<PAGE>
Registration No. 333-_________
As filed with the Securities and Exchange Commission on May 2, 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)
-----------------------------------------------------------------
1996 AVIC GROUP INTERNATIONAL, INC.
STOCK OPTION PLAN
-----------------------------------
(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 Amount to be Proposed Maximum Proposed Amount of
Securities to be Registered Registered(1) Offering Price per Maximum Registration
Share(1) Aggregate Fee(2)
Offering
Price(1)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share 3,000,000 $3.00 $ 9,000,000
- ------------------------------------------------------------------------------------------------
Common Stock, par value
$0.001 per share 20,000 $1.50 $ 30,000
- ------------------------------------------------------------------------------------------------
Common Stock, par value
$0.001 per share 4,520,000 $0.35 $ 1,582,000
- ------------------------------------------------------------------------------------------------
Common Stock, par value
$0.001 per share 4,460,000 $4.00 $17,840,000
- ------------------------------------------------------------------------------------------------
TOTAL 12,000,000 $28,452,000 $8,621.82
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------------
(1) Estimated solely for the purpose of calculating the registration fee based:
(a) upon the exercise price of the 7,540,000 options granted pursuant to
the Company's 1996 Stock Option Plan (the "1996 Plan"), as of the date of
this Registration Statement, and (b) with respect to the balance of the
4,460,000 options which have not been so granted under the Plan, upon the
closing market price ($4.00 per share) of the Common Stock as reported on
the American Stock Exchange on April 29, 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.
12,000,000 SHARES
COMMON STOCK
OFFERED BY SELLING STOCKHOLDERS
This Reoffer Prospectus (the "Prospectus") relates to the reoffer and
resale of up to 12,000,000 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") pursuant to the Company's 1996 Stock Option Plan (the
"1996 Plan"), 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"). 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 April 29, 1997, the
closing market price for the Common Stock on the American Stock Exchange was
approximately $4.00 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 May 2, 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,
September 30 and December 31, 1996.
(c) Current Reports on Form 8-K, dated May 1, 1995, December 22, 1995 and
March 20, 1997.
(d) 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.
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.
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.
3
<PAGE>
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 up to 12,000,000 shares of Common Stock which
have been or may be acquired by the Selling Stockholders from time to time
through the issuance of shares of Common Stock to certain officers, directors,
employees and consultants of the Company as compensation for employment or
consulting services pursuant to the 1996 Plan. 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 PERCENT #
NAME AND ADDRESS OWNED BEFORE TO BE OFFERED OWNED AFTER -----------------------------------
OF BENEFICIAL OWNER OFFERING# FOR RESALE OFFERING* BEFORE OFFERING AFTER OFFERING*
- ------------------- ------------- ------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Joseph R. Wright, Jr.(1) 6,297,500 6,000,000 297,500 16.90% **
Michael J. Lim(2) 1,006,900 1,000,000 6,900 3.12% **
Xiao Jun(3) 525,000 400,000 125,000 1.65% **
Timothy P.F. Crowley(4) 100,000 100,000 0 ** **
</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 April 29, 1997, there were issued and outstanding 31,257,921 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. Certain of
the Selling Stockholders, as indicated below, are currently not deemed to
be the beneficial owners of a certain number of shares of Common Stock
which are being registered for their benefit in connection with the
Registration Statement. Therefore, the number of shares of Common Stock
indicated in the chart as beneficially owned by such Selling Stockholders
may exceed the number of shares which are currently deemed to be
beneficially owned by certain Selling Stockholders pursuant to the rules of
the Commission.
* Assumes the exercise in full and sale of all the Shares registered for
reoffer and resale pursuant to this Registration Statement.
** Less than 1%.
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 4,500,000 shares of Common
Stock. Further, up to an additional 1,500,000 options to purchase shares
of Common Stock, which are not currently deemed to be beneficially owned by
Mr. Wright, may vest pursuant to the terms of an employment agreement, as
amended, 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. Lim is 599 Lexington Avenue, 44th Floor, New York, New
York 10022. Mr. Lim is the beneficial owner of 6,900 shares of Common
Stock and options to purchase up to 750,000 shares of Common Stock.
Further, up to an additional 250,000 options to purchase shares of Common
Stock, which are not currently deemed to be beneficially owned by Mr. Lim,
may vest pursuant to the terms of an employment agreement between Mr. Lim
and the Company. Mr. Lim is the Chief Financial Officer and Executive Vice
President-Operations, and a director of the Company.
3. The address for Mr. Xiao is 201 West Live Oak, Arcadia, California 91007.
Mr. Xiao is the beneficial owner of 10,000 shares of Common Stock and
options to purchase up to 315,000 shares of Common Stock. Further, up to
an additional 200,000 options to purchase shares of Common Stock, which are
not currently deemed to be beneficially owned by Mr. Xiao, may vest
pursuant to the terms of an employment agreement between Mr. Xiao and the
Company. Mr. Xiao is the Executive Vice President-AVIC China and a
director of the Company.
4. The address for Mr. Crowley is 599 Lexington Avenue, 44th Floor, New York,
New York 10022. Mr. Crowley is the beneficial owner of options to purchase
up to 50,000 shares of Common Stock. Further, up to an additional 50,000
options to purchase shares of Common Stock, which are not currently deemed
to be beneficially owned by Mr. Crowley, may vest pursuant to the terms of
a stock option agreement between Mr. Crowley and the Company. Mr. Crowley
is the Secretary of 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 14,102 shares of Common Stock,
exercisable at $1.50 per share, which are not the subject of this Registration
Statement.
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.
12,000,000 SHARES
OF COMMON STOCK
------------
PROSPECTUS
------------
MAY 2, 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,
September 30 and December 31, 1996.
(c) Current Reports on Form 8-K, dated May 1, 1995, December 22, 1995
and March 20, 1997.
(d) 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.
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 14,102 shares of Common Stock,
exercisable at $1.50 per share, which are not the subject of this
Registration Statement.
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 certificate 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 1996 Stock Option Plan(1)
4.2 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(2) and September 12, 1996(3)
4.3 Employment Agreement between the Registrant and Michael J. Lim, dated
as of November 6, 1995(4)
4.4 Employment Agreement between the Registrant and Xiao Jun, dated as of
January 1, 1996(4)
4.5 Stock Option Agreement between the Registrant and Timothy P.F.
Crowley, dated as of January 17, 1996
4.6 Stock Option Agreement between the Registrant and Cheryl Bell, dated as of
September 6, 1996
4.7 Stock Option Agreement between the Registrant and Meghan McCloskey, dated
as of January 17, 1996
4.8 Stock Option Agreement between the Registrant and Hua Yu, dated as of
January 17, 1996
4.9 Stock Option Agreement between the Registrant and Orina Chang, dated as of
October 23, 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 Transition Report on Form 10-KSB for the
Transition Period from October 1, 1994 to March 31, 1995
(2) Filed as part of the Company's Current Reports on Form 8-K, dated May 1,
1995 and December 22, 1995.
(3) Filed as part of the Company's Registration Statement on Form S-8, as filed
with the Commission on January 31, 1997.
(4) Filed as part of the Company's Current Report on Form 8-K, dated
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;
II-3
<PAGE>
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.
(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 30th day of April, 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 April 30, 1997
- ------------------------- Directors, Chief Executive Officer,
Joseph R. Wright, Jr. President and Director
(Principal Executive Officer)
/s/ Michael J. Lim Chief Financial Officer and Director April 30, 1997
- ------------------------- (Principal Financial Officer
Michael J. Lim and Principal Accounting
Officer)
/s/ Tim McNamar Vice Chairman of the Board of April 30, 1997
- ------------------------- Directors and Director
Tim McNamar
/s/ Xiao Jun Director April 30, 1997
- -------------------------
Xiao Jun
Director
- -------------------------
Ju Feng
Director
- -------------------------
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 April 30, 1997
- ----------------------------- Directors, Chief Executive Officer,
Joseph R. Wright, Jr. President and Director
(Principal Executive Officer)
/s/ Michael J. Lim Chief Financial Officer and Director April 30, 1997
- ----------------------------- (Principal Financial Officer
Michael J. Lim and Principal Accounting
Officer)
/s/ Tim McNamar Vice Chairman of the Board of April 30, 1997
- ----------------------------- Directors and Director
Tim McNamar
/s/ Xiao Jun Director April 30, 1997
- -----------------------------
Xiao Jun
Director
- -----------------------------
Ju Feng
Director
- -----------------------------
Teoh Set Seng
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Document Description of Document Numbered Page
- -------- ----------------------- -------------
<S> <C> <C>
4.1 1996 Stock Option Plan(1)
4.2 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(2) and September 12, 1996(3)
4.3 Employment Agreement between the Registrant
and Michael J. Lim, dated as of November 6, 1995(4)
4.4 Employment Agreement between the Registrant
and Xiao Jun, dated as of January 1, 1996(4)
4.5 Stock Option Agreement between the Registrant
and Timothy P.F. Crowley, dated as of January 17, 1996
4.6 Stock Option Agreement between the Registrant
and Cheryl Bell, dated as of September 6, 1996
4.7 Stock Option Agreement between the Registrant
and Meghan McCloskey, dated as of January 17, 1996
4.8 Stock Option Agreement between the Registrant
and Hua Yu, dated as of January 17, 1996
4.9 Stock Option Agreement between the Registrant
and Orina Chang, dated as of October 23, 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 Transition Report on Form 10-KSB for the
Transition Period from October 1, 1994 to March 31, 1995.
(2) Filed as part of the Company's Current Reports on Form 8-K, dated May 1,
1995 and December 22, 1995.
(3) Filed as part of the Company's Registration Statement on Form S-8, as filed
with the Commission on January 31, 1997.
(4) Filed as part of the Company's Current Report on Form 8-K, dated December
22, 1995.
<PAGE>
AVIC GROUP INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of January 17, 1996, by and
between Avic Group International, Inc., a Colorado corporation (the "Company"),
and Timothy Crowley ("Optionee").
R E C I T A L S
The Board of Directors of the Company has authorized the granting to
Optionee of a nonqualified stock option to purchase the number of shares of
Common Stock of the Company specified in Paragraph 1 hereof, at the price
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to Optionee
the option ("Option") to purchase, upon and subject to the terms and conditions
of the Plan, 100,000 shares of Common Stock of the Company at the price of $0.35
per share.
<PAGE>
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to exercise
25% on each of the following dates: July 31, 1996, January 31, 1997, July 31,
1997 and January 31, 1998. If the Optionee's employment is terminated within
twelve (12) months following any Change in Control either by the Company or the
Optionee all shares will become subject to exercise. For purposes of this
Agreement, a Change in Control shall mean: (a) any transfer or series of
transfers of capital stock of the Company, other than as a result of a sale of
capital stock of the Company pursuant to a public offering registered under the
Securities Act of 1933, as amended, as a result of which the holders of capital
stock of the Company prior to such transfer or transfers become, collectively,
the legal or beneficial holders of less than fifty percent (50%) of the capital
stock of the Company; (b) the consummation of any merger or consolidation of the
Company with another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if, immediately following such merger or
consolidation, legal or beneficial holders of capital stock of the Company prior
to such merger or consolidation shall own or control, directly or indirectly,
2
<PAGE>
through one or more intermediaries, equity securities representing the power to
vote or direct the voting of more than fifty percent (50%) of the voting power
of all classes of equity securities entitled to vote in the election of
directors of the corporation resulting from such merger or consolidation; or (c)
any transfer of all or substantially all of the business and assets of the
Company to another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if the legal or beneficial holders of capital
stock of the Company prior to such transfer of control, retain directly or
indirectly through one or more intermediaries, the power to vote or direct the
voting of more than fifty percent (50%) of the voting power of all classes of
equity securities entitled to vote in the election of directors of such
corporation to which all or substantially all of the business and assets of the
Company are transferred.
4. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Board of
Directors and upon the request of the Optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the Optionee upon the exercise of this Option.
3
<PAGE>
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, or if Optionee shall cease to be employed by the Company,
Optionee's right to exercise the Option will be limited to installments accrued
under Paragraph 3 hereof on the date of termination.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares of
common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of another
company, through reorganization, merger, recapitalization, reclassification,
stock split, reverse stock split, stock dividend, or similar transaction, an
appropriate adjustment shall be made changing the number or kind of shares and
the exercise price per share allocated to any Shares subject to the unexercised
portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be exercised
only by Optionee during his lifetime and after his death, by his personal
representative or by the person entitled thereto under his will or the laws of
intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a
4
<PAGE>
stock certificate or stock certificates to him upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to continue
to perform services for the Company or any Parent or Subsidiary, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate any officer, director, employee, independent contractor or consultant
at any time for any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon his exercise of the Option, in whole or in part, unless there is in effect
at that time under the Securities Act of 1933 a registration statement relating
to the shares issued to him, he will acquire the shares issuable upon exercise
of this Option for the purpose of investment and not with a view to their resale
or further distribution, and that upon such exercise thereof he will furnish to
the Company a written statement to such effect, satisfactory to the Company in
form and substance. The Company agrees that it will use its best efforts to
file a Registration Statement on Form S-8 or other applicable form so as to
enable Optionee to sell shares issued upon exercise of this Option. Optionee
agrees that any certificate issued upon exercise of this Option may bear a
legend indicating that their transferability is restricted in
5
<PAGE>
accordance with applicable state and federal securities law and with this
Agreement. Any person or persons entitled to exercise this Option shall,
upon each exercise of the Option under circumstances in which Optionee would
be required to furnish such a written statement, also furnish to the Company
a written statement to the same effect, satisfactory to the Company in form
and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at the
principal office of the Company at 599 Lexington Avenue, 44th Floor, New York,
NY 10022, and all notices to Optionee shall be addressed to Optionee at the
address of Optionee on file with the Company or its Subsidiaries, or to such
other address as either may designate to the other in writing. A notice shall
be deemed to be duly given if and when enclosed in a properly addressed sealed
envelope deposited, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as aforesaid, written notice under this Agreement
may be given by personal delivery to Optionee or to the Company (as the case may
be).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of any
Shares acquired by exercise of this Option, he will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
6
<PAGE>
with all applicable requirements of law, which, in the judgment of the Company,
must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By:/s/ Joseph R. Wright, Jr.
---------------------------------
Its:Chairman/Chief Executive Officer
--------------------------------
OPTIONEE
/s/ Timothy Crowley
------------------------------------
Timothy Crowley
Social Security Number: Address:
###-##-#### 599 Lexington Avenue, 44th Floor
- ------------------------------- New York, New York 10022
7
<PAGE>
AVIC GROUP INTERNATIONAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of September 6, 1996, by and
between Avic Group International, Inc., (the "Company"), and Cheryl L. Bell
("Optionee").
R E C I T A L S
Pursuant to the 1996 Stock Option Plan (the "Plan"), the Board of
Directors of the Company has authorized the granting to Optionee of an
incentive stock option to purchase the number of shares of Common Stock of
the Company specified in Paragraph 1 hereof, at the price specified therein,
such option to be for the term and upon the terms and conditions hereinafter
stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings
of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to
Optionee the option ("Option") to purchase, upon and subject to the terms and
conditions of the Plan, 10,000 shares of Common Stock of the Company at the
price of $1.50 per share.
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to
exercise on March 26, 1998, provided that Optionee is then employed by the
Company. In the event the Company terminates the employment of Optionee
other than for "cause," as defined in the Employment Agreement dated as of
March 27, 1996 (the "Employment Agreement"), all shares will become subject
to exercise. In addition, if the Optionee's employment is terminated within
twelve (12) months following any Change in Control either by the Company or
the Optionee all shares will become subject to exercise. For purposes of
this Agreement, a Change in Control shall mean: (a) any transfer or series
of transfers of capital stock of the Company, other than as a result of a
sale of capital stock of the Company pursuant to a public offering registered
under the Securities Act of 1933, as amended, as a result of which the
holders of capital stock of the Company prior to such transfer or transfers
become, collectively, the legal or beneficial holders of less than fifty
percent (50%) of the capital stock of the Company; (b) the
<PAGE>
consummation of any merger or consolidation of the Company with another
corporation; provided, however, that no Change in Control shall be deemed to
have occurred if, immediately following such merger or consolidation, legal
or beneficial holders of capital stock of the Company prior to such merger or
consolidation shall own or control, directly or indirectly, through one or
more intermediaries, equity securities representing the power to vote or
direct the voting of more than fifty percent (50%) of the voting power of all
classes of equity securities entitled to vote in the election of directors of
the corporation resulting from such merger or consolidation; or (c) any
transfer of all or substantially all of the business and assets of the
Company to another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if the legal or beneficial holders of
capital stock of the Company prior to such transfer of control, retain
directly or indirectly through one or more intermediaries, the power to vote
or direct the voting of more than fifty percent (50%) of the voting power of
all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the
business and assets of the Company are transferred.
4. TAX WITHHOLDING. In the event that this Option shall lose its
qualification as an incentive stock option, as a condition to exercise of
this Option, the Company may require the Optionee to pay over to the Company
all applicable federal, state and local taxes which the Company is required
to withhold with respect to the exercise of this Option. At the discretion
of the Board of Directors and upon the request of the Optionee, the minimum
statutory withholding tax requirements may be satisfied by the withholding of
shares of Stock otherwise issuable to the Optionee upon the exercise of this
Option.
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, as defined in the Employment Agreement, or if Optionee
shall cease to be employed by the Company, Optionee's right to exercise the
Option will be limited as provided under Paragraph 3 hereof.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares
of common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of
another company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, or
similar transaction, an appropriate adjustment shall be made changing the
number or kind of shares and the exercise price per share allocated to any
Shares subject to the unexercised portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and
2
<PAGE>
distribution, and may be exercised only by Optionee during her lifetime and
after her death, by her personal representative or by the person entitled
thereto under her will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a stock certificate or stock
certificates to her upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to
continue to perform services for the Company or any Parent or Subsidiary, or
shall interfere with or restrict in any way the rights of the Company to
discharge or terminate any officer, director, employee, independent
contractor or consultant at any time for any reason whatsoever, with or
without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon her exercise of the Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to her, she will acquire the shares issuable
upon exercise of this Option for the purpose of investment and not with a
view to their resale or further distribution, and that upon such exercise
thereof she will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. The Company agrees that
it will use its best efforts to file a Registration Statement on Form S-8 or
other applicable form so as to enable Optionee to sell shares issued upon
exercise of this Option. Optionee agrees that any certificate issued upon
exercise of this Option may bear a legend indicating that their
transferability is restricted in accordance with applicable state and federal
securities law and with this Agreement. Any person or persons entitled to
exercise this Option shall, upon each exercise of the Option under
circumstances in which Optionee would be required to furnish such a written
statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at
the principal office of the Company at 599 Lexington Avenue, 44th Floor, New
York, NY 10022, and all notices to Optionee shall be addressed to Optionee at
the address of Optionee on file with the Company or its Subsidiaries, or to
such other address as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States
3
<PAGE>
Postal Service. In lieu of giving notice by mail as aforesaid, written
notice under this Agreement may be given by personal delivery to Optionee or
to the Company (as the case may be).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of
any Shares acquired by exercise of this Option, she will first notify the
Company in writing of such proposed disposition and cooperate with the
Company in complying with all applicable requirements of law, which, in the
judgment of the Company, must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Timothy Crowley
----------------------------------------------
Its: Secretary
----------------------------------------------
OPTIONEE
/s/ Cheryl L. Bell
--------------------------------------------------
Cheryl L. Bell
Address:
599 Lexington Avenue, 44th Floor
New York, NY 10022
Social Security Number:
###-##-####
--------------------------------------------------
4
<PAGE>
AVIC GROUP INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of January 17, 1996, by and
between Avic Group International, Inc., a Colorado corporation (the
"Company"), and Meghan McCloskey ("Optionee").
R E C I T A L S
The Board of Directors of the Company has authorized the granting to
Optionee of a nonqualified stock option to purchase the number of shares of
Common Stock of the Company specified in Paragraph 1 hereof, at the price
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings
of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to
Optionee the option ("Option") to purchase, upon and subject to the terms and
conditions of the Plan, 10,000 shares of Common Stock of the Company at the
price of $0.35 per share.
<PAGE>
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to
exercise 25% on each of the following dates: July 31, 1996, January 31, 1997,
July 31, 1997 and January 31, 1998. If the Optionee's employment is
terminated within twelve (12) months following any Change in Control either
by the Company or the Optionee all shares will become subject to exercise.
For purposes of this Agreement, a Change in Control shall mean: (a) any
transfer or series of transfers of capital stock of the Company, other than
as a result of a sale of capital stock of the Company pursuant to a public
offering registered under the Securities Act of 1933, as amended, as a result
of which the holders of capital stock of the Company prior to such transfer
or transfers become, collectively, the legal or beneficial holders of less
than fifty percent (50%) of the capital stock of the Company; (b) the
consummation of any merger or consolidation of the Company with another
corporation; provided, however, that no Change in Control shall be deemed to
have occurred if, immediately following such merger or consolidation, legal
or beneficial holders of capital stock of the Company prior to such merger or
consolidation shall own or control, directly or indirectly,
2
<PAGE>
through one or more intermediaries, equity securities representing the power
to vote or direct the voting of more than fifty percent (50%) of the voting
power of all classes of equity securities entitled to vote in the election of
directors of the corporation resulting from such merger or consolidation; or
(c) any transfer of all or substantially all of the business and assets of
the Company to another corporation; provided, however, that no Change in
Control shall be deemed to have occurred if the legal or beneficial holders
of capital stock of the Company prior to such transfer of control, retain
directly or indirectly through one or more intermediaries, the power to vote
or direct the voting of more than fifty percent (50%) of the voting power of
all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the
business and assets of the Company are transferred.
4. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Board of
Directors and upon the request of the Optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the Optionee upon the exercise of this Option.
3
<PAGE>
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, or if Optionee shall cease to be employed by the
Company, Optionee's right to exercise the Option will be limited to
installments accrued under Paragraph 3 hereof on the date of termination.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares
of common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of
another company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, or
similar transaction, an appropriate adjustment shall be made changing the
number or kind of shares and the exercise price per share allocated to any
Shares subject to the unexercised portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be
exercised only by Optionee during her lifetime and after her death, by her
personal representative or by the person entitled thereto under her will or
the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a
4
<PAGE>
stock certificate or stock certificates to her upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to
continue to perform services for the Company or any Parent or Subsidiary, or
shall interfere with or restrict in any way the rights of the Company to
discharge or terminate any officer, director, employee, independent
contractor or consultant at any time for any reason whatsoever, with or
without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon her exercise of the Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to her, she will acquire the shares issuable
upon exercise of this Option for the purpose of investment and not with a
view to their resale or further distribution, and that upon such exercise
thereof she will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. The Company agrees that
it will use its best efforts to file a Registration Statement on Form S-8 or
other applicable form so as to enable Optionee to sell shares issued upon
exercise of this Option. Optionee agrees that any certificate issued upon
exercise of this Option may bear a legend indicating that their
transferability is restricted in
5
<PAGE>
accordance with applicable state and federal securities law and with this
Agreement. Any person or persons entitled to exercise this Option shall,
upon each exercise of the Option under circumstances in which Optionee would
be required to furnish such a written statement, also furnish to the Company
a written statement to the same effect, satisfactory to the Company in form
and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at
the principal office of the Company at 599 Lexington Avenue, 44th Floor, New
York, NY 10022, and all notices to Optionee shall be addressed to Optionee at
the address of Optionee on file with the Company or its Subsidiaries, or to
such other address as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States Postal
Service. In lieu of giving notice by mail as aforesaid, written notice under
this Agreement may be given by personal delivery to Optionee or to the
Company (as the case may be).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of
any Shares acquired by exercise of this Option, she will first notify the
Company in writing of such proposed disposition and cooperate with the
Company in
6
<PAGE>
complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Joseph R. Wright, Jr.
------------------------------------------------
Its: Chairman/Chief Executive Officer
----------------------------------------------
OPTIONEE
/s/ Meghan McCloskey
--------------------------------------------------
Meghan McCloskey
Social Security Number: Address:
###-##-#### 599 Lexington Avenue, 44th Floor
- ---------------------- New York, New York 10022
7
<PAGE>
AVIC GROUP INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of January 17, 1996, by and
between Avic Group International, Inc., a Colorado corporation (the
"Company"), and Hua Yu ("Optionee").
R E C I T A L S
The Board of Directors of the Company has authorized the granting to
Optionee of a nonqualified stock option to purchase the number of shares of
Common Stock of the Company specified in Paragraph 1 hereof, at the price
specified therein, such option to be for the term and upon the terms and
conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings
of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to Optionee
the option ("Option") to purchase, upon and subject to the terms and conditions
of the Plan, 10,000 shares of Common Stock of the Company at the price of $0.35
per share.
<PAGE>
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to
exercise 25% on each of the following dates: July 31, 1996, January 31, 1997,
July 31, 1997 and January 31, 1998. If the Optionee's employment is
terminated within twelve (12) months following any Change in Control either
by the Company or the Optionee all shares will become subject to exercise.
For purposes of this Agreement, a Change in Control shall mean: (a) any
transfer or series of transfers of capital stock of the Company, other than
as a result of a sale of capital stock of the Company pursuant to a public
offering registered under the Securities Act of 1933, as amended, as a result
of which the holders of capital stock of the Company prior to such transfer
or transfers become, collectively, the legal or beneficial holders of less
than fifty percent (50%) of the capital stock of the Company; (b) the
consummation of any merger or consolidation of the Company with another
corporation; provided, however, that no Change in Control shall be deemed to
have occurred if, immediately following such merger or consolidation, legal
or beneficial holders of capital stock of the Company prior to such merger or
consolidation shall own or control, directly or indirectly,
2
<PAGE>
through one or more intermediaries, equity securities representing the power
to vote or direct the voting of more than fifty percent (50%) of the voting
power of all classes of equity securities entitled to vote in the election of
directors of the corporation resulting from such merger or consolidation; or
(c) any transfer of all or substantially all of the business and assets of
the Company to another corporation; provided, however, that no Change in
Control shall be deemed to have occurred if the legal or beneficial holders
of capital stock of the Company prior to such transfer of control, retain
directly or indirectly through one or more intermediaries, the power to vote
or direct the voting of more than fifty percent (50%) of the voting power of
all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the
business and assets of the Company are transferred.
4. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Board of
Directors and upon the request of the Optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the Optionee upon the exercise of this Option.
3
<PAGE>
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, or if Optionee shall cease to be employed by the
Company, Optionee's right to exercise the Option will be limited to
installments accrued under Paragraph 3 hereof on the date of termination.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares
of common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of
another company, through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split, stock dividend, or
similar transaction, an appropriate adjustment shall be made changing the
number or kind of shares and the exercise price per share allocated to any
Shares subject to the unexercised portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be
exercised only by Optionee during her lifetime and after her death, by her
personal representative or by the person entitled thereto under her will or
the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a
4
<PAGE>
stock certificate or stock certificates to her upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to
continue to perform services for the Company or any Parent or Subsidiary, or
shall interfere with or restrict in any way the rights of the Company to
discharge or terminate any officer, director, employee, independent
contractor or consultant at any time for any reason whatsoever, with or
without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon her exercise of the Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to her, she will acquire the shares issuable
upon exercise of this Option for the purpose of investment and not with a
view to their resale or further distribution, and that upon such exercise
thereof she will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. The Company agrees that
it will use its best efforts to file a Registration Statement on Form S-8 or
other applicable form so as to enable Optionee to sell shares issued upon
exercise of this Option. Optionee agrees that any certificate issued upon
exercise of this Option may bear a legend indicating that their
transferability is restricted in
5
<PAGE>
accordance with applicable state and federal securities law and with this
Agreement. Any person or persons entitled to exercise this Option shall,
upon each exercise of the Option under circumstances in which Optionee would
be required to furnish such a written statement, also furnish to the Company
a written statement to the same effect, satisfactory to the Company in form
and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at
the principal office of the Company at 599 Lexington Avenue, 44th Floor, New
York, NY 10022, and all notices to Optionee shall be addressed to Optionee at
the address of Optionee on file with the Company or its Subsidiaries, or to
such other address as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States Postal
Service. In lieu of giving notice by mail as aforesaid, written notice under
this Agreement may be given by personal delivery to Optionee or to the
Company (as the case may be).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of
any Shares acquired by exercise of this Option, she will first notify the
Company in writing of such proposed disposition and cooperate with the
Company in
6
<PAGE>
complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Joseph R. Wright, Jr.
-----------------------------------------------
Its: Chairman/Chief Executive Officer
----------------------------------------------
OPTIONEE
/s/ Hua Yu
--------------------------------------------------
Hua Yu
Social Security Number: Address:
###-##-#### 599 Lexington Avenue, 44th Floor
- ----------------------- New York, New York 10022
7
<PAGE>
AVIC GROUP INTERNATIONAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of October 23, 1996, by and
between Avic Group International, Inc., (the "Company"), and Orina Chang
("Optionee").
R E C I T A L S
Pursuant to the 1996 Stock Option Plan (the "Plan"), the Board of Directors
of the Company has authorized the granting to Optionee of an incentive stock
option to purchase the number of shares of Common Stock of the Company specified
in Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. The Company hereby grants to Optionee
the option ("Option") to purchase, upon and subject to the terms and conditions
of the Plan, 10,000 shares of Common Stock of the Company at the price of $1.50
per share.
2. TERM. This Option shall expire on the day before the tenth
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of this Agreement.
3. SHARES SUBJECT TO EXERCISE. Subject to Paragraph 5 hereof, shares
issuable upon exercise of the Option (the "Shares") shall be subject to exercise
25% on each of the following dates: January 31, 1997, March 31, 1997, June 30,
1997 and September 30, 1997. If the Optionee's employment is terminated within
twelve (12) months following any Change in Control either by the Company or the
Optionee all shares will become subject to exercise. For purposes of this
Agreement, a Change in Control shall mean: (a) any transfer or series of
transfers of capital stock of the Company, other than as a result of a sale of
capital stock of the Company pursuant to a public offering registered under the
Securities Act of 1933, as amended, as a result of which the holders of capital
stock of the Company prior to such transfer or transfers become, collectively,
the legal or beneficial holders of less than fifty percent (50%) of the capital
stock of the Company; (b) the consummation of any merger or consolidation of the
Company with another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if, immediately
<PAGE>
following such merger or consolidation, legal or beneficial holders of
capital stock of the Company prior to such merger or consolidation shall own
or control, directly or indirectly, through one or more intermediaries,
equity securities representing the power to vote or direct the voting of more
than fifty percent (50%) of the voting power of all classes of equity
securities entitled to vote in the election of directors of the corporation
resulting from such merger or consolidation; or (c) any transfer of all or
substantially all of the business and assets of the Company to another
corporation; provided, however, that no Change in Control shall be deemed to
have occurred if the legal or beneficial holders of capital stock of the
Company prior to such transfer of control, retain directly or indirectly
through one or more intermediaries, the power to vote or direct the voting of
more than fifty percent (50%) of the voting power of all classes of equity
securities entitled to vote in the election of directors of such corporation
to which all or substantially all of the business and assets of the Company
are transferred.
4. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Board of
Directors and upon the request of the Optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the Optionee upon the exercise of this Option.
5. EXERCISE ON TERMINATION OF EMPLOYMENT. In the event of Optionee's
death or disability, as defined in the Employment Agreement, or if Optionee
shall cease to be employed by the Company, Optionee's right to exercise the
Option will be limited as provided under Paragraph 3 hereof.
6. ADJUSTMENT IN SHARES SUBJECT TO OPTION. If the outstanding shares of
common stock of the Company are changed into, or exchanged for, cash or a
different number or kind of shares or securities of the Company, or of another
company, through reorganization, merger, recapitalization, reclassification,
stock split, reverse stock split, stock dividend, or similar transaction, an
appropriate adjustment shall be made changing the number or kind of shares and
the exercise price per share allocated to any Shares subject to the unexercised
portion of the Option.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be exercised
only by Optionee during her lifetime and after her death, by her personal
representative or by the person entitled thereto under her will or the laws of
intestate succession.
2
<PAGE>
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a stock certificate or stock certificates
to her upon exercise of the Option.
9. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement shall confer upon
the Optionee any right to continue in the employ of the Company or to continue
to perform services for the Company or any Parent or Subsidiary, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate any officer, director, employee, independent contractor or consultant
at any time for any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon her exercise of the Option, in whole or in part, unless there is in effect
at that time under the Securities Act of 1933 a registration statement relating
to the shares issued to her, she will acquire the shares issuable upon exercise
of this Option for the purpose of investment and not with a view to their resale
or further distribution, and that upon such exercise thereof she will furnish to
the Company a written statement to such effect, satisfactory to the Company in
form and substance. The Company agrees that it will use its best efforts to
file a Registration Statement on Form S-8 or other applicable form so as to
enable Optionee to sell shares issued upon exercise of this Option. Optionee
agrees that any certificate issued upon exercise of this Option may bear a
legend indicating that their transferability is restricted in accordance with
applicable state and federal securities law and with this Agreement. Any person
or persons entitled to exercise this Option shall, upon each exercise of the
Option under circumstances in which Optionee would be required to furnish such a
written statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
11. NOTICES. All notices to the Company shall be addressed to the
Chairman of the Plan Committee of the Board of Directors of the Company at the
principal office of the Company at 599 Lexington Avenue, 44th Floor, New York,
NY 10022, and all notices to Optionee shall be addressed to Optionee at the
address of Optionee on file with the Company or its Subsidiaries, or to such
other address as either may designate to the other in writing. A notice shall
be deemed to be duly given if and when enclosed in a properly addressed sealed
envelope deposited, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as aforesaid, written notice under this Agreement
may be given by personal delivery to Optionee or to the Company (as the case may
be).
3
<PAGE>
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form or transfer) of any
Shares acquired by exercise of this Option, she will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
with all applicable requirements of law, which, in the judgment of the Company,
must be satisfied prior to such disposition.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ Joseph R. Wright, Jr.
-----------------------------------
Its:Charirman/Chief Executive Officer
----------------------------------
OPTIONEE
/s/ Orina Chang
---------------------------------------
Orina Chang
Address:
599 Lexington Avenue, 44th Floor
New York, NY 10022
Social Security Number:
###-##-####
4
<PAGE>
May 2, 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 12,000,000 shares (the "Shares") of the Company's common stock, par value
$0.001 per share (the "Common Stock) reserved for issuance pursuant to the
Company's 1996 Stock Option Plan (the "Plan") and with respect to any options
("Options") to purchase shares of Common Stock which may be granted in
connection with the Plan. 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>
AVIC Group International, Inc.
May 2, 1997
Page 2
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 Options duly granted pursuant to the Plan, when issued, paid for
and delivered upon the exercise of such Options, in accordance with the terms of
the Plan, 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 14,102
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>
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 fiscal year ended March 31, 1996. We hereby consent
to the incorporation by reference of said report in the Registration Statement
of AVIC Group International, Inc. on Form S-8.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
May 2, 1997
