As filed with the Securities and Exchange Commission on March 2, 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)
<TABLE>
<CAPTION>
Virginia 54-1847851
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
748 Miller Drive, S.E.
Leesburg, Virginia 20175
(Address of principal executive offices)
--------------------
Precision Tune
Stock Option 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
<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............ 175,000 $10.50 $1,837,500.00 $557.00
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Determined pursuant to Rule 457, solely for the purpose of calculating the
registration fee.
- --------------------------------------------------------------------------------
<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 (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
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
- 1 -
<PAGE>
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 Tune Stock Option 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.
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:
- 2 -
<PAGE>
(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 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.
- 3 -
<PAGE>
(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 2nd day of
March, 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 March 2, 1998
of Directors
/s/John F. Ripley
______________________
John F. Ripley President, Chief March 2, 1998
Executive Officer
and Director
*
______________________
William R. Klumb Vice President-Precision March 2, 1998
Auto Wash Operations and
Director
*
______________________
Woodley A. Allen Director March 2, 1998
*
______________________
George Bavelis Director March 2, 1998
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
*
______________________
Bernard H. Clineburg Director March 2, 1998
*
______________________
C. Eugene Deal Director March 2, 1998
*
______________________
Effie Eliopulos Director March 2, 1998
*
______________________
Bassam Ibrahim Director March 2, 1998
*
______________________
Richard O. Johnson Director March 2, 1998
*
______________________
Arthur Kellar Director March 2, 1998
*
______________________
Harry G. Pappas, Jr. Director March 2, 1998
*
______________________
Gerald Zamensky Director March 2, 1998
By: /s/ John F. Ripley
______________________
John F. Ripley March 2, 1998
(Attorney-in-Fact)**
</TABLE>
- ---------------------
**By authority of Powers of Attorney filed with this Registration Statement on
Form S-8.
<PAGE>
Index to Exhibits
Exhibit
Number Description
- ------- -----------
4. Precision Tune Stock Option 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.
Exhibit 4
PRECISION TUNE
STOCK OPTION PLAN
1. Purpose
The proper execution of the duties and responsibilities of the key
employees of Precision Auto Care, Inc. (the "Corporation") and its subsidiaries
is a vital factor in the continued growth and success of the Corporation. Toward
this end, it is necessary to attract and retain effective and capable
individuals to assume positions that contribute materially to the successful
operation of the business of the Corporation and its subsidiaries. It will
benefit the Corporation, therefore, to bind the interests of these persons more
closely to its own interests by offering them an attractive opportunity to
acquire a proprietary interest in the Corporation and thereby provide them with
added incentive to remain in the service of the Corporation and its subsidiaries
and to increase the prosperity, growth, and earnings of the Corporation. This
stock option plan is intended to serve these purposes. This document is an
amendment and restatement by the Corporation of the Precision Tune Stock Option
Plan ("Plan") as originally adopted by WE JAC Corporation. The Corporation has
assumed the rights and obligations of WE JAC Corporation under the Plan pursuant
to Section 22.1, Article XXII of the Plan of Reorganization and Agreement for
Share Exchange Offers by and among the Corporation, WE JAC Corporation ("WE
JAC"), Lube Ventures, Inc., Rocky Mountain Ventures, Inc., Prema Properties,
Ltd., Miracle Industries, Inc., Miracle Partners, Inc., Rocky Mountain Ventures
II, Inc., Ralston
<PAGE>
Car Wash, Ltd., and The Karl Byrer Group, Inc., dated as of August 27, 1997 (the
"Share Exchange Agreement"). The Corporation succeeded to and assumed all
rights, obligations and liabilities of WE JAC under WE JAC's Precision Tune
Stock Option Plan, including (i) the obligation to issue capital stock pursuant
to outstanding options to purchase common stock under the Plan and (ii) the
authority to amend the Plan. The effective date of the Plan as hereby amended
and restated is August 27, 1997.
2. Definitions
The following terms wherever used herein shall have the meanings set forth
below.
(a) The term "Board of Directors" shall mean the Board of Directors of
the Corporation.
(b) The term "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.
(c) The term "Committee" shall mean a committee to be appointed by the
Board of Directors to consist of three or more members.
- 2 -
<PAGE>
(d) The term "Common Stock" shall mean the shares of common stock, par
value $0.01 per share, of the Corporation.
(e) The term "Corporation" shall mean Precision Auto Care,
Inc.
(f) The term "Fair Market Value" shall mean the current fair market
value of Common Stock, as determined in good faith by the Committee.
(g) The term "Incentive Stock Option" shall mean any Option granted
pursuant to the Plan that is designated as an Incentive Stock Option and which
satisfies the requirements of Section 422(b) of the Code.
(h) The term "Nonqualified Stock Option" shall mean any Option granted
pursuant to the Plan that is not an Incentive Stock Option.
(i) The term "Option" or "Stock Option" shall mean a right granted
pursuant to the Plan to purchase shares of Common Stock, and shall include the
terms Incentive Stock Option and Nonqualified Stock Option.
- 3 -
<PAGE>
(j) The term "Option Agreement" shall mean the written agreement
representing Options granted pursuant to the Plan as contemplated by Paragraph 7
of the Plan.
(k) The term "Plan" shall mean the Precision Tune Stock Option Plan as
originally approved by the Board of Directors of WE JAC Corporation on September
28, 1995, as the same may be amended from time to time. The Plan is hereby
amended and restated by action of the Board of Directors of the Corporation
effective as of August 27, 1997.
(l) The term "subsidiary" or "subsidiaries" shall mean a corporation of
which capital stock possessing 50% or more of the total combined voting power of
all classes of its capital stock entitled to vote generally in the election of
directors is owned in the aggregate by the Corporation directly or indirectly
through one or more subsidiaries.
3. Effective Date of the Plan
The effective date of the Plan as hereby amended and restated is August
27, 1997.
- 4 -
<PAGE>
4. Administration
(a) The Plan shall be administered by the Committee.
(b) The Committee may establish, from time to time and at any time,
subject to the approval of the Board of Directors and subject to the limitations
of the Plan as set forth herein, such rules and regulations and amendments and
supplements thereto, as it deems necessary to comply with applicable law and
regulation and for the proper administration of the Plan. A majority of the
members of the Committee shall constitute a quorum. The vote of a majority of a
quorum shall constitute action by the Committee.
(c) The Committee shall from time to time submit to the Board of
Directors for its approval the names of those key employees who, in its opinion,
should receive Options, and shall recommend the numbers of shares on which
Options should be granted to each such person and the nature of the Options to
be granted. No member of the Committee shall participate in the deliberations
concerning the grant of an Option to himself.
(d) Options shall be granted by the Corporation and shall become
effective only after prior approval of the Board of Directors, and upon the
execution of an Option Agreement between the Corporation and the Option holder.
- 5 -
<PAGE>
(e) The Committee's interpretation and construction of the provisions
of the Plan and the rules and regulations adopted by the Committee shall be
final, unless otherwise determined by the Board of Directors. No member of the
Committee or the Board of Directors shall be liable for any action taken or
determination made, in respect of the Plan, in good faith.
5. Participation in the Plan
Participation in the Plan shall be limited to the members of the Board
of Directors and key employees of the Corporation and its subsidiaries who shall
be designated by the Committee and approved by the Board of Directors.
6. Stock Subject to the Plan
(a) There shall be reserved for the granting of Options pursuant to the
Plan and for issuance and sale pursuant to such Options One Hundred Seventy-Five
Thousand (175,000) shares of Common Stock. To determine the number of shares of
Common Stock available at any time for the granting of Options, there shall be
deducted from the total number of reserved shares of Common Stock, the number of
shares of Common Stock in respect of which Options have been granted pursuant to
the Plan that are still outstanding or have been exercised. The shares of Common
Stock to be issued upon the exercise of Options granted pursuant to the Plan
shall be
- 6 -
<PAGE>
made available from the authorized and unissued shares of Common Stock. If for
any reason shares of Common Stock as to which an Option has been granted cease
to be subject to purchase thereunder, then such shares of Common Stock again
shall be available for issuance pursuant to the exercise of Options pursuant to
the Plan.
(b) Proceeds from the purchase of shares of Common Stock upon the
exercise of Options granted pursuant to the Plan shall be used for the general
business purposes of the Corporation.
(c) In the event of reorganization, recapitalization, stock split,
stock dividend, combination of shares of Common Stock, merger, consolidation,
share exchange, acquisition of property or stock, or any change in the capital
structure of the Corporation, the Committee shall make such adjustments as may
be appropriate in the number and kind of shares reserved for purchase by
executives or other key employees, in the number, kind and price of shares
covered by Options granted pursuant to the Plan but not then exercised.
7. Terms and Conditions of Options
(a) Each Option granted pursuant to the Plan shall be evidenced by an
Option Agreement in such form as the Committee from time to time may determine.
- 7 -
<PAGE>
(b) The exercise price per share for Options shall be established by
the Board of Directors upon the recommendation of the Committee at the time of
the grant of Options pursuant to the Plan and shall not be less than the Fair
Market Value of a share of Common Stock on the date on which the Option is
granted. If the Board of Directors does not establish a specific exercise price
per share at the time of grant, the exercise price per share shall be equal to
the Fair Market Value of a share of Common Stock on the date of grant of the
Options.
(c) Each Option, subject to the other limitations set forth in the
Plan, may extend for a period of up to 10 years from the date on which it is
granted. The term of each Option shall be determined by the Committee at the
time of grant of the Option, provided that if no term is established by the
Committee, the term of the Option shall be 10 years from the date on which it is
granted.
(d) The Board of Directors, upon recommendation of the Committee, may
provide in the Option Agreement that the right to exercise each Option for the
number of shares subject to each Option shall vest in the Option holder over
such period of time as the Committee, in its discretion, shall determine for
each Option holder. If no vesting schedule is designated by the Committee, the
right to exercise the Option shall vest one-third at the first anniversary of
the grant date of the Option, two-thirds at the
- 8 -
<PAGE>
second anniversary of the grant date of the Option, and 100% at the third
anniversary of the grant date of the Option.
(e) Options shall be nontransferable and nonassignable, except that
Options may be transferred by testamentary instrument or by the laws of descent
and distribution.
(f) Upon voluntary or involuntary termination of an Option holder's
employment, his Option and all rights thereunder shall terminate effective at
the close of business on the date the Option holder ceases to be a regular,
full-time employee of the Corporation or any of its subsidiaries, except (i) to
the extent previously exercised and (ii) as provided in subparagraphs (g), (h)
and (i) of this Paragraph 7.
(g) In the event an Option holder (i) takes a leave of absence from the
Corporation or any of its subsidiaries for personal reasons or as a result of
entry into the armed forces of the United States, or any of the departments or
agencies of the United States government, or (ii) terminates his employment, or
ceases providing services to the Corporation or any of its subsidiaries, by
reason of illness, disability, voluntary termination with the consent of the
Committee, or other special circumstance, the Committee may consider his case
and may take such action in respect of the related Option Agreement as it may
deem appropriate under the circumstances, including accelerating the
- 9 -
<PAGE>
time previously granted Options may be exercised and extending the time
following the Option holder's termination of employment during which the Option
holder is entitled to purchase the shares of Common Stock subject to such
Options, provided that in no event may any Option be exercised after the
expiration of the term of the Option.
(h) If an Option holder dies during the term of his Option without
having fully exercised his Option, the executor or administrator of his estate
or the person who inherits the right to exercise the Option by bequest or
inheritance shall have the right within ninety days of the Option holder's death
to purchase the number of shares of Common Stock that the deceased Option holder
was entitled to purchase at the date of his death, after which the Option shall
lapse, provided that in no event may any Option be exercised after the
expiration of the term of the Option.
(i) If an Option holder terminates employment without his having fully
exercised his Option due to his retirement with the consent of the Corporation,
then such Option holder shall have the right within ninety days of the Option
holder's termination of employment to purchase the number of shares of Common
Stock that the Option holder was entitled to purchase at the date of his
termination, after which the Option shall lapse, provided that in no event may
any Option be exercised after the expiration of the term of the Option. The
Committee may cancel an Option during the
- 10 -
<PAGE>
ninety day period referred to in this paragraph, if the Participant engages in
employment or activities contrary, in the opinion of the Committee, to the best
interests of the Corporation. The Committee shall determine in each case whether
a termination of employment shall be considered a retirement with the consent of
the Corporation, and, subject to applicable law, whether a leave of absence
shall constitute a termination of employment. Any such determination of the
Committee shall be final and conclusive, unless overruled by the Board.
(j) Notwithstanding any other provisions of the Plan to the contrary,
in the event an Option holder is demoted or has his or her employment
responsibilities reduced, all as determined by the Committee, the Committee may,
in its sole and absolute discretion, cancel all or any portion of the Option
granted to the Option holder.
(k) The granting of an Option pursuant to the Plan shall not constitute
or be evidence of any agreement or understanding, express or implied, on the
part of the Corporation or any of its subsidiaries to retain or employ the
Option holder for any specified period.
(l) Solely for purposes of this paragraph, termination of employment,
when applied to an Option holder who is a member of the Board of Directors,
shall mean the resignation or removal of the
- 11 -
<PAGE>
Option holder as a member of the Board of Directors.
(m) In addition to the general terms and conditions set forth in this
Paragraph 7 in respect of Options granted pursuant to the Plan, Incentive Stock
Options granted pursuant to the Plan shall be subject to the following
additional terms and conditions:
(i) "Incentive stock options" shall be granted only to
individuals who, at the date of grant of the Option,
are regular, full-time employees of the Corporation
or any of its subsidiaries;
(ii) No employee who owns beneficially more than 10% of
the total combined voting power of all classes of
stock of the Corporation shall be eligible to be
granted an "incentive stock option;"
(iii) The aggregate fair market value (determined at
the time the Incentive Stock Option is
granted) of the shares of Common Stock in
respect of which "incentive stock options" are
exercisable for the first time by the Option
holder during any calendar year (under all
such plans of the Corporation and its
subsidiaries) shall not exceed $100,000; and
- 12 -
<PAGE>
(iv) Any other terms and conditions specified by the Board
of Directors that are not inconsistent with the Plan,
except that such terms and conditions must be
consistent with the requirements for "incentive stock
options" under Section 422 of the Code.
8. Methods of Exercise of Options
(a) An Option holder (or other person or persons, if any, entitled to
exercise an Option hereunder) desiring to exercise an Option granted pursuant to
the Plan as to all or part of the shares of Common Stock covered by the Option
shall (i) notify the Corporation in writing at its principal office at 748
Miller Drive, S.E., Leesburg, Virginia 22075, to that effect, specifying the
number of shares of Common Stock to be purchased and the method of payment
therefor, and (ii) make payment or provision for payment for the shares of
Common Stock so purchased in accordance with this Paragraph 8. Such written
notice may be given by means of a facsimile transmission. If a facsimile
transmission is used, the Option holder should mail the original executed copy
of the written notice to the Corporation promptly thereafter.
- 13 -
<PAGE>
(b) Payment or provision for payment shall be made as follows:
(i) The Option holder shall deliver to the Corporation at
the address set forth in subparagraph 8(a) United
States currency in an amount equal to the aggregate
purchase price of the shares of Common Stock as to
which such exercise relates; or
(ii) The Option holder shall tender to the Corporation
shares of Common Stock already owned by the Option
holder that, together with any cash tendered
therewith, have an aggregate fair market value
(determined based on the Fair Market Value of a
share of Common Stock on the date the notice set
forth in subparagraph 8(a) is received by the
Corporation) equal to the aggregate purchase price
of the shares of Common Stock as to which such
exercise relates; or
(iii) The Option holder shall deliver to the Corporation an
exercise notice together with irrevocable
instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds
necessary to pay the aggregate purchase price of the
shares of Common Stock as to which such
- 14 -
<PAGE>
exercise relates and to sell the shares of Common
Stock to be issued upon exercise of the Option and
deliver the cash proceeds, less commissions and
brokerage fees to the Option holder or to deliver the
remaining shares of Common Stock to the Option
holder.
Notwithstanding the foregoing provisions, the Committee and the Board
of Directors, in granting Options pursuant to the Plan, may limit the
methods in which an Option may be exercised by any person and, in
processing any purported exercise of an Option granted pursuant to the
Plan, may refuse to recognize the method of exercise selected by the
Option holder (other than the method of exercise set forth in
subparagraph 8(b)(i)).
(c) In addition to the alternative methods of exercise set forth in
subparagraph 8(b), holders of Nonqualified Stock Options shall be entitled, at
or prior to the time the written notice provided for in subparagraph 8(a) is
delivered to the Corporation, to elect to have the Corporation withhold from the
shares of Common Stock to be delivered upon exercise of the Nonqualified Stock
Option that number of shares of Common Stock (determined based on the Fair
Market Value of a share of Common Stock on the date the notice set forth in
subparagraph 8(a) is received by the Corporation) necessary to satisfy any
withholding taxes
- 15 -
<PAGE>
attributable to the exercise of the Nonqualified Stock Option. Alternatively,
such holder of a Nonqualified Stock Option may elect to deliver previously owned
shares of Common Stock upon exercise of the Nonqualified Stock Option to satisfy
any withholding taxes attributable to the exercise of the Nonqualified Stock
Option. If the Board of Directors does not include any provisions relating to
this withholding feature in its resolutions granting the Nonqualified Stock
Option or in the Option Agreement, however, the maximum amount that an Option
holder may elect to have withheld from the shares of Common Stock otherwise
deliverable upon exercise or the maximum number of previously owned shares an
Option holder may deliver shall be equal to the minimum federal and state
withholding. Notwithstanding the foregoing provisions, the Committee or the
Board of Directors may include in the Option Agreement relating to any such
Nonqualified Stock Option provisions limiting or eliminating the Option holder's
ability to pay his withholding tax obligation with shares of Common Stock or, if
no such provisions are included in the Option Agreement but in the opinion of
the Committee or the Board of Directors such withholding would have an adverse
tax or accounting effect to the Corporation, at or prior to exercise of the
Nonqualified Stock Option the Committee or the Board of Directors may so limit
or eliminate the Option holder's ability to pay his withholding tax obligation
with shares of Common Stock. Notwithstanding the foregoing provisions, a holder
of a Nonqualified Stock Option may not elect any of the methods of satisfying
his withholding tax obligation in respect of
- 16 -
<PAGE>
any exercise if, in the opinion of counsel to the Corporation, such method would
not be in full compliance with all applicable laws and regulations, including,
but not limited to, subjecting the holder to liability under Section 16 of the
Securities Exchange Act of 1934, as amended, if applicable.
(d) An Option holder at any time may elect in writing to abandon an
Option in respect of all or part of the number of shares of Common Stock as to
which the Option shall not have been exercised.
(e) An Option holder shall have none of the rights of a stockholder of
the Corporation until the shares of Common Stock covered by the Option are
issued to him upon exercise of the Option.
9. Amendments and Discontinuance of the Plan
(a) The Board of Directors shall have the right at any time and from
time to time to amend, modify, or discontinue the Plan provided that, except as
provided in subparagraph 6(c), no such amendment, modification, or
discontinuance of the Plan shall (i) revoke or alter the terms of any valid
Option previously granted pursuant to the Plan, (ii) increase the number of
shares of Common Stock to be reserved for issuance and sale pursuant to Options
granted pursuant to the Plan, (iii) change the maximum aggregate
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<PAGE>
number of shares of Common Stock that may be issued upon the exercise of Options
granted pursuant to the Plan to any single individual, (iv) decrease the price
determined pursuant to the provisions of subparagraph 7(b), (v) change the class
of persons to whom Options may be granted pursuant to the Plan, or (vi) provide
for Options exercisable more than 10 years after the date granted.
10. Plan Subject to Governmental Laws and Regulations
The Plan and the grant and exercise of Options pursuant to the Plan
shall be subject to all applicable governmental laws and regulations.
Notwithstanding any other provision of the Plan to the contrary, the Board of
Directors may in its sole and absolute discretion make such changes in the Plan
as may be required to conform the Plan to such laws and regulations.
11. Duration of the Plan
No Option shall be granted pursuant to the Plan after the close of
business on September 28, 2005.
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Exhibit 5
March 2, 1998
Miles & Stockbridge P.C.
10 Light Street
Baltimore, Maryland 21202
Re: Precision Tune Stock Option 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 175,000
shares of the Common Stock of Precision Auto Care, Inc. (the "Corporation") for
use in connection with the Precision Tune Stock Option 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>
Precision Auto Care, Inc.
March 2, 1998
Page 2
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. 33-000000) pertaining to the Precision Tune Stock Option 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 /s/ ERNST & YOUNG LLP
February 27, 1998 ______________________
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, our true and lawful
attorneys-in-fact with full power to sign for us, in our names and in the
capacities indicated below, a registration statement or registration statements
on Form S-8, and all amendments thereto (including post-effective amendments),
for the purpose of registering under the Securities Act of 1933 (i) up to
400,000 shares of the Common Stock of the Corporation which may be purchased or
issued from time to time pursuant to the terms of the Precision Auto Care, Inc.
Employee Stock Option Plan, (ii) up to 175,000 shares of Common Stock of the
Corporation which may be purchased or issued from time to time pursuant to the
terms of the Precision Tune Stock Option Plan, and (iii) up to 25,000 shares of
Common Stock of the Corporation which may be purchased or issued from time to
time pursuant to the terms of the Precision Tune 1996 Employee Stock Purchase
Plan.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
/s/ Lynn E. Caruthers
________________________
Lynn E. Caruthers Chairperson and Director November 9, 1997
/s/ John F. Ripley
________________________
John F. Ripley President and Chief November 9, 1997
Executive Officer
and Director
/s/ William R. Klumb
________________________
William R. Klumb Vice President-Precision November 9, 1997
Auto Wash Operations and
Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
/s/ Woodley A. Allen
________________________
Woodley A. Allen Director November 9, 1997
/s/ George Bavelis
________________________
George Bavelis Director November 9, 1997
/s/ Bernard H. Clineburg
________________________
Bernard H. Clineburg Director November 9, 1997
/s/ Clarence E. Deal
________________________
Clarence E. Deal Director November 9, 1997
/s/ Effie Eliopulos
________________________
Effie Eliopulos Director November 9, 1997
/s/ Bassam Ibrahim
________________________
Bassam Ibrahim Director November 9, 1997
/s/ Richard O. Johnson
________________________
Richard O. Johnson Director November 9, 1997
/s/ Arthur Kellar
________________________
Arthur Kellar Director November 9, 1997
/s/ Harry G. Pappas, Jr.
________________________
Harry G. Pappas, Jr. Director November 9, 1997
/s/ Gerald Zamensky
________________________
Gerald Zamensky Director November 9, 1997
/s/ Peter Kendrick
________________________
Peter Kendrick Chief Financial Officer November 9, 1997
and Treasurer
(Principal Finance and
Accounting Officer)
</TABLE>
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