EXHIBIT 4.2
AMERICAN PACIFIC CORPORATION
2002 DIRECTORS STOCK OPTION PLAN
ARTICLE I.
PURPOSE
The purpose of the American Pacific Corporation 2002 Directors Stock
Option Plan (the "Plan") is to promote the long-term success of the Company and
the creation of stockholder value by (a) encouraging Directors to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
Directors with exceptional qualifications and (c) linking Directors directly to
stockholder interests through increased stock ownership. The Plan will provide a
means whereby such directors may purchase shares of the common stock, $.10 par
value, of American Pacific Corporation upon exercise of options granted in
accordance with the Plan.
ARTICLE II.
DEFINITIONS
The following capitalized terms used in the Plan shall have the respective
meanings set forth in this Article:
2.1 "Board" shall mean the Board of Directors of American Pacific Corporation.
2.2 "Change in Control" shall be deemed to have occurred if:
a. 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 stockholders 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;
b. 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 stockholders 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;
c. 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 the
stockholders 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
d. 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 stockholders 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 definition, 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
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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 stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company.
2.3 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" shall mean the Stock Option Committee of the Board.
2.5 "COMPANY" shall mean American Pacific Corporation.
2.6 "DIRECTOR" shall mean any person who is a member of the Board of
Directors of the Company.
2.7 "ELIGIBLE PERSON" shall mean any Director who is neither a full- nor a
part-time Employee of the Company.
2.8 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
2.9 "EXERCISE PRICE" shall mean the price per Share at which an Option may
be exercised, as specified in the applicable Option Agreement.
2.10 "FAIR MARKET VALUE" shall mean the closing sale price of a Share as
reported on the principal national securities exchange or automated quotation
system on which the Shares are listed or traded on the Grant Date or on the next
preceding trading day on which Shares were traded if no Shares were traded on
the Grant Date. If the Shares are not listed or traded on a national securities
exchange or automated quotation system, Fair Market Value shall mean the average
of the closing bid and asked prices of the Shares in the over-the-counter market
on the Grant Date, or the next preceding trading day on which closing bid and
asked prices were available, if no closing bid and asked prices were available
on the Grant Date. If Fair Market Value cannot be determined in the foregoing
manner, it shall be determined by the Committee in accordance with the
provisions of the Code. Such determination shall be conclusive and binding on
all persons.
2.11 "GRANT DATE" shall mean the Initial Grant Date or any Subsequent Grant
Date.
2.12 "IMMEDIATE FAMILY" shall mean any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include
adoptive relationships.
2.13 "INITIAL GRANT DATE" shall mean November 22, 2002, or if an Eligible
Director is first elected to the Board subsequent to November 22, 2002 the date
of such election.
2.14 "OPTION" shall mean an Option to purchase Shares granted pursuant to
the Plan. Options do not qualify as incentive options described in Section
422(b) of the Code.
2.15 "OPTION AGREEMENT" shall mean the written agreement described in
Article VI hereof.
2.16 "PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of whole Shares with respect to which an Option is exercised.
2.17 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
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2.18 "SHARES" shall mean shares of common stock, $.10 par value, of the
Company.
2.19 "SUBSEQUENT GRANT DATE" shall mean each anniversary of the Initial
Grant Date.
ARTICLE III.
ADMINISTRATION
3.1 GENERAL. The Committee shall administer the Plan in accordance with its
express provisions. The Committee shall consist exclusively of three or more
Eligible Persons, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy (a) such requirements as the
Securities and Exchange Commission may establish for administrators acting under
plans intended to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act and (b) such requirements as any national securities
exchange or automated quotation system on which the Shares are listed or traded
may establish for administrators acting under stock option plans.
3.2 POWERS OF THE COMMITTEE. The Committee shall have full and complete
authority to adopt such rules and regulations and to make all such other
determinations not inconsistent with the Plan as may be necessary for the
administration of the Plan. The Committee's determinations under the Plan shall
be conclusive and binding on all persons.
ARTICLE IV.
SHARES SUBJECT TO PLAN
Subject to adjustment in accordance with Article VIII, an aggregate of
200,000 Shares is reserved for issuance under the Plan. Shares sold under the
Plan may be either authorized and unissued Shares or treasury Shares. If an
Option or any portion thereof shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares subject to such Option
shall be available for future grants of Options.
ARTICLE V.
GRANTS
On the Initial Grant Date, and on each Subsequent Grant Date, each
Eligible Person shall be granted an Option to purchase 5,000 Shares.
ARTICLE VI.
TERMS OF OPTION
Each Option shall be evidenced by a written Option Agreement executed by
the Company and the Eligible Person, which shall specify the Grant Date, the
number of Shares subject to the Option, the Exercise Price, which shall be the
Fair Market Value of the Shares, and shall also include or incorporate by
reference the substance of all of the following provisions and such other
provisions consistent with the Plan as the Committee may determine. The terms of
the grant of Options to an Eligible Person may only be changed if permitted
under Rule 16b-3 of the Exchange Act.
6.1 TERM. The term of each Option shall be 10 years from the Grant Date,
subject to earlier termination in accordance with Articles VI and VIII.
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6.2 RESTRICTION ON EXERCISE. Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at grant, provided, however, that unless a longer vesting period is
otherwise determined by the Committee at grant, an Option shall be exercisable
as to one-half of the aggregate Shares covered thereby commencing on the Grant
Date and as to the remaining one-half of the Shares covered thereby commencing
on the first anniversary of the Grant Date.
6.3 EXERCISE PRICE. The Exercise Price for each Share subject to an Option
shall be its Fair Market Value.
6.4 MANNER OF EXERCISE. An Option shall be exercised in accordance with its
terms by delivery of a written notice of exercise to the Company and payment of
the full Purchase Price of the Shares being purchased. An Eligible Person may
exercise an Option with respect to all or fewer than all of the Shares as to
which such Option may then be exercised, but in no event shall fractional Shares
be issued.
6.5 PAYMENT. The Purchase Price for Shares purchased upon exercise of an
Option or portion thereof may be paid:
a. in United States Dollars, in cash or by check, bank draft or money
order payable to the Company;
b. by delivery of Shares already owned by an Eligible Person with an
aggregate Fair Market Value on the date of exercise equal to the Purchase
Price, subject to the provisions of Section 16(b) of the Exchange Act; or
c. through the written election of the Eligible Person to have Shares
withheld by the Company from the Shares otherwise to be received, with such
withheld Shares having an aggregate Fair Market Value on the date of
exercise equal to the Purchase Price.
6.6 TRANSFERABILITY. No Option shall be transferable otherwise than by will
or the laws of descent and distribution; provided, however, that to the extent
the related Option Agreement provisions do not disqualify such option for
exemption under Rule 16b-3 under the Exchange Act, an Option may be transferable
during an Optionee's lifetime to Immediate Family of an Optionee, partnerships
and limited liability companies in which the only partners or members are
members of the Optionee's Immediate Family, and trusts established solely for
the benefit of such Immediate Family; and provided, further, that an Option may
be transferred pursuant to a qualified domestic relations order (as defined in
the Code and the rules promulgated thereunder). An Option shall be exercisable
during the Eligible Person's lifetime only by the Eligible Person, his guardian,
legal representative or permitted transferee.
6.7 TERMINATION OF SERVICE. If an Eligible Person's service as a Director
terminates for any reason other than cause, an Option held on the date of
termination may be exercised to the extent exercisable on the date of
termination at any time within one year after the date of such termination (but
in no event after the term of the Option expires) and shall thereafter
terminate; provided, however, that if such termination occurs by reason of death
or disability of the Optionee, an Option held on the date of termination may be
exercised as to the full number of Shares covered thereby. If an Eligible
Person's service as a Director is terminated for cause, which determination
shall be made by the Committee, Options held by him shall terminate concurrently
with the termination of such service.
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ARTICLE VII.
GOVERNMENT AND OTHER REGULATIONS
7.1 DELIVERY OF SHARES. The obligation of the Company to issue or transfer
and deliver Shares for exercised Options under the Plan shall be subject to all
applicable laws, regulations, rules, orders and approvals that shall then be in
effect. The Company reserves the right to restrict, in whole or in part, the
delivery of Shares pursuant to any Option prior to the satisfaction of all legal
requirements relating to the issuance of such Shares, to their registration,
qualification or listing or to an exemption from registration, qualification or
listing.
7.2 EXERCISE OF OPTION FOR INVESTMENT. Unless the reoffer and resale of
Shares issuable under the Plan have been registered under 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.
ARTICLE VIII.
ADJUSTMENTS
8.1 PROPORTIONATE ADJUSTMENTS. If the outstanding Shares are increased,
decreased, changed into or exchanged into a different number or kind of Shares
or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
to the maximum number and kind of Shares as to which Options may be granted
under the Plan. A corresponding adjustment changing the number or kind of Shares
allocated to unexercised Options or portions thereof, which shall have been
granted prior to any such change, shall likewise be made. Any such adjustment in
the outstanding Options shall be made without change in the Purchase Price
applicable to the unexercised portion of the Option with a corresponding
adjustment in the Exercise Price of the Shares covered by the Option.
Notwithstanding the foregoing, there shall be no adjustment for the issuance of
Shares on conversion of notes, preferred stock or exercise of warrants or Shares
issued by the Board for such consideration as the Board deems appropriate.
8.2 CHANGE OF CONTROL. Upon the occurrence of a Change in Control, all
outstanding Options shall become exercisable immediately as to the full number
of Shares covered thereby on a date determined by the Committee providing a
reasonable time thereafter within which to exercise such Options prior to the
effectiveness of such Change in Control.
ARTICLE IX.
AMENDMENT OR TERMINATION OF PLAN
9.1 AMENDMENTS. The Committee may at any time amend or revise the terms of
the Plan, provided no such amendment or revision shall, unless appropriate
stockholder approval of such amendment or revision is obtained:
a. increase the maximum number of Shares that may be sold pursuant to
Options granted under the Plan, except as permitted under the provisions of
Article VIII;
b. change the minimum Exercise Price set forth in Article VI;
c. increase the maximum term of Options provided for in Article VI; or
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d. permit the granting of Options to any one other than as provided in
Article V.
9.2 TERMINATION. The Committee at any time may suspend or terminate the
Plan. The Plan, unless sooner terminated, shall terminate on the tenth
anniversary of its adoption by the Board. No Option may be granted under the
Plan while the Plan is suspended or after it is terminated.
9.3 CONSENT OF HOLDER. No amendment, suspension or termination of the Plan
shall, without the consent of the holder of an outstanding Option, alter or
impair any rights or obligations under such Option.
ARTICLE X.
MISCELLANEOUS PROVISIONS
10.1 PRIVILEGE OF STOCK OWNERSHIP. No Eligible Person entitled to exercise
an Option granted under the Plan shall have any of the rights or privileges of a
stockholder of the Company with respect to any Shares issuable upon exercise of
such Option until certificates representing such Shares shall have been issued
and delivered.
10.2 PLAN EXPENSES. Any expenses incurred in the administration of the Plan
shall be borne by the Company.
10.3 USE OF PROCEEDS. Payment received from an Eligible Person upon the
exercise of an Option shall be used for general corporate purposes of the
Company.
10.4 GOVERNING LAW. The Plan has been adopted under the laws of the State
of Delaware. The Plan and all Options that may be granted hereunder and all
matters related thereto, shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
ARTICLE XI.
STOCKHOLDER APPROVAL
The Plan is subject to approval by stockholders of the Company within 12
months after the date the Board approves the Plan, by the affirmative vote of
holders of a majority of the voting Shares of the Company represented in person
or by proxy and entitled to vote at the meeting. Options may be granted, but not
exercised, before such stockholder approval. If the stockholders fail to approve
the Plan within the required time period, any Options granted under the Plan
shall be void and no additional Options may thereafter be granted thereunder.
ARTICLE XII.
TAXES
The Company may make such provision as it may deem appropriate, consistent
with applicable law, in connection with any Option granted under the Plan with
respect to the withholding of any taxes or any other tax matters.
AMERICAN PACIFIC CORPORATION
November 12, 2002