<PAGE>
Registration No. 333-________
As filed with the Securities and Exchange Commission on January 31, 1997
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
______________________
AVIC GROUP INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1989122
- ---------------- ----------------------
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
599 Lexington Avenue
44th Floor
New York, New York 10022
(212) 319-9160
(Address, including zip code, and telephone number,
including area code, or registrant's principal executive offices)
SHARES OF COMMON STOCK AND WARRANTS
ISSUED PURSUANT TO
EMPLOYMENT AND CONSULTING AGREEMENTS
(Full title of plan)
Joseph R. Wright, Jr.
Chief Executive Officer
AVIC Group International, Inc.
599 Lexington Avenue
44th Floor
New York, New York 10022
(212) 319-9160
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Matthias & Berg LLP
515 South Flower Street
Seventh Floor
Los Angeles, California 90071
Attn: Jeffrey P. Berg, Esq.
Phone (213) 895-4200
Fax (213) 895-4058
<PAGE>
(REGISTRATION STATEMENT COVER PAGE CONTINUED)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered(1) Offering Price per Share(1) Aggregate Offering Registration
Price(1) Fee(2)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 per
share 397,500 $2.75 $1,093,125.00 $331.25
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
_________________________________
(1) Estimated solely for the purpose of calculating the registration fee based
upon the closing market price of the Common Stock as reported on the
American Stock Exchange on January 30, 1997.
(2) Pursuant to General Instruction E, the registration fee paid in connection
herewith is based on the maximum aggregate price at which securities
covered by this registration statement are proposed to be offered.
<PAGE>
REOFFER PROSPECTUS
AVIC GROUP INTERNATIONAL, INC.
397,500 SHARES
COMMON STOCK
OFFERED BY SELLING STOCKHOLDERS
This Reoffer Prospectus (the "Prospectus") relates to the reoffer and
resale of up to 397,500 shares (the "Shares") of common stock, par value
$0.001 (the "Common Stock") of AVIC Group International, Inc., a Delaware
corporation (the "Company"), to be offered from time to time for the account
of certain directors, officers, employees and consultants of the Company (the
"Selling Stockholders"), some of whom may be deemed to be "affiliates" of the
Company, as such term is defined in Rule 405 of the Securities Act of 1933,
as amended (the "Securities Act"). The 397,500 Shares constitute: (i) up to
197,500 shares of Common Stock which have been or may be issued to certain
officers, directors, employees and consultants of the Company as compensation
for employment or consulting services, and (ii) up to 200,000 shares of
Common stock which may be issued by the Company upon the exercise of certain
warrants granted to David Rubenstein as compensation for consulting services.
See "Selling Stockholders" and "Plan of Distribution."
The Selling Stockholders directly, through agents designated from time
to time, or through brokers, dealers, or through underwriters to be
designated, may sell the shares of Common Stock offered hereby from time to
time on terms to be determined at the time of sale. To the extent required
by applicable law, the specific shares to be sold, the terms of the offering,
including price, the names of any agent, dealer or underwriter, and any
applicable commission, discount or other compensation with respect to a
particular sale will be set forth in an accompanying Prospectus Supplement.
See "Selling Stockholders" and "Plan of Distribution."
The Company will receive none of the proceeds from the sale of these
Shares. The Selling Stockholders and any broker-dealer, agents or
underwriters that participate with the Selling Stockholders in the
distribution of the Common Stock may be deemed to be underwriters within the
meaning of the Securities Act and any commission received by them and any
profit on the resale of the Common Stock purchased by them may be deemed to
be underwriting commissions or discounts under the Securities Act. The
Company has paid all of the costs of the Offering with respect to the Shares
to be offered by the Selling Stockholders. See "Selling Stockholders" and
"Plan of Distribution."
The Company's Common Stock is currently listed for trading on the
American Stock Exchange under the symbol "AV." On January 30, 1997, the
closing market price for the Common Stock on the American Stock Exchange was
approximately $2.75 per share.
THESE SECURITIES ARE SPECULATIVE
AND INVOLVE A HIGH DEGREE OF RISK.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 31, 1997
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission, a Registration Statement on
Form S-8 under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Shares, reference is made to the Registration Statement and
the exhibits and schedules filed as a part thereof. Statements made in this
Prospectus as to the contents of any contract or any other document referred
to are not necessarily complete, and, in each instance, reference is made to
the copy of such contract or document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference to such exhibits. The Registration Statement, including exhibits
and schedules thereto, may be inspected without charge at the public
reference facilities maintained by the Securities and Exchange Commission
(the "Commission") at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission at 7
World Trade Center, 13th Floor, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2411. Copies of the
Registration Statement and the exhibits and schedules thereto may be obtained
from the Commission at such offices upon payment of prescribed rates.
The Company is currently subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
may be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington D.C. 20549; at its New York
Regional Office, Room 1400, 7 World Trade Center, New York, New York 10048;
and at its Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2411, and copies of such materials can be obtained
from the Public Reference Section at prescribed rates. The Company intends
to furnish its stockholders with annual reports containing audited financial
statements and such other periodic reports as the Company may determine to be
appropriate or as may be required by law.
Further, the Company's most recent reports, proxy and information
statements and other information may be inspected and copied at the offices
of American Stock Exchange, 86 Trinity Place, New York, New York 10006, at
prescribed rates.
The following documents, including the exhibits thereto, which are on
file with the Securities and Exchange Commission (the "Commission"), are
incorporated in this Registration Statement by reference:
(a) Annual Report on Form 10-KSB for the fiscal year ended March 31, 1996.
(b) Quarterly Reports on Form 10-QSB for the quarters ended June 30 and
September 30, 1996.
(c) The description of the Common Stock which is contained in the
registration statements filed under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 14 and
15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all shares offered hereby have been sold or which
deregisters all shares then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part
hereof from the date of filing of such documents.
2
<PAGE>
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated by reference in this Prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to: AVIC Group
International, Inc., 599 Lexington Avenue, 44th Floor, New York, New York
10022, Attention: Timothy P.F. Crowley, Secretary. Telephone requests may be
directed to the Secretary at (212) 319-9160.
Any statements contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated herein by reference modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. All
information appearing in this Prospectus is qualified in its entirety by the
information and financial statements (including notes thereto) appearing in
the documents incorporated herein by reference, except to the extent set
forth in the immediately preceding statement.
THE COMPANY
The Company is a development stage company which is engaged principally
in the business of establishing joint ventures ("Sino-foreign joint
ventures") with entities situated in the People's Republic of China ("PRC")
in the telecommunications industry in the PRC. The Company intends to
establish these Sino-foreign joint ventures to develop telecommunications
networks in the PRC in cooperation with authorized telecommunications network
operators in the PRC. In connection with this business plan, the Company has
entered into certain agreements with entities, which are affiliates of
Tweedia International Ltd., the Company's principal stockholder. These
agreements contemplate the Company's participation in distributions from the
authorized operations of Sino-foreign joint ventures for the purpose of
building telecommunications networks, transferring ownership of the networks
to authorized telecommunications network operators in the PRC, and servicing
and maintaining such telecommunications networks ("BTSM"), including the
creation and development of a Global Service Mobile telephone network in
Hebei Province, PRC, and a paging system network, a fixed wire telephone
network and a cellular telephone network in the PRC.
Certain of these agreements are preliminary in nature and are subject to
the receipt of significant approvals and permits from various governmental
agencies in the PRC, and, in certain cases, the execution of more definitive
agreements. There can be no assurances that, with respect to these
Sino-foreign joint ventures that require more definitive agreements and
further approvals, such definitive agreements will ever be consummated or
that such approvals and permits will be obtained for the benefit of the
Company.
Since the Company does not currently have the technical capability,
personnel or resources to build, service or maintain a telecommunications
network, the consummation of all or any of these transactions may require the
cooperation and participation of third parties, other than PRC governmental
agencies, who may be parties to or independent contractors with any such
proposed Sino-foreign joint ventures. There can be no assurances that the
Company will be able to obtain the requisite cooperation or participation of
any such third parties with respect to the Company's proposed business
operations.
Although each of these agreements sets forth certain understandings as
to the extent of the contributions and interests in these proposed
Sino-foreign joint ventures, there can be no assurances as to the final terms
of the definitive agreements, if any, with respect to these proposed
Sino-foreign joint ventures.
3
<PAGE>
Further, each of these agreements will require significant financings
necessary to fund the construction of such networks. The Company does not
currently have any commitments for any such financing or sufficient
resources to fund such construction, and there can be no assurances that any
such financing can be obtained on terms favorable to the Company or at all.
In addition, the Company's proposed business operations in the PRC are
subject to significant risks. These risks include, but are not limited to
the limited precedent for the establishment of Sino-foreign joint ventures
for the purpose of engaging in the telecommunications industry in the PRC,
governmental restrictions on foreign business ventures in the PRC, PRC
regulation of its economy and foreign currency exchange and the general
political environment in the PRC.
The Company's successful transition from a development stage company to
profitable operations is dependent upon obtaining adequate financing to fund
current operations and the development of a market for the Company's business.
The Company's auditors have included an explanatory paragraph in their
Report of Independent Certified Public Accountants to the effect that
recovery of the Company's assets are dependent upon future events, the
outcome of which is undeterminable, and that the successful completion of the
Company's development program and its transition, ultimately, to the
attainment of profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of
sales adequate to support the Company's cost structure. There can be no
assurances that such a financing can be completed on terms favorable to the
Company or at all, or that the business of the Company will ever achieve
profitable operations.
The Company's principal executive offices are located at 599 Lexington
Avenue, 44th Floor, New York, New York 10022, tel. no. (212) 319-9160.
4
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the net proceeds from the shares of
Common Stock to be offered by the Selling Stockholders, all of which net
proceeds will be received by the Selling Stockholders. See "Selling
Stockholders" and "Plan of Distribution."
PLAN OF DISTRIBUTION
The shares of the Company's Common Stock offered hereby by the Selling
Stockholders may be sold from time to time to purchasers directly by the
Selling Stockholders. Alternatively, the Selling Stockholders may from time
to time offer the shares of Common Stock through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or the
purchasers of the shares for whom they may act as agent. The Selling
Stockholders and any underwriters, dealers or agents that participate in the
distribution of the shares of Common Stock may be deemed to be underwriters
and any profit on the sale of shares by them and any discounts, commissions
or concessions received by any such underwriters, dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
At the time a particular offer of shares is made, to the extent required by
applicable law, a Prospectus Supplement will be distributed which will set
forth the specific shares to be sold and the terms of the offering, including
the name or names of any underwriters, dealer-agents, any discounts,
commissions or concessions allowed or reallowed or paid to dealers.
The shares of Common Stock may be sold from time to time in one or more
transactions at a fixed offering price which may be changed or at varying
prices determined at the time of sale or negotiated prices.
The Company has paid all of the expenses incident to the offering of the
shares of the Common Stock offered by the Selling Stockholders, other than
commissions and discounts of underwriters, dealers or agents.
5
<PAGE>
SELLING STOCKHOLDERS
This Prospectus relates to shares of Common Stock which have been or may
be acquired by the Selling Stockholders from time to time through: (i) the
issuance of up to 197,500 shares of Common Stock to certain officers,
directors, employees and consultants of the Company as compensation for
employment or consulting services, and (ii) the exercise of certain warrants
to purchase up to 200,000 shares of Common Stock granted pursuant to the
terms of a consulting agreement. The following table sets forth certain
information with respect to Selling Stockholders, some of whom may be deemed
to be "affiliates" of the Company, as such term is defined in Rule 405 of the
Securities Act, as of the date of this Prospectus, as follows: (i) the name
and position with the Company within the past three (3) years of each Selling
Stockholder; (ii) the number of shares of Common Stock beneficially owned by
each Selling Stockholder (including shares obtainable under options
exercisable within sixty (60) days of such date); (iii) the number of shares
of Common Stock being offered hereby, and (iv) the number and percentage of
the Company's outstanding shares of Common Stock to be beneficially owned by
each Selling Stockholder before and after completion of the sale of Common
Stock being offered hereby. There can be no assurance that any of the
Selling Stockholders will sell any or all of the shares of Common Stock
offered hereby.
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SHARES
BENEFICIALLY NO. OF SHARES BENEFICIALLY
NAME AND ADDRESS OWNED BEFORE TO BE OFFERED OWNED AFTER PERCENT #
OF BENEFICIAL OWNER OFFERING FOR RESALE OFFERING* BEFORE OFFERING AFTER OFFERING*
- -------------------- ------------- ------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Joseph R. Wright, Jr.(1) 3,297,500 187,500 3,110,000 9.70 9.15
E. Pendleton James(2) 10,000 10,000 0 (3) (3)
David Rubenstein(4) 200,000 200,000 0 (3) (3)
</TABLE>
Information with respect to Selling Stockholders from time to time will
be updated in supplements to this Prospectus, which will be filed with the
Commission in accordance with Rule 424(b) under the Securities Act.
As of January 31, 1997, there were issued and outstanding 30,987,190
shares of Common Stock.
(FOOTNOTES ON FOLLOWING PAGE)
6
<PAGE>
(FOOTNOTES FROM PRIOR PAGE)
# Pursuant to the rules of the Commission, shares of Common Stock which an
individual or group has a right to acquire within 60 days pursuant to the
exercise of options or warrants are deemed to be outstanding for the
purpose of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table.
* Assumes the exercise in full and sale of all the Shares registered for
reoffer and resale pursuant to this Registration Statement.
1. The address for Mr. Wright is 599 Lexington Avenue, 44th Floor, New York,
New York 10022. Mr. Wright is the beneficial owner of 297,500 shares of
Common Stock and options to purchase up to 3,000,000 shares of Common
Stock. Further, up to an additional 3,000,000 options to purchase shares
of Common Stock may vest pursuant to the terms of an employment agreement
between Mr. Wright and the Company. Mr. Wright is the Chairman of the
Board of Directors, Chief Executive Officer and President of the Company.
2. The address for Mr. James is 200 Park Avenue, Suite 4250, New York, New
York 10166. The Company issued 10,000 shares of Common Stock to Mr. James
as compensation pursuant to the terms of a consulting agreement between Mr.
James and the Company.
3. Less than 1%.
4. The address for Mr. Rubenstein is 1001 Pennsylvania Avenue, N.W., Suite
220, Washington, D.C. 20004-2505. The Company issued warrants to Mr.
Rubenstein to purchase up to 200,000 shares of Common Stock at an exercise
price of $1.27 per share as compensation pursuant to the terms of a
consulting agreement between Mr. Rubenstein and the Company.
7
<PAGE>
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Commission has expressed its opinion that indemnification of
directors, officers and controlling persons of the Company against
liabilities arising under the Securities Act, is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by an Indemnitee of
the Company in the successful defense of any such act or proceeding) is
asserted by such Indemnitee in connection with securities which have been
registered by the Company, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
LEGAL MATTERS
Certain matters with respect to the validity of the Shares offered
hereby will be passed upon for the Company by Matthias & Berg LLP, 515 South
Flower Street, Seventh Floor, Los Angeles, California 90071. Matthias & Berg
LLP currently owns options to purchase up to 20,102 shares of Common Stock,
exercisable at $1.50 per share.
EXPERTS
The audited financial statements of the Company as of March 31, 1996 and
1995 and the related statements of operations, stockholders' equity and cash
flows for the years ended March 31, 1996, and 1995, incorporated by reference
in this Prospectus, have been so incorporated herein in reliance on the
report of Singer Lewak Greenbaum & Goldstein LLP (successors to the practice
of Shillan Abrams & Company), independent certified public accountants, given
on the authority of such firm as experts in auditing and accounting.
8
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR
A SOLICITATION OF ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION. . . . . . 2
THE COMPANY. . . . . . . . . . . 3
USE OF PROCEEDS. . . . . . . . . 5
PLAN OF DISTRIBUTION . . . . . . 5
SELLING STOCKHOLDERS . . . . . . 6
DISCLOSURE OF COMMISSION POSITION
OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES . . . . . . . . 8
LEGAL MATTERS. . . . . . . . . . 8
EXPERTS. . . . . . . . . . . . . 8
AVIC GROUP
INTERNATIONAL, INC.
397,500 SHARES
OF COMMON STOCK
____________
PROSPECTUS
____________
JANUARY 31, 1997
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1: PLAN INFORMATION.
The information required by Part I is included in documents to be sent or
given to the participants.
ITEM 2: REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon written or oral request, AVIC Group International, Inc., a Delaware
corporation (the "Registrant") will provide, without charge, a copy of all
documents incorporated by reference in Item 3 of Part II of this Registration
Statement, which are incorporated by reference in the Section 10(a)
Prospectus, and all other documents required to be delivered to employees
pursuant to Rule 428(b) promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). All requests should be made to AVIC Group
International, Inc., Timothy P.F. Crowley, Secretary, 599 Lexington Avenue,
44th Floor, New York, New York 10022, tel. no. (212) 319-9160.
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3: INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, including the exhibits thereto, which are on file
with the Securities and Exchange Commission (the "Commission"), are incorporated
in this Registration Statement by reference:
(a) Annual Report on Form 10-KSB for the fiscal year ended March 31, 1996.
(b) Quarterly Reports on Form 10-QSB for the quarters ended June 30 and
September 30, 1996.
(c) The description of the Common Stock which is contained in the
registration statements filed under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 14 and
15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all shares offered hereby have been sold or which
deregisters all shares then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part
hereof from the date of filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation generally provide for the
maximum indemnification of a corporation's officers and directors as
permitted by law in the State of Delaware. Delaware law empowers a
corporation to indemnify any person who was or is a party or who is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except in the case of an action by or in the right of the
corporation, by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation or other enterprise. Depending on the character of the
proceeding, a corporation may indemnify against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with such action, suit or proceeding if
the person indemnified acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceedings, had no
reasonable cause to believe his or her conduct was unlawful.
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses, including amounts paid in
settlement and attorney's fees actually and reasonably incurred by him or her
in connection with the defense or settlement of the action or suit if he or
she acted in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which
such a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim,
issue or matter therein, he or she must be indemnified by the corporation
against expenses, including attorney's fees, actually and reasonably incurred
by him in connection with the defense. Any indemnification under this
section, unless ordered by a court or advanced pursuant to this section, must
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made: (a) by
the stockholders; (b) by the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or
proceeding; (c) if a majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or (d) if a quorum consisting of
directors who were not parties to the action, suit or proceeding cannot be
obtained, by independent legal counsel in a written opinion.
The certificate of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by
the corporation as they are incurred and in advance of the final disposition
of the action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he or she is not
entitled to be indemnified by the corporation. The provisions of this
section do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under
any contract or otherwise by law.
II-2
<PAGE>
The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section: (a) does not exclude any other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his or her official capacity or an action in another capacity while holding
his or her office, except that indemnification, unless ordered by a court
pursuant to this section or for the advancement of any director or officer if
a final adjudication establishes that his or her acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was
material to the cause of action; and (b) continues for a person who has
ceased to be a director, officer, employee or agent and inures to the benefit
of the heirs, executors and administrators of such a person.
ITEM 8: EXHIBITS
4.1 Consulting Agreement between the Registrant and David Rubenstein, dated
October 15, 1996
4.2 Consulting Agreement between the Registrant and E. Pendleton James, dated
March 22, 1995, and amendment thereto dated January 8, 1997
4.3 Employment Agreement between the Registrant and Joseph R. Wright, Jr.,
dated as of April 15, 1995, and amendments thereto dated as of November 21,
1995(1) and September 12, 1996
5.1 Opinion of Matthias & Berg LLP
24.1 Consent of Matthias & Berg LLP (included in Exhibits 5.1)
24.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
_________________________________
(1) Filed as part of the Company's Current Reports on Form 8-K, dated May 1,
1995 and December 22, 1995.
ITEM 9: UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not
apply if the Registration Statement is on From S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is incorporated by reference from periodic reports filed by the
Registrant under the Exchange Act.
(2) That, for determining liability under the Securities Act, to treat
each such post-effective amendment as a new registration statement of the
securities offered, and the offering of such securities at that time to be the
initial BONA FIDE offering.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the end of the
offering.
The undersigned registrant hereby under takes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
any employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officers or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of New York, New York, on this
31st day of January, 1997.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Joseph R. Wright, Jr.
------------------------------
Joseph R. Wright, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
---------- -------------------------- ------
<S> <C> <C>
/s/ Joseph R. Wright, Jr. Chairman of the Board of January 31, 1997
- ------------------------------- Directors, Chief Executive Officer,
Joseph R. Wright, Jr. President and Director
(Principal Executive Officer)
/s/ Michael J. Lim Chief Financial Officer and Director January 31, 1997
- ------------------------------- (Principal Financial Officer
Michael J. Lim and Principal Accounting
Officer)
/s/ Tim McNamar Vice Chairman of the Board of January 31, 1997
- ------------------------------- Directors and Director
Tim McNamar
/s/ Xiao Jun Director January 31, 1997
- -------------------------------
Xiao Jun
Director _______________, 1997
- -------------------------------
Ju Feng
/s/ William H. Davidson Director January 31, 1997
- -------------------------------
William H. Davidson
Director _______________, 1997
- -------------------------------
Teoh Set Seng
</TABLE>
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph R. Wright, Jr. and Michael J. Lim,
or either of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) and supplements to this Registration Statement, and
to file the same with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each end every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
---------- -------------------------- ------
<S> <C> <C>
/s/ Joseph R. Wright, Jr. Chairman of the Board of January 31, 1997
- ------------------------------- Directors, Chief Executive Officer,
Joseph R. Wright, Jr. President and Director
(Principal Executive Officer)
/s/ Michael J. Lim Chief Financial Officer and Director January 31, 1997
- ------------------------------- (Principal Financial Officer
Michael J. Lim and Principal Accounting
Officer)
/s/ Tim McNamar Vice Chairman of the Board of January 31, 1997
- ------------------------------- Directors and Director
Tim McNamar
/s/ Xiao Jun Director January 31, 1997
- -------------------------------
Xiao Jun
Director _______________, 1997
- -------------------------------
Ju Feng
/s/ William H. Davidson Director January 31, 1997
- -------------------------------
William H. Davidson
Director _______________, 1997
- -------------------------------
Teoh Set Seng
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Document Description of Document Numbered Page
-------- ------------------------- ---------------
<S> <C> <C>
4.1 Consulting Agreement between the Registrant
and David Rubenstein, dated October 15, 1996
4.2 Consulting Agreement between the Registrant
and E. Pendleton James, dated March 22, 1995, and
amendment thereto dated January 8, 1997
4.3 Employment Agreement between the Registrant
and Joseph R. Wright, Jr., dated as of April 15,and
amendments thereto dated as of November 21, 1995(1)
and September 12, 1996
5.1 Opinion of Matthias & Berg LLP
24.1 Consent of Matthias & Berg LLP (included in Exhibits 5.1)
24.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
</TABLE>
_______________________________
(1) Filed as part of the Company's Current Reports on Form 8-K, dated May 1,
1995 and December 22, 1995.
<PAGE>
EXHIBIT 4.1
AVIC GROUP INTERNATIONAL, INC.
15 October 1996
Mr. David Rubenstein
The Carlyle Group
1001 Pennsylvania Avenue, NW #220
Washington, DC 20004-2505
Dear David:
I want to confirm the details of the warrants that you and I have discussed over
the past several days. For your advisory services to AVIC Group International,
Inc., we will issue you a warrant to purchase 200,000 shares of the Company's
Common Stock at an exercise price of $1.50. The advisory services performed by
you will include advising the Company on legal matters relating to the structure
of our Sino-foreign joint ventures and marketing strategies for the Company in
the People's Republic of China.
Sincerely,
Joseph R. Wright
Chairman
<PAGE>
EXHIBIT 4.2
AVIC GROUP INTERNATIONAL, INC.
8 January 1997
E. Pendelton James
Pendelton James & Associates, Inc.
200 Park Avenue
Suite 4520
New York, New York 10166
Dear Pen:
I want to confirm the terms of the revision to our agreement that we
have you. Originally, our agreement dated March 22, 1995 (attached), awarded
you fees for executive search services that you were providing the Company. As
we have revised your duties to assisting the Company in finding Directors for
the Company's board of directors, we agree to compensate you 5,000 shares of the
Company's stock in lieu of cash compensation. This stock is in addition to the
5,000 shares we awarded you in lieu of cash for executive search services
rendered by you per the original agreement.
If you have any questions concerning this matter, please do not
hesitate to contact me at (212) 319-9160.
Sincerely,
/s/ Joseph R. Wright, Jr.
-------------------------------
Joseph R. Wright, Jr.
Chairman and CEO
<PAGE>
EXHIBIT 4.3
AVIC GROUP INTERNATIONAL, INC.
September 12, 1996
Joseph R. Wright, Jr.
AVIC Group International, Inc.
599 Lexington Avenue
44th Floor
New York, New York 10022
RE: MODIFICATION OF EMPLOYMENT AGREEMENT
Dear Mr. Wright:
This letter will constitute a modification of your existing Employment
Agreement, as amended, as follows:
1. Your existing Employment Agreement provides for a salary of $150,000
during your first year of employment. An amount of $131,250 has been accrued
but unpaid from June 1, 1995 through April 15, 1996. You are now in the second
year of your Employment Agreement and as of August 31, 1996 an additional amount
of $112,500 was accrued but unpaid. It is hereby agreed that all amounts
accrued but unpaid under your Employment Agreement as of August 31, 1996
($243,750) will be paid in stock of the Company valued at $1.50 per share (the
closing price as of Tuesday, September 3, 1996). Your compensation for the
second year of this contract will be $300,000 and this amount will increase
$100,000 per year throughout the term of your Employment Agreement.
2. You have been granted options to purchase 3 million shares of Common
Stock of the Company at $.35 per share and 3 million shares of Common Stock of
the Company at $3.00 per share. This will confirm that all of such options will
vest as follows: 25% on April 15, 1995, 25% on April 15, 1996, 25% on April 15,
1997 and 25% on April 15, 1998 provided that you are still employed by the
Company at the time of vesting.
3. In the last sentence of Paragraph IV B of your Employment Agreement
you agree not to sell any Common Stock issued upon exercise of stock options for
a period three years and that for a period of five years you will not sell more
than 1,500,000 shares issued upon exercise of such options. It is hereby agreed
that such sentence shall be deemed to be stricken from your Employment
<PAGE>
Agreement. Instead, you will agree to be limited in the sale of shares of
Common Stock issued upon exercise of options to the same extent as other senior
executives of the Company.
4. Paragraph 4K of your Employment Agreement is hereby amended to provide
that you shall be entitled to an allowance of $30,000 per year (subject to
required withholding) for financial planning and tax preparation expenses.
5. Your existing Employment Agreement provides that the term of your
employment ends on April 14, 2000 and that the term will be automatically
renewed for one additional year unless you or the Company gives notice in
writing, at least 90 days prior to the expiration of the Agreement of your or
its desire to terminate or modify the Employment Agreement. It is hereby agreed
that the foregoing term shall be modified to provide that the term will be April
14, 2000, provided, however, that on April 14 of each year commencing on April
14, 1996, the term will be automatically extended for an additional year, unless
at least 90 days prior to such April 14th, either party gives notice to the
other that the term shall not be so extended.
If your are in agreement with the foregoing, please indicate your
acceptance in the place indicated below on the enclosed copy of this letter and
return the signed copy to me.
Very truly yours,
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Chen Li
-------------------------------
Chen Li
Co-Chairman of the Board
AGREED AND ACCEPTED:
/s/ Joseph R. Wright, Jr.
- -------------------------------
Joseph R. Wright, Jr.
<PAGE>
EXHIBIT 5.1
January 31, 1997
AVIC Group International, Inc.
599 Lexington Avenue
44th Floor
New York, New York 10022
RE: REGISTRATION STATEMENT ON FORM S-8
AVIC GROUP INTERNATIONAL, INC.
Gentlemen:
We are acting as counsel for AVIC Group International, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of the offering and sale of
up to 397,500 shares (the "Shares") of the Company's common stock, par value
$0.001 per share (the "Common Stock). The 397,500 Shares constitute: (i)
197,500 shares of Common Stock which have been issued to certain employees and
consultants of the Company as compensation for employment or consulting services
previously rendered to the Company, and (ii) up to 200,000 shares of Common
Stock which may be issued by the Company upon the exercise of certain warrants
granted to a consultant of the Company as compensation for consulting services
previously rendered to the Company (collectively, the "Contracts"). A
Registration Statement on Form S-8 covering the Shares (the "Registration
Statement") is being filed under the Act with the Securities and Exchange
Commission.
In rendering the opinions expressed herein, we have reviewed such
matters of law as we have deemed necessary and have examined copies of such
agreements, instruments, documents and records as we have deemed relevant.
In rendering the opinions expressed herein, we have assumed the
genuineness and authenticity of all documents examined by us and of all
signatures thereon, the legal capacity of all natural persons executing such
documents, the conformity to original documents of all documents submitted to us
as certified or conformed copies or photocopies and the completeness and
accuracy of the certificates of public officials examined by us. We have made
no independent factual investigation with regard to any such matters.
<PAGE>
Based upon the foregoing and subject to the qualifications stated
herein, it is our opinion that the Shares, issued or to be issued upon the
exercise of any warrants ("Warrants") duly granted pursuant to the Contracts,
when issued, paid for and delivered upon the exercise of such Warrants, in
accordance with the terms of the Contracts, will be validly issued, fully paid
and non-assessable.
The opinions expressed herein are limited to matters involving the
federal laws of the United States and to the corporate laws of the State of
Delaware, and we express no opinion as to the effect on the matters covered by
this opinion of the laws of any other jurisdiction.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. Counsel currently owns options to purchase up to 20,102
shares of Common Stock which are not the subject of the Registration Statement.
The opinions expressed herein are rendered solely for your benefit in
connection with the transaction described herein. Except as otherwise provided
herein, this opinion may not be used or relied upon by any person, nor may this
letter or any copies thereof be furnished to a third party, filed with a
governmental agency, quoted, cited or otherwise referred to without our prior
written consent.
Respectfully submitted,
MATTHIAS & BERG LLP
<PAGE>
EXHIBIT 24.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 18, 1996 accompanying the consolidated
financial statements included in the Annual Report of AVIC Group
International, Inc. on Form 10-KSB for the year ended March 31, 1996. We
hereby consent to the incorporation by reference of said report in this
Registration Statement on Form S-8.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
January 31, 1997
