118 Spruce Street
________________________________
Philadelphia, PA 19106
________________________________
Optionee's address (zip code)
<PAGE>
EXHIBIT 5
INCENTIVE STOCK OPTION AGREEMENT NO. 96-1.1
ISSUED UNDER THE
AYDIN CORPORATION
1996 EQUITY INCENTIVE PLAN
THIS AGREEMENT (the "Agreement"), dated October 8,
1996, is made by and between Aydin Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), and
I. Gary Bard, an employee of the Company (the "Employee").
WHEREAS, the Company wishes to afford the Employee the
opportunity to purchase shares of its common stock, par value
$1.00 per share (the "Common Stock"); and
WHEREAS, the Company wishes to carry out the Aydin
Corporation 1996 Equity Incentive Plan (the "Plan"), the terms
of which are incorporated herein by this reference and made a
part of this Agreement; and
WHEREAS, the Board of Directors of the Company (the
"Committee") has determined that it would be to the advantage
and best interest of the Company and its stockholders to grant
to the Employee the stock option provided for herein as an
inducement to remain in the service of the Company, and as an
incentive for increased efforts during such service and has
advised the Company thereof and instructed the undersigned
officers to issue said option;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement,
they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.1 - Employee
Employee shall mean directors, officers and other key
employees of the Company and its Subsidiaries.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.3 - Option
"Option" shall mean the option to purchase Common Stock
granted under this Agreement.
Section 1.4 - Plan
"Plan" shall mean the Aydin Corporation 1996 Equity
Incentive Plan, as amended from time to time.
Section 1.5 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.6 - Subsidiary
"Subsidiary" shall have the same meaning as defined in
Section 425 of the Code.
Section 1.7 - Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the
Company or any Subsidiary is terminated for any reason,
including, but not by way of limitation, a termination by
resignation, discharge, lay-off, death or retirement. The
Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to
Termination of Employment, including, but not by way of
limitation, all questions of whether particular leaves of
absence constitute Terminations of Employment.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
(a) In consideration of the Employee's agreement to
remain in the employ of the Company or its Subsidiary, and for
other good and valuable consideration, on the date hereof the
Company grants to the Employee the Option to purchase any part
or all of an aggregate of 38,796 shares of Common Stock
upon the terms and conditions set forth in this Agreement and
the Plan.
(b) This Option is in addition to any other options
heretofore or hereafter granted to the Employee by the
Company. To the extent permitted under Section 422 of the
Code, this Option is intended to qualify as an incentive stock
option. In order to qualify as an incentive stock option,
this Option shall not have an aggregate fair market value,
determined at the time it is granted, of Common Stock with
respect to which the Option is exercisable for the first time
by the Employee during any calendar year under the Plan and
any other employee stock option plan of the Company or
Subsidiary thereof ("Other Plans"), determined in accordance
with the provisions of Section 422 of the Code, which exceeds
$100,000 (the "$100,000 Limit"). If the aggregate fair market
value determined on the grant date with respect to all
incentive stock options previously granted under the Plan and
under the Other Plans ("Prior Grants") and any incentive stock
options under this Agreement (the "Current Grant") which are
exercisable for the first time during any calendar year would
exceed the $100,000 Limit, the Option shall be exercisable as
follows:
(i) The portion of the Current Grant exercisable
for the first time by the Employee during any calendar year
which would be, when added to any portion of any Prior Grants
exercisable for the first time by the Employee during any such
calendar year with respect to Common Stock which would have an
aggregate fair market value determined at the time of each
such grant, in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable
for the first time by the Employee in the first subsequent
calendar year or years in which it would be exercisable for
the first time by the Employee when added to all Prior Grants
without exceeding the $100,000 Limit; and
(ii) If, viewed as of the date of the Current Grant,
any portion of the Current Grant could not be exercised under
the provisions of the immediately preceding sentence during
any calendar year commencing with the calendar year in which
it is first exercisable through and including the last
calendar year in which it may by its terms be exercised, such
portion of the Current Grant shall not be an incentive stock
option, but shall be exercisable as a separate nonqualified
stock option at such date or dates as are provided in the
Current Grant.
Section 2.2 - Purchase Price
The purchase price of the shares of Common Stock covered
by the Option shall be $10.31 per share without commission or
other charge.
Section 2.3 - Adjustments in Option - Acceleration of
Exercisability
(a) Changes in Capitalization. The number of shares of
Common Stock covered by the Option and the price per share of
Common Stock covered by the Option shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Commit-
tee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common
Stock subject to the Option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Option
will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.
The Committee may, in the exercise of its sole discretion in
such instances, declare that the Option shall terminate as of
a date fixed by the Committee and give the Employee the right
to exercise the Option as to all or any part of the shares of
Common Stock covered by the Option, including shares as to
which the Option would not otherwise be exercisable.
(c) Sale or Merger. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the
Committee, in the exercise of its sole discretion, may take
such action as it deems desirable, including, but not limited
to: (i) causing the Option to be assumed or an equivalent
option to be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, (ii)
providing that the Employee shall have the right to exercise
the Option as to all of the shares of Common Stock covered by
the Option, including shares as to which the Option would not
otherwise be exercisable, or (iii) declaring that the Option
shall terminate at a date fixed by the Committee provided that
the Employee is given notice and opportunity to exercise the
Option prior to such date.
ARTICLE III
EXERCISABILITY OF OPTIONS
Section 3.1 - Commencement of Exercisability
(a) The Option is not exercisable in whole or in part
during the first year after the date of its grant.
Thereafter, subject to Section 2.3 hereof, the Option shall
become exercisable in four cumulative annual installments as
follows:
(i) The first installment of 9,699 shares covered
by the Option shall become exercisable on October 8, 1997.
(ii) The second installment of 9,699 of the shares
covered by the Option shall become exercisable on
October 8, 1998.
(iii) The third installment of 9,699 of the shares
covered by the Option shall become exercisable October 8,
1999.
(iv) The fourth installment of 9,699 of the shares
covered by the Option shall become exercisable on
October 8, 2000.
The foregoing rights are cumulative and while the
Employee continues to be employed by the Company, may be
exercised up to and including the expiration date set forth in
Section 3.3(a) hereof.
(b) If the Option has not become exercisable at
Termination of Employment, it shall not thereafter become
exercisable.
Section 3.2 - Duration of Exercisability
Once the Option becomes exercisable it shall remain
exercisable until it expires as provided in Section 3.3
hereof.
Section 3.3 - Expiration of Option
(a) The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
(i) The expiration of five years from the date the
Option was granted; or
(ii) The expiration of 30 days from the date of the
Employee's Termination of Employment unless such Termination
of Employment results from the Employee's death, the
Employee's lay-off or the Employee's disability within the
meaning of Section 72(m)(7) of the Code; or
(iii) The expiration of three months from the date of
the Employee's Termination of Employment by reason of the
Employee's lay-off; or
(iv) The expiration of one year from the date of the
Employee's Termination of Employment by reason of the
Employee's death or disability (within the meaning of Section
72(m)(7) of the Code).
(b) Notwithstanding the foregoing, the Committee may, in
its absolute discretion and upon such terms and conditions as
it deems appropriate, extend the period for the exercise of
the Option as set forth in Section 3.3(a)(ii) or (iii) or (iv)
hereof, whichever may be applicable, but not beyond the
expiration date of the Option as set forth in Section
3.3(a)(i) hereof.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Employee, only the Employee
may exercise the Option or any portion thereof. After the
death of the Employee, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable
under Section 3.3 hereof, be exercised by the Employee's
personal representative or by any person empowered to do so
under the Employee's will or under the then applicable laws of
descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole
or in part at any time prior to the time when the Option or
portion thereof expires under Section 3.3 hereof; provided,
however, that each partial exercise shall be for whole shares
only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office
of all of the following prior to the time when the Option or
such portion expires under Section 3.3 hereof:
(a) Notice in writing signed by the Employee or other
person then entitled to exercise the Option or any portion
thereof, stating that the entire Option or a specific portion
thereof is thereby exercised, and identifying the Option by
the Stock Option Agreement number;
(b) Full payment in cash, Common Stock of the Company
(valued at the mean of the high and low prices on the New York
Stock Exchange on the trading day immediately preceding the
date of exercise) or a combination thereof, as the Committee
may determine in its sole discretion, for the shares with
respect to which such Option or portion thereof is exercised;
and
(c) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 hereof by any person or
persons other than the Employee, appropriate proof of the
right of such person or persons to exercise the Option.
Section 4.4 - Issuance of Stock
The shares of Common Stock deliverable upon the exercise
of the Option, or any portion thereof, may be either
previously authorized but unissued shares or issued shares
which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not
be required to issue or deliver any certificate or
certificates for shares of Common Stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment
of all of the following conditions:
(a) The admission of such shares to listing on the New
York Stock Exchange on which such class of stock is then
listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law or
under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which
the Committee shall, in its absolute discretion, deem
necessary or advisable;
(c) The obtaining of any approval or other clearance
from any state or federal governmental agency which the
Committee shall, in its absolute discretion, determine to be
necessary or advisable; and
(d) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may from
time to time establish for reasons of administrative
convenience.
Section 4.5 - Termination of Employment for Misconduct
If the employment of the Employee is terminated for
fraud, embezzlement, theft, commission of a felony or
dishonest conduct or is found to have disclosed confidential
information of the Company or any Subsidiary, the Employee
shall forfeit all unexercised Options and all exercised
Options as to which the Company has not yet delivered the
certificates. In making such determination, the Committee
shall act fairly and in utmost good faith and shall give full
consideration of the facts presented on behalf of both the
Company and the Employee.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan
and this Agreement and to adopt such rules for the
administration, interpretation, and application of the Plan as
are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Company and all other
interested persons. No member of the Committee shall be
personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or
the Option.
Section 5.2 - Options not Transferable
Neither the Option nor any interest or right therein or
part thereof shall be liable for the debts, contracts, or
engagements of the Employee or his successors in interest or
shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or
by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including
bankruptcy) and any attempted disposition thereof shall be
null and void and of no effect; provided, however, that this
Section 5.2 shall not prevent transfer by will or by the
applicable laws of descent and distribution.
Section 5.3 - Withholding
All amounts which, under federal, state or local law, are
required to be withheld from the amount payable with respect
to any Option shall be withheld by the Company. Whenever the
Company proposes or is required to issue or transfer shares of
Common Stock, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to
satisfy any federal, state, or local withholding tax
requirements prior to the delivery of any certificate or
certificates for such shares.
Section 5.4 - No Right of Continued Service
Nothing in this Agreement or in the Plan shall confer
upon the Employee any right to continue in the employ of the
Company or shall interfere with or restrict in any way the
rights of the Company, which are hereby expressly reserved, to
discharge the Employee.
Section 5.5 - Shares to be Reserved
The Company shall at all times during the term of the
Option reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements
of this Agreement.
Section 5.6 - Notices
Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of
its Secretary and any notice to be given to the Employee shall
be addressed to the Employee at the address shown in the
Company's personnel files. By a notice given pursuant to this
Section 5.6, either party may hereafter designate a different
address for notices to be given to it or him. Any notice
which is required to be given to the Employee shall, if the
Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed
the Company of the representative's status and address by
written notice under this Section 5.6. Any notice shall have
been deemed duly given when delivered in person, deposited in
first class United States mail, postage prepaid, or sent by
overnight courier.
Section 5.7 - Titles
Titles are provided herein for convenience of reference
only and are not to serve as a basis for interpretation or
construction of this Agreement.
Section 5.8 - Notification of Disposition
With respect to shares acquired through the exercise of
any incentive stock option, the Employee shall give prompt
notice to the Company of any disposition or other transfer of
such shares if such disposition or transfer is made (a) within
two years from the date of granting the Option with respect to
such shares or (b) within one year after the transfer of such
shares to him.
Such notice shall specify the date of such disposition or
other transfer and the amount realized, in cash, other
property, assumption of indebtedness, or other consideration,
by the Employee in such disposition or other transfer.
Section 5.9 - Governing Law
This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Employee have
caused this Agreement to be executed and the Employee
acknowledges receipt of a copy of the Plan and acceptance of
an original copy of this Agreement.
Attest: AYDIN CORPORATION
/s/ Robert A. Clancy By: /s/ James R. Henderson
Secretary Title: Vice President
(SEAL)
/s/ I. Gary Bard (SEAL)
__________________________
Employee Signature
I. Gary Bard
__________________________
Employee Name (Please Print)
Employee's Taxpayer
Identification Number: ###-##-####
<PAGE>
EXHIBIT 6
NON-QUALIFIED STOCK OPTION AGREEMENT NO. 96-1.2
ISSUED UNDER THE
AYDIN CORPORATION
1996 EQUITY INCENTIVE PLAN
THIS AGREEMENT (the "Agreement"), dated October 8,
1996, is made by and between Aydin Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), and
I. Gary Bard, an employee of the Company (the "Employee").
WHEREAS, the Company wishes to afford the Employee the
opportunity to purchase shares of its common stock, par value
$1.00 per share (the "Common Stock"); and
WHEREAS, the Company wishes to carry out the Aydin
Corporation 1996 Equity Incentive Plan (the "Plan"), the terms
of which are incorporated herein by this reference and made a
part of this Agreement; and
WHEREAS, the Board of Directors of the Company (the
"Committee") has determined that it would be to the advantage
and best interest of the Company and its stockholders to grant
to the Employee the stock option provided for herein as an
inducement to remain in the service of the Company, and as an
incentive for increased efforts during such service and has
advised the Company thereof and instructed the undersigned
officers to issue said option;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement,
they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.1 - Employee
Employee shall mean directors, officers and other key
employees of the Company and its Subsidiaries.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.3 - Option
"Option" shall mean the option to purchase Common Stock
granted under this Agreement.
Section 1.4 - Plan
"Plan" shall mean the Aydin Corporation 1996 Equity
Incentive Plan, as amended from time to time.
Section 1.5 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.6 - Subsidiary
"Subsidiary" shall have the same meaning as defined in
Section 425 of the Code.
Section 1.7 - Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the
Company or any Subsidiary is terminated for any reason,
including, but not by way of limitation, a termination by
resignation, discharge, lay-off, death or retirement. The
Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to
Termination of Employment, including, but not by way of
limitation, all questions of whether particular leaves of
absence constitute Terminations of Employment.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
(a) In consideration of the Employee's agreement to
remain in the employ of the Company or its Subsidiary, and for
other good and valuable consideration, on the date hereof the
Company grants to the Employee the Option to purchase any part
or all of an aggregate of 111,204 shares of Common Stock upon
the terms and conditions set forth in this Agreement and the
Plan.
(b) This Option is in addition to any other
options heretofore or hereafter granted to the Employee by the
Company.
The Option granted hereunder is not intended to qualify
as an incentive stock option under Section 422 of the Code.
Section 2.2 - Purchase Price
The purchase price of the shares of Common Stock covered
by the Option shall be $10.31 per share without commission or
other charge.
Section 2.3 - Adjustments in Option - Acceleration of
Exercisability
(a) Changes in Capitalization. The number of shares of
Common Stock covered by the Option and the price per share of
Common Stock covered by the Option shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common
Stock subject to the Option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Option
will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.
The Committee may, in the exercise of its sole discretion in
such instances, declare that the Option shall terminate as of
a date fixed by the Committee and give the Employee the right
to exercise the Option as to all or any part of the shares of
Common Stock covered by the Option, including shares as to
which the Option would not otherwise be exercisable.
(c) Sale or Merger. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the
Committee, in the exercise of its sole discretion, may take
such action as it deems desirable, including, but not limited
to: (i) causing the Option to be assumed or an equivalent
option to be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, (ii)
providing that the Employee shall have the right to exercise
the Option as to all of the shares of Common Stock covered by
the Option, including shares as to which the Option would not
otherwise be exercisable, or (iii) declaring that the Option
shall terminate at a date fixed by the Committee provided that
the Employee is given notice and opportunity to exercise the
Option prior to such date.
ARTICLE III
EXERCISABILITY OF OPTIONS
Section 3.1 - Commencement of Exercisability
(a) The Option is not exercisable in whole or in part
during the first year after the date of its grant.
Thereafter, subject to Section 2.3 hereof, the Option shall
become exercisable in four cumulative annual installments as
follows:
(i) The first installment of 27,801 shares covered
by the Option shall become exercisable on October 8, 1997.
(ii) The second installment of 27,801 shares
covered by the Option shall become exercisable on October 8,
1998.
(iii) The third installment of 27,801 shares covered
by the Option shall become exercisable on October 8, 1999.
(iv) The fourth installment of 27,801 shares
covered by the Option shall become exercisable on October 8,
2000.
The foregoing rights are cumulative and while the
Employee continues to be employed by the Company, may be
exercised up to and including the expiration date set forth in
Section 3.3(a) hereof.
(b) If the Option has not become exercisable at
Termination of Employment, it shall not thereafter become
exercisable.
Section 3.2 - Duration of Exercisability
Once the Option becomes exercisable it shall remain
exercisable until it expires as provided in Section 3.3
hereof.
Section 3.3 - Expiration of Option
(a) The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
(i) The expiration of five years from the date the
Option was granted; or
(ii) The expiration of 30 days from the date of the
Employee's Termination of Employment unless such Termination
of Employment results from the Employee's death, the
Employee's lay-off or the Employee's disability within the
meaning of Section 72(m)(7) of the Code; or
(iii) The expiration of three months from the date of
the Employee's Termination of Employment by reason of the
Employee's lay-off; or
(iv) The expiration of one year from the date of the
Employee's Termination of Employment by reason of the
Employee's death or disability (within the meaning of Section
72(m)(7) of the Code).
(b) Notwithstanding the foregoing, the Committee may, in
its absolute discretion and upon such terms and conditions as
it deems appropriate, extend the period for the exercise of
the Option as set forth in Section 3.3(a)(ii) or (iii) or (iv)
hereof, whichever may be applicable, but not beyond the
expiration date of the Option as set forth in Section
3.3(a)(i) hereof.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Employee, only the Employee
may exercise the Option or any portion thereof. After the
death of the Employee, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable
under Section 3.3 hereof, be exercised by the Employee's
personal representative or by any person empowered to do so
under the Employee's will or under the then applicable laws of
descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole
or in part at any time prior to the time when the Option or
portion thereof expires under Section 3.3 hereof; provided,
however, that each partial exercise shall be for whole shares
only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of
all of the following prior to the time when the Option or such
portion expires under Section 3.3 hereof:
(a) Notice in writing signed by the Employee or other
person then entitled to exercise the Option or any portion
thereof, stating that the entire Option or a specific portion
thereof is thereby exercised, and identifying the Option by
the Stock Option Agreement number;
(b) Full payment in cash, Common Stock of the Company
(valued at the mean of the high and low prices on the New York
Stock Exchange on the trading day immediately preceding the
date of exercise) or a combination thereof, as the Committee
may determine in its sole discretion, for the shares with
respect to which such Option or portion thereof is exercised;
and
(c) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 hereof by any person or
persons other than the Employee, appropriate proof of the
right of such person or persons to exercise the Option.
Section 4.4 - Issuance of Stock
The shares of Common Stock deliverable upon the exercise
of the Option, or any portion thereof, may be either
previously authorized but unissued shares or issued shares
which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not
be required to issue or deliver any certificate or
certificates for shares of Common Stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment
of all of the following conditions:
(a) The admission of such shares to listing on the New
York Stock Exchange on which such class of stock is then
listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law or
under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which
the Committee shall, in its absolute discretion, deem
necessary or advisable;
(c) The obtaining of any approval or other clearance
from any state or federal governmental agency which the
Committee shall, in its absolute discretion, determine to be
necessary or advisable; and
(d) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may from
time to time establish for reasons of administrative
convenience.
Section 4.5 - Termination of Employment for Misconduct
If the employment of the Employee is terminated for
fraud, embezzlement, theft, commission of a felony or
dishonest conduct or is found to have disclosed confidential
information of the Company or any Subsidiary, the Employee
shall forfeit all unexercised Options and all exercised
Options as to which the Company has not yet delivered the
certificates. In making such determination, the Committee
shall act fairly and in utmost good faith and shall give full
consideration of the facts presented on behalf of both the
Company and the Employee.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan
and this Agreement and to adopt such rules for the
administration, interpretation, and application of the Plan as
are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Company and all other
interested persons. No member of the Committee shall be
personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or
the Option.
Section 5.2 - Options not Transferable
Neither the Option nor any interest or right therein or
part thereof shall be liable for the debts, contracts, or
engagements of the Employee or his successors in interest or
shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or
by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including
bankruptcy) and any attempted disposition thereof shall be
null and void and of no effect; provided, however, that this
Section 5.2 shall not prevent transfer by will or by the
applicable laws of descent and distribution.
Section 5.3 - Withholding
All amounts which, under federal, state or local law, are
required to be withheld from the amount payable with respect
to any Option shall be withheld by the Company. Whenever the
Company proposes or is required to issue or transfer shares of
Common Stock, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to
satisfy any federal, state, or local withholding tax
requirements prior to the delivery of any certificate or
certificates for such shares.
Section 5.4 - No Right of Continued Service
Nothing in this Agreement or in the Plan shall confer
upon the Employee any right to continue in the employ of the
Company or shall interfere with or restrict in any way the
rights of the Company, which are hereby expressly reserved, to
discharge the Employee.
Section 5.5 - Shares to be Reserved
The Company shall at all times during the term of the
Option reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements
of this Agreement.
Section 5.6 - Notices
Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of
its Secretary and any notice to be given to the Employee shall
be addressed to the Employee at the address shown in the
Company's personnel files. By a notice given pursuant to this
Section 5.6, either party may hereafter designate a different
address for notices to be given to it or him. Any notice
which is required to be given to the Employee shall, if the
Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed
the Company of the representative's status and address by
written notice under this Section 5.6. Any notice shall have
been deemed duly given when delivered in person, deposited in
first class United States mail, postage prepaid, or sent by
overnight courier.
Section 5.7 - Titles
Titles are provided herein for convenience of reference
only and are not to serve as a basis for interpretation or
construction of this Agreement.
Section 5.8 - Notification of Disposition
With respect to shares acquired through the exercise of
any incentive stock option, the Employee shall give prompt
notice to the Company of any disposition or other transfer of
such shares if such disposition or transfer is made (a) within
two years from the date of granting the Option with respect to
such shares or (b) within one year after the transfer of such
shares to him. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in
cash, other property, assumption of indebtedness, or other
consideration, by the Employee in such disposition or other
transfer.
Section 5.9 - Governing Law
This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Employee have
caused this Agreement to be executed and the Employee
acknowledges receipt of a copy of the Plan and acceptance of
an
original copy of this Agreement.
Attest: AYDIN CORPORATION
/s/ Robert A. Clancy By: /s/ James R. Henderson
Secretary Title: Vice President
(SEAL)
/s/ I. Gary Bard (SEAL)
__________________________
Employee Signature
I. Gary Bard
__________________________
Employee Name (Please Print)
Employee's Taxpayer
Identification Number: ###-##-####
