EXHIBIT 4.1
AMERICAN PACIFIC CORPORATION
AMENDED AND RESTATED
2001 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This Amended and Restated 2001 Stock Option Plan (the "Plan") is intended
as an incentive, to retain key employees, Directors, consultants and advisors to
AMERICAN PACIFIC CORPORATION, a Delaware corporation (the "Company"), and any
Subsidiary of the Company within the meaning of Section 424(f) of the United
States Internal Revenue Code of 1986, as amended (the "Code"), having experience
and ability, to attract new employees, Directors, consultants and advisors whose
services are considered valuable, to encourage the sense of proprietorship and
to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries.
It is further intended that certain options granted pursuant to the Plan
shall constitute incentive stock options within the meaning of Section 422 of
the Code (the "Incentive Options") while certain other options granted pursuant
to the Plan shall be nonqualified stock options (the "Nonqualified Options").
Incentive Options and Nonqualified Options are hereinafter referred to
collectively as "Options."
The Company intends that the Plan meet the requirements of Rule 16b-3
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and that transactions of the type specified in
subparagraphs (d) to (f) inclusive of Rule 16b-3 by officers and Directors of
the Company pursuant to the Plan be exempt from the operation of Section 16(b)
of the Exchange Act. The Company also intends that the Plan meet the rules,
regulations and requirements of the principal national securities exchange or
automated quotation system on which the shares of the Company's Common Stock,
$.10 par value per share (the "Stock"), are listed or traded. Further, the Plan
is intended to satisfy the performance-based compensation exception to the
limitation on the Company's tax deductions imposed by Section 162(m) of the
Code. In all cases, the terms, provisions, conditions and limitations of the
Plan shall be construed and interpreted consistent with the Company's intent as
stated in this Section 1.
2. ADMINISTRATION OF THE PLAN.
The Board of Directors of the Company (the "Board") shall appoint and
maintain as administrator of the Plan a Committee (the "Committee") consisting
of three or more Directors who are "Non-Employee Directors" (as such term is
defined in Rule 16b-3) and "Outside Directors" (as such term is defined in
Section 162(m) of the Code), which shall serve at the pleasure of the Board. The
Committee, subject to Sections 3 and 5 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan. The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall interpret the
Plan and all Options granted under the Plan, shall make such rules as it deems
necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any inconsistency
in the Plan or in any Options granted under the Plan in the manner and to the
extent that the Committee deems desirable to carry into effect the Plan or any
Options. The act or determination of a majority of the Committee shall be the
act or determination of the Committee and any decision reduced to writing and
signed by all of the members of the Committee shall be fully effective as if it
had been made by a majority at a meeting duly held. Subject to the provisions of
the Plan, any action taken or determination made by the Committee pursuant to
1
this and the other Sections of the Plan shall be conclusive on all parties.
In the event that for any reason the Committee is unable to act or if the
Committee at the time of any grant, award or other acquisition under the Plan of
Options or Stock does not consist of three or more Non-Employee Directors, or if
there shall be no such Committee, then the Plan shall be administered by the
Board, and references herein to the Committee (except in the proviso to this
sentence) shall be deemed to be references to the Board, and any such grant,
award or other acquisition may be approved or ratified in any other manner
contemplated by subparagraph (d) of Rule 16b-3; provided, however, that options
granted to the Company's Chief Executive Officer or to any of the Company's
other four most highly compensated officers that are intended to qualify as
performance-based compensation under Section 162(m) of the Code may only be
granted by the Committee.
3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as recipients of
Options (the "Optionees") shall include employees, officers and Directors of,
and consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and the
Subsidiaries. In selecting Optionees, and in determining the number of shares to
be covered by each Option granted to Optionees, the Committee may consider the
office or position held by the Optionee or the Optionee's relationship to the
Company, the Optionee's degree of responsibility for and contribution to the
growth and success of the Company or any Subsidiary, the Optionee's length of
service, age, promotions, potential and any other factors that the Committee may
consider relevant. An Optionee who has been granted an Option hereunder may be
granted an additional Option or Options, if the Committee shall so determine.
4. Stock Reserved for the Plan.
Subject to adjustment as provided in Section 7 hereof, a total of 650,000
shares of Stock shall be subject to the Plan. The maximum number of shares of
Stock that may be subject to options granted under the Plan to any individual in
any calendar year shall not exceed 50,000, and the method of counting such
shares shall conform to any requirements applicable to performance-based
compensation under Section 162(m) of the Code. The shares of Stock subject to
the Plan shall consist of authorized and unissued shares or treasury shares, and
such number of shares of Stock shall be and hereby is reserved for such purpose.
Any of such shares of Stock that may remain unsold and that are not subject to
outstanding Options at the termination of the Plan shall cease to be reserved
for the purposes of the Plan, but until termination of the Plan, the Company
shall at all times reserve a sufficient number of shares of Stock to meet the
requirements of the Plan. Should any Option expire or be canceled prior to its
exercise in full or should the number of shares of Stock to be delivered upon
the exercise in full of an Option be reduced for any reason, the shares of Stock
theretofore subject to such Option may be subject to future Options under the
Plan, except where such reissuance is inconsistent with the provisions of
Section 162(m) of the Code.
5. Terms and Conditions of Options.
Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
a. OPTION PRICE. The purchase price of each share of Stock purchasable
under any Option shall be determined by the Committee at the time of grant, but
shall not be less than 100% of the Fair Market Value (as defined below) of such
share of Stock on the date the Option is granted; provided, however, that with
respect to an Incentive Option granted to an Optionee who, at the time such
Incentive Option is granted, owns (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
2
of the Company or of any Subsidiary, the purchase price per share of Stock shall
be at least 110% of the Fair Market Value per share of Stock on the date of
grant. The exercise price for each Option shall be subject to adjustment as
provided in Section 7 below. "Fair Market Value" means the closing price of
publicly traded shares of Stock on the principal securities exchange on which
shares of Stock are listed (if the shares of Stock are so listed), or on the
Nasdaq Stock Market (if the shares of Stock are regularly quoted on the Nasdaq
Stock Market), or, if not so listed or regularly quoted, the mean between the
closing bid and asked prices of publicly traded shares of Stock in the
over-the-counter market, or, if such bid and asked prices shall not be
available, as reported by any nationally recognized quotation service selected
by the Company, or as determined by the Committee in a manner consistent with
the provisions of the Code. Anything in this Section 5(a) to the contrary
notwithstanding, in no event shall the purchase price of a share of Stock be
less than the minimum price permitted under the rules and policies of any
national securities exchange or automated quotation system on which the shares
of Stock are listed or traded.
b. OPTION TERM. The term of each Option shall be fixed by the Committee,
but no Option shall be exercisable more than 10 years after the date such Option
is granted and in the case of an Incentive Option granted to an Optionee who, at
the time such Incentive Option is granted, owns (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, no such Incentive Option
shall be exercisable more than five years after the date such Incentive Option
is granted.
c. EXERCISABILITY. Subject to Section 5(j) hereof, Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at the time of grant.
Upon the occurrence of a "Change in Control" (as hereinafter defined), the
Committee may accelerate the vesting and exercisability of outstanding Options,
in whole or in part, as determined by the Committee in its sole discretion. In
its sole discretion, the Committee may also determine that, upon the occurrence
of a Change in Control, each outstanding Option shall terminate within a
specified number of days after notice to the Optionee thereunder, and each such
Optionee shall receive, with respect to each share of Stock subject to such
Option, an amount equal to the excess of the Fair Market Value of such shares
immediately prior to such Change in Control over the exercise price per share of
such Option; such amount shall be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or a
combination thereof, as the Committee shall determine in its sole discretion.
For purposes of the Plan, a Change in Control shall be deemed to have
occurred if:
i. a tender offer (or series of related offers) shall be made and
consummated for the ownership of 30% or more of the outstanding voting
securities of the Company, unless upon conclusion of such tender offer (or
series of related offers) more than 50% of the outstanding voting
securities of the Company or any surviving or resulting corporation shall
nevertheless be owned in the aggregate by the shareholders of the Company
(as of the time immediately prior to the commencement of such offer or
series of related offers), any employee benefit plan of the Company or its
Subsidiaries, and their affiliates;
ii. the Company shall be merged or consolidated with another
corporation, unless as a result of such merger or consolidation more than
50% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the shareholders of the
Company (as of the time immediately prior to such transaction), any
employee benefit plan of the Company or its Subsidiaries, and their
affiliates;
iii. the Company shall sell substantially all of its assets to another
corporation that is not wholly owned by the Company, unless as a result of
such sale more than 50% of such assets shall be owned in the aggregate by
3
the shareholders of the Company (as of the time immediately prior to such
transaction), any employee benefit plan of the Company or its Subsidiaries
and their affiliates; or
iv. a Person (as defined below) shall acquire 50% or more of the
outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record), unless as a result of such acquisition more
than 50% of the outstanding voting securities of the Company or any
surviving or resulting corporation shall be owned in the aggregate by the
shareholders of the Company (as of the time immediately prior to the first
acquisition of such securities by such Person), any employee benefit plan
of the Company or its Subsidiaries, and their affiliates.
For purposes of this Section 5(c), ownership of voting securities shall
take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the
Exchange Act. In addition, for such purposes, "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; provided, however, a Person shall not include (A) the
Company or any of its Subsidiaries; (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Subsidiaries; (C) an underwriter temporarily holding securities pursuant to an
offering of such securities; or (D) a corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same proportion as their
ownership of stock of the Company.
d. METHOD OF EXERCISE. Options to the extent then exercisable may be
exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price, in cash, or by
check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may be made at the election of the Optionee (i) in the form
of Stock owned by the Optionee (based on the Fair Market Value of the Stock on
the date of exercise) that is not the subject of any pledge or security
interest, (ii) in the form of shares of Stock withheld by the Company from the
shares of Stock otherwise to be received with such withheld shares of Stock
having a Fair Market Value on the date of exercise equal to the exercise price
of the Option, or (iii) by a combination of the foregoing, provided that the
combined value of all cash and cash equivalents and the Fair Market Value of any
shares surrendered to the Company is at least equal to such exercise price and
except with respect to (ii) above, such method of payment will not cause a
disqualifying disposition of all or a portion of the Stock received upon
exercise of an Incentive Option. An Optionee shall have the right to dividends
and other rights of a stockholder with respect to shares of Stock purchased upon
exercise of an Option at such time as the Optionee has given written notice of
exercise and has paid in full for such shares and (ii) has satisfied such
conditions that may be imposed by the Company with respect to the withholding of
taxes.
e. NON-TRANSFERABILITY OF OPTIONS. Options are not transferable and may be
exercised solely by the Optionee during his lifetime or after his death by the
person or persons entitled thereto under his will or the laws of descent and
distribution. The Committee, in its sole discretion, may permit a transfer of a
Nonqualified Option to (i) a trust for the benefit of the Optionee or (ii) a
member of the Optionee's immediate family (or a trust for his or her benefit).
Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject
to execution, attachment or similar process, any Option contrary to the
provisions hereof shall be void and ineffective and shall give no right to the
purported transferee.
f. TERMINATION BY DEATH. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year after the date of such death or until the expiration of the
stated term of such Option as provided under the Plan, whichever period is
shorter.
4
g. TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the Company
or any Subsidiary terminates by reason of total and permanent disability, any
Option held by such Optionee may thereafter be exercised, to the extent it was
exercisable at the time of termination due to Disability (or on such accelerated
basis as the Committee shall determine at or after grant), but may not be
exercised after one year after the date of such termination of employment or
service or the expiration of the stated term of such Option, whichever period is
shorter; provided, however, that, if the Optionee dies within three months of
termination of employment, any unexercised Option held by such Optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of one year after the date of such death or for the stated
term of such Option, whichever period is shorter.
h. TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the Company
or any Subsidiary terminates by reason of Normal or Early Retirement (as such
terms are defined below), any Option held by such Optionee may thereafter be
exercised to the extent it was exercisable at the time of such Retirement (or on
such accelerated basis as the Committee shall determine at or after grant), but
may not be exercised after three months after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such three month period, any unexercised Option held by such Optionee
shall thereafter be exercisable, to the extent to which it was exercisable at
the time of death, for a period of one year after the date of such death or for
the stated term of such Option, whichever period is shorter.
For purposes of this paragraph (h) "Normal Retirement" shall mean
retirement from active employment with the Company or any Subsidiary on or after
the normal retirement date specified in the applicable Company or Subsidiary
pension plan or if no such pension plan, age 65, and "Early Retirement" shall
mean retirement from active employment with the Company or any Subsidiary
pursuant to the early retirement provisions of the applicable Company or
Subsidiary pension plan or if no such pension plan, age 55.
i. OTHER TERMINATION. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option shall thereupon terminate, except that the portion
of any Option that was exercisable on the date of such termination of employment
or service may be exercised for the lesser of three months after the date of
termination or the balance of such Option's term if the Optionee's employment or
service with the Company or any Subsidiary is terminated by the Company or such
Subsidiary without cause (the determination as to whether termination was for
cause to be made by the Committee). The transfer of an Optionee from the employ
of or service to the Company to the employ of or service to a Subsidiary, or
vice versa, or from one Subsidiary to another, shall not be deemed to constitute
a termination of employment or service for purposes of the Plan.
j. LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate Fair Market Value,
determined as of the date the Incentive Option is granted, of Stock for which
Incentive Options are exercisable for the first time by any Optionee during any
calendar year under the Plan (and/or any other stock option plans of the Company
or any Subsidiary) shall not exceed $100,000.
k. TRANSFER OF INCENTIVE OPTION SHARES. The stock option agreement
evidencing any Incentive Options granted under this Plan shall provide that if
the Optionee makes a disposition, within the meaning of Section 424(c) of the
Code and regulations promulgated thereunder, of any share or shares of Stock
issued to him upon exercise of an Incentive Option granted under the Plan within
the two-year period commencing on the day after the date of the grant of such
Incentive Option or within a one-year period commencing on the day after the
date of transfer of the share or shares to him pursuant to the exercise of such
Incentive Option, he shall, within 10 days after such disposition, notify the
Company thereof and immediately deliver to the Company any amount of United
States federal, state and local income tax withholding required by law.
5
6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after January 16,
2011, but Options theretofore granted may extend beyond that date.
7. CAPITAL CHANGE OF THE COMPANY.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or split, or other change in corporate
structure affecting the Stock, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares reserved for issuance
under the Plan and in the number and option price of shares subject to
outstanding Options granted under the Plan, to the end that after such event
each Optionee's proportionate interest shall be maintained as immediately before
the occurrence of such event.
8. PURCHASE FOR INVESTMENT.
Unless the reoffer and resale of Stock issuable under the Plan have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account,
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
9. TAXES.
The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.
10. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on January 16, 2001, provided the Plan is
subsequently approved by majority vote of the Company's stockholders not later
than January 15, 2002.
11. AMENDMENT AND TERMINATION.
The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made that would impair the rights of any Optionee under any
Option theretofore granted without the Optionee's consent, and except that no
amendment shall be made which, without the approval of the stockholders of the
Company would:
a. increase the number of shares that may be issued under the Plan,
except as is provided in Section 7;
b. materially increase the benefits accruing to the Optionees under
the Plan;
c. materially modify the requirements as to eligibility for
participation in the Plan;
d. decrease the exercise price of an Option to less than 100% of the
Fair Market Value per share of Stock on the date of grant thereof; or
e. extend the term of any Option beyond that provided for in Section
5(b).
6
The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without the Optionee's consent. The Committee may also substitute
new Options for previously granted Options, including options granted under
other plans applicable to the participant and previously granted Options having
higher option prices, upon such terms as the Committee may deem appropriate.
12. GOVERNMENT REGULATIONS.
The Plan, and the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies, national securities exchanges and interdealer
quotation systems as may be required.
13. GENERAL PROVISIONS.
a. CERTIFICATES. All certificates for shares of Stock delivered under the
Plan shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, or other securities commission having
jurisdiction, any applicable Federal or state securities law, any stock exchange
or automated quotation system upon which the Stock is then listed or traded and
the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
b. EMPLOYMENT MATTERS. The adoption of the Plan shall not confer upon any
Optionee of the Company or any Subsidiary any right to continued employment or,
in the case of an Optionee who is a Director, continued service as a Director,
with the Company or a Subsidiary, as the case may be, nor shall it interfere in
any way with the right of the Company or any Subsidiary to terminate the
employment of any of its employees, the service of any of its Directors or the
retention of any of its consultants or advisors at any time.
c. LIMITATION OF LIABILITY. No member of the Board or the Committee, or
any officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the fullest extent permitted by
law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
14. GOVERNING LAW.
The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules.
AMERICAN PACIFIC CORPORATION
November 12, 2002
7