-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q/Z1xMtHcntj77YsO9ZJYhbpPp0RPZ6pl2geBHH3KqnosOf/ZYLPJkzJj8Y3n8W7 Eaxq/TWB447II8YOxV/YyA== 0000921895-98-000484.txt : 19980525 0000921895-98-000484.hdr.sgml : 19980525 ACCESSION NUMBER: 0000921895-98-000484 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980522 EFFECTIVENESS DATE: 19980522 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN PACIFIC CORP CENTRAL INDEX KEY: 0000350832 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 596490478 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-53449 FILM NUMBER: 98630861 BUSINESS ADDRESS: STREET 1: 3770 HOWARD HUGHES PKWY STE 300 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027352200 MAIL ADDRESS: STREET 1: 3770 HOWARD HUGHES PKWY STE 300 STREET 2: 3770 HOWARD HUGHES PKWY STE 300 CITY: LAS VEGAS STATE: NV ZIP: 89109 S-8 1 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on May 22, 1998 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 -------------------- AMERICAN PACIFIC CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE 59-6490478 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 3770 HOWARD HUGHES PARKWAY, 89109 SUITE 300 (Zip Code) LAS VEGAS, NEVADA (Address of principal executive offices) 1997 STOCK OPTION PLAN AND OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS AND DIRECTORS (Full Title of the Plan) DAVID N. KEYS EXECUTIVE VICE PRESIDENT AMERICAN PACIFIC CORPORATION 3770 HOWARD HUGHES PARKWAY, SUITE 300 LAS VEGAS, NEVADA 89109 (Name and Address of Agent for Service) (702) 735-2200 (Telephone number, including area code, of agent for service) WITH A COPY TO: VICTOR M. ROSENZWEIG, ESQ. OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP 505 PARK AVENUE NEW YORK, NEW YORK 10022 (212) 753-7200 Approximate date of proposed sales pursuant to the plan: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE ==================================================================================================================================== Proposed Proposed maximum maximum Title of Amount offering aggregate Amount of securities to be price offering registration to be registered registered per share price fee - ------------------------------------------------------------------------------------------------------------------------------------ Common Stock, $.10 par value 325,000 shares(1) $9.9375(4) $3,229,687.50(4) $ 952.76 ------------------------------------------------------------------------------------------------------------- 95,000 shares(1) $ 7.00(2) $ 665,000 $1,961.75 ------------------------------------------------------------------------------------------------------------- 180,000 shares(1) $7.125(3) $1,282,500 $ 378.34 - ------------------------------------------------------------------------------------------------------------------------------------ Total................. 600,000 shares $5,177,187.50 $3,292.85 ====================================================================================================================================
(1) There are also registered hereby such indeterminate number of shares of Common Stock as may become issuable by reason of the operation of the anti-dilution provisions of the 1997 Stock Option Plan (the "Plan") of the Company and of the Option Agreements with certain Executive Officers and Directors. 2) Represents the average price per share of Common Stock to be issued upon the exercise of options held by certain Directors of the Company. (3) Represents the average price per share of Common Stock to be issued upon the exercise of options held by certain Executive Officers of the Company. (4) Pursuant to Rules 457(g) and (h), the offering price for such 325,000 shares is estimated solely for the purpose of determining the registration fee and is based on the average of the high and low prices of the Company's Common Stock ($9.9375) as reported by The Nasdaq Stock Market, Inc. on May 20, 1998. -2- PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference and made a part hereof: (a) The Annual Report of American Pacific Corporation (the "Company") on Form 10-K and Form 10-K/A for the fiscal year ended September 30, 1997. (b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1997 and March 31, 1998, and the Company's Current Reports on Form 8-K filed on October 15, 1997, February 19, 1998 and March 27, 1998. (c) The description of the Company's securities contained in the Company's Registration Statement on Form 8-A filed December 28, 1992. All reports and other documents subsequently filed by the Company pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents. ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL Certain legal matters in connection with the issuance of the Shares offered hereby have been passed upon for the Company by Messrs. Olshan Grundman Frome & Rosenzweig LLP, New York, New York 10022. Victor M. Rosenzweig, a member of such firm, is a Director of the Company and holds shares of Common Stock and options to purchase Common Stock of the Company. ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS The General Corporation Law of the State of Delaware (the "DGCL") permits indemnification of directors, employees and agents of corporations under certain conditions and subject to certain limitations. The section of Delaware law pertaining to indemnification is set forth below in full. Pursuant to the DGCL, the Company has included provisions in its Restated Certificate of Incorporation, as amended, (A) to provide that the Company shall indemnify its directors and officers to the full extent permitted by the DGCL and any other laws of Delaware as from time to time in effect and (B) to limit the personal liability of a director to the Company for monetary damages for breach of fiduciary duty as a director; except that liability is not eliminated for (i) any breach of the director's duty of loyalty to the Company or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) unlawful payment of dividends or stock purchases or redemptions pursuant to Section 174 of the DGCL, or (iv) any transaction from which the director derived an improper personal benefit. The Company's by-laws provide that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of -3- the fact that he is or was a director, officer, employee or an agent of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of (or in any other capacity) another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the defense or settlement of such action, suit or proceeding, to the extent and in the manner substantially the same as set forth in and permitted by the DGCL. Such indemnification (other than as ordered by a court) shall be made by the Company only upon a determination that indemnification is proper in the circumstances because the individual met the applicable standard of conduct. Advances for such indemnification may be made pending such determination. Such determination shall be made by a majority vote of a quorum consisting of disinterested directors, or by independent legal counsel or by the stockholders. Such right of indemnification is not to be deemed exclusive of any other rights to which such director, officer, employee or agent is entitled and shall inure to the benefit of the heirs, executors and administrators of each such person. The Company also maintains a directors and officers insurance and company reimbursement policy. The policy insures directors and officers against unindemnified loss arising from certain wrongful acts in their capacities and reimburses the Company for such loss for which the Company has lawfully indemnified the directors and officers. The policy contains various exclusions, no one of which relates to the offering hereunder. Section 145 of the DGCL provides as follows: (a) 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, suit or proceeding, whether civil, criminal, administrative or investigative (other than action by or in the right of the corporation) by reason of the fact that he 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, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) 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 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, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. -4- (c) 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 in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall 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 because he has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. (e) Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition or such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this section. Such expenses incurred by other employees and agents may be paid upon such terms and conditions, if any, as the board of directors deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who 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, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this section. (h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any such excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to any employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner reasonably believed to be in the interest of the participants and beneficiaries of any employee benefit plan shall be deemed -5- to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS * 4.1 - American Pacific Corporation 1997 Stock Option Plan (the "Plan"). * 4.2 - Form of Option Agreement under the Plan. * 4.3 - Stock Option Agreement dated July 8, 1997, between the Company and David N. Keys. * 4.4 - Stock Option Agreement dated July 8, 1997, between the Company and John R. Gibson. * 4.5 - Form of Stock Option Agreement between the Company and certain Directors. * 5 - Opinion of Olshan Grundman Frome & Rosenzweig LLP. *23.1 - Consent of Deloitte & Touche LLP, independent auditors. *23.2 - Consent of Olshan Grundman Frome & Rosenzweig LLP (included in its opinion filed as Exhibit 5). *24 - Powers of Attorney (included on page 8). ----------------------------- * Filed herewith. ITEM 9. UNDERTAKINGS. A. 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 of 1933; (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 -6- thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement; (2) That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment 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; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. B. The undersigned registrant hereby undertakes 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 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this 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. C. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 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 of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer 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 a 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 of 1933 and will be governed by the final adjudication of such issue. -7- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Las Vegas, State of Nevada, on this 22nd day of May, 1998. AMERICAN PACIFIC CORPORATION (Registrant) By:/S/ JOHN R. GIBSON ----------------------------------------- John R. Gibson, President and Chief Executive Officer POWER OF ATTORNEYS AND SIGNATORIES Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Each of the undersigned officers and directors of American Pacific Corporation hereby constitutes and appoints John R. Gibson and David N. Keys and each of them singly, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him in his name in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and to prepare any and all exhibits thereto, and other documents in connection therewith, and to make any applicable state securities law or blue sky filings, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite or necessary to be done to enable American Pacific Corporation to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, 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 their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. SIGNATURE TITLE /S/ JOHN R. GIBSON President, Chief Executive Officer (Principal - -------------------------- Executive Officer) and Director (John R. Gibson) /S/ DAVID N. KEYS Executive Vice President, Chief Financial - -------------------------- Officer (Principal Financial and Principal (David N. Keys) Accounting Officer), Treasurer, Secretary and Director /S/ FRED D. GIBSON, JR. Director - ------------------------- (Fred D. Gibson, Jr.) /S/ EUGENE A. CAFIERO Director - ------------------------- (Eugene A. Cafiero) /S/ THOMAS A. TURNER Director - ------------------------- (Thomas A. Turner) /S/ JAN H. LOEB Director - ------------------------- (Jan H. Loeb) /S/ NORVAL F. POHL Director - ------------------------- (Norval F. Pohl) /S/ C. KEITH ROOKER Director - ------------------------- (C. Keith Rooker) /S/ JANE L. WILLIAMS Director - ------------------------- (Jane L. Williams) /S/ BERLYN D. MILLER Director - ------------------------- (Berlyn D. Miller) /S/ VICTOR M. ROSENZWEIG Director - ------------------------ (Victor M. Rosenzweig) /S/ DEAN M. WILLARD Director - ------------------------- (Dean M. Willard) -8- EX-4.1 2 AMERICAN PACIFIC 1997 STOCK OPTION PLAN AMERICAN PACIFIC CORPORATION 1997 STOCK OPTION PLAN 1. PURPOSE OF THE PLAN. This 1997 Stock Option Plan (the "Plan") is intended as an incentive, to retain in the employ of and as consultants and advisors to AMERICAN PACIFIC CORPORATION, a Delaware corporation with its principal office at 3770 Howard Hughes Parkway, Las Vegas, Nevada 89109 (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"), persons of training, experience and ability, to attract new employees, directors, advisors and consultants 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 (c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company pursuant to the Plan will be exempt from the operation of Section 16 (b) of the Exchange Act. 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 ("Section 162(m)"). 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 two or more directors that are "Non-Employee Directors" (as such term is defined in Rule 16b-3) and "Outside Directors" 1 (as such term is defined in Section 162 (m)), 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 he 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 this and the other Sections of the Plan shall he 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 as hereinafter defined does not consist of two or more Non- Employee Directors, or if there shall he no such Committee, then the Plan shall be administered by 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) 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 2 other factors that the Committee may consider relevant. An Optionee who has been granted an Option hereunder may he 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 325,000 shares of the Company's Common Stock, $0.10 par value per share (the "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 100,000, and the method of counting such shares shall conform to any requirements applicable to performance-based compensation under Section 162 (m). The shares of Stock subject to the Plan shall consist of unissued shares or previously issued shares held by any Subsidiary of the Company, and such amount of shares of Stock shall be and is hereby 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 cancelled 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. 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 an Incentive 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 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, 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 purchase price of each share of Stock purchasable under a Nonqualified option shall not be less than 100% of the Fair Market Value of such share of Stock on the date the Option is granted; provided, however, that if an Option granted to the Company's Chief Executive Officer or to any of the Company's other four most highly compensated officers is intended to qualify as performance-based compensation under Section 3 162(m), the exercise price of such Option shall not be less than 100% of the Fair Market Value of such share of Stock on the date the Option is granted. 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 the securities exchange or automated quotation system on which the shares of Stock are listed. (b) OPTION TERM. The term of each Option shall be fixed by the Committee, but no Option shall he exercisable more than 10 years after the date such Option is granted; provided, however, that the term 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 any Subsidiary shall not exceed five years. (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. (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, 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 also be made in the form of Stock owned by the Optionee (based on the Fair Market Value of the Stock on the trading day before the Option is exercised). 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 after (i) the Optionee has given written notice of exercise and has paid in full for such shares and (ii) becomes a stockholder of record with respect thereto. (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. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, 4 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. (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 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. (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. Early Retirement shall mean retirement from active employment with the Company or any Subsidiary 5 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 may he 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 the Company to a Subsidiary, or vice versa, or from one Subsidiary to another, shall not be deemed to constitute a termination of employment 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 income tax withholding required by law. 6. TERM OF PLAN. No Option shall be granted pursuant to the Plan on or after December 14, 2007, 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 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 6 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 Options and shares covered by 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 he 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 December 15, 1997, provided however that the Plan shall subsequently be approved by majority vote of the Company's stockholders within one year of the date thereof. 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 his consent, and except that no amendment shall be made which, without the approval of the stockholders of the Company would: (a) materially 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 Optionee's under the Plan; (c) materially modify the requirements as to eligibility for participation in the Plan; 7 (d) decrease the exercise price of an Incentive Option to less than 100% of the Fair Market Value per share of Stock on the date of grant thereof or the exercise price of a Nonqualified 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). 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 his 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 automated 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 8 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 extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation. (d) REGISTRATION OF STOCK. Notwithstanding any other provision in the Plan, no Option may be exercised unless and until the Stock to be issued upon the exercise thereof has been registered under the Securities Act and applicable state securities laws, or are, in the opinion of counsel to the Company, exempt from such registration in the United States. The Company shall not be under any obligation to register under applicable federal or state securities laws any Stock to be issued upon the exercise of an Option granted hereunder in order to permit the exercise of an Option and the issuance and sale of the Stock subject to such Option however, the Company may in its sole discretion register such Stock at such time as the Company shall determine. If the Company chooses to comply with such an exemption from registration, the Stock issued under the Plan may, at the direction of the Committee, bear an appropriate restrictive legend restricting the transfer or pledge of the Stock represented thereby, and the Committee may also give appropriate stop transfer instructions to the Company's transfer agents. 9 EX-4.2 3 FORM OF OPTION AGREEMENT AMERICAN PACIFIC CORPORATION 1997 STOCK OPTION PLAN STOCK OPTION AGREEMENT This Stock Option Agreement is made and entered into effective as of the "Day" day of "Month," "Year," by and between American Pacific Corporation, a Delaware corporation (the "Company"), and "Name," of "City," "State" (the "Optionee"). RECITALS: A. The Company has adopted the American Pacific Corporation 1997 Stock Option Plan (the "Plan"). B. The Optionee is an individual to whom the Company has decided to grant Options to purchase shares of the Common Stock of the Company pursuant to the Plan. C. The Company and the Optionee now desire to set forth the terms and conditions pursuant to which the Option shall be granted to the Optionee, and certain terms and conditions that will govern the issuance, holding and exercise of such Option, subject in all respects to the terms and conditions of the Plan. PROVISIONS: NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties to this Option Agreement agree as follows: 1. NUMBER OF SHARES SUBJECT TO OPTION. The Company hereby grants to the Optionee, upon the terms and conditions set forth in this Option Agreement and in the Plan, "Stock_Type" (the "Option") to purchase "NoShares" shares of the Common Stock of the Company. 2. EXERCISE PRICE. The price for which the Option hereby granted to the Optionee may be exercised shall be $"ExercisePrice" per share of the Common Stock of the Company, which amount represents the Value of a share of the Common Stock on the date of the Option Agreement. 3. TIME FOR EXERCISE. The Option hereby granted to the Optionee shall be exercisable at the following times: With respect to One-half of the shares of Common Stock (the "Shares") subject to the Option, the Option shall be exercisable on or after the date of this Option Agreement; With respect to the balance of the Shares, the Option shall be exercisable on or after "Date2"; and The Option shall be exercisable for a period of five years after the Option first becomes exercisable in accordance with the foregoing provisions of this Section 3, unless the period of exercise is sooner terminated in accordance with the provisions of this Option Agreement or of the Plan. The Optionee shall have no right to exercise any such Option except during the times provided above. 4. GOVERNING PLAN DOCUMENT. This Option Agreement incorporates by reference all of the terms and conditions of the Plan as presently existing and as hereafter amended; provided, however, that no such amendment shall adversely affect the rights of any Optionee in and to any Option previously granted, except as presently provided by the Plan, or except as may be required by applicable law. The Optionee expressly acknowledges and agrees that the terms and provisions of this Option Agreement are subject in all respects to the provisions of the Plan; that the terms and provisions of this Option Agreement in no way limit or modify any term or provision of the Plan; and that in case of any conflict between the provisions of the Plan and the terms and provisions of this Option Agreement, the provisions of the Plan shall control and shall bind the parties hereto. The Optionee also hereby expressly acknowledges, agrees and represents as follows: (a) The Optionee has received of a copy of the Plan and represents that he is familiar with the provisions of the Plan, and that he enters into this Option Agreement subject to all of the provisions of the Plan. (b) The Optionee is familiar with Section 5(d) of the Plan document, relating to the procedure for exercise of Options, and represents that he understands and agrees that all Options are exercisable only strictly in accordance with Section 5(d) and all other provisions of the Plan document. (c) The Optionee understands that the Optionee's use of Common Stock of the Company owned by such Optionee to pay the Exercise Price of an Option, to the extent permitted by Section 5(d) of the Plan document, could have adverse tax consequences to the Optionee, and that the Company recommends that the Optionee consult with a knowledgeable tax advisor before paying the Exercise Price of an Option with Company Common Stock. 2 5. EXERCISE OF OPTION. In order to exercise the Option, the Optionee shall deliver a written notice of exercise to the Company at its principal business office. The notice shall specify the number of Shares with respect to which the Option is being exercised, and shall be accompanied by payment in full in the form of cash or check of the Exercise Price. In lieu of paying the total purchase price in the form of cash or check, the Optionee may, with the approval of the Committee, pay all or any portion of the Exercise Price with shares of Common Stock of the Company owned by the Optionee. For this purpose, shares of Company Common Stock shall be valued by the Committee at their value as of the date on which the Optionee gives notice of exercise of an Option to the Company (the "Value"). The Committee's determination of the Value of the Common Stock of the Company shall be binding upon all persons having any interest in the shares or in the Options exercised therewith. If an Optionee pays the Exercise Price of an Option using Common Stock, the notice of exercise shall be accompanied by the certificates representing the shares of Company Common Stock surrendered in payment of the Exercise Price, duly and properly endorsed for transfer to the Company. 6. REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of any Option granted pursuant to the Plan, the Company may require the person exercising such Option to make any representations and warranties to the Company that legal counsel to the Company may determine to be required or advisable under any applicable law or regulation, including without limitation representations and warranties that the shares of the Company's Common Stock being acquired through the exercise of the Option are being acquired only for investment and without any present intention or view to sell or distribute any such shares. The Optionee hereby represents and warrants as follows: (a) The Optionee understands that unless at the time of the exercise of the Option a registration statement under the Securities Act of 1933, as amended (the "Act"), is in effect as to such Shares, any Shares purchased by the optionee upon the exercise of the Option shall be acquired for investment and not for sale or distribution, and if the Company so requests, upon any exercise of the Option, in whole or in part, the Optionee will execute and deliver to the Company a certificate to such effect. The Company shall not be obligated to issue any Shares pursuant to the option if, in the opinion of counsel to the Company, the Shares to be so issued are required to be registered or otherwise qualified under the Act or under any other applicable statute, regulation or ordinance affecting the sale of securities, unless and until such Shares have been so registered or otherwise qualified. (b) The Optionee understands that under existing law, unless at the time of the exercise of the Option, a registration statement under the Act is in effect as to Shares so issuable (i) any Shares purchased by the optionee upon exercise of the Option may be required to be held indefinitely unless such Shares are subsequently registered under the Act or an exemption from such registration is available; (ii) any sales of such Shares made in reliance upon Rule 144 promulgated under the Act may be 3 made only in accordance with the terms and conditions of that Rule (which, under certain circumstances, restrict the number of shares which may be sold and the manner in which shares may be sold); (iii) certificates for Shares to be issued to the Optionee hereunder shall bear a legend to the effect that the Shares have not been registered under the Act and that the Shares may not be sold, hypothecated or otherwise transferred in the absence of an effective registration statement under the Act relating thereto or an opinion of counsel satisfactory to the Company that such registration is not required; (iv) the Company will place an appropriate "stop transfer" order with its transfer agent with respect to such Shares; and (v) the Company has undertaken no obligation to register the Shares or to include the Shares in any registration statement which may be filed by it subsequent to the issuance of the Shares to the Optionee. In addition, the optionee understands and acknowledges that the Company has no obligation to the optionee to furnish information necessary to enable the optionee to make sales under Rule 144. 7. RESTRICTIONS ON TRANSFERS AND ENCUMBRANCES. During the lifetime of an Optionee, the Option may not be sold, pledged, assigned, hypothecated, encumbered or transferred in any manner, either voluntarily or involuntarily, by operation of law or otherwise, except by will or by applicable laws of descent and distribution, and may be exercised during the Optionee's lifetime only by the Optionee or his legal representative. To the extent that the Option is exercisable after the date of the Optionee's death, it may be exercised only by the person or persons to whom the Optionee's rights under the Option have passed by will or by applicable laws of descent and distribution. 8. OPTIONEE RIGHTS. No provision of this Option Agreement or of the Plan document shall be deemed to give to any Employee or Director of the Company or of any subsidiary of the Company (a "Subsidiary Corporation") or to any other individual, any right to be retained in the service of the Company or of any Subsidiary Corporation, or to interfere in any way with the right of the Company or of the Subsidiary Corporations at any time to discharge any employee, to discontinue using the services of any individual, or to remove any Director. 9. WITHHOLDING OF TAXES. The Optionee authorizes the Company to withhold, in accordance with applicable laws and regulations, from any compensation or other amount payable to an Optionee, all federal, state and other taxes attributable to taxable income realized by the Optionee as a result of the grant or exercise of any Option. 10. ACCEPTANCE OF TERMS. The Optionee hereby accepts and adopts each and every provision of the Plan document, whether or not any such provision is similar in scope or effect to any term or provision of this Option Agreement, and whether or not any provision of such document is set forth, described or referenced in this Option Agreement. 4 11. NOTICES. (a) All notices, demands or requests provided for or permitted to be given pursuant hereto must be in writing. All notices, demands and requests shall be deemed to have been properly given or served when deposited in the United States mail, addressed to the individual or entity to whom notice is given, postage prepaid and registered or certified with return receipt requested, at the last known address of such individual or entity. (b) By giving at least fifteen (15) days prior written notice, the Company, a Subsidiary Corporation and an Optionee shall have the right from time to time to change their addresses and to specify any other address within the United States of America. 12. TITLES AND CAPTIONS. All Article and Section titles and captions in this Option Agreement are for convenience or reference only, and shall not be deemed part of this Option Agreement, and in no way define, limit, extend or describe the scope or intent of any provision hereof. 13. CAPITALIZED TERMS. Capitalized terms that are used in this Option Agreement that are not specifically defined herein shall have the meanings set forth in the Plan document. 14. PRONOUNS AND PLURALS. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 15. APPLICABLE LAW. This Option Agreement shall be construed in accordance with and shall be governed by the laws of the State of Nevada. 16. BINDING EFFECT. This Option Agreement shall be binding upon each Optionee and upon such Optionee's heirs, executors, administrators, successors, legal representatives and assigns. 17. CREDITORS. None of the provisions of this Option Agreement shall be for the benefit of or shall be enforceable by any creditor of any Optionee. 18. SEVERABILITY. In the event that any condition, covenant or other provision herein contained is held to be invalid or void by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this document and shall in no way affect any other covenant or condition herein contained. If such condition, covenant or other provision shall be deemed invalid due to its scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. 5 IN WITNESS WHEREOF, the Company and the Optionee have executed this Option Agreement this ________ day of ____________________, 1998. "Company" AMERICAN PACIFIC CORPORATION, a Delaware corporation By --------------------------------- John R. Gibson President Attest: - --------------------- David N. Keys Secretary "Optionee" -------------------------------------- "Name" Address: "Street" "City," "State" "PostalCode" EX-4.3 4 STOCK OPTION AGREEMENT DATED JULY 8, 1997 STOCK OPTION AGREEMENT This Stock Option Agreement is made and entered into effective as of the 8/th/ day of July, 1997, by and between American Pacific Corporation, a Delaware corporation (the "Company"), and David N. Keys, of Las Vegas, Nevada (the "Optionee"). RECITALS: A. The Optionee is serving as Chief Financial Officer of the Company. The Company desires to encourage the ownership of its Common Stock by the Optionee, and to provide an incentive for the Optionee to assist in expanding and improving the growth, profitability and general prosperity of the Company and of its Subsidiary Corporations, and to stimulate the efforts of the Optionee by giving suitable recognition, in the form of compensation, to his abilities and industry, which contribute materially to the growth and profitability of the Company and of its Subsidiary Corporations. B. The Company has decided to grant to the Optionee the option to purchase shares of the Common Stock of the Company. C. The Company and the Optionee now desire to set forth the terms and conditions upon which the Optionee shall have the Option to purchase shares of the Common Stock of the Company, and certain terms and conditions that will govern the issuance, holding and exercise of such Options. PROVISIONS: NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties to this Option Agreement agree as follows: ARTICLE I DEFINITIONS As used in this Option Agreement, the following terms shall have the indicated meanings: 1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean the Board of Directors of the Company. 1.02 COMMITTEE shall mean the Stock Option Committee of the Board of Directors of the Company referred to in Article II of this Option Agreement. 1.03 COMMON STOCK shall mean the common stock of the Company, par value ten cents ($0.10) per share. 1.04 COMPANY shall mean American Pacific Corporation, a Delaware corporation. 1.05 DISABILITY shall mean a physical or mental condition that, based upon medical reports and other evidence satisfactory to the Committee, presumably permanently prevents the Optionee from satisfactorily performing his usual duties for the Company. 1.06 EXERCISE PRICE shall mean the price for which an Option granted hereunder may be exercised, as provided in Section 3.02 of this Option Agreement. 1.07 OPTION shall mean the right to purchase shares of the Common Stock of the Company, granted pursuant to the provisions of this Option Agreement. 1.08 OPTION AGREEMENT or AGREEMENT shall mean this Stock Option Agreement. 1.09 OPTIONEE shall mean the Optionee identified above, to whom this Option has been granted, upon the terms and conditions set forth in this Option Agreement. 1.10 SUBSIDIARY CORPORATIONS shall mean and include all corporations that join with the Company in, or would be eligible to join with the Company in, if timely and proper elections were made, the filing of a consolidated federal income tax return, under the applicable provisions of the Internal Revenue Code in effect from time to time. 1.11 VALUE of a share of the Common Stock of the Company shall mean the closing price of a share of the Company's Common Stock, as reported on the National Market System of the National Association of Securities Dealers, Inc. If a reported closing price is not available for the date on which the Common Stock is sought to be valued, the reported closing price for the next preceding business day shall be used. If reported closing prices are not available for either such date, the Value of a share of the Company's Common Stock shall be the arithmetic mean of the bid and asked prices of the Company's Common Stock, as published by the National Association of Securities Dealers, Inc., as of the date on which the Company's Common Stock is sought to be valued, or if quoted prices are not available as of such day, then the bid and asked prices as of the next preceding business day shall be used. If the Value cannot be determined under the preceding rules of this Section 1.11, the Value shall be the fair market value of the Company's Common Stock, determined under the method selected by the Committee. Unless modified by the Board of Directors, the Committee's good-faith determination of the Value of a share of the Company's Common Stock shall be conclusive, and shall be valid and binding upon all persons having any interest in any Option granted hereunder. 2 ARTICLE II ADMINISTRATION 2.01 COMMITTEE. Subject to the terms of the Plan, the Option granted pursuant to this Option Agreement shall be administered by the Stock Option Committee of the Board of Directors of the Company. If for any reason a Committee is not acting, the Board of Directors shall act as the Committee. All determinations, decisions, interpretations and other action made or taken with respect to the Option granted hereunder by the Committee shall be final and binding upon all persons having any interest in any Option granted pursuant hereto, unless otherwise determined by the Board of Directors. The Board of Directors shall have the power by appropriate action to reverse or modify any action taken by the Committee. 2.02 COMMITTEE TO CONSTRUE AGREEMENT. The Committee shall administer the Option granted pursuant hereto, and shall have all powers necessary for that purpose, including but not limited to the power to interpret this Agreement and the power to determine the rights hereunder of all persons. The Committee shall maintain the records of the Company that relate to the Option granted pursuant hereto, and shall have the power to adjust its records as necessary to correct errors and rectify omissions, in the manner that the Committee believes will best result in the equitable administration of the Option granted pursuant hereto. 2.03 ORGANIZATION OF COMMITTEE. The Chairman of the Committee shall be the Chairman of the Board of Directors. The Committee may adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Option. The Committee may appoint agents, who need not be members of the Committee, to whom it may delegate such powers as it deems appropriate. The action of a majority of the members of the Committee shall be the action of the Committee. 2.04 INDEMNIFICATION OF COMMITTEE MEMBERS. The Company shall defend, indemnify and hold harmless each member of the Committee against any and all claims, loss, damages, expense and liability arising from any actual or alleged action or failure to act in connection with the administration of the Option granted pursuant hereto, except when the same is judicially determined to be due to the gross negligence or willful misconduct of such Committee member. ARTICLE III TERMS AND CONDITIONS 3.01 NUMBER OF SHARES SUBJECT TO OPTION. The Company hereby grants to the Optionee, upon the terms and conditions set forth in this Option Agreement, the option to purchase Eighty Thousand (80,000) shares of the Common Stock of the Company. 3 3.02 EXERCISE PRICE. The price for which each Option hereby granted to the Optionee may be exercised shall be $7.125 per share of the Common Stock of the Company, which amount represents the Value of a share of the Common Stock on the date of this Option Agreement. 3.03 TIME FOR EXERCISE. The Option hereby granted to the Optionee shall be exercisable at the following times: With respect to Twenty Thousand (20,000) shares of common stock, the Option shall be exercisable on or after the date of this Option Agreement; With respect to an additional Twenty Thousand (20,000) shares of common stock, the Option shall be exercisable on or after one year after the date of this Option Agreement. With respect to a third Twenty Thousand (20,000) shares of common stock, the Option shall be exercisable on or after two years after the date of this Agreement. With respect to the final Twenty Thousand (20,000) shares of common stock, the Option shall be exercisable on or after three years after the date of this Option Agreement. The Option granted hereunder shall be exercisable for a period of five years after such Option first becomes exercisable in accordance with the foregoing provisions of this Section 3.03, unless the period of exercise is sooner terminated in accordance with the provisions of this Option Agreement. The Optionee shall have no right whatsoever to exercise the Option except during the times provided above. 3.04 RESTRICTIONS ON TRANSFERS AND ENCUMBRANCE. During the lifetime of the Optionee, the Option granted hereunder may not be sold, pledged, assigned, hypothecated, encumbered or transferred in any manner, either voluntarily or involuntarily, by operation of law or otherwise, except by will or by applicable laws of descent and distribution, and may be exercised during an Optionee's lifetime only by the Optionee or by the Optionee's legal representative. Any Option that has not expired as of the date of the Optionee's death may be exercised after the Optionee's death only by the person or persons to whom the Optionee's interest in the Option have passed by will, by the terms of a family trust agreement or other like instrument or by applicable laws of descent and distribution. 3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the Optionee dies or becomes Disabled while in, or within ninety days after ceasing to be a Director of the Company, the Optionee shall be treated for all purposes of this Agreement as continuing in the service of the Company throughout the period ending on the date as of which the last Option granted to the Optionee hereunder would have expired under the provisions of this Article III but for the Optionee's death or Disability. 4 3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option granted hereunder only if the Optionee has remained continuously in the service of the Company or as a Director since the date on which the Option sought to be exercised was granted to such Optionee, through a date that is not more than two years prior to the date on which the Option is sought to be exercised. The provisions of this Section shall not prevent the individual or entity to whom an Option has passed by will or by applicable laws of descent and distribution after the death of an Optionee from exercising the Option within the period of time during which the Option is otherwise exercisable under the provisions of this Option Agreement, if the Option was exercisable under all provisions of this Agreement (including the provisions of this Section 3.06) by the Optionee as of the date of the Optionee's death. ARTICLE IV PROCEDURE FOR EXERCISE 4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV, the Option granted hereunder shall be exercisable only during the times provided in this Option Agreement. 4.02 EXERCISE UPON CORPORATE CAPITAL TRANSACTION. In the event that the Company, its shareholders, or both, enter into a written agreement to dispose of all or substantially all of the assets or Common Stock of the Company by means of a sale, merger, consolidation, reorganization, liquidation or similar transaction (other than a reorganization, merger or consolidation effected solely to change the Company's name or state of incorporation), the Option issued pursuant to this Option Agreement shall become immediately exercisable, whether or not such Option was exercisable prior to such event, during the period of time beginning with the date on which the Company agrees in writing to enter into such transaction, and ending on the earlier of the date the Option would otherwise have expired or the date on which the transaction is consummated. Upon the consummation of the transaction, any unexercised portion of the Option issued hereunder shall terminate and cease to be effective. In the event that the agreement to enter into any such transaction is terminated, all unexercised portions of the Option shall revert to the status they had before the Company agreed to enter into the transaction in question. Any exercise of Option made before the agreement to enter into the transaction was terminated shall remain effective after the termination of the agreement, notwithstanding that the Option may have become exercisable solely by reason of the Company entering into the agreement. 4.03 WITHHOLDING OF TAXES. The Optionee hereby agrees that the Company may, if it elects to do so, withhold federal, state and other taxes attributable to taxable income realized by the Optionee upon the exercise of Option from any compensation or other payment payable to such Optionee by the Company. 4.04 EXERCISE. Subject to all other terms and provisions of this Option Agreement, the Option granted hereunder shall be deemed to be exercised when written notice of 5 exercise has been given to the Company by the Optionee or other person entitled to exercise the Option and full payment in cash or cash equivalents for the shares of Common Stock with respect to which the Option is exercised has been received by the Company. Until certificates have been issued for the number of Shares represented by the exercise of the Option, the Optionee shall have no right to vote, to receive dividends, or other right as a stockholder with respect to shares of Common Stock purchased through the exercise of the Option. Except as provided in Section 5.01 hereof, no adjustments shall be made for dividends or other rights declared or paid with respect to stock acquired through the exercise of the Option for which the record date is prior to the date on which a stock certificate for such shares is issued. 4.05 EXERCISE IN INSTALLMENTS. Subject to Section 3.03, the Optionee may exercise the Option in installments, but only in units of whole shares of the Common Stock of the Company. 4.06 ISSUANCE OF CERTIFICATES. As soon as practicable after the Option has been exercised in accordance with the provisions of this Option Agreement, the Company shall, without transfer or issue tax or other charge to the Optionee, deliver to the Optionee at the principal business office of the Company, or at such other place as may be agreed, certificates representing the number of shares of Common Stock as to which the Option has been exercised. The Company may, however, postpone the time of delivery of certificates for such period of time as the Company may determine to be necessary for it with reasonable diligence to comply with any applicable listing requirements of any national or regional securities exchange, of the National Association of Securities Dealers, Inc., or with any law or regulation applicable to the issuance or delivery of shares of the Company's Common Stock. ARTICLE V RESTRICTIONS AND ADDITIONAL PROVISIONS 5.01 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the number of outstanding shares of the Common Stock of the Company is increased or decreased, or if the Common Stock of the Company underlying the Option granted pursuant to the provisions of this Option Agreement is changed into or exchanged for a different number or kind of shares or securities of the Company through a reorganization, merger, recapitalization, reclassification, stock dividend, stock split or reverse stock split, an appropriate and proportionate adjustment shall be made by the Committee in the terms and conditions of the Options granted pursuant hereto, including the Exercise Price of the Option; provided, however, that no such adjustment need be made if, upon the advice of legal counsel to the Company, the Committee determines that any such adjustment could result in the recognition of federal taxable income by the Optionee, or by holders of Common Stock or other securities of the Company. 5.02 RESERVATION OF SHARES OF COMMON STOCK. The Company shall, at all times during the periods of time during which the Option may be exercised hereunder, reserve and keep 6 available for issuance to the Optionee a number of shares of its Common Stock sufficient to satisfy all obligations of the Company hereunder. 5.03 RESTRICTIONS ON ISSUANCE OF SHARES. The Company shall use its best efforts to seek and to obtain from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of shares of its Common Stock as shall be sufficient to satisfy the obligations of the Company under this Agreement. The inability of the Company to obtain authorization deemed to be necessary by the Company's legal counsel to the lawful issuance and sale of any shares of the Company's Common Stock shall relieve the Company of any liability for the nonissuance or nonsale of any Common Stock as to which the requisite approval or authorization shall not have been obtained. 5.04 REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of the Option granted hereunder, the Committee may require the person exercising the Option to make any representations or warranties to the Company that legal counsel to the Company may determine to be required or advisable under any applicable law or regulation, including without limitation a representation and warranty that the shares of the Company's Common Stock being acquired are being acquired only for investment and without any present intention or view to sell or distribute any such shares. 5.05 OPTIONEE RIGHTS. No provision of this Agreement shall be deemed to constitute a condition of the service or status of any Director. No provision of this Option Agreement shall be deemed to give to the Optionee any right to be retained in the service of the Company or of any Subsidiary Corporation in any capacity (whether as an employee, Director, independent contractor or otherwise), or to interfere in any way with the right of the Company and its Subsidiary Corporations at any time to remove any Director, or to discontinue using the services of any individual. The Optionee shall have no right or interest in any share of the Company's Common Stock prior to exercise of the Option, except as provided in this Option Agreement. 5.06 LEGENDS ON STOCK CERTIFICATES. Unless an appropriate registration statement is on file and effective with appropriate federal, state and local governmental authorities, each certificate representing Common Stock of the Company issued pursuant to the exercise of the Option shall be endorsed on its face with a legend similar to the following: Neither the Option pursuant to which the shares represented by this certificate are issued nor the shares represented hereby have been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or with any state securities agency. The transfer or sale of the shares represented hereby without appropriate registration, or pursuant to an exemption from registration, is unlawful. 7 ARTICLE VI MISCELLANEOUS PROVISIONS 6.01 NOTICES (a) All notices, demands or requests provided for or permitted to be given pursuant hereto must be in writing. All notices, demands and requests shall be deemed to have been properly given or served when deposited in the United States mail, addressed to the individual or entity to whom notice is given, postage prepaid and registered or certified with return receipt requested, at the last known address of such individual or entity. (b) By giving at least fifteen (15) days prior written notice, the Company, a Subsidiary Corporation and the Optionee shall have the right from time to time to change their addresses and to specify any other address within the United States of America. 6.02 TITLES AND CAPTIONS. All Article and Section titles and captions in this Option Agreement are for convenience or reference only, and shall not be deemed part of this Option Agreement, and in no way define, limit, extend or describe the scope or intent of any provisions hereof. 6.03 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 6.04 APPLICABLE LAW. This Option Agreement shall be construed in accordance with and shall be governed by the laws of the State of Nevada. 6.05 BINDING EFFECT. This Option Agreement shall be binding upon the Optionee and upon the Optionee's heirs, executors, administrators, successors, legal representatives and assigns. 6.06 CREDITORS. None of the provisions of this Option Agreement shall be for the benefit of or shall be enforceable by any creditor of the Optionee. 6.07 SEVERABILITY. In the event that any condition, covenant or other provision herein contained is held to be invalid or void by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this Option Agreement and shall in no way affect any other covenant or condition herein contained. If such condition, covenant or other provision shall be deemed invalid due to its scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. 6.08 PLAN CONTROLS. This Option Agreement is subject to the terms and provisions of the Plan, and in the event of an inconsistency herewith, the terms of the plan shall control. 8 IN WITNESS WHEREOF, the Company and the Optionee have executed this Option Agreement as of the date first set forth above. "Company" AMERICAN PACIFIC CORPORATION, a Delaware corporation By /s/ John R. Gibson ------------------------------- John R. Gibson President Attest: /s/ C. Keith Rooker - ----------------------------- C. Keith Rooker Secretary "Optionee" /s/ David N. Keys --------------------------------- David N. Keys Address: 1824 Glenview Drive Las Vegas, NV 89134 9 EX-4.4 5 STOCK OPTION AGREEMENT DATED JULY 8, 1997 STOCK OPTION AGREEMENT This Stock Option Agreement is made and entered into effective as of the 8/th/ day of July, 1997, by and between American Pacific Corporation, a Delaware corporation (the "Company"), and John R. Gibson, of Las Vegas, Nevada (the "Optionee"). RECITALS: A. The Optionee is serving as President and Chief Executive Officer of the Company. The Company desires to encourage the ownership of its Common Stock by the Optionee, and to provide an incentive for the Optionee to assist in expanding and improving the growth, profitability and general prosperity of the Company and of its Subsidiary Corporations, and to stimulate the efforts of the Optionee by giving suitable recognition, in the form of compensation, to his abilities and industry, which contribute materially to the growth and profitability of the Company and of its Subsidiary Corporations. B. The Company has decided to grant to the Optionee the option to purchase shares of the Common Stock of the Company. C. The Company and the Optionee now desire to set forth the terms and conditions upon which the Optionee shall have the Option to purchase shares of the Common Stock of the Company, and certain terms and conditions that will govern the issuance, holding and exercise of such Options. PROVISIONS: NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties to this Option Agreement agree as follows: ARTICLE I DEFINITIONS As used in this Option Agreement, the following terms shall have the indicated meanings: 1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean the Board of Directors of the Company. 1.02 COMMITTEE shall mean the Stock Option Committee of the Board of Directors of the Company referred to in Article II of this Option Agreement. 1.03 COMMON STOCK shall mean the common stock of the Company, par value ten cents ($0.10) per share. 1.04 COMPANY shall mean American Pacific Corporation, a Delaware corporation. 1.05 DISABILITY shall mean a physical or mental condition that, based upon medical reports and other evidence satisfactory to the Committee, presumably permanently prevents the Optionee from satisfactorily performing his usual duties for the Company. 1.06 EXERCISE PRICE shall mean the price for which an Option granted hereunder may be exercised, as provided in Section 3.02 of this Option Agreement. 1.07 OPTION shall mean the right to purchase shares of the Common Stock of the Company, granted pursuant to the provisions of this Option Agreement. 1.08 OPTION AGREEMENT or AGREEMENT shall mean this Stock Option Agreement. 1.09 OPTIONEE shall mean the Optionee identified above, to whom this Option has been granted, upon the terms and conditions set forth in this Option Agreement. 1.10 SUBSIDIARY CORPORATIONS shall mean and include all corporations that join with the Company in, or would be eligible to join with the Company in, if timely and proper elections were made, the filing of a consolidated federal income tax return, under the applicable provisions of the Internal Revenue Code in effect from time to time. 1.11 VALUE of a share of the Common Stock of the Company shall mean the closing price of a share of the Company's Common Stock, as reported on the National Market System of the National Association of Securities Dealers, Inc. If a reported closing price is not available for the date on which the Common Stock is sought to be valued, the reported closing price for the next preceding business day shall be used. If reported closing prices are not available for either such date, the Value of a share of the Company's Common Stock shall be the arithmetic mean of the bid and asked prices of the Company's Common Stock, as published by the National Association of Securities Dealers, Inc., as of the date on which the Company's Common Stock is sought to be valued, or if quoted prices are not available as of such day, then the bid and asked prices as of the next preceding business day shall be used. If the Value cannot be determined under the preceding rules of this Section 1.11, the Value shall be the fair market value of the Company's Common Stock, determined under the method selected by the Committee. Unless modified by the Board of Directors, the Committee's good-faith determination of the Value of a share of the Company's Common Stock shall be conclusive, and shall be valid and binding upon all persons having any interest in any Option granted hereunder. 2 ARTICLE II ADMINISTRATION 2.01 COMMITTEE. Subject to the terms of the Plan, the Option granted pursuant to this Option Agreement shall be administered by the Stock Option Committee of the Board of Directors of the Company. If for any reason a Committee is not acting, the Board of Directors shall act as the Committee. All determinations, decisions, interpretations and other action made or taken with respect to the Option granted hereunder by the Committee shall be final and binding upon all persons having any interest in any Option granted pursuant hereto, unless otherwise determined by the Board of Directors. The Board of Directors shall have the power by appropriate action to reverse or modify any action taken by the Committee. 2.02 COMMITTEE TO CONSTRUE AGREEMENT. The Committee shall administer the Option granted pursuant hereto, and shall have all powers necessary for that purpose, including but not limited to the power to interpret this Agreement and the power to determine the rights hereunder of all persons. The Committee shall maintain the records of the Company that relate to the Option granted pursuant hereto, and shall have the power to adjust its records as necessary to correct errors and rectify omissions, in the manner that the Committee believes will best result in the equitable administration of the Option granted pursuant hereto. 2.03 ORGANIZATION OF COMMITTEE. The Chairman of the Committee shall be the Chairman of the Board of Directors. The Committee may adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Option. The Committee may appoint agents, who need not be members of the Committee, to whom it may delegate such powers as it deems appropriate. The action of a majority of the members of the Committee shall be the action of the Committee. 2.04 INDEMNIFICATION OF COMMITTEE MEMBERS. The Company shall defend, indemnify and hold harmless each member of the Committee against any and all claims, loss, damages, expense and liability arising from any actual or alleged action or failure to act in connection with the administration of the Option granted pursuant hereto, except when the same is judicially determined to be due to the gross negligence or willful misconduct of such Committee member. ARTICLE III TERMS AND CONDITIONS 3.01 NUMBER OF SHARES SUBJECT TO OPTION. The Company hereby grants to the Optionee, upon the terms and conditions set forth in this Option Agreement, the option to purchase One Hundred Thousand (100,000) shares of the Common Stock of the Company. 3 3.02 EXERCISE PRICE. The price for which each Option hereby granted to the Optionee may be exercised shall be $7.125 per share of the Common Stock of the Company, which amount represents the Value of a share of the Common Stock on the date of this Option Agreement. 3.03 TIME FOR EXERCISE. The Option hereby granted to the Optionee shall be exercisable at the following times: With respect to Twenty-five Thousand (25,000) shares of common stock, the Option shall be exercisable on or after the date of this Option Agreement; With respect to an additional Twenty-five Thousand (25,000) shares of common stock, the Option shall be exercisable on or after one year after the date of this Option Agreement. With respect to a third Twenty-five Thousand (25,000) shares of common stock, the Option shall be exercisable on or after two years after the date of this Agreement. With respect to the final Twenty-five Thousand (25,000) shares of common stock, the Option shall be exercisable on or after three years after the date of this Option Agreement. The Option granted hereunder shall be exercisable for a period of five years after such Option first becomes exercisable in accordance with the foregoing provisions of this Section 3.03, unless the period of exercise is sooner terminated in accordance with the provisions of this Option Agreement. The Optionee shall have no right whatsoever to exercise the Option except during the times provided above. 3.04 RESTRICTIONS ON TRANSFERS AND ENCUMBRANCE. During the lifetime of the Optionee, the Option granted hereunder may not be sold, pledged, assigned, hypothecated, encumbered or transferred in any manner, either voluntarily or involuntarily, by operation of law or otherwise, except by will or by applicable laws of descent and distribution, and may be exercised during an Optionee's lifetime only by the Optionee or by the Optionee's legal representative. Any Option that has not expired as of the date of the Optionee's death may be exercised after the Optionee's death only by the person or persons to whom the Optionee's interest in the Option have passed by will, by the terms of a family trust agreement or other like instrument or by applicable laws of descent and distribution. 3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the Optionee dies or becomes Disabled while in, or within ninety days after ceasing to be a Director of the Company, the Optionee shall be treated for all purposes of this Agreement as continuing in the service of the Company throughout the period ending on the date as of which the last Option granted to the Optionee hereunder would have expired under the provisions of this Article III but for the Optionee's death or Disability. 4 3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option granted hereunder only if the Optionee has remained continuously in the service of the Company or as a Director since the date on which the Option sought to be exercised was granted to such Optionee, through a date that is not more than two years prior to the date on which the Option is sought to be exercised. The provisions of this Section shall not prevent the individual or entity to whom an Option has passed by will or by applicable laws of descent and distribution after the death of an Optionee from exercising the Option within the period of time during which the Option is otherwise exercisable under the provisions of this Option Agreement, if the Option was exercisable under all provisions of this Agreement (including the provisions of this Section 3.06) by the Optionee as of the date of the Optionee's death. ARTICLE IV PROCEDURE FOR EXERCISE 4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV, the Option granted hereunder shall be exercisable only during the times provided in this Option Agreement. 4.02 EXERCISE UPON CORPORATE CAPITAL TRANSACTION. In the event that the Company, its shareholders, or both, enter into a written agreement to dispose of all or substantially all of the assets or Common Stock of the Company by means of a sale, merger, consolidation, reorganization, liquidation or similar transaction (other than a reorganization, merger or consolidation effected solely to change the Company's name or state of incorporation), the Option issued pursuant to this Option Agreement shall become immediately exercisable, whether or not such Option was exercisable prior to such event, during the period of time beginning with the date on which the Company agrees in writing to enter into such transaction, and ending on the earlier of the date the Option would otherwise have expired or the date on which the transaction is consummated. Upon the consummation of the transaction, any unexercised portion of the Option issued hereunder shall terminate and cease to be effective. In the event that the agreement to enter into any such transaction is terminated, all unexercised portions of the Option shall revert to the status they had before the Company agreed to enter into the transaction in question. Any exercise of Option made before the agreement to enter into the transaction was terminated shall remain effective after the termination of the agreement, notwithstanding that the Option may have become exercisable solely by reason of the Company entering into the agreement. 4.03 WITHHOLDING OF TAXES. The Optionee hereby agrees that the Company may, if it elects to do so, withhold federal, state and other taxes attributable to taxable income realized by the Optionee upon the exercise of Option from any compensation or other payment payable to such Optionee by the Company. 4.04 EXERCISE. Subject to all other terms and provisions of this Option Agreement, the Option granted hereunder shall be deemed to be exercised when written notice of 5 exercise has been given to the Company by the Optionee or other person entitled to exercise the Option and full payment in cash or cash equivalents for the shares of Common Stock with respect to which the Option is exercised has been received by the Company. Until certificates have been issued for the number of Shares represented by the exercise of the Option, the Optionee shall have no right to vote, to receive dividends, or other right as a stockholder with respect to shares of Common Stock purchased through the exercise of the Option. Except as provided in Section 5.01 hereof, no adjustments shall be made for dividends or other rights declared or paid with respect to stock acquired through the exercise of the Option for which the record date is prior to the date on which a stock certificate for such shares is issued. 4.05 EXERCISE IN INSTALLMENTS. Subject to Section 3.03, the Optionee may exercise the Option in installments, but only in units of whole shares of the Common Stock of the Company. 4.06 ISSUANCE OF CERTIFICATES. As soon as practicable after the Option has been exercised in accordance with the provisions of this Option Agreement, the Company shall, without transfer or issue tax or other charge to the Optionee, deliver to the Optionee at the principal business office of the Company, or at such other place as may be agreed, certificates representing the number of shares of Common Stock as to which the Option has been exercised. The Company may, however, postpone the time of delivery of certificates for such period of time as the Company may determine to be necessary for it with reasonable diligence to comply with any applicable listing requirements of any national or regional securities exchange, of the National Association of Securities Dealers, Inc., or with any law or regulation applicable to the issuance or delivery of shares of the Company's Common Stock. ARTICLE V RESTRICTIONS AND ADDITIONAL PROVISIONS 5.01 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the number of outstanding shares of the Common Stock of the Company is increased or decreased, or if the Common Stock of the Company underlying the Option granted pursuant to the provisions of this Option Agreement is changed into or exchanged for a different number or kind of shares or securities of the Company through a reorganization, merger, recapitalization, reclassification, stock dividend, stock split or reverse stock split, an appropriate and proportionate adjustment shall be made by the Committee in the terms and conditions of the Options granted pursuant hereto, including the Exercise Price of the Option; provided, however, that no such adjustment need be made if, upon the advice of legal counsel to the Company, the Committee determines that any such adjustment could result in the recognition of federal taxable income by the Optionee, or by holders of Common Stock or other securities of the Company. 5.02 RESERVATION OF SHARES OF COMMON STOCK. The Company shall, at all times during the periods of time during which the Option may be exercised hereunder, reserve and keep 6 available for issuance to the Optionee a number of shares of its Common Stock sufficient to satisfy all obligations of the Company hereunder. 5.03 RESTRICTIONS ON ISSUANCE OF SHARES. The Company shall use its best efforts to seek and to obtain from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of shares of its Common Stock as shall be sufficient to satisfy the obligations of the Company under this Agreement. The inability of the Company to obtain authorization deemed to be necessary by the Company's legal counsel to the lawful issuance and sale of any shares of the Company's Common Stock shall relieve the Company of any liability for the nonissuance or nonsale of any Common Stock as to which the requisite approval or authorization shall not have been obtained. 5.04 REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of the Option granted hereunder, the Committee may require the person exercising the Option to make any representations or warranties to the Company that legal counsel to the Company may determine to be required or advisable under any applicable law or regulation, including without limitation a representation and warranty that the shares of the Company's Common Stock being acquired are being acquired only for investment and without any present intention or view to sell or distribute any such shares. 5.05 OPTIONEE RIGHTS. No provision of this Agreement shall be deemed to constitute a condition of the service or status of any Director. No provision of this Option Agreement shall be deemed to give to the Optionee any right to be retained in the service of the Company or of any Subsidiary Corporation in any capacity (whether as an employee, Director, independent contractor or otherwise), or to interfere in any way with the right of the Company and its Subsidiary Corporations at any time to remove any Director, or to discontinue using the services of any individual. The Optionee shall have no right or interest in any share of the Company's Common Stock prior to exercise of the Option, except as provided in this Option Agreement. 5.06 LEGENDS ON STOCK CERTIFICATES. Unless an appropriate registration statement is on file and effective with appropriate federal, state and local governmental authorities, each certificate representing Common Stock of the Company issued pursuant to the exercise of the Option shall be endorsed on its face with a legend similar to the following: Neither the Option pursuant to which the shares represented by this certificate are issued nor the shares represented hereby have been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or with any state securities agency. The transfer or sale of the shares represented hereby without appropriate registration, or pursuant to an exemption from registration, is unlawful. 7 ARTICLE VI MISCELLANEOUS PROVISIONS 6.01 NOTICES (a) All notices, demands or requests provided for or permitted to be given pursuant hereto must be in writing. All notices, demands and requests shall be deemed to have been properly given or served when deposited in the United States mail, addressed to the individual or entity to whom notice is given, postage prepaid and registered or certified with return receipt requested, at the last known address of such individual or entity. (b) By giving at least fifteen (15) days prior written notice, the Company, a Subsidiary Corporation and the Optionee shall have the right from time to time to change their addresses and to specify any other address within the United States of America. 6.02 TITLES AND CAPTIONS. All Article and Section titles and captions in this Option Agreement are for convenience or reference only, and shall not be deemed part of this Option Agreement, and in no way define, limit, extend or describe the scope or intent of any provisions hereof. 6.03 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 6.04 APPLICABLE LAW. This Option Agreement shall be construed in accordance with and shall be governed by the laws of the State of Nevada. 6.05 BINDING EFFECT. This Option Agreement shall be binding upon the Optionee and upon the Optionee's heirs, executors, administrators, successors, legal representatives and assigns. 6.06 CREDITORS. None of the provisions of this Option Agreement shall be for the benefit of or shall be enforceable by any creditor of the Optionee. 6.07 SEVERABILITY. In the event that any condition, covenant or other provision herein contained is held to be invalid or void by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this Option Agreement and shall in no way affect any other covenant or condition herein contained. If such condition, covenant or other provision shall be deemed invalid due to its scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. 6.08 PLAN CONTROLS. This Option Agreement is subject to the terms and provisions of the Plan, and in the event of an inconsistency herewith, the terms of the plan shall control. 8 IN WITNESS WHEREOF, the Company and the Optionee have executed this Option Agreement as of the date first set forth above. "Company" AMERICAN PACIFIC CORPORATION, a Delaware corporation By /s/ John R. Gibson ------------------------------------ John R. Gibson President Attest: /s/ C. Keith Rooker - ---------------------------- C. Keith Rooker Secretary "Optionee" /s/ John R. Gibson ------------------------------------ John R. Gibson Address: 7409 Doe Avenue Las Vegas, NV 89117 9 EX-4.5 6 FORM OF STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT This Stock Option Agreement is made and entered into effective as of the 21/st/ day of May, 1997, by and between American Pacific Corporation, a Delaware corporation (the "Company"), and (INSERT NAME & ADDRESS OF DIRECTOR) (the "Optionee"). RECITALS: A. The Optionee is serving as a Director of the Company. The Company desires to encourage the ownership of its Common Stock by the Optionee, and to provide an incentive for the Optionee to assist in expanding and improving the growth, profitability and general prosperity of the Company and of its Subsidiary Corporations, and to stimulate the efforts of the Optionee by giving suitable recognition, in the form of compensation, to his abilities and industry, which contribute materially to the growth and profitability of the Company and of its Subsidiary Corporations. B. The Company has decided to grant to the Optionee the option to purchase shares of the Common Stock of the Company. C. The Company and the Optionee now desire to set forth the terms and conditions upon which the Optionee shall have the Option to purchase shares of the Common Stock of the Company, and certain terms and conditions that will govern the issuance, holding and exercise of such Options. PROVISIONS: NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties to this Option Agreement agree as follows: ARTICLE I DEFINITIONS As used in this Option Agreement, the following terms shall have the indicated meanings: 1.01 BOARD OF DIRECTORS. The term Board of Directors shall mean the Board of Directors of the Company. 1.02 COMMITTEE shall mean the Stock Option Committee of the Board of Directors of the Company referred to in Article II of this Option Agreement. 1.03 COMMON STOCK shall mean the common stock of the Company, par value ten cents ($0.10) per share. 1.04 COMPANY shall mean American Pacific Corporation, a Delaware corporation. 1.05 DISABILITY shall mean a physical or mental condition that, based upon medical reports and other evidence satisfactory to the Committee, presumably permanently prevents the Optionee from satisfactorily performing his usual duties for the Company. 1.06 EXERCISE PRICE shall mean the price for which an Option granted hereunder may be exercised, as provided in Section 3.02 of this Option Agreement. 1.07 OPTION shall mean the right to purchase shares of the Common Stock of the Company, granted pursuant to the provisions of this Option Agreement. 1.08 OPTION AGREEMENT or AGREEMENT shall mean this Stock Option Agreement. 1.09 OPTIONEE shall mean the Optionee identified above, to whom this Option has been granted, upon the terms and conditions set forth in this Option Agreement. 1.10 SUBSIDIARY CORPORATIONS shall mean and include all corporations that join with the Company in, or would be eligible to join with the Company in, if timely and proper elections were made, the filing of a consolidated federal income tax return, under the applicable provisions of the Internal Revenue Code in effect from time to time. 1.11 VALUE of a share of the Common Stock of the Company shall mean the closing price of a share of the Company's Common Stock, as reported on the National Market System of the National Association of Securities Dealers, Inc. If a reported closing price is not available for the date on which the Common Stock is sought to be valued, the reported closing price for the next preceding business day shall be used. If reported closing prices are not available for either such date, the Value of a share of the Company's Common Stock shall be the arithmetic mean of the bid and asked prices of the Company's Common Stock, as published by the National Association of Securities Dealers, Inc., as of the date on which the Company's Common Stock is sought to be valued, or if quoted prices are not available as of such day, then the bid and asked prices as of the next preceding business day shall be used. If the Value cannot be determined under the preceding rules of this Section 1.11, the Value shall be the fair market value of the Company's Common Stock, determined under the method selected by the Committee. Unless modified by the Board of Directors, the Committee's good-faith determination of the Value of a share of the Company's Common Stock shall be conclusive, and shall be valid and binding upon all persons having any interest in any Option granted hereunder. ARTICLE II ADMINISTRATION 2.01 COMMITTEE. Subject to the terms of the Plan, the Option granted pursuant to this Option Agreement shall be administered by the Stock Option Committee of the Board of Directors of the Company. If for any reason a Committee is not acting, the Board of Directors shall act as the Committee. All determinations, decisions, interpretations and other action made or taken with respect to the Option granted hereunder by the Committee shall be final and binding upon all persons having any interest in any Option granted pursuant hereto, unless otherwise determined by the Board of Directors. The Board of Directors shall have the power by appropriate action to reverse or modify any action taken by the Committee. 2.02 COMMITTEE TO CONSTRUE AGREEMENT. The Committee shall administer the Option granted pursuant hereto, and shall have all powers necessary for that purpose, including but not limited to the power to interpret this Agreement and the power to determine the rights hereunder of all persons. The Committee shall maintain the records of the Company that relate to the Option granted pursuant hereto, and shall have the power to adjust its records as necessary to correct errors and rectify omissions, in the manner that the Committee believes will best result in the equitable administration of the Option granted pursuant hereto. 2.03 ORGANIZATION OF COMMITTEE. The Chairman of the Committee shall be the Chairman of the Board of Directors. The Committee may adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Option. The Committee may appoint agents, who need not be members of the Committee, to whom it may delegate such powers as it deems appropriate. The action of a majority of the members of the Committee shall be the action of the Committee. 2 2.04 INDEMNIFICATION OF COMMITTEE MEMBERS. The Company shall defend, indemnify and hold harmless each member of the Committee against any and all claims, loss, damages, expense and liability arising from any actual or alleged action or failure to act in connection with the administration of the Option granted pursuant hereto, except when the same is judicially determined to be due to the gross negligence or willful misconduct of such Committee member. ARTICLE III TERMS AND CONDITIONS 3.01 NUMBER OF SHARES SUBJECT TO OPTION. The Company hereby grants to the Optionee, upon the terms and conditions set forth in this Option Agreement, the option to purchase Fifteen Thousand (15,000) shares of the Common Stock of the Company. 3.02 EXERCISE PRICE. The price for which each Option hereby granted to the Optionee may be exercised shall be $7.00 per share of the Common Stock of the Company, which amount represents the Value of a share of the Common Stock on the date of this Option Agreement. 3.03 TIME FOR EXERCISE. The Option hereby granted to the Optionee shall be exercisable at the following times: With respect to (INSERT NUMBER OF SHARES) (####) shares of common stock, the Option shall be exercisable on or after the date of this Option Agreement; With respect to the remaining (INSERT NUMBER OF SHARES) (####) shares of common stock, the Option shall be exercisable on or after one year after the date of this Option Agreement. The Option granted hereunder shall be exercisable for a period of five years after such Option first becomes exercisable in accordance with the foregoing provisions of this Section 3.03, unless the period of exercise is sooner terminated in accordance with the provisions of this Option Agreement. The Optionee shall have no right whatsoever to exercise the Option except during the times provided above. 3.04 RESTRICTIONS ON TRANSFERS AND ENCUMBRANCE. During the lifetime of the Optionee, the Option granted hereunder may not be sold, pledged, assigned, hypothecated, encumbered or transferred in any manner, either voluntarily or involuntarily, by operation of law or otherwise, except to family members or trusts for such family members, affiliates of the Optionee or by will or by applicable laws of descent and distribution, and may be exercised during an Optionee's lifetime only by the Optionee, a permitted transferee or by the Optionee's legal representative. Any Option that has not expired as of the date of the Optionee's death may be exercised after the Optionee's death only by the person or persons to whom the Optionee's interest in the Option have passed by will, by the terms of a family trust agreement or other like instrument or by applicable laws of descent and distribution. 3.05 EXERCISE AFTER DEATH OR DISABILITY. In the event that the Optionee dies or becomes Disabled while in, or within ninety days after ceasing to be a Director of the Company, the Optionee shall be treated for all purposes of this Agreement as continuing in the service of the Company throughout the period ending on the date as of which the last Option granted to the Optionee hereunder would have expired under the provisions of this Article III but for the Optionee's death or Disability. 3.06 EXERCISE SUBJECT TO SERVICE. The Optionee may exercise the Option granted hereunder only if the Optionee has remained continuously in the service of the Company or as a Director since the date on which the Option sought to be exercised was granted to such Optionee, through a date that is not more than two years prior to the date on which the Option is sought to be exercised. The provisions of this Section shall not prevent the individual or entity to whom an Option has passed by will or by applicable laws of descent and distribution after the death of an 3 Optionee from exercising the Option within the period of time during which the Option is otherwise exercisable under the provisions of this Option Agreement, if the Option was exercisable under all provisions of this Agreement (including the provisions of this Section 3.06) by the Optionee as of the date of the Optionee's death. ARTICLE IV PROCEDURE FOR EXERCISE 4.01 TIME FOR EXERCISE. Subject to the provisions of this Article IV, the Option granted hereunder shall be exercisable only during the times provided in this Option Agreement. 4.02 EXERCISE UPON CORPORATE CAPITAL TRANSACTION. In the event that the Company, its shareholders, or both, enter into a written agreement to dispose of all or substantially all of the assets or Common Stock of the Company by means of a sale, merger, consolidation, reorganization, liquidation or similar transaction (other than a reorganization, merger or consolidation effected solely to change the Company's name or state of incorporation), the Option issued pursuant to this Option Agreement shall become immediately exercisable, whether or not such Option was exercisable prior to such event, during the period of time beginning with the date on which the Company agrees in writing to enter into such transaction, and ending on the earlier of the date the Option would otherwise have expired or the date on which the transaction is consummated. Upon the consummation of the transaction, any unexercised portion of the Option issued hereunder shall terminate and cease to be effective. In the event that the agreement to enter into any such transaction is terminated, all unexercised portions of the Option shall revert to the status they had before the Company agreed to enter into the transaction in question. Any exercise of Option made before the agreement to enter into the transaction was terminated shall remain effective after the termination of the agreement, notwithstanding that the Option may have become exercisable solely by reason of the Company entering into the agreement. 4.03 WITHHOLDING OF TAXES. The Optionee hereby agrees that the Company may, if it elects to do so, withhold federal, state and other taxes attributable to taxable income realized by the Optionee upon the exercise of Option from any compensation or other payment payable to such Optionee by the Company. 4.04 EXERCISE. Subject to all other terms and provisions of this Option Agreement, the Option granted hereunder shall be deemed to be exercised when written notice of exercise has been given to the Company by the Optionee or other person entitled to exercise the Option and full payment in cash or cash equivalents for the shares of Common Stock with respect to which the Option is exercised has been received by the Company. In lieu of cash, the purchase price may be satisfied by the delivery of common stock of the Company (in proper form for transfer and accompanied by all requisite stock transfer stamps or cash in lieu thereof) owned by the Optionee for at least six months prior to such delivery and having a fair market value equal to the exercise price applicable to that portion of the Option being exercised. The fair market value of the common stock so delivered shall be the value of such common stock determined in accordance with Section 1.11 hereof on the date of delivery. Until certificates have been issued for the number of Shares represented by the exercise of the Option, the Optionee shall have no right to vote, to receive dividends, or other right as a stockholder with respect to shares of Common Stock purchased through the exercise of the Option. Except as provided in Section 5.01 hereof, no adjustments shall be made for dividends or other rights declared or paid with respect to stock acquired through the exercise of the Option for which the record date is prior to the date on which a stock certificate for such shares is issued. 4.05 EXERCISE IN INSTALLMENTS. Subject to Section 3.03, the Optionee may exercise the Option in installments, but only in units of whole shares of the Common Stock of the Company. 4.06 ISSUANCE OF CERTIFICATES. As soon as practicable after the Option has been exercised in accordance with the provisions of this Option Agreement, the Company shall, without transfer or issue tax or other charge to the Optionee, deliver to the Optionee at the principal business office of the Company, or at such other place as may be agreed, certificates representing the number of shares of Common Stock as to which the Option has been exercised. The Company may, however, postpone the time of delivery of certificates for such period of time as the Company may determine to be necessary for it with reasonable diligence to comply with any applicable listing 4 requirements of any national or regional securities exchange, of the National Association of Securities Dealers, Inc., or with any law or regulation applicable to the issuance or delivery of shares of the Company's Common Stock. ARTICLE V RESTRICTIONS AND ADDITIONAL PROVISIONS 5.01 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the number of outstanding shares of the Common Stock of the Company is increased or decreased, or if the Common Stock of the Company underlying the Option granted pursuant to the provisions of this Option Agreement is changed into or exchanged for a different number or kind of shares or securities of the Company through a reorganization, merger, recapitalization, reclassification, stock dividend, stock split or reverse stock split, an appropriate and proportionate adjustment shall be made by the Committee in the terms and conditions of the Options granted pursuant hereto, including the Exercise Price of the Option; provided, however, that no such adjustment need be made if, upon the advice of legal counsel to the Company, the Committee determines that any such adjustment could result in the recognition of federal taxable income by the Optionee, or by holders of Common Stock or other securities of the Company. 5.02 RESERVATION OF SHARES OF COMMON STOCK. The Company shall, at all times during the periods of time during which the Option may be exercised hereunder, reserve and keep available for issuance to the Optionee a number of shares of its Common Stock sufficient to satisfy all obligations of the Company hereunder. 5.03 RESTRICTIONS ON ISSUANCE OF SHARES. The Company shall use its best efforts to seek and to obtain from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of shares of its Common Stock as shall be sufficient to satisfy the obligations of the Company under this Agreement. The inability of the Company to obtain authorization deemed to be necessary by the Company's legal counsel to the lawful issuance and sale of any shares of the Company's Common Stock shall relieve the Company of any liability for the nonissuance or nonsale of any Common Stock as to which the requisite approval or authorization shall not have been obtained. 5.04 REPRESENTATIONS AND WARRANTIES. As a condition to the exercise of the Option granted hereunder, the Committee may require the person exercising the Option to make any representations or warranties to the Company that legal counsel to the Company may determine to be required or advisable under any applicable law or regulation, including without limitation a representation and warranty that the shares of the Company's Common Stock being acquired are being acquired only for investment and without any present intention or view to sell or distribute any such shares. 5.05 OPTIONEE RIGHTS. No provision of this Agreement shall be deemed to constitute a condition of the service or status of any Director. No provision of this Option Agreement shall be deemed to give to the Optionee any right to be retained in the service of the Company or of any Subsidiary Corporation in any capacity (whether as an employee, Director, independent contractor or otherwise), or to interfere in any way with the right of the Company and its Subsidiary Corporations at any time to remove any Director, or to discontinue using the services of any individual. The Optionee shall have no right or interest in any share of the Company's Common Stock prior to exercise of the Option, except as provided in this Option Agreement. 5.06 LEGENDS ON STOCK CERTIFICATES. Unless an appropriate registration statement is on file and effective with appropriate federal, state and local governmental authorities, each certificate representing Common Stock of the Company issued pursuant to the exercise of the Option shall be endorsed on its face with a legend similar to the following: Neither the Option pursuant to which the shares represented by this certificate are issued nor the shares represented hereby have been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or with any state securities agency. The transfer or sale of the shares represented hereby without appropriate registration, or pursuant to an exemption from registration, is unlawful. 5 It is understood however that upon stockholder approval of this Option as contemplated in Section 6.08 hereof, the Company will file a registration statement with the Securities and Exchange Commission registering the common stock issuable pursuant to this Option on Form S-8. ARTICLE VI MISCELLANEOUS PROVISIONS 6.01 NOTICES (a) All notices, demands or requests provided for or permitted to be given pursuant hereto must be in writing. All notices, demands and requests shall be deemed to have been properly given or served when deposited in the United States mail, addressed to the individual or entity to whom notice is given, postage prepaid and registered or certified with return receipt requested, at the last known address of such individual or entity. (b) By giving at least fifteen (15) days prior written notice, the Company, a Subsidiary Corporation and the Optionee shall have the right from time to time to change their addresses and to specify any other address within the United States of America. 6.02 TITLES AND CAPTIONS. All Article and Section titles and captions in this Option Agreement are for convenience or reference only, and shall not be deemed part of this Option Agreement, and in no way define, limit, extend or describe the scope or intent of any provisions hereof. 6.03 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 6.04 APPLICABLE LAW. This Option Agreement shall be construed in accordance with and shall be governed by the laws of the State of Nevada. 6.05 BINDING EFFECT. This Option Agreement shall be binding upon the Optionee and upon the Optionee's heirs, executors, administrators, successors, legal representatives and assigns. 6.06 CREDITORS. None of the provisions of this Option Agreement shall be for the benefit of or shall be enforceable by any creditor of the Optionee. 6.07 SEVERABILITY. In the event that any condition, covenant or other provision herein contained is held to be invalid or void by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this Option Agreement and shall in no way affect any other covenant or condition herein contained. If such condition, covenant or other provision shall be deemed invalid due to its scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. 6.08 STOCKHOLDER APPROVAL. This Option Agreement is subject to approval and ratification by the stockholders of the Company, together with similar Option Agreements granted to non-management Directors on the date hereof. 6 IN WITNESS WHEREOF, the Company and the Optionee have executed this Option Agreement as of the date first set forth above. "Company" AMERICAN PACIFIC CORPORATION, a Delaware corporation By ------------------------------------ Fred D. Gibson, Jr. President Attest: - ------------------------------- C. Keith Rooker Secretary "Optionee" -------------------------------------- -------------------------------------- Address: ----------------------------- ----------------------------- 7 EX-5 7 LETTER TO SEC May 22, 1998 Securities and Exchange Commission 450 Fifth Street, N.W. Judiciary Plaza Washington, D.C. 20549 Re: American Pacific Corporation - Registration Statement On Form S-8 ---------------------------------- Ladies and Gentlemen: Reference is made to the Registration Statement on Form S-8 (the "Registration Statement"), filed on the date hereof with the Securities and Exchange Commission by American Pacific Corporation, a Delaware corporation (the "Company"). The Registration Statement relates to an aggregate of 600,000 shares (the "Shares") of common stock, par value $.10 per share (the "Common Stock"), of the Company to be issued and sold by the Company in accordance with its 1997 Stock Option Plan (the "Plan") and certain option agreements between the Company and executive officers and directors parties thereto (the "Option Agreements"). We advise you that we have examined originals or copies certified or otherwise identified to our satisfaction of the Certificate of Incorporation and By-laws of the Company, each as amended to date, minutes of meetings of the Board of Directors and stockholders of the Company, the Plan, the Option Agreements and such other documents, instruments and certificates of officers and representatives of the Company and public officials, and we have made such examination of law, as we have deemed appropriate as the basis for the opinion hereinafter expressed. In making such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of documents submitted to us as certified or photostatic copies. Securities and Exchange Commission May 22, 1998 Page -2- Based upon the foregoing, we are of the opinion that the Shares, when issued and paid for in accordance with the terms and conditions set forth in the Plan and the Option Agreements, will be duly and validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We advise you that Victor M. Rosenzweig, a member of this firm, is a Director of the Company and holds shares of Common Stock and options to purchase Common Stock of the Company. Very truly yours, /S/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP ------------------------------------------ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP EX-23.1 8 CONSENT INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of American Pacific Corporation on Form S-8 of our report dated November 14, 1997, appearing in the Annual Report on Form 10-K of American Pacific Corporation for the year ended September 30, 1997. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Las Vegas, Nevada May 20, 1998 -----END PRIVACY-ENHANCED MESSAGE-----