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 Auto Care Employee
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............ 400,000 $10.50 $4,200,000.00 $1,273.00
- ---------------------------------------------------------------------------------------------------------------------
(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 (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
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. The Precision Auto Care Employee 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.
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<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>
<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. The Precision Auto Care Employee
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 AUTO CARE, INC.
EMPLOYEE STOCK OPTION PLAN
<PAGE>
PRECISION AUTO CARE, INC.
EMPLOYEE STOCK OPTION PLAN
1. Purpose
The proper execution of the duties and responsibilities of the
executives and 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.
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 "Change in Control of the Corporation" shall mean a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Corporation is in fact required to comply therewith, provided
that, without limitation, such a change in control shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation or any of its subsidiaries or
a corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as the ownership of Common
Stock of the Corporation, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding securities; (B) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board and any new
director (other than a director designated by a person who has entered into an
agreement with the Corporation to effect a transaction described in clauses (A)
or (D) of this definition) whose election by the Board or nomination for
election
<PAGE>
by the Corporation's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board; (C) the
Corporation enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control of the Corporation; or (D) the
stockholders of the Corporation approve a merger, share exchange or
consolidation of the Corporation with any other corporation, other than a
merger, share exchange or consolidation that would result in the voting
securities of the Corporation outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the combined voting power of
the voting securities of the Corporation or such surviving entity outstanding
immediately after such merger, share exchange or consolidation, or the
stockholders of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all the Corporation's assets.
(c) The term "Committee" shall mean a committee to be appointed by the
Board of Directors to consist of three or more members, all of whom are members
of the Board of Directors.
(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., a
Virginia corporation.
(f) The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(g) The term "Fair Market Value" shall mean the then current fair
market value of Common Stock, as determined in good faith by the Committee and
in a manner consistent with the rules set forth in Treas. Reg. ss.20.2031-2.
(h) The term "Option" or "Stock Option" shall mean a right granted
pursuant to the Plan to purchase shares of Common Stock.
(i) The term "Option Agreement" shall mean the written agreement
representing Options granted pursuant to the Plan as contemplated by Paragraph 7
of the Plan.
(j) The term "Plan" shall mean the Precision Auto Care, Inc. Employee
Stock Option Plan as approved by the Board of Directors on November 5, 1997, as
the same may be amended from time to time.
-2-
<PAGE>
(k) 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 Plan shall become effective upon adoption of the Plan by the Board
of Directors.
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 executives and 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.
(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.
(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
(a) Participation in the Plan shall be limited to the key employees and
consultants of the Corporation and its subsidiaries who shall be designated by
the Committee and approved by the Board of Directors.
-3-
<PAGE>
(b) No member of the Board of Directors who is not also an officer of
the Corporation shall be eligible to participate in the Plan.
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 four hundred thousand
(400,000) 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 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.
(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.
-4-
<PAGE>
(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 Board of Directors
at the time of grant of the Option, provided that if no term is established by
the Board of Directors 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. Notwithstanding the foregoing, each Option Agreement shall
provide that, upon the occurrence of a Change in Control of the Corporation, all
Options then outstanding shall become immediately exercisable.
(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 time
previously granted Options may be exercised and extending the time following the
Option holder's termination of active 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
-5-
<PAGE>
within ninety (90) 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 (90) 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 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) 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.
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 20175, 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.
-6-
<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 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 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 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
-7-
<PAGE>
satisfy any withholding taxes attributable to the exercise of the Stock Option.
Alternatively, such holder of a Stock Option may elect to deliver previously
owned shares of Common Stock upon exercise of the Stock Option to satisfy any
withholding taxes attributable to the exercise of the Stock Option. If the Board
of Directors does not include any provisions relating to this withholding
feature in its resolutions granting the 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 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 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 Stock Option may not elect any of the
methods of satisfying his withholding tax obligation in respect of any exercise
if, in the opinion of counsel to the Corporation, there is a substantial
likelihood that the election or timing of the election would subject the holder
to a substantial risk of liability under Section 16 of the Exchange Act.
(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 number of
shares of Common Stock that may be issued upon the exercise of Options granted
pursuant to the Plan to any single
-8-
<PAGE>
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 November 4, 2007.
-9-
Exhibit 5
March 2, 1998
Miles & Stockbridge P.C.
10 Light Street
Baltimore, Maryland 21202
Re: Precision Auto Care Employee 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 400,000
shares of the Common Stock of Precision Auto Care, Inc. (the "Corporation") for
use in connection with the Precision Auto Care Employee 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 Auto Care Employee 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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