As filed with the Securities and Exchange Commission on April 1, 1998.
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
PRECISION AUTO CARE, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1847851
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
748 MILLER DRIVE, S.E.
LEESBURG, VIRGINIA 20175
(Address of principal executive offices)
--------------------
PRECISION AUTO CARE, INC. 1998 EMPLOYEE
STOCK PURCHASE PLAN
(Full title of the plan)
--------------------
PETER KENDRICK
PRECISION AUTO CARE, INC.
748 MILLER DRIVE, S.E.
LEESBURG, VIRGINIA 20175
(703) 777-9095
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S><C>
COMMON STOCK, PAR
VALUE $.01 PER SHARE................. 30,000 $10.88 $326,400.00 $100.00
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</TABLE>
(1) DETERMINED PURSUANT TO RULE 457, SOLELY FOR THE PURPOSE OF CALCULATING THE
REGISTRATION FEE.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference and made a
part hereof:
(a) The Registrant's Prospectus filed pursuant to Rule 424(b)
with the Commission on November 6, 1997 which formed a part of the Registrant's
Registration Statement on Form S-1 (Registration No. 333-34439);
(b) The Registrant's Report on Form 10-Q for the quarter ended
September 30, 1997, filed with the Commission on December 19, 1997;
(c) The Registrant's Current Report on Form 10-Q for the
quarter ended December 31, 1997, filed with the commission on February 17, 1998;
and
(d) The description of the Registrant's capital stock
contained in the Registrant's Registration Statement on Form 8-A filed with the
Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), and any amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to filing of a
post-effective amendment which indicates that all securities offered have been
sold or which removes from registration all securities then remaining unsold,
shall be deemed to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of the filing of such documents.
ITEM 4. Description of Securities.
Not Applicable
ITEM 5. Interests of Named Experts and Counsel.
Not Applicable
- 1 -
<PAGE>
ITEM 6. Indemnification of Directors and Officers.
The Articles of Incorporation of the Company provide that, to the
fullest extent permitted by the Virginia Stock Corporation Act, the Company
shall indemnify current and former directors and officers of the Company against
any and all liabilities and expenses in connection with their services to the
Company in such capacities. The Articles of Incorporation further mandate that
the Company shall advance expenses to its directors and officers to the full
extent permitted by the Virginia Stock Corporation Act. The Articles of
Incorporation also permit the Company, by action of its Board of Directors, to
indemnify its employees and agents with the same scope and effect as the
foregoing indemnification of directors and officers.
The Articles of Incorporation of the Company provide that, to the
fullest extent permitted by the Virginia Stock Corporation Act, no director or
officer of the Company shall be personally liable to the Company or its
stockholders for monetary damages. Under current Virginia law, the effect of
this provision is to eliminate the rights of the Company and its stockholders to
recover monetary damages against a director or officer except for the director
or officer's (a) willful misconduct, (b) knowing violation of any criminal law
or of any federal or state securities law, including (without limitation), any
claim of unlawful insider trading or manipulation of the market for any
security, or (c) payment of unlawful distributions, including dividends and
stock redemptions.
The Articles of Incorporation of the Company authorize the Company to
purchase liability insurance for its officers and directors and the Company
currently maintains such insurance coverage on behalf of its officers and
directors.
ITEM 7. Exemption from Registration Claimed.
Not Applicable
ITEM 8. Exhibits.
4. Precision Auto Care, Inc. 1998 Employee Stock Purchase
Plan
5. Opinion of Miles & Stockbridge P.C.
23.1. Consent of Ernst & Young LLP, independent auditors.
23.2. Consent of Miles & Stockbridge P.C. (included in the
opinion filed as Exhibit 5).
24. Power of Attorney.
- 2 -
<PAGE>
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 thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) (ss.230.424(b) of
this chapter) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective 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 (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and 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 Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose 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.
(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 of 1933, each filing of the
registrant's annual report pursuant to
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<PAGE>
section 13(a) or section 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 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.
(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 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 Act and will
be governed by the final adjudication of such issue.
- 4 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Leesburg, State of Virginia on the 1st day of April,
1998.
PRECISION AUTO CARE, INC.
By: /s/John F. Ripley
__________________________
John F. Ripley
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S><C>
*
_______________________
Lynn E. Caruthers Chairperson of the Board April 1, 1998
of Directors
/s/John F. Ripley
_______________________
John F. Ripley President, Chief April 1, 1998
Executive Officer
and Director
*
_______________________
William R. Klumb Vice President-Precision April 1, 1998
Auto Wash Operations and
Director
*
_______________________
Woodley A. Allen Director April 1, 1998
_______________________
George Bavelis Director April 1, 1998
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S><C>
*
_______________________
Bernard H. Clineburg Director April 1, 1998
_______________________
C. Eugene Deal Director April 1, 1998
*
_______________________
Effie Eliopulos Director April 1, 1998
*
_______________________
Bassam Ibrahim Director April 1, 1998
_______________________
Richard O. Johnson Director April 1, 1998
*
_______________________
Arthur Kellar Director April 1, 1998
*
_______________________
Harry G. Pappas, Jr. Director April 1, 1998
*
_______________________
Gerald Zamensky Director April 1, 1998
*
_______________________
Peter Kendrick Chief Financial April 1, 1998
Officer and Treasurer
(Principal Finance and
Accounting Officer)
By: /s/John F. Ripley
_______________________
John F. Ripley April 1, 1998
(Attorney-in-Fact)**
</TABLE>
- ---------------------
**By authority of Power of Attorney filed with this Registration Statement on
Form S-8.
<PAGE>
Index to Exhibits
Exhibit
Number Description
- ------- -----------
4. Precision Auto Care, Inc. 1998 Employee
Stock Purchase Plan.
5. Opinion of Miles & Stockbridge P.C.
23.1. Consent of Ernst & Young LLP,
independent auditors.
23.2. Consent of Miles & Stockbridge P.C.
(included in the opinion
filed as Exhibit 5).
24. Power of Attorney.
PRECISION AUTO CARE, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
This 1998 Employee Stock Purchase Plan (the "Plan") is intended to
encourage and facilitate the purchase of the Common Stock of Precision Auto
Care, Inc. (the "Company"), by employees of the Company and its Designated
Subsidiaries, thereby providing employees with a personal stake in the Company
and a long-range inducement to remain in the employ of the Company and its
Designated Subsidiaries. It is the intention of the Company to have the Plan
qualify as an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS.
2.1 Board. The "Board" is the Board of Directors of the
Company.
2.2 Common Stock. The "Common Stock" is Precision Auto Care,
Inc. Common Stock, par value of $0.01 per share.
2.3 Designated Subsidiaries. The "Designated Subsidiaries" are WE
JAC Corporation; Lube Ventures, Inc.; Rocky Mountain Ventures, Inc.; Rocky
Mountain Ventures II, Inc.; Ralston Car Wash, Ltd.; Miracle Partners, Inc.;
Miracle Industries, Inc.; Prema Properties Ltd.; Hydro Spray Car Wash Equipment
Company, Ltd.; Precision Tune Auto Care, Inc.; Worldwide Drying Systems, Inc.;
National 60 Minute Tune, Inc.; PTW, Inc.; KBG, LLC and any subsidiary of the
Company whose Eligible Employees shall be authorized to participate in the Plan
by the Board, so long as such authorization is continued by the Board.
2.4 Eligible Compensation. The "Eligible Compensation" of each
Participant is his or her regular rate of base compensation for a Grant Period
determined as of the first Grant Date of the Grant Period on which the
Participant is an Eligible Employee. "Eligible Compensation" does not include
management incentives, variable commissions, bonuses, overtime, shift
differential, COLA adjustments, extended work-week premiums, amounts paid or
accrued with respect to any qualified or nonqualified plan of deferred
compensation or other employee welfare plan, payments for group insurance,
hospitalization and similar benefits, perquisites reported as income,
reimbursement for expenses and other forms of extraordinary pay. An employee's
base pay shall be calculated by multiplying the employee's normal rate of pay as
of the first Grant Date on which the employee is an Eligible Employee by the
number of pay periods between said Grant Date and the end of the Grant Period.
2.5 Eligible Employee. An "Eligible Employee" is an employee of
the Company or of a Designated Subsidiary; provided, however, that the term
"Eligible Employee" shall not include:
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<PAGE>
2.5.1 Employees who are scheduled to work less than twenty
(20) hours per week or less than five (5) months during the Grant Period; or
2.5.2 Any employee who, immediately after a Grant Date, owns
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or its subsidiaries as determined pursuant to
Section 424(e) and (f) of the Code. For purposes of this Subsection 2.5.2, the
attribution rules of Section 424(d) of the Code shall apply in determining the
stock ownership of an employee, and stock which the employee may purchase under
outstanding options, whether or not granted under this Plan, shall be treated as
stock owned by the employee.
2.6 Exercise Dates. The "Exercise Dates" are October 31,
January 31, and March 31.
2.7 Fair Market Value. The "Fair Market Value" of the Common Stock
on any Offering Date or on any Purchase Date, as the case may be, shall be (a)
the average on that date of the high and low prices of a share of Common Stock
on the principal national securities exchange on which shares of Common Stock
are then trading, or, if shares were not traded on such date, then on the next
preceding date on which a trade occurred; or (b) if Common Stock is not traded
on a national securities exchange but is quoted on the National Association of
Securities Dealers, Inc. Authorized Quotation System ("NASDAQ") or a successor
quotation system, the last reported sale price on such date as reported by
NASDAQ or such successor quotation system; or (c) if Common Stock is not traded
on a national securities exchange and is not reported on NASDAQ or a successor
quotation system, the closing bid price (or average of bid prices) last quoted
on such date by an established quotation service for over-the-counter
securities; or (d) if Common Stock is not traded on a national securities
exchange, is not reported on NASDAQ or a successor quotation system and is not
otherwise publicly traded on such date, the fair market value of a share of
Common Stock as established by the Board acting in good faith and taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale or offer prices for the Common Stock in private
arm's-length transactions. During periods when the Fair Market Value of a share
of Common Stock cannot be determined under any of the methods specified in
clauses (a), (b) and (c), above, the Committee shall have the authority to
establish the Fair Market Value of the Common Stock as of the beginning of (or
periodically during) each fiscal year of the Company and to use such value for
all transactions occurring thereafter within such fiscal year.
2.8 Grant Dates. The "Grant Dates" are April 1, July 1,
October 1 and January 1.
2.9 Grant Period. Each "Grant Period" shall commence on
April 1st and shall end on March 31st.
2.10 Participant. A "Participant" is an Eligible Employee of the
Company or of a Designated Subsidiary who elects to participate in the Plan by
filing an enrollment form with the Company as provided in Section 6.
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<PAGE>
2.11 Purchase Price. The "Purchase Price" of a share of Common
Stock purchased pursuant to an option granted under the Plan shall be
eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on
the Grant Date.
2.12 Subsidiary. A "Subsidiary" is a corporation, fifty percent
(50%) or more of the outstanding voting power of all classes of stock of which
at the time of granting of an option under the Plan is owned directly, or
indirectly through a subsidiary, by the Company within the meaning of Section
424(f) of the Code.
3. ADMINISTRATION.
3.1 The Plan shall be administered by a committee (the
"Committee") selected by the Board. The Committee shall consist of not less than
three (3) members who are members of the Board of Directors. An individual will
not be eligible to serve on the Committee if the individual is a Participant.
Each member of the Committee shall serve for a term commencing on a date
specified by the Board and continuing until such member dies, resigns, becomes a
Participant or is removed from office by the Board.
3.2 From time to time the Committee may adopt such rules and
regulations for carrying out the Plan as it may deem proper and in the best
interest of the Company. All determinations of the Committee shall be made by a
majority of its members. The interpretation of any provision of the Plan by the
Committee shall be final and the Board shall adopt and place into effect the
determinations of the Committee.
4. STOCK SUBJECT TO THE PLAN.
The stock subject to options under the Plan shall be authorized
but unissued shares of the Company's Common Stock. The aggregate amount of stock
for which options may be granted under the Plan shall be thirty thousand
(30,000) shares, subject to adjustment in accordance with Section 12. In the
event that an option granted under the Plan to any Participant is unexercised at
the end of a Grant Period as to any shares covered thereby, such shares
thereafter shall be available for the granting of options under the Plan.
5. GRANT OF OPTION.
Options will be granted on the Grant Dates. All Participants
granted options under the Plan shall have the same rights and privileges. On
each Grant Date of the Grant Period, each Participant who is an Eligible
Employee on the Grant Date may elect to be granted an option by the Board to
purchase whole shares of Common Stock. The maximum number of shares of Common
Stock for which each Participant may elect to be granted options during the
Grant Period shall equal ten percent (10%) of the Participant's Eligible
Compensation divided by eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock on the first Grant Date of the Grant Period on which the
Participant is an Eligible Employee. In the event that the maximum number of
shares to be granted to all Participants on a Grant Date (determined according
to the above formula) exceeds the total number of shares available for sale
under the Plan pursuant to Section 4, the Committee shall make a pro rata
allocation of the available shares
-3-
<PAGE>
among all Participants on such Grant Date based upon a uniform relationship to
the Eligible Compensation of all Participants in effect on the Grant Date. The
Committee may on the first Grant Date of each Grant Period decrease the
percentage of Eligible Compensation set forth above to calculate the number of
shares of Common Stock for which an Eligible Employee may elect to be granted
options to a minimum of five percent (5%) or increase it to a maximum of twenty
percent (20%). Notwithstanding the foregoing, in the event options are granted
prior to the approval of this Plan by stockholders owning a majority of the
common stock of the Company, such grant is expressly conditioned on subsequent
approval of the Plan by the stockholders. Furthermore, both the grant and the
exercise of any options under this Plan are expressly conditioned on the
effective and continuing registration of this Plan under the Securities Act of
1933 or an available exemption from registration and effective registration or
available exemption from registration under applicable state securities laws.
6. ENROLLMENT, PAYROLL DEDUCTIONS AND CASH PAYMENTS.
6.1 Within the thirty (30) day period prior to each Grant Date,
the Company shall notify all employees of the Company and its Designated
Subsidiaries of the dates of the Grant Period, the Grant Dates and the Exercise
Dates, and furnish them with enrollment forms and other pertinent information.
6.2 An employee who is not a Participant and who will be an
Eligible Employee (as defined in Section 2.5) on any Grant Date of the Grant
Period may become a Participant by completing the enrollment form and forwarding
such form to such employee's appropriate payroll office prior to the Grant Date
on which the employee will be an Eligible Employee.
6.3 An enrollment form will allow an Eligible Employee to become a
Participant by authorizing a regular payroll deduction from the Participant's
Eligible Compensation on each pay day during the Grant Period at a rate which
will result in not less than a Five Dollar ($5.00) deduction per pay day and
which will not exceed ten percent (10%) of the Participant's Eligible
Compensation. An enrollment form shall also provide each Eligible Employee with
the option of becoming a Participant by electing to fund his or her stock
purchase account, in whole or in part, by making a lump sum cash payment
pursuant to the provisions of Section 6.8 hereof.
6.4 A participant's payroll deductions and lump sum cash payments
shall be deposited in the Company's general corporate account and shall be
credited to the Participant's stock purchase account under the Plan. No interest
shall accrue on the amount credited to a Participant's stock purchase account.
Except as provided in Sections 6.5 and 6.8, a Participant may not make any
separate cash payment into his or her account. A Participant may change the
amount of the payroll deduction only if the Participant elects to increase or
decrease the number of shares of Common Stock the Participant has an option to
purchase during the Grant Period.
6.5 During leaves of absence approved by the Company and meeting
the requirements of Treasury Regulation Section 1.421-7(h)(2), a Participant may
continue
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<PAGE>
participation in the Plan by making cash payments to the Company on his or her
normal pay days equal to the short fall in his or her stock purchase account
caused by such leave of absence.
6.6 Payroll deductions for a Participant for each Grant Period
shall commence on the first pay day following the first Grant Date on which the
Participant is an Eligible Employee and shall end on the last pay day prior to
the end of the Grant Period, unless sooner terminated by the Participant as
provided in Section 8.
6.7 Individual stock purchase accounts will be maintained for each
Participant in the Plan. A statement will be given to each Participant promptly
following each Exercise Date of the Grant Period which sets forth the amount of
the Participant's payroll deductions and any cash payments, the per share
Purchase Price, the number of shares purchased, and the amount of the remaining
balance, if any, credited to the Participant's stock purchase account.
6.8 A Participant may elect to make a lump sum cash payment to be
credited to his or her stock purchase account on or before the last day of the
Grant Period in an amount which, when added to the amount already credited to
his or her stock purchase account for the Grant Period, does not exceed ten
percent (10%) of his or her Eligible Compensation.
7. EXERCISE OF OPTION.
7.1 Each Participant who is an Eligible Employee on an Exercise
Date may elect by written notice to the Company to exercise his or her option to
purchase up to the number of whole shares for which the Participant then has
sufficient credit to his stock purchase account, except that on the last
Exercise Date of the Grant Period each Participant shall be deemed to have
exercised an option to purchase such number of whole shares of Common Stock as
the credit to the Participant's stock purchase account on the Exercise Date will
pay for at the applicable Purchase Price. No fractional shares of Common Stock
shall be purchased. During the Participant's lifetime, the option to purchase
shares of Common Stock under the Plan is exercisable only by the Participant.
7.2 Any amount remaining credited to a Participant's stock
purchase account on the last Exercise Date of the Grant Period, after the
purchase of shares as provided above, will be refunded to the Participant
promptly.
7.3 No Participant may be granted an option under the Plan which
would permit such employee's rights to purchase stock under all such employee
stock purchase plans of the Company or its Subsidiaries to accrue at a rate
which exceeds $25,000 in Fair Market Value of such stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.
7.4 Shares of Common Stock purchased by a Participant under the
Plan will be issued only in the name of the Participant, or if the Participant
so indicates on his or her enrollment form or in writing, in the name of the
Participant and any other person as joint tenants with rights of survivorship.
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<PAGE>
7.5 As promptly as practicable after each Exercise Date of the
Grant Period, the Company shall cause the number of shares purchased by each
Participant to be registered on the stock transfer records of the Company in the
name of the Participant.
8. WITHDRAWAL.
A Participant, at any time and for any reason, may terminate
participation in the Plan by delivering written notice of withdrawal to the
Participant's appropriate payroll office. If a Participant withdraws from the
Plan, the Participant shall not be eligible to again participate in the Plan for
six (6) months thereafter, and the balance in the Participant's stock purchase
account will be promptly refunded after receipt by the Company of the
Participant's notice of withdrawal.
9. TERMINATION OF EMPLOYMENT OR ELIGIBILITY.
9.1 If the employment of a Participant terminates, such
Participant's participation in the Plan automatically and without any act on his
or her part shall terminate as of the date of the termination of his or her
employment. The Company promptly will pay to the Participant the amount credited
to his or her stock purchase account under the Plan (without interest), and
thereupon the Participant's interest in the Plan and any options under the Plan
shall terminate.
9.2 In the event a Participant fails to meet the requirements of
an Eligible Employee under the Plan on any Exercise Date of the Grant Period, as
set forth in Section 2.5, the Participant will be deemed to have withdrawn from
the Plan and the payroll deductions credited to such Participant's account will
be promptly refunded to the Participant and no option to purchase shares of
Common Stock shall be granted to such Participant.
9.3 A Participant's withdrawal from participation in the Plan
during the Grant Period shall preclude (i) such Participant's eligibility to
participate in the Plan, and (ii) such Participant's eligibility to participate
in any similar plan which has been or may be adopted by the Company, for a
period of six (6) months thereafter.
10. TRANSFERABILITY.
Neither payroll deductions or cash payments credited to a
Participant's stock purchase account nor any rights with regard to the exercise
of an option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way by the Participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 8.
11. RIGHTS OF A STOCKHOLDER.
Subject to the provisions set forth in Sections 9.6 and 22 hereof,
each Participant shall have the rights or privileges of a stockholder of the
Company with respect to shares
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<PAGE>
purchased under the Plan when the shares have been registered in the name of the
Participant on the stock transfer records of the Company.
12. CAPITAL ADJUSTMENT AFFECTING COMMON STOCK.
In the event of a capital adjustment resulting from a
recapitalization, stock dividend, stock split, reorganization, merger,
consolidation or other change in capitalization affecting the present Common
Stock, the Board may, at its option, terminate the Plan or make appropriate
adjustments in the number of shares which may be issued and sold under the Plan
and may make such other adjustments as it may deem equitable.
13. TERMINATION AND AMENDMENTS TO PLAN.
The Board, at any time, may terminate the Plan or from time to
time, may amend the Plan without the approval of the stockholders of the
Company; provided, however, that no such amendment shall be made without the
stockholders' approval which would (i) cause the Plan to fail to meet the
requirements of an "employee stock purchase plan" as defined in Section 423 of
the Code, or (ii) permit a Participant to be a member of the Committee.
Notwithstanding anything to the contrary, the Plan shall terminate immediately
after the last Exercise Date, which is March 31, 1999.
14. TERMINATION OF THE PLAN.
Upon termination of the Plan, the amount credited to the stock
purchase accounts for all Participants shall be refunded promptly. The Exercise
Dates may be accelerated by the Company in the event of a termination of the
Plan.
15. NON-GUARANTEE OF EMPLOYMENT.
Nothing in the Plan or in any option granted pursuant to the Plan
shall be construed as a contract of employment between the Company or a
Subsidiary and its employees, or as a contractual right to continue in the
employ of the Company or a Subsidiary, or as a limitation of the right of the
Company or a Subsidiary to discharge its employees at any time.
16. EXCLUSION FROM RETIREMENT AND FRINGE BENEFIT COMPUTATION.
No portion of the award of options under this Plan shall be taken
into account as "wages," "salary" or "compensation" for any purpose, whether in
determining eligibility, benefits or otherwise, under (i) any pension,
retirement, profit sharing or other qualified or non-qualified plan of deferred
compensation, (ii) any employee welfare or fringe benefit plan including, but
not limited to, group insurance, hospitalization, medical, and disability, or
(iii) any form of extraordinary pay including but not limited to bonuses, sick
pay and vacation pay.
-7-
<PAGE>
17. LIABILITY LIMITED; INDEMNIFICATION.
17.1 To the maximum extent permitted by Virginia law, neither the
Company, Board or Committee nor any of its members, shall be liable for any
action or determination made with respect to this Plan.
17.2 In addition to such other rights of indemnification that they
may have, the members of the Board and Committee shall be indemnified by the
Company to the maximum extent permitted by Virginia law against any and all
liabilities and expenses incurred in connection with their service in such
capacity.
18. GOVERNMENTAL REGULATIONS.
The Company's obligation to sell and deliver the Common Stock
under the plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of such stock.
19. APPLICATION OF FUNDS.
Any payroll deductions received or held by the Company under the
Plan may be used for any corporate purpose.
20. STOCKHOLDER APPROVAL.
The Plan shall be subject to the approval of the stockholders
owning a majority of the outstanding shares of the Common Stock, which approval
must occur within the period beginning twelve (12) months before and ending
twelve (12) months after the date the Plan is adopted by the Board.
21. OTHER TERMS AND CONDITIONS.
The Committee may impose such other terms and conditions not
inconsistent with the terms of the Plan, as it deems advisable, including,
without limitation, restrictions and requirements relating to (i) the
registration, listing or qualification of the Common Stock, (ii) the grant or
exercise of options, or (iii) the shares of Common Stock acquired under the
Plan. The Committee may require that a Participant notify the Company of any
disposition of shares of Common Stock purchased under the Plan within a period
of two (2) years subsequent to the Grant Date of the options exercised to
purchase those shares.
22. MISCELLANEOUS.
22.1 The headings in this Plan are for reference purposes only and
shall not affect the meaning or interpretation of the Plan.
22.2 This Plan shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Virginia, without regard to principles of
conflict of laws.
-8-
<PAGE>
22.3 All notices and other communications made or given pursuant
to this Plan shall be in writing and shall be sufficiently made or given if
delivered or mailed, addressed to the employee at the address contained in the
records of the Company or to the Company at the Company's principal office.
22.4 This Plan may be executed in any number of counterparts, each
of which shall be considered an original and all of which taken together shall
constitute one and the same instrument.
WITNESS: PRECISION AUTO CARE, INC.
_______________________ By: ____________________________________
John F. Ripley
President
Dated: _______________________________
-9-
Exhibit 5
March 31, 1998
Miles & Stockbridge P.C.
10 Light Street
Baltimore, Maryland 21202
Re: Precision Auto Care, Inc. 1998 Employee
Stock Purchase Plan
Ladies and Gentlemen:
On behalf of our client, Precision Auto Care, Inc., we submit this
opinion to you in connection with the filing with the Securities and Exchange
Commission of a Registration Statement on Form S-8 (the "Registration
Statement") on the date hereof. The Registration Statement registers 30,000
shares of the Common Stock of Precision Auto Care, Inc. (the "Corporation") for
use in connection with the Precision Auto Care, Inc. 1998 Employee Stock
Purchase Plan (the "Plan"). The Plan contemplates that the shares of Common
Stock subject to the Plan shall be reserved as authorized but unissued shares.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Registration Statement.
As counsel to the Corporation, we have examined such corporate records,
certificates and other documents and have reviewed such questions of law as we
deemed necessary or appropriate for the purpose of this opinion. Based upon that
examination and review, we advise you that in our opinion:
(i) the Corporation has been duly incorporated, is validly
existing and is in good standing under the laws of the Commonwealth
of Virginia; and
(ii) to the extent that the operation of the Plan results in the
issuance of the shares of Common Stock of the Corporation, such shares of Common
Stock have been duly and validly authorized and, when issued in accordance with
the terms set forth in the Registration Statement, will be legally issued, fully
paid and nonassessable.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our opinion in the Registration
Statement. In giving our consent, we do not admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
nor the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Miles & Stockbridge P.C.
By: /s/ John B. Frisch
________________________
Principal
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
We consent to the reference to our firm in the Registration Statement
(Form S-8 No. 33-00000) pertaining to the Precision Auto Care, Inc. 1998
Employee Stock Purchase Plan and to the incorporation by reference therein of
our reports dated (a) August 15, 1997, with respect to the balance sheet of
Precision Auto Care, Inc., (b) August 15, 1997, with respect to the consolidated
financial statements of WE JAC Corporation, (c) March 28, 1997, with respect to
the consolidated financial statements of Miracle Industries, Inc., (d) March 21,
1997, with respect to the financial statements of Lube Ventures, Inc., and (e)
March 21, 1997, with respect to the financial statements of Prema Properties,
Ltd., included in the Registration Statement (Form S-1) and related Prospectus
of Precision Auto Care, Inc. for the registration of 2,443,600 shares of its
common stock.
Vienna, Virginia
March 30, 1998
/s/ Ernst & Young LLP
_____________________
Ernst & Young LLP
Exhibit 24
POWER OF ATTORNEY
We, the undersigned Officers and Directors of Precision Auto Care, Inc.
(the "Corporation") hereby constitute and appoint John F. Ripley and Arnold
Janofsky, and each of them, with power of substitution and resubstitution, our
true and lawful attorneys with full power to sign for us, in our names and in
the capacities indicated below, (i) one or more Registration Statements on Form
S- 8 (or other applicable form), (ii) all amendments thereto (including
post-effective amendments), and (iii) all other documents that may be required
in connection therewith (including a Registration Statement filed under Rule
462(b) of the Securities Act of 1933, as amended), for the purpose of
registering under the Securities Act of 1933 up to 30,000 shares of the
Corporation's Common Stock which may be sold by selling stockholders for sale to
the public.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S><C>
/s/ Lynn E. Caruthers
_________________________
Lynn E. Caruthers Chairperson and Director March 20, 1998
/s/ John F. Ripley
_________________________
John F. Ripley President and Chief March 18, 1998
Executive Officer
and Director
/s/ William R. Klumb
_________________________
William R. Klumb Vice President-Precision March 18, 1998
Auto Wash Operations and
Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- -----
<S><C>
/s/ Woodley A. Allen
_________________________
Woodley A. Allen Director March 19, 1998
_________________________
George Bavelis Director March __, 1998
/s/ Bernard H. Clineburg
_________________________
Bernard H. Clineburg Director March 20, 1998
_________________________
Clarence E. Deal Director March __, 1998
/s/ Effie Eliopulos
_________________________
Effie Eliopulos Director March 20, 1998
/s/ Bassam Ibrahim
_________________________
Bassam Ibrahim Director March 19, 1998
_________________________
Richard O. Johnson Director March __, 1998
/s/ Arthur Kellar
_________________________
Arthur Kellar Director March 23, 1998
/s/ Harry G. Pappas, Jr.
_________________________
Harry G. Pappas, Jr. Director March 20, 1998
/s/ Gerald Zamensky
_________________________
Gerald Zamensky Director March 20, 1998
/s/ Peter Kendrick
_________________________
Peter Kendrick Chief Financial Officer March 17, 1998
and Treasurer
(Principal Finance and
Accounting Officer)
</TABLE>
