As filed with the Securities and Exchange Commission on April
25, 1997.
Registration No.
333-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
FIRST AVIATION SERVICES INC.
(Exact name of registrant as specified in its
charter)
___________________
DELAWARE
06-1419064
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization) Identification
Number)
15 Riverside Avenue
Westport, Connecticut 06880-4214
Telephone: (203) 291-3300
(Address, including zip code, and telephone number,
including
area code, of registrant's principal executive
offices)
FIRST AVIATION SERVICES INC. STOCK INCENTIVE PLAN
(Full title of the plan)
Michael C. Culver
15 Riverside Avenue
Westport, Connecticut 06880-4214
Telephone: (203) 291-3300
(Name, address, including zip code, and telephone
number,
including area code, of agent for service)
___________________
Copy to:
J. Jay Herron, Esq.
George C. Demos, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive
Newport Beach, California 92660
(714) 760-9600
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C>
<C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate
Amount of
securities to be price offering
registration
to be registered registered per unit price
fee
Common Stock, par 400,000<1> $9.25<2>
$3,700,000<2> $1,122<2>
value $0.01 per share shares
<FN>
<1> This Registration Statement covers, in addition to the
number of Shares of Common Stock stated above, options to
purchase or acquire the shares of Common Stock covered by
the Prospectus and, pursuant to Rule 416(c) under the
Securities Act of 1933, as amended, an additional
indeterminate number of shares of Common Stock which by
reason of certain events specified in the Plan may become
subject to the Plan.
<2> Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon average of the high and low prices of
the Common Stock on April 18, 1997, as reported on the
National Association of Securities Dealers Automated
Quotation System National Market System and as published in
the Western Edition of the Wall Street Journal.
The Exhibit Index included in this Registration Statement
is at page S-3.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant information)
will be sent or given to employees as specified by Securities and
Exchange Commission Rule 428(b)(1). Such documents need not be
filed with the Securities and Exchange Commission either as part
of
this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents, which include
the statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof), as
applied to foreign private issuers, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of First Aviation Services
Inc.
(the "Company") filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) The Company's Prospectus dated February 24, 1997,
filed
with the Securities and Exchange Commission pursuant
to
Rule 424(b) under the Securities Act on February 24,
1997 (the "Prospectus"); and
(b) The description of the Company's Common Stock
contained
in its Registration Statement on Form 8-A dated
January
17, 1997, and any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 (if applicable) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which
registers all securities then remaining unsold shall be deemed to
be incorporated by reference into the prospectus and to be a part
hereof from the date of filing of such documents. Any statement
contained herein or in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein,
shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is
or
is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or amended,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Company's Common Stock, par value $0.01 per share
(the "Common Stock"), is registered pursuant to Section 12 of the
Exchange Act, and, therefore, the description of Securities is
omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Section
102(b)(7)
of the Delaware General Corporation Law (the "DGCL") provides
that
a Delaware corporation has the power to eliminate or limit the
personal liability of a director for violations of the director's
fiduciary duty, except (i) for any breach of the director's duty
of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of
the
DGCL (providing for liability of directors for unlawful payment
of
dividends or unlawful stock purchases or redemptions) or (iv) for
any transaction from which a director derived an improper
personal
benefit.
Section 145 of the DGCL empowers a Delaware
corporation
to 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 an action by or in the right of such
corporation ) by reason of the fact that such person is or was an
officer of director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee
or
agent of another corporation, partnership, joint venture, trust
or
other enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection
with
such action, suit or proceeding, provided that 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. A Delaware corporation may
indemnify past or present officers or directors of such
corporation
or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the
corporation to procure a judgment in its favor under the same
conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is
successful on the merits or otherwise in the defense of any
action
referred to above, or in defense of the claim, issue or matter
therein, the corporation must indemnify him against the expenses
(including attorneys' fees) which he actually and reasonably
incurred in connection therewith.
The Company has adopted provisions in its Certificate
of
Incorporation that limit the liability of its directors for
monetary damages arising from a breach of their fiduciary duty as
directors to the fullest extent permitted by the DGCL as it now
exists or may in the future be amended. The Company's Bylaws
provide that indemnification will not extend in the event that
the
person's conduct was intentional or was a knowing and culpable
violation of the law. Moreover, the right to indemnification
conferred by the Company includes the right to be paid by the
Company for any expenses incurred in defending any proceeding in
advance of its final disposition.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index at page S-3.
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;
(ii) To reflect in the
prospectus any
facts or events arising after the effective
date of
the Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in
the Registration Statement; and
(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 (a)(1)(i)
and
(a)(1)(ii) 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 Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration
Statement;
(2) That, for the purpose of determining any
liability under the Securities Act, 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
which 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,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where
applicable,
each filing of an employee benefit plan's annual report pursuant
to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new
registration statement relating to the securities offered
therein,
and the offering of such securities at that time shall be deemed
to
be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described in Item 6 above, 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 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 controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification
by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Stamford, State of Connecticut, on this 24th day of April,
1997.
FIRST AVIATION SERVICES INC.
By: /s/ Michael C. Culver
Michael C. Culver
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Michael C. Culver, his true and lawful attorney-in-fact-
and agent, with full powers of substitution and resubstitution,
for
him and in his name, place and stead, in any and all capacities,
to
sign any and all amendments (including post-effective amendments)
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, granting unto said
attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to
be
done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby
ratifying
and confirming that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Capacity
Date
/s/ Aaron P. Hollander Chairman of the Board of Directors
April 24, 1997
Aaron P. Hollander
/s/ Michael C. Culver Chief Executive Officer and Director
April 24, 1997
Michael C. Culver (Principal Executive Officer)
/s/ John F. Risko Chief Operating Officer and Director
April 24, 1997
John F. Risko
/s/ John A. Marsalisi Chief Financial Officer, Secretary
April 24, 1997
John A. Marsalisi and Director (Principal Financial
and Accounting Officer)
/s/ Joshua S. Friedman Director
April 24, 1997
Joshua S. Friedman
/s/ Robert L. Kirk Director
April 24, 1997
Robert L. Kirk
/s/ Charles Ryan Director
April 24, 1997
Charles Ryan
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4. First Aviation Services Inc.
Stock Incentive Plan.
5. Opinion of O'Melveny & Myers LLP
(opinion of counsel).
23.1 Consent of Ernst & Young LLP, Independent
Accountants.
23.2 Consent of Price Waterhouse LLP, Independent
Accountants.
23.3 Consent of counsel (included in Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
FIRST AVIATION SERVICES INC.
STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
Page
1. THE PLAN . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure. . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . . 3
1.4 Shares Available for Awards; Share Limits. . . . . 3
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . 4
1.6 Award Period . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards. . . 4
1.8 No Transferability; Limited Exception to
Transfer Restrictions. . . . . . . . . . . . . . . 5
2. OPTIONS. . . . . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . . 6
2.3 Limitations on Grant and Terms of Incentive
Stock Options. . . . . . . . . . . . . . . . . . . 7
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . 7
2.5 Options and Rights in Substitution for Stock
Options Granted by Other Corporations. . . . . . . 7
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED
STOCK APPRECIATION RIGHTS) . . . . . . . . . . . . 8
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Exercise of Stock Appreciation Rights. . . . . . . 8
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . 9
3.4 Limited Stock Appreciation Rights. . . . . . . . . 9
4. RESTRICTED STOCK AWARDS. . . . . . . . . . . . . . 10
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Restrictions . . . . . . . . . . . . . . . . . . . 10
4.3 Return to the Corporation. . . . . . . . . . . . . 11
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES . . . . 11
5.1 Grants of Performance Share Awards . . . . . . . . 11
5.2 Special Performance-Based Share Awards . . . . . . 11
5.3 Grants of Stock Bonuses. . . . . . . . . . . . . . 13
5.4 Deferred Payments. . . . . . . . . . . . . . . . . 14
6. OTHER PROVISIONS . . . . . . . . . . . . . . . . . 14
6.1 Rights of Eligible Persons, Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . . 14
6.2 Adjustments; Acceleration. . . . . . . . . . . . . 15
6.3 Effect of Termination of Employment. . . . . . . . 16
6.4 Compliance with Laws . . . . . . . . . . . . . . . 17
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . 18
6.6 Plan Amendment, Termination and Suspension . . . . 18
6.7 Privileges of Stock Ownership. . . . . . . . . . . 19
6.8 Effective Date of the Plan . . . . . . . . . . . . 19
6.9 Term of the Plan . . . . . . . . . . . . . . . . . 19
6.10 Governing Law/Construction/Severability. . . . . . 19
6.11 Captions . . . . . . . . . . . . . . . . . . . . . 20
6.12 Effect of Change of Subsidiary Status. . . . . . . 20
6.13 Non-Exclusivity of Plan. . . . . . . . . . . . . . 20
7. DEFINITIONS. . . . . . . . . . . . . . . . . . . . 21
7.1 Definitions. . . . . . . . . . . . . . . . . . . . 21
<PAGE>
FIRST AVIATION SERVICES INC.
STOCK INCENTIVE PLAN
1. THE PLAN
1.1 Purpose
The purpose of this Plan is to promote the success
of the Company by providing an additional means through the
grant of Awards to attract, motivate, retain and reward key
employees, including officers, whether or not directors, of
the Company with awards and incentives for high levels of
individual performance and improved financial performance of
the Company and to attract, motivate and retain experienced
and knowledgeable independent directors. "Corporation"
means First Aviation Services Inc., a Delaware corporation,
and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are
defined in Article 7.
1.2 Administration and Authorization; Power and
Procedure.
(a) Committee. This Plan shall be administered by
and all Awards to Eligible Persons shall be authorized by
the Committee. Action of the Committee with respect to the
administration of this Plan shall be taken pursuant to a
majority vote or by written consent of its members.
(b) Plan Awards; Interpretation; Powers of
Committee. Subject to the express provisions of this Plan,
the Committee shall have the authority:
(i) to determine from among those persons
eligible the particular Eligible Persons who will
receive any Awards;
(ii) to grant Awards to Eligible Persons,
determine the price at which securities will be offered
or awarded and the amount of securities to be offered
or awarded to any of such persons, and determine the
other specific terms and conditions of such Awards
consistent with the express limits of this Plan, and
establish the installments (if any) in which such
Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is
required, and establish the events of termination or
reversion of such Awards;
(iii)to approve the forms of Award Agreements
(which need not be identical either as to type of award
or among Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the
Company and Participants under this Plan, further
define the terms used in this Plan, and prescribe,
amend and rescind rules and regulations relating to the
administration of this Plan;
(v) to cancel, modify, or waive the Corporation's
rights with respect to, or modify, discontinue,
suspend, or terminate any or all outstanding Awards
held by Eligible Persons, subject to any required
consent under Section 6.6;
(vi) to accelerate or extend the exercisability or
extend the term of any or all such outstanding Awards
within the maximum ten-year term of Awards under
Section 1.6; and
(vii)to make all other determinations and take
such other action as contemplated by this Plan or as
may be necessary or advisable for the administration of
this Plan and the effectuation of its purposes.
Notwithstanding the foregoing, the provisions of Article 8
relating to Non-Employee Director Awards shall be automatic
and, to the maximum extent possible, self-effectuating.
(c) Binding Determinations. Any action taken by,
or inaction of, the Corporation, any Subsidiary, the Board
or the Committee relating or pursuant to this Plan shall be
within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member
of the Board or Committee, or officer of the Corporation or
any Subsidiary, shall be liable for any such action or
inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself.
Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this
Plan.
(d) Reliance on Experts. In making any
determination or in taking or not taking any action under
this Plan, the Committee or the Board, as the case may be,
may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No
director, officer or agent of the Company shall be liable
for any such action or determination taken or made or
omitted in good faith.
(e) Delegation. The Committee may delegate
ministerial, non-discretionary functions to individuals who
are officers or employees of the Company.
1.3 Participation.
Awards may be granted by the Committee only to
those persons that the Committee determines to be Eligible
Persons. An Eligible Person who has been granted an Award
may, if otherwise eligible, be granted additional Awards if
the Committee shall so determine.
1.4 Shares Available for Awards; Share Limits.
(a) Shares Available. Subject to the provisions
of Section 6.2, the capital stock that may be delivered
under this Plan shall be shares of the Corporation's
authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.
(b) Share Limits. The maximum number of shares
of Common Stock that may be delivered pursuant to Awards
(including Incentive Stock Options) granted to Eligible
Persons under this Plan shall not exceed 400,000 shares (the
"Share Limit"). The maximum number of shares of Common
Stock that may be delivered pursuant to options qualified as
Incentive Stock Options granted under this Plan is 400,000
shares. The maximum number of shares subject to those
Options and Stock Appreciation Rights that are granted
during any calendar year to any individual shall be limited
to 150,000 and the maximum individual limit on the number of
shares in the aggregate subject to all Awards that during
any calendar year are granted under this Plan shall be
150,000. Each of the four foregoing numerical limits shall
be subject to adjustment as contemplated by this Section 1.4
and Section 6.2.
(c) Share Reservation; Replenishment and Reissue
of Unvested Awards. No Award may be granted under this Plan
unless, on the date of grant, the sum of (i) the maximum
number of shares issuable at any time pursuant to such
Award, plus (ii) the number of shares that have previously
been issued pursuant to Awards granted under this Plan,
other than reacquired shares available for reissue
consistent with any applicable legal limitations, plus (iii)
the maximum number of shares that may be issued at any time
after such date of grant pursuant to Awards that are
outstanding on such date, does not exceed the Share Limit.
Shares that are subject to or underlie Awards which expire
or for any reason are cancelled or terminated, are
forfeited, fail to vest, or for any other reason are not
paid or delivered under this Plan, as well as reacquired
shares, shall again, except to the extent prohibited by law,
be available for subsequent Awards under the Plan. Except
as limited by law, if an Award is or may be settled only in
cash, such Award need not be counted against any of the
limits under this Section 1.4.
1.5 Grant of Awards.
Subject to the express provisions of this Plan,
the Committee shall determine the number of shares of Common
Stock subject to each Award, the price (if any) to be paid
for the shares or the Award and, in the case of Performance
Share Awards, in addition to matters addressed in Section
1.2(b), the specific objectives, goals and performance
criteria (such as an increase in sales, market value,
earnings or book value over a base period, the years of
service before vesting, the relevant job classification or
level of responsibility or other factors) that further
define the terms of the Performance Share Award. Each Award
shall be evidenced by an Award Agreement signed by the
Corporation and, if required by the Committee, by the
Participant.
1.6 Award Period.
Each Award and all executory rights or obligations
under the related Award Agreement shall expire on such date
(if any) as shall be determined by the Committee, but in the
case of Options or other rights to acquire Common Stock not
later than ten (10) years after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Unless the
Committee otherwise expressly provides, no Award shall be
exercisable or shall vest until at least six months after
the initial Award Date, and once exercisable an Award shall
remain exercisable until the expiration or earlier
termination of the Award.
(b) Procedure. Any exercisable Award shall be
deemed to be exercised when the Secretary of the Corporation
receives written notice of such exercise from the
Participant, together with any required payment made in
accordance with Section 2.2(a).
(c) Fractional Shares/Minimum Issue. Fractional
share interests shall be disregarded, but may be
accumulated. The Committee, however, may determine in the
case of Eligible Persons that cash, other securities, or
other property will be paid or transferred in lieu of any
fractional share interests. No fewer than [100] shares may
be purchased on exercise of any Award at one time unless the
number purchased is the total number at the time available
for purchase under the Award.
1.8 No Transferability; Limited Exception to
Transfer Restrictions.
(a) Limit On Exercise and Transfer. Unless
otherwise expressly provided in (or pursuant to) this
Section 1.8, by applicable law and by the Award Agreement,
as the same may be amended, (i) all Awards are non-
transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; Awards shall be exercised only by the
Participant; and (ii) amounts payable or shares issuable
pursuant to an Award shall be delivered only to (or for the
account of) the Participant.
(b) Exceptions. The Committee may permit
Awards to be exercised by and paid only to certain persons
or entities related to the Participant, including but not
limited to members of the Participant's immediate family,
charitable institutions, or trusts or other entities whose
beneficiaries or beneficial owners are members of the
Participant's immediate family and/or charitable
institutions, or to such other persons or entities as may be
approved by the Committee, pursuant to such conditions and
procedures as the Committee may establish. Any permitted
transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without
consideration (other than nominal consideration).
Notwithstanding the foregoing, Incentive Stock Options and
Restricted Stock Awards shall be subject to any and all
additional transfer restrictions under the Code.
(c) Further Exceptions to Limits On
Transfer. The exercise and transfer restrictions in Section
1.8(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive
benefits in the event of the Participant's
death or, if the Participant has died,
transfers to or exercise by the Participant's
beneficiary, or, in the absence of a validly
designated beneficiary, transfers by will or
the laws of descent and distribution,
(iii) transfers pursuant to a QDRO order if
approved or ratified by the Committee,
(iv) if the Participant has suffered a disability,
permitted transfers or exercises on behalf of
the Participant by his or her legal
representative, or
(v) the authorization by the Committee of
"cashless exercise" procedures with third
parties who provide financing for the purpose
of (or who otherwise facilitate) the exercise
of Awards consistent with applicable laws and
the express authorization of the Committee.
Notwithstanding the foregoing, Incentive Stock Options and
Restricted Stock Awards shall be subject to any and all
additional transfer restrictions under the Code.
2. OPTIONS.
2.1 Grants.
One or more Options may be granted under this
Article to any Eligible Person. Each Option granted shall
be designated in the applicable Award Agreement, by the
Committee as either an Incentive Stock Option, subject to
Section 2.3, or a Non-Qualified Stock Option; provided,
however, that Incentive Stock Options may only be granted to
Eligible Persons who are employees of the Company.
2.2 Option Price.
(a) Pricing Limits. The purchase price per share
of the Common Stock covered by each Option shall be
determined by the Committee at the time of the Award, but in
the case of Incentive Stock Options shall not be less than
100% (110% in the case of a Participant described in Section
2.4) of the Fair Market Value of the Common Stock on the
date of grant.
(b) Payment Provisions. The purchase price of any
shares purchased on exercise of an Option granted under this
Article shall be paid in full at the time of each purchase
in one or a combination of the following methods: (i) in
cash or by electronic funds transfer; (ii) by check payable
to the order of the Corporation; (iii) if authorized by the
Committee or specified in the applicable Award Agreement, by
a promissory note of the Participant consistent with the
requirements of Section 1.8; (iv) by notice and third party
payment in such manner as may be authorized by the
Committee; or (v) by the delivery of shares of Common Stock
of the Corporation already owned by the Participant,
provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an
Award by delivering such shares, and provided further that
any shares delivered which were initially acquired upon
exercise of a stock option must have been owned by the
Participant at least six months as of the date of delivery.
Shares of Common Stock used to satisfy the exercise price of
an Option shall be valued at their Fair Market Value on the
date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock
Options.
(a) $100,000 Limit. To the extent that the
aggregate "Fair Market Value" of stock with respect to which
incentive stock options first become exercisable by a
Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock
Options under this Plan and stock subject to incentive stock
options under all other plans of the Company [or any parent
corporation], such options shall be treated as Nonqualified
Stock Options. For this purpose, the "Fair Market Value" of
the stock subject to options shall be determined as of the
date the options were awarded. In reducing the number of
options treated as incentive stock options to meet the
$100,000 limit, the most recently granted options shall be
reduced first. To the extent a reduction of simultaneously
granted options is necessary to meet the $100,000 limit, the
Committee may, in the manner and to the extent permitted by
law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
(b) Option Period. Each Option and all rights
thereunder shall expire no later than 10 years after the
Award Date.
(c) Other Code Limits. Incentive Stock Options
may only be granted to Eligible Employees of the Corporation
or a Subsidiary that satisfies the other eligibility
requirements of the Code. There shall be imposed in any
Award Agreement relating to Incentive Stock Options such
other terms and conditions as from time to time are required
in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any
person who, at the time the Option is granted, owns (or is
deemed to own under Section 424(d) of the Code) shares of
outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such Option is at
least 110% of the Fair Market Value of the stock subject to
the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option
is granted.
2.5 Options and Rights in Substitution for Stock
Options Granted by Other Corporations. Options and Stock
Appreciation Rights may be granted to Eligible Persons under
this Plan in substitution for employee stock options granted
by other entities to persons who are or who will become
Eligible Persons in respect of the Company, in connection
with a distribution, merger or reorganization by or with the
granting entity or an affiliated entity, or the acquisition
by the Company, directly or indirectly, of all or a
substantial part of the stock or assets of the other entity.
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK
APPRECIATION RIGHTS).
3.1 Grants.
In its discretion, the Committee may grant Stock
Appreciation Rights to any Eligible Person either
concurrently with the grant of another Award or in respect
of an outstanding Award, in whole or in part, or
independently of any other Award. Any Stock Appreciation
Right granted in connection with an Incentive Stock Option
shall contain such terms as may be required to comply with
the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder
otherwise agrees.
3.2 Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement
or the Committee otherwise provides, a Stock Appreciation
Right related to another Award shall be exercisable at such
time or times, and to the extent, that the related Award
shall be exercisable.
(b) Effect on Available Shares. To the extent
that a Stock Appreciation Right is exercised, the number of
underlying shares of Common Stock theretofore subject to a
related Award shall be charged against the maximum amount of
Common Stock that may be delivered pursuant to Awards under
this Plan. The number of shares subject to the Stock
Appreciation Right and the related Option of the Participant
shall, however, be reduced by the number of underlying
shares as to which the exercise related, unless the Award
Agreement otherwise provides.
(c) Stand-Alone SARs. A Stock Appreciation Right
granted independently of any other Award shall be
exercisable pursuant to the terms of the Award Agreement.
3.3 Payment.
(a) Amount. Unless the Committee otherwise
provides, upon exercise of a Stock Appreciation Right and
the attendant surrender of an exercisable portion of any
related Award, the Participant shall be entitled to receive
payment of an amount determined by multiplying
(i) the difference obtained by subtracting
the exercise price per share of Common Stock under the
related Award (if applicable) or the initial share
value specified in the Award from the Fair Market Value
of a share of Common Stock on the date of exercise of
the Stock Appreciation Right, by
(ii) the number of shares with respect to
which the Stock Appreciation Right shall have been
exercised.
(b) Form of Payment. The Committee, in its sole
discretion, shall determine the form in which payment shall
be made of the amount determined under paragraph (a) above,
either solely in cash, solely in shares of Common Stock
(valued at Fair Market Value on the date of exercise of the
Stock Appreciation Right), or partly in such shares and
partly in cash, provided that the Committee shall have
determined that such exercise and payment are consistent
with applicable law. If the Committee permits the
Participant to elect to receive cash or shares (or a
combination thereof) on such exercise, any such election
shall be subject to such conditions as the Committee may
impose.
3.4 Limited Stock Appreciation Rights.
The Committee may grant to any Eligible Person
Stock Appreciation Rights exercisable only upon or in
respect of a change in control or any other specified event
("Limited SARs") and such Limited SARs may relate to or
operate in tandem or combination with or substitution for
Options, other Stock Appreciation Rights or other Awards (or
any combination thereof), and may be payable in cash or
shares based on the spread between the base price of the
Stock Appreciation Right and a price based upon the Fair
Market Value of the Shares during a specified period or at a
specified time within a specified period before, after or
including the date of such event.
4. RESTRICTED STOCK AWARDS.
4.1 Grants.
The Committee may, in its discretion, grant one or
more Restricted Stock Awards to any Eligible Person. Each
Restricted Stock Award Agreement shall specify the number of
shares of Common Stock to be issued to the Participant, the
date of such issuance, the consideration for such shares
(but not less than the minimum lawful consideration under
applicable state law) by the Participant, the extent (if
any) to which and the time (if ever) at which the
Participant shall be entitled to dividends, voting and other
rights in respect of the shares prior to vesting, and the
restrictions (which may be based on performance criteria,
passage of time or other factors or any combination thereof)
imposed on such shares and the conditions of release or
lapse of such restrictions. Stock certificates evidencing
shares of Restricted Stock pending the lapse of the
restrictions ("Restricted Shares") shall bear a legend
making appropriate reference to the restrictions imposed
hereunder and shall be held by the Corporation or by a third
party designated by the Committee until the restrictions on
such shares shall have lapsed and the shares shall have
vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of the Restricted Stock Award,
the Participant may be required to provide such further
assurance and documents as the Committee may require to
enforce the restrictions.
4.2 Restrictions.
(a) Pre-Vesting Restraints. Except as provided
in Section 4.1 and 1.8, restricted shares comprising any
Restricted Stock Award may not be sold, assigned,
transferred, pledged or otherwise disposed of or encumbered,
either voluntarily or involuntarily, until the restrictions
on such shares have lapsed and the shares have become
vested.
(b) Dividend and Voting Rights. Unless otherwise
provided in the applicable Award Agreement, a Participant
receiving a Restricted Stock Award shall be entitled to cash
dividend and voting rights for all shares issued even though
they are not vested, provided that such rights shall
terminate immediately as to any Restricted Shares which
cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have
paid or received cash (including any dividends) in
connection with the Restricted Stock Award, the Award
Agreement shall specify whether and to what extent such cash
shall be returned (with or without an earnings factor) as to
any restricted shares which cease to be eligible for
vesting.
4.3 Return to the Corporation.
Unless the Committee otherwise expressly provides,
Restricted Shares that remain subject to restrictions at the
time of termination of employment or are subject to other
conditions to vesting that have not been satisfied by the
time specified in the applicable Award Agreement shall not
vest and shall be returned to the Corporation in such manner
and on such terms as the Committee shall therein provide.
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant
Performance Share Awards to Eligible Persons based upon such
factors as the Committee shall deem relevant in light of the
specific type and terms of the award. An Award Agreement
shall specify the maximum number of shares of Common Stock
(if any) subject to the Performance Share Award, the
consideration (but not less than the minimum lawful
consideration) to be paid for any such shares as may be
issuable to the Participant, the duration of the Award and
the conditions upon which delivery of any shares or cash to
the Participant shall be based. The amount of cash or
shares or other property that may be deliverable pursuant to
such Award shall be based upon the degree of attainment over
a specified period of not more than 10 years (a "performance
cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial
credit, prior to completion of such performance cycle or the
attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement,
or Total Disability, a Change in Control Event or in such
other circumstances as the Committee.
5.2 Special Performance-Based Share Awards.
Without limiting the generality of the foregoing,
and in addition to Options and Stock Appreciation Rights
granted under other provisions of this Plan which are
intended to satisfy the exception for "performance-based
compensation" under Section 162(m) of the Code (with such
Awards hereinafter referred to as a "Qualifying Option" or a
"Qualifying Stock Appreciation Right," respectively), other
performance-based awards within the meaning of
Section 162(m) of the Code ("Performance-Based Awards"),
whether in the form of restricted stock, performance stock,
phantom stock or other rights, the grant, vesting,
exercisability or payment of which depends on the degree of
achievement of the Performance Goals relative to
preestablished targeted levels for the Corporation or the
Corporation and one or more of its Subsidiaries, may be
granted under this Plan. Any Qualifying Option or
Qualifying Stock Appreciation Right shall be subject only to
the requirements of subsections (a) and (c) below in order
for such Awards to satisfy the requirements for Performance-
Based Awards under this Section 5.2. With the exception of
any Qualifying Option or Qualifying Stock Appreciation
Right, an Award that is intended to satisfy the requirements
of this Section 5.2 shall be designated as a Performance-
Based Award at the time of grant.
(a) Eligible Class. The eligible class of
persons for Performance-Based Awards under this Section
shall be the executive officers of the Corporation.
(b) Performance Goal Alternatives. The specific
performance goals for Performance-Based Awards granted under
this Section (other than Qualifying Options and Qualifying
Stock Appreciation Rights) shall be, on an absolute or
relative basis, one or more of the Performance Goals, as
selected by the Committee in its sole discretion. The
Committee shall establish in the applicable Award Agreement
the specific performance target(s) relative to the
Performance Goal(s) which must be attained before the
compensation under the Performance-Based Award becomes
payable. The specific targets shall be determined within
the time period permitted under Section 162(m) of the Code
(and any regulations issued thereunder) so that such targets
are considered to be preestablished and so that the
attainment of such targets is substantially uncertain at the
time of their establishment. The applicable performance
measurement period may not be less than one nor more than 10
years.
(c) Maximum Performance-Based Award.
Notwithstanding any other provision of the Plan to the
contrary, the maximum number of shares of Common Stock which
may be delivered pursuant to options, stock appreciation
rights, restricted stock or other share-based awards that
are granted as Performance-Based Awards to any Participant
in any calendar year shall not exceed 150,000 shares, either
individually or in the aggregate, subject to adjustment as
provided in Section 6.2. Awards that are cancelled during
the year shall be counted against this limit to the extent
required by Section 162(m) of the Code. In addition, the
aggregate amount of compensation to be paid to any
Participant in respect of any Cash-Based Awards that are
granted during any calendar year as Performance-Based Awards
shall not exceed $150,000.
(d) Committee Certification. Before any
Performance-Based Award under this Section 5.2 (other than
Qualifying Options or Qualifying Stock Appreciation Rights)
is paid, the Committee must certify in writing that the
Performance Goal(s) and any other material terms of the
Performance-Based Award were satisfied; provided, however,
that a Performance-Based Award may be paid without regard to
the satisfaction of the applicable Performance Goal in the
event of a Change in Control Event in accordance with
Section 6.2(d).
(e) Terms and Conditions of Awards. The
Committee will have the discretion to determine the
restrictions or other limitations of the individual Awards
granted under this Section 5.2 including the authority to
reduce Awards, payouts or vesting or to pay no Awards, in
its sole discretion, if the Committee preserves such
authority at the time of grant by language to this effect in
its authorizing resolutions or otherwise.
(f) Adjustments for Changes in Capitalization and
other Material Changes. In the event of a change in
corporate capitalization, such as a stock split or stock
dividend, or a corporate transaction, such as a merger,
consolidation, spinoff, reorganization or similar event, or
any partial or complete liquidation of the Corporation, or
any similar event consistent with regulations issued under
Section 162(m) of the Code including, without limitation,
any material change in accounting policies or practices
affecting the Corporation and/or the Performance Goals or
targets, then the Committee may make adjustments to the
Performance Goals and targets relating to outstanding
Performance-Based Awards to the extent such adjustments are
made to reflect the occurrence of such an event; provided,
however, that adjustments described in this subsection may
be made only to the extent that the occurrence of an event
described herein was unforeseen at the time the targets for
a Performance-Based Award were established by the Committee.
5.3 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any
Eligible Person to reward exceptional or special services,
contributions or achievements in the manner and on such
terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee.
The number of shares so awarded shall be determined by the
Committee. The Award may be granted independently or in
lieu of a cash bonus.
5.4 Deferred Payments.
The Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or
shares that may become due or of cash otherwise payable
under this Plan, and provide for accredited benefits thereon
based upon such deferment, at the election or at the request
of such Participant, subject to the other terms of this
Plan. Such deferral shall be subject to such further
conditions, restrictions or requirements as the Committee
may impose, subject to any then vested rights of
Participants.
6. OTHER PROVISIONS.
6.1 Rights of Eligible Persons, Participants and
Beneficiaries.
(a) Employment Status. Status as an Eligible
Person shall not be construed as a commitment that any Award
will be made under this Plan to an Eligible Person or to
Eligible Persons generally.
(b) No Employment Contract. Nothing contained in
this Plan (or in any other documents related to this Plan or
to any Award) shall confer upon any Eligible Person or other
Participant any right to continue in the employ or other
service of the Company or constitute any contract or
agreement of employment or other service, nor shall
interfere in any way with the right of the Company to change
such person's compensation or other benefits or to terminate
the employment of such person, with or without cause, but
nothing contained in this Plan or any document related
hereto shall adversely affect any independent contractual
right of such person without his or her consent thereto.
(c) Plan Not Funded. Awards payable under this
Plan shall be payable in shares or from the general assets
of the Corporation, and (except as provided in Section 1.4)
no special or separate reserve, fund or deposit shall be
made to assure payment of such Awards. No Participant,
Beneficiary or other person shall have any right, title or
interest in any fund or in any specific asset (including
shares of Common Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder.
Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor
any action taken pursuant to the provisions of this Plan
shall create, or be construed to create, a trust of any kind
or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent
that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder,
such right shall be no greater than the right of any
unsecured general creditor of the Company.
6.2 Adjustments; Acceleration.
(a) Adjustments. If there shall occur any
extraordinary dividend or other extraordinary distribution
in respect of the Common Stock (whether in the form of cash,
Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock
split, reorganization, merger, combination, consolidation,
split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Corporation, or
there shall occur any similar, unusual or extraordinary
corporate transaction or event in respect of the Common
Stock or a sale of substantially all the assets of the
Corporation as an entirety, then the Committee shall, in
such manner and to such extent (if any) as it deems
appropriate and equitable (1) proportionately adjust any or
all of (a) the number and type of shares of Common Stock (or
other securities) which thereafter may be made the subject
of Awards (including the specific maxima and numbers of
shares set forth elsewhere in this Plan), (b) the number,
amount and type of shares of Common Stock (or other
securities or property) subject to any or all outstanding
Awards, (c) the grant, purchase, or exercise price of any or
all outstanding Awards, (d) the securities, cash or other
property deliverable upon exercise of any outstanding
Awards, or (e) the performance standards appropriate to any
outstanding Awards, or (2) in the case of an extraordinary
dividend or other distribution, recapitalization,
reclassification, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin
off, make provision for a cash payment or for the
substitution or exchange of any or all outstanding Awards or
the cash, securities or property deliverable to the holder
of any or all outstanding Awards based upon the distribution
or consideration payable to holders of the Common Stock of
the Corporation upon or in respect of such event; provided,
however, in each case, that with respect to Awards of
Incentive Stock Options, no such adjustment shall be made
which would cause the Plan to violate Section 424(a) of the
Code or any successor provisions thereto without the written
consent of holders materially adversely affected thereby.
In any of such events, the Committee may take such action
sufficiently prior to such event if necessary to permit the
Participant to realize the benefits intended to be conveyed
with respect to the underlying shares in the same manner as
is available to shareholders generally.
(b) Possible Early Termination of Awards. If any
Award or other right to acquire Common Stock has not been
exercised or has not become vested or exercisable prior to
(i) a dissolution of the Corporation or (ii) a
reorganization event described in Section 6.2(a) that the
Corporation does not survive, and no provision has been made
for the substitution, exchange or other settlement of such
Award, such Award shall thereupon terminate.
(c) Possible Early Termination of Accelerated
Awards. If any Option or other right to acquire Common
Stock under this Plan (other than under Article 8) has been
fully accelerated as permitted by Section 6.2(b) but is not
exercised prior to (i) a dissolution of the Corporation, or
(ii) an event described in Section 6.2(a) that the
Corporation does not survive, or (iii) the consummation of
an event described in Section 6.2(a) that results in a
Change of Control approved by the Board, such Option or
right shall thereupon terminate, subject to any provision
that has been expressly made by the Committee for the
survival, substitution, exchange or other settlement of such
Option or right.
6.3 Effect of Termination of Employment.
(a) Options - Resignation or Dismissal. If the
Participant's employment by (or other service specified in
the Award Agreement to) the Company terminates for any
reason (the date of such termination being referred to as
the "Severance Date") other than Retirement, Total
Disability or death, or "for cause" (as determined in the
discretion of the Committee), the Participant shall have,
unless otherwise provided in the Award Agreement and subject
to earlier termination pursuant to or as contemplated by
Section 1.6 or 6.2, three months after the Severance Date to
exercise any Option to the extent it shall have become
exercisable on the Severance Date. In the case of a
termination "for cause", the Option shall terminate on the
Severance Date. In other cases, the Option, to the extent
not exercisable on the Severance Date, shall terminate.
(b) Options - Death or Disability. If the
Participant's employment by (or specified service to) the
Company terminates as a result of Total Disability or death,
the Participant, Participant's Personal Representative or
his or her Beneficiary, as the case may be, shall have,
unless otherwise provided in the Award Agreement and subject
to earlier termination pursuant to or as contemplated by
Section 1.6 or 6.2, until 3 months after the Severance Date
to exercise any Option to the extent it shall have become
exercisable by the Severance Date. Any Option to the extent
not exercisable on the Severance Date shall terminate.
(c) Options - Retirement. If the Participant's
employment by (or specified service to) the Company
terminates as a result of Retirement, the Participant,
Participant's Personal Representative or his or her
Beneficiary, as the case may be, shall have, unless
otherwise provided in the Award Agreement and subject to
earlier termination pursuant to or as contemplated by
Section 1.6 or 6.2, until 3 months after the Severance Date
to exercise any Nonqualified Stock Option (three months
after the Severance Date in the case of an Incentive Stock
Option) to the extent it shall have become exercisable by
the Severance Date. The Option, to the extent not
exercisable on the Severance Date, shall terminate.
(d) Certain SARs. Any SAR granted concurrently
or in tandem with an Option shall have the same post-
termination provisions and exercisability periods as the
Option to which it relates, unless the Committee otherwise
provides.
(e) Other Awards. The Committee shall establish
in respect of each other Award granted hereunder the
Participant's rights and benefits (if any) in the event of a
termination of employment and in so doing may make
distinctions based upon the cause of termination and the
nature of the Award.
(f) Committee Discretion. Notwithstanding the
foregoing provisions of this Section 2.6, in the event of,
or in anticipation of, a termination of employment with the
Company for any reason, other than discharge for cause, the
Committee may, in its discretion, increase the portion of
the Participant's Award available to the Participant, or
Participant's Beneficiary or Personal Representative, as the
case may be, or, subject to the provisions of Section 1.6,
extend the exercisability period upon such terms as the
Committee shall determine and expressly set forth in or by
amendment to the Award Agreement.
6.4 Compliance with Laws.
This Plan, the granting and vesting of Awards
under this Plan and the offer, issuance and delivery of
shares of Common Stock and/or the payment of money under
this Plan or under Awards granted hereunder are subject to
compliance with all applicable federal and state laws, rules
and regulations (including but not limited to state and
federal securities law and federal margin requirements) and
to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall
be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Corporation,
provide such assurances and representations to the
Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal
requirements.
6.5 Tax Withholding.
Upon any exercise, vesting, or payment of any
Award or upon the disposition of shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock
Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall
have the right at its option to (i) require the Participant
(or Personal Representative or Beneficiary, as the case may
be) to pay or provide for payment of the amount of any taxes
which the Company may be required to withhold with respect
to such Award event or payment or (ii) deduct from any
amount payable in cash the amount of any taxes which the
Company may be required to withhold with respect to such
cash payment. In any case where a tax is required to be
withheld in connection with the delivery of shares of Common
Stock under this Plan, the Committee may in its sole
discretion grant (either at the time of the Award or
thereafter) to the Participant the right to elect, pursuant
to such rules and subject to such conditions as the
Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire)
the appropriate number of shares valued at their then Fair
Market Value, to satisfy such withholding obligation.
6.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any
time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No Awards may be
granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding in accordance
with the terms of this Plan.
(b) Shareholder Approval. Any amendment that
would (i) materially increase the benefits accruing to
Participants under this Plan, (ii) materially increase the
aggregate number of securities that may be issued under this
Plan, or (iii) materially modify the requirements as to
eligibility for participation in this Plan, shall be subject
to shareholder approval only to the extent then required by
Section 422 of the Code or applicable law, or deemed
necessary or advisable by the Board.
(c) Amendments to Awards. Without limiting any
other express authority of the Committee under but subject
to the express limits of this Plan, the Committee by
agreement or resolution may waive conditions of or
limitations on Awards to Eligible Persons that the Committee
in the prior exercise of its discretion has imposed, without
the consent of a Participant, and may make other changes to
the terms and conditions of Awards that do not affect in any
manner materially adverse to the Participant, his or her
rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards.
No amendment, suspension or termination of this Plan or
change of or affecting any outstanding Award shall, without
written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits
of the Participant or obligations of the Corporation under
any Award granted under this Plan prior to the effective
date of such change. Changes contemplated by Section 6.2
shall not be deemed to constitute changes or amendments for
purposes of this Section 6.6.
6.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the
Committee or this Plan, a Participant shall not be entitled
to any privilege of stock ownership as to any shares of
Common Stock not actually delivered to and held of record by
him or her. No adjustment will be made for dividends or
other rights as a shareholders for which a record date is
prior to such date of delivery.
6.8 Effective Date of the Plan.
This Plan shall be effective as of _________, ___,
the date of Board approval, subject to shareholder approval
within 12 months thereafter.
6.9 Term of the Plan.
No Award shall be granted under this Plan after
more than ten years after the effective date of this Plan
(the "termination date"). Unless otherwise expressly
provided in this Plan or in an applicable Award Agreement,
any Award granted prior to the termination date may extend
beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to
amend an Award, shall continue during any suspension of this
Plan and in respect of Awards outstanding on the termination
date.
6.10 Governing Law/Construction/Severability.
(a) Choice of Law. This Plan, the Awards, all
documents evidencing Awards and all other related documents
shall be governed by, and construed in accordance with the
laws of the state of incorporation of the Corporation.
(b) Severability. If any provision shall be held
by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall
continue in effect.
(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the
Corporation that transactions in and affecting Awards in the
case of Participants who are or may be subject to Section 16
of the Exchange Act satisfy any then applicable requirements
of Rule 16b-3 so that such persons (unless they otherwise
agree) will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 of the Exchange Act
in respect of those transactions and will not be subjected
to avoidable liability thereunder. If any provision of this
Plan or of any Award would otherwise frustrate or conflict
with the intent expressed above, that provision to the
extent possible shall be interpreted as to avoid such
conflict. If the conflict remains irreconcilable, the
Committee may disregard the provision if it concludes that
to do so furthers the interest of the Corporation and is
consistent with the purposes of this Plan as to such persons
in the circumstances.
(2) Section 162(m). It is the further
intent of the Company that Options or SARs with an exercise
or base price not less than Fair Market Value on the date of
grant and performance awards under Section 5.2 of this Plan
that are granted to or held by a Section 16 Person shall
qualify as performance-based compensation under Section
162(m) of the Code, and this Plan shall be interpreted
consistent with such intent.
6.11 Captions.
Captions and headings are given to the sections
and subsections of this Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
6.12 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder,
if an entity ceases to be a Subsidiary a termination of
employment and service shall be deemed to have occurred with
respect to each Eligible Person in respect of such
Subsidiary who does not continue as an Eligible Person in
respect of another entity within the Company.
6.13 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to
limit the authority of the Board or the Committee to grant
awards or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or
authority.
7. DEFINITIONS.
7.1 Definitions.
(a) "Award" shall mean an award of any
Option, Stock Appreciation Right, Restricted Stock, Stock
Bonus, Performance Share Award, dividend equivalent or
deferred payment right or other right or security that would
constitute a "derivative security" under Rule 16a-1(c) of
the Exchange Act, or any combination thereof, whether
alternative or cumulative, authorized by and granted under
this Plan.
(b) "Award Agreement" shall mean any writing
setting forth the terms of an Award that has been authorized
by the Committee.
(c) "Award Date" shall mean the date upon which
the Committee took the action granting an Award or such
later date as the Committee designates as the Award Date at
the time of the Award or, in the case of Awards under
Article 8, the applicable dates set forth therein.
(d) "Award Period" shall mean the period
beginning on an Award Date and ending on the expiration date
of such Award.
(e) "Beneficiary" shall mean the person, persons,
trust or trusts designated by a Participant or, in the
absence of a designation, entitled by will or the laws of
descent and distribution, to receive the benefits specified
in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's
executor or administrator if no other Beneficiary is
designated and able to act under the circumstances.
(f) "Board" shall mean the Board of Directors of
the Corporation.
(g) "Cash Flow" shall mean cash and cash
equivalents derived from either (i) net cash flow from
operations or (ii) net cash flow from operations, financings
and investing activities, as determined by the Committee at
the time an Award is granted.
(h) "Change in Control Event" shall mean any of
the following:
(1) Approval by the shareholders of the
Corporation of the dissolution or liquidation of the
Corporation;
(2) Approval by the shareholders of the
Corporation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities
that are not Subsidiaries or other affiliates, as a
result of which less than 50% of the outstanding voting
securities of the surviving or resulting entity
immediately after the reorganization are, or will be,
owned, directly or indirectly, by shareholders of the
Corporation immediately before such reorganization
(assuming for purposes of such determination that there
is no change in the record ownership of the
Corporation's securities from the record date for such
approval until such reorganization and that such record
owners hold no securities of the other parties to such
reorganization), but including in such determination
any securities of the other parties to such
reorganization held by affiliates of the Corporation);
(3) Approval by the shareholders of the
Corporation of the sale of substantially all of the
Corporation's business and/or assets to a person or
entity which is not a Subsidiary or other affiliate; or
(4) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act but
excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), other than
a person who is the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of more than 25% of
the outstanding Shares of Common Stock at the time of
adoption of this Plan, (or an affiliate, successor,
heir, descendant or related party of or to any such
person, becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation
representing more than 50% of the combined voting power
of the Corporation's then outstanding securities
entitled to then vote generally in the election of
directors of the Corporation; or
(5) During any period not longer than two
consecutive years, individuals who at the beginning of
such period constituted the Board cease to constitute
at least a majority thereof, unless the election, or
the nomination for election by the Corporation's
shareholders, of each new Board member was approved by
a vote of at least three-fourths of the Board members
then still in office who were Board members at the
beginning of such period (including for these purposes,
new members whose election or nomination was so
approved).
(i) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(j) "Commission" shall mean the Securities and
Exchange Commission.
(k) "Committee" shall mean the Board or a
committee appointed by the Board to administer this Plan,
which committee shall be comprised only of two or more
directors or such greater number of directors as may be
required under applicable law, each of whom, (i) in respect
of any decision at a time when the Participant affected by
the decision may be subject to Section 162(m) of the Code,
shall be an "outside director" within the meaning of Section
162(m) of the Code, and/or (ii) in respect of any decision
at a time when the Participant affected by the decision may
be subject to Section 16 of the Exchange Act, shall be a
"Non-Employee Director" within the meaning of Rule 16b-
3(b)(3).
(l) "Common Stock" shall mean the Common Stock
of the Corporation and such other securities or property as
may become the subject of Awards, or become subject to
Awards, pursuant to an adjustment made under Section 6.2 of
this Plan.
(m) "Company" shall mean, collectively, the
Corporation and its Subsidiaries.
(n) "Corporation" shall mean First Aviation
Services Inc., a Delaware corporation, and its successors.
(o) "EBITDA" shall mean earnings before interest,
taxes, depreciation and amortization.
(p) "Eligible Employee" shall mean an officer
(whether or not a director) or other employee of the
Company.
(q) "Eligible Person" means an Eligible Employee,
or any Other Eligible Person, as determined and selected by
the Committee, in its discretion, for participation in this
Plan.
(r) "EPS" shall mean earnings per common share on
a fully diluted basis determined by dividing (i) net
earnings, less dividends on preferred stock of the
Corporation by (ii) the weighted average number of common
shares and common shares equivalents outstanding.
(s) "EVA" shall mean net income of the business
unit in excess of the required rate of return on capital
employed.
(t) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(u) "Fair Market Value" on any date shall mean
(i) if the stock is listed or admitted to trade on a
national securities exchange, the closing price of the stock
on the Composite Tape, as published in the Western Edition
of The Wall Street Journal, of the principal national
securities exchange on which the stock is so listed or
admitted to trade, on such date, or, if there is no trading
of the stock on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding
date on which there was trading in such shares; (ii) if the
stock is not listed or admitted to trade on a national
securities exchange, the last price for the stock on such
date, as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the NASDAQ National Market
Reporting System or a similar organization if the NASD is no
longer reporting such information; (iii) if the stock is not
listed or admitted to trade on a national securities
exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a
similar organization; or (iv) if the stock is not listed or
admitted to trade on a national securities exchange, is not
reported on the National Market Reporting System and if bid
and asked prices for the stock are not furnished by the NASD
or a similar organization, the value as established by the
Committee at such time for purposes of this Plan.
(v) "Incentive Stock Option" shall mean an Option
which is intended, as evidenced by its designation, as an
incentive stock option within the meaning of Section 422 of
the Code, the award of which contains such provisions
(including but not limited to the receipt of shareholder
approval of this Plan, if the Award is made prior to such
approval) and is made under such circumstances and to such
persons as may be necessary to comply with that section.
(w) "Nonqualified Stock Option" shall mean an
Option that is designated as a Nonqualified Stock Option
and shall include any Option intended as an Incentive Stock
Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not
designated as an incentive stock option shall be deemed to
be designated a nonqualified stock option under this Plan
and not an incentive stock option under the Code.
(x) "Non-Employee Director" shall mean a member
of the Board of Directors of the Corporation who is not an
officer or employee of the Company.
(y) "Non-Employee Director Participant" shall
mean a Non-Employee Director who holds an outstanding Award
under the provisions of Article 8.
(z) "Option" shall mean an option to purchase
Common Stock granted under this Plan. The Committee shall
designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.
(aa) "Other Eligible Person" shall mean any Non-
Employee Director or any individual consultant or advisor
who renders or has rendered bona fide services (other than
services in connection with the offering or sale of
securities of the Company in a capital raising transaction)
to the Company, and who is selected to participate in this
Plan by the Committee.
(ab) "Participant" shall mean an Eligible Person
who has been granted an Award under this Plan and a Non-
Employee Director who has been received an Award under this
Plan.
(ac) "Performance Goal" shall mean EBITDA or EPS
or EVA or Return on Assets or ROE or Cash Flow or Total
Stockholder Return, and "Performance Goals" means any
combination thereof.
(ad) "Performance Share Award" shall mean an Award
of a right to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the
issuance or payment of which is contingent upon, among other
conditions, the attainment of performance objectives
specified by the Committee.
(ae) "Personal Representative" shall mean the
person or persons who, upon the disability or incompetence
of a Participant, shall have acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and
who shall have become the legal representative of the
Participant.
(af) "Plan" shall mean this Stock Incentive Plan.
(ag) "QDRO" shall mean a qualified domestic
relations order.
(ah) "Restricted Shares" or "Restricted Stock"
shall mean shares of Common Stock awarded to a Participant
under this Plan, subject to payment of such consideration,
if any, and such conditions on vesting (which may include,
among others, the passage of time, specified performance
objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan
and the related Award Agreement, for so long as such shares
remain unvested under the terms of the applicable Award
Agreement.
(ai) "Retirement" shall mean retirement with the
consent of the Company or, from active service as an
employee or officer of the Company on or after attaining age
55 with 10 or more years of service or after age 65 or, in
the case of a Non-Employee Director, a retirement or
resignation as a director after at least five years service
as a director.
(aj) "Return on Assets" shall mean consolidated
net income of the Corporation, divided by the average total
assets for the period.
(ak) "ROE" shall mean consolidated net income of
the Corporation (less preferred dividends), divided by the
average consolidated common shareholders equity.
(al) "Rule 16b-3" shall mean Rule 16b-3 as
promulgated by the Commission pursuant to the Exchange Act,
as amended from time to time.
(am) "Section 16 Person" shall mean a person
subject to Section 16(a) of the Exchange Act.
(an) "Securities Act" shall mean the Securities
Act of 1933, as amended from time to time.
(ao) "Stock Appreciation Right" shall mean a right
authorized under this Plan to receive a number of shares of
Common Stock or an amount of cash, or a combination of
shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value
of the Common Stock.
(ap) "Stock Bonus" shall mean an Award of shares
of Common Stock granted under this Plan for no consideration
other than past services and without restriction other than
such transfer or other restrictions as the Committee may
deem advisable to assure compliance with law.
(aq) "Subsidiary" shall mean any corporation or
other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by
the Corporation.
(ar) "Total Disability" shall mean a "permanent
and total disability" within the meaning of Section 22(e)(3)
of the Code and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may
include.
(as) "Total Stockholder Return" shall mean with
respect to the Corporation or other entities (if measures on
a relative basis), the (i) change in the market price of its
common stock (as quoted in the principal market on which it
is traded as of the beginning and ending of the period) plus
dividends and other distributions paid, divided by (ii) the
beginning quoted market price, all of which is adjusted for
any changes in equity structure, including but not limited
to stock splits and stock dividends.
<PAGE>
<PAGE>
[O'Melveny & Myers LLP Letterhead]
April
25th
1 9 9 7
613,257-008
NB1-306395.V1
First Aviation Services Inc.
One Omega Drive
Stamford, Connecticut 06907
Re: Registration on Form S-8 of First
Aviation Services Inc. (the "Company")
Ladies and Gentlemen:
At your request, we have examined the Registration
Statement on Form S-8 to be filed with the Securities and
Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of 400,000
shares of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock"), to be issued pursuant to the
First Aviation Services Inc. Stock Incentive Plan (the "Plan").
We have examined the proceedings heretofore taken and to be
taken in connection with the authorization of the Plan and
the Common Stock to be issued pursuant to and in accordance
with the Plan.
Based upon such examination and upon such matters of
fact and law as we have deemed relevant, we are of the opinion
that the Common Stock has been duly authorized by all necessary
corporate action on the part of the Company and, when issued in
accordance with such authorization, the provisions of the Plan
and relevant agreements duly authorized by and in accordance with
the terms of the Plan, will be validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to
the Registration Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
O'MELVENY & MYERS LLP
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Employee Stock Incentive
Plan of our reports dated September 12, 1996 (except Note 12, as
to
which the date is December 20, 1996), with respect to the
consolidated financial statements and schedules of First Aviation
Services Inc. included in its Registration Statement (Form S-1)
and related Prospectus, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
San Francisco, California
April 24, 1997
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated June 14,
1995, which appears on page F-20 of the Prospectus dated February
24, 1997 constituting part of the Registration Statement on Form
S-1 (Form S-1) of First Aviation Services, Inc. We also consent
to the application of such report to the Financial Statement
Schedule for the years ended March 31, 1994 and 1995 listed under
item 16(b) of the Form S-1 when such schedule is read in
conjunction with the financial statements referred to in our
report.
/s/PRICE WATERHOUSE LLP
San Francisco, California
April 23, 1997
<PAGE>
