MERCURY AIR GROUP INC, S-8, 1999-05-11

MERCURY AIR GROUP INC
S-8, 1999-05-11
PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS)

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<PAGE> 1
As filed with the Securities and Exchange Commission on May 11, 1999
Registration No. 33______

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-8
REGISTRATION STATEMENT

Under
THE SECURITIES ACT OF 1933

MERCURY AIR GROUP, INC.
(Exact name of registrant as specified in charter)

New York 11-1800515
(State of incorporation) (I.R.S. Employer
Identification Number)

5456 McConnell Avenue, Los Angeles, California 90066
(Address of principal executive offices) (Zip Code)

1998 Long-Term Incentive Plan (600,000 Shares)
1998 Directors Stock Option Plan (300,000 Shares)
S. K. Acquisition, Inc. Stock Option Grant (45,375 Shares)
Eric Beelar Stock Subscription Agreement (68,750 Shares)
Zack Vernikovsky Stock Subscription Agreement (68,750 Shares)
(Full titles of plans)

CT Corporation System
818 West Seventh Street
Los Angeles, CA 90017
(213) 627-8252

(Name and address, including zip code, and telephone number, including area
code, of agent for service)

Calculation of Registration Fee

<TABLE>
<CAPTION>
Proposed maximum
Title of Securities Amount to be Proposed maximum aggregate offering Amount of
to be registered registered offering price(1) price(1) registration fee
- ------------------- ------------ ----------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock, 1,082,875 shares $6.46875 $7,004,848 $1,947.35
$.01 Par Value
- ------------------- ---------------- ----------------- ------------------ ----------------
</TABLE>

(1) Calculated pursuant to Rule 457 based on the average of the high and low
prices reported on the American Stock
Exchange on May 7, 1999 for registrant's Common Stock, $.01 par value.

<PAGE> 2

Part I

Information Required in the Section 10(a) Prospectus

Item 1. Plan Information.

The information required for this item is included in documents
distributed to each participant.

Item 2. Registrant Information and Employee Plan Annual Information.

The information required for this Item is included in documents
distributed to each participant.

Part II

Information Required in the Registration Statement

Item 3. Incorporation of Documents by Reference

The following documents which have been filed by Mercury Air Group,
Inc., a New York corporation (the "Company") with the Securities and Exchange
Commission are incorporated by reference
into this Registration Statement:

(1) The Annual Report of the Company on Form 10-K for the fiscal year
ended June 30, 1998;

(2) The Quarterly Reports of the Company on Form 10-Q for the fiscal
quarters ended September 30, 1998, December 31, 1998, and March 31, 1999; and

(3) The description of the Company's Common Stock, $.01 par value
("Common Stock"), contained in its Registration Statement on Form 8-A filed
under the Securities Exchange Act of 1934.

All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment to the Registration Statement that indicates that all
securities offered hereby have been sold or which deregisters such securities
remaining unsold, shall be deemed to be incorporated herein by reference and to
be a part hereof from the date of filing of such documents. Any statement
contained herein or in any document incorporated or deemed incorporated herein
by reference shall be deemed modified or superseded to the extent that a
statement contained in any subsequently filed document which is also deemed
incorporated herein by reference modifies or supersedes such earlier statement.

Item 4. Description of Securities.

Not applicable.

<PAGE> 3

Item 5. Interests of Named Experts or Counsel.

The law firm of McBreen, McBreen & Kopko will be furnishing an opinion
as to the legality of the Common Stock registered under this Registration
Statement. During fiscal 1998, the Company paid $47,557 to McBreen, McBreen &
Kopko for legal services. Frederick H. Kopko, Jr. is a partner of McBreen,
McBreen & Kopko. Mr. Kopko is a director of the Company and holds options to
purchase 82,500 shares of Common Stock issued under the 1990 Directors Stock
Option Plan.

Item 6. Indemnification of Directors and Officers.

Section 722 of the New York Business Corporation Law (the "NYBCL")
authorizes indemnification by a corporation of its directors and officers
against amounts paid in settlement and reasonable expenses, including attorneys
fees, actually and necessarily incurred by them in connection with the defense
or settlement of such action, or in connection with an appeal therein, if such
director or officer acted in good faith for a purpose which they reasonably
believed to be in the best interests of the corporation. No indemnification will
be made however, in respect of an action brought derivatively or by or in the
right of the corporation if (1) a threatened action, or a pending action which
is settled or otherwise disposed of or (2) any claim, issue or matter as to
which any such officer or director is adjudged to be liable to the corporation,
unless and only to the extent that the court to which the action was brought,
or, if no action was brought, any court of competent jurisdiction, determines
upon application that in view of all the circumstances of the case, the director
or officer is fairly and reasonably entitled to indemnity for such portion of
the settlement amount and expenses as the court deems proper.

The indemnification provided in Section 722 of the NYBCL is mandatory
in any instance where the officer or director is successful on the merits in
defending a civil or criminal action. Otherwise, indemnification can only be
made pursuant to a specific authorization given in a particular case. Such
authorization must be contained in court order, resolution approved by a quorum
of disinterested directors, resolution of the board following a written opinion
of independent counsel that indemnification is proper or shareholder resolution.
Expenses incurred in defending an action may be advanced pending final
disposition of such action upon receipt of an undertaking to reimburse such
advances if it is ultimately determined that indemnification is not appropriate.

The Company's bylaws authorize it to indemnify its directors and
officers against any judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees, if such director or officer acted in good
faith.

The Company further has entered into indemnification agreements with
its officers and directors obligating it to indemnify them to the fullest extent
permitted by law. The indemnification agreements obligate the Company to advance
expenses pending a resolution of whether or not indemnification is ultimately
appropriate upon receipt of an undertaking. The indemnification agreement
further provides a presumption in favor of indemnification and procedures and
standards for implementing the indemnification permitted pursuant to Section 722
of the NYBCL.

The NYBCL further provides that a New York corporation has the power to
purchase and maintain insurance in order to indemnify the corporation for any
obligation which it incurs as a result or the indemnification of directors and
officers pursuant to the provisions of the NYBCL, to indemnify directors

<PAGE> 4

and officers in instances in which they may be indemnified by the corporation
pursuant to the provisions of the NYBCL, and to indemnify directors and officers
in instances in which they may not otherwise by indemnified by the corporation
pursuant to the provisions of the NYBCL, provided the contract of insurance
covering such directors and officers provides, in a manner acceptable to the
superintendent of insurance, for a retention amount and for co-insurance. The
company has purchased an officers and directors liability insurance policy.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

4.1 Restated Certificate of Incorporation (1)
4.2 Form of Amendment to Restated Certificate of Incorporation of the
Registrant creating the Series A 8% Cumulative Redeemable Preferred Stock
(1)
4.3 Form of Amendment to the Restated Certificate of Incorporation declaring
the separation date for the Series A 8% Cumulative Redeemable Preferred
Stock (2)
4.4 Bylaws (1)
4.5 Amendment To ByLaws of the Company (3)
4.6 1998 Long-Term Incentive Plan (4)
4.7 1998 Directors Stock Option Plan (5)
4.8 S. K. Acquisition, Inc. Nonqualified Stock Option Agreement (6)
4.9 Eric Beelar Stock Subscription Agreement
4.10 Zack Vernikovsky Stock Subscription Agreement
5.1 Opinion of McBreen, McBreen & Kopko as to the legality of the stock
registered hereby
23.1 Consent of McBreen, McBreen & Kopko--contained in Exhibit 5.1 23.2 Consent
of Deloitte & Touche LLP
- ------------------------------------------
(1) All such documents, were previously filed as exhibits to the Company's
Registration Statement on Form S-2 dated June 18, 1991 (Registration Statement
No. 33-39044) and are incorporated herein by
reference.

(2) Such document was previously filed as an exhibit to the Company's Quarterly
Report on Form 10-Q for the Quarter ended March 31, 1992 and is incorporated
herein by reference.

(3) Such document was previously filed as an Exhibit to the Company's Annual
Report on Form 10-K for the year ended June 30, 1995 and is incorporated herein
by reference.

(4) Such document was previously filed as Appendix A to the Company's Proxy
Statement for the December 3, 1998 Annual Meeting of Shareholders.

(5) Such document was previously filed as Appendix B to the Company's Proxy
Statement for the December 3, 1998 Annual Meeting of Shareholders.

(6) Such document was previously filed as an exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996 and is incorporated
herein by reference.

<PAGE> 5

Item 9. Undertakings

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;
and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form F-3, 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) or 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 post-effective amendment shall be deemed 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.

The undersigned registrant hereby undertaken that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' 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.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions or otherwise, the company 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 Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the

<PAGE> 6

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.

<PAGE> 7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 the Company
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 Los Angeles, State of California, on the 11th day of
May 1999.

MERCURY AIR GROUP, INC.

By: /s/ JOSEPH A. CZYZYK
---------------------------------
Joseph A. Czyzyk
Chief Executive Officer and President

<PAGE> 8

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph A. Czyzyk and Randolph E. Ajer his
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitutes or substitute may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ SEYMOUR KAHN Chairman of the Board May 11, 1999
- ---------------------------
Seymour Kahn

/s/ JOSEPH A. CZYZYK President, Chief Executive May 11, 1999
- --------------------------- Officer and Director
Joseph A. Czyzyk (Principal Executive Officer)

/s/ RANDOLPH E. AJER Secretary, Chief Financial May 11, 1999
- --------------------------- Officer, Chief Accounting
Randolph E. Ajer Officer, Treasurer and
Executive Vice President
(Principal Financial and
Accounting Officer)

/s/ ROBERT L. LIST Director May 11, 1999
- ---------------------------
Robert L. List

/s/ PHILIP J. FAGAN, JR., M.D. Director May 11, 1999
- ------------------------------
Philip J. Fagan, Jr., M.D.

/s/ FREDERICK H. KOPKO, JR. Director May 11, 1999
- ---------------------------
Frederick H. Kopko, Jr.

/s/ WILLIAM G. LANGTON Director May 11, 1999
- ---------------------------
William G. Langton
</TABLE>

<PAGE> 9

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Page
Item Sequentially
Number Description Numbered
- ------ ----------- --------
<S> <C> <C>
4.1 Restated Certificate of Incorporation N/A

4.2 Form of Amendment to Restated
Certificate of Incorporation of the
Registrant creating the Series A 8%
Cumulative Redeemable Preferred Stock N/A

4.3 Form of Amendment to the Restated
Certificate or Incorporation declaring
the separation date for the Series A 8%
Cumulative Redeemable Preferred Stock N/A

4.4 Bylaws N/A

4.5 Amendment to Bylaws N/A

4.6 1998 Long-Term Incentive Plan N/A

4.7 1998 Director Stock Option Plan N/A

4.8 S. K. Acquisition, Inc. Nonqualified Stock Option
Agreement N/A

4.9 Eric Beelar Stock Subscription Agreement ___

4.10 Zack Vernikovsky Stock Subscription Agreement ___

5.1 Opinion of McBreen, McBreen & Kopko as to the
legality of the stock registered hereby ___

23.1 Consent of McBreen, McBreen & Kopko N/A

23.2 Consent of Deloitte & Touche LLP ___
</TABLE>

<PAGE> 1
EXHIBIT 4.9

STOCK SUBSCRIPTION AGREEMENT

This Stock Subscription Agreement is made as of October 10, 1995 (the
"Effective Date") by and between Mercury Air Group, Inc., a New York corporation
("Mercury"), and Eric Beelar (the "Purchaser"), with reference to the following:

R E C I T A L S

A. Purchaser is Vice President--Fuel Sales of Mercury.

B. Mercury desires to sell to Purchaser on the Effective Date and
Purchaser desires to subscribe for the purchase from Mercury at such time of
certain shares of the capital stock of Mercury as set forth in this Agreement.

C. In order to induce Mercury to sell such shares, Purchaser
desires to have such shares subject to the restrictions and interests created by
this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and mutual
covenants and conditions contained herein, the parties agree as follows:

1. Sale and Purchase of Stock. Mercury hereby agrees to sell to
Purchaser, subject to the conditions and restrictions contained in this
Agreement, and Purchaser hereby agrees to purchase from Mercury, Fifty Thousand
(50,000) shares (the "Shares") of the common stock, par value $.01 ("Common
Stock"), of Mercury, at a price of $8.125 per share for an aggregate purchase
price of Four Hundred Six Thousand Two Hundred Fifty Dollars ($406,250) (the
"Purchase Price"). Purchaser shall pay Forty Thousand Dollars ($40,000) of the
Purchase Price by check payable to Mercury and shall issue a secured promissory
note in the form attached hereto as Exhibit A (the "Note") to Mercury for Three
Hundred Sixty-Six Thousand Two Hundred Fifty Dollars ($366,250), the balance of
the Purchase Price. The Note shall be secured by a pledge of the Shares, the
terms and conditions of which are expressed in this Agreement.

<PAGE> 2

2. Restriction on Transfer of the Shares. Except as otherwise
provided herein, Purchaser may not sell, transfer, assign, pledge, hypothecate
or otherwise dispose of any of the Shares, or any right or interest therein,
during the term of this Agreement. Any purported sale, transfer (including
involuntary transfers initiated by operation of legal process), hypothecation or
disposition of any of the Shares or any right or interest therein, except in
strict compliance with the terms and conditions of this Agreement, shall be null
and void.

3. Repurchase Option Upon Termination.

(a) Vesting of Shares. For purposes of this Agreement, and
subject to Section 3(b) hereof, the Shares shall vest concurrent with any
payment made or deemed made under the Note such that at all times the percentage
of the total Shares vested shall equal the percentage which the total principle
amount of the Note repaid plus Forty Thousand Dollars ($40,000) is of the
Purchase Price. Notwithstanding the foregoing, no vesting of Shares shall be
deemed to occur prior to August 24, 1996.

(b) Mercury's Repurchase Option. In the event that Purchaser's
employment by Mercury terminates for any reason (including, without limitation,
voluntary resignation or dismissal by Mercury, with or without cause), prior to
the vesting of all of the Shares, Mercury shall purchase from Purchaser all of
the non-vested Shares (the "Repurchase"). The purchase price for any Shares to
be purchased pursuant to the Repurchase shall equal the price per share
originally paid for the Shares. The Shares shall be escrowed pursuant to this
Agreement to ensure Mercury's Repurchase.

(c) Adjustments of Repurchase Option. The purchase price for
any Shares to be purchased pursuant to the Repurchase shall be increased or
decreased appropriately to reflect any subdivision or combination of such Shares
or any dividend or distribution with respect to such Shares which has been paid
in additional shares of Common Stock. The Repurchase shall also apply to any
property or other securities issued with respect to unvested Shares; provided,
however, that such property or securities shall be deemed vested upon vesting of
the Shares with respect to which such property or securities were issued or when
the Shares with respect to which such property or securities were issued would
have vested. The number of Shares vested shall be

<PAGE> 3

increased or decreased appropriately to maintain the ratio between vested shares
and the paid portion of the Purchase Price set forth in paragraph (a) hereof in
connection with any subdivision or combination of such Shares or any dividend or
distribution with respect to such Shares which has been paid in additional
shares of Common Stock.

(d) Exercise of Repurchase Option. The Repurchase Option shall
be exercised by Mercury by delivering to Purchaser the canceled Note and on or
before October 10, 1996 (the vesting of the first installment of the Shares) a
check for an additional Forty-Thousand Dollars ($40,000).

4. Permitted Transfers. Purchaser may, at any time or times,
transfer any or all of the Shares: inter vivos to Purchaser's spouse or issue,
or to a trust for their benefit; provided, however, that such Shares shall not
be transferred until the Permitted Transferee executes a valid undertaking to
Mercury to the effect that the Shares so transferred shall thereafter remain
subject to all of the provisions of this Agreement (including the Repurchase in
the event Purchaser's employment by Mercury is terminated for any reason prior
to the vesting of the Shares) as though the Permitted Transferee were a party to
this Agreement, bound in every respect in the same way as Purchaser. The
restrictions on transfer set forth in this Agreement shall lapse upon vesting
with respect to all vested Shares.

5. Rights as Shareholder. Subject to compliance with the
provisions of this Agreement, Purchaser shall be entitled to vote the Shares and
receive all cash dividends while the Shares are held by Mercury's Corporate
Secretary pursuant to Section 9 of this Agreement; provided, however, that any
dividends or distributions with respect to the Shares in a form other than cash
shall be held by the Corporate Secretary of Mercury.

6. Investment Representations. Purchaser represents and warrants
to Mercury as follows:

(a) Purchaser is acquiring the Shares for his own account and
not with a view to or for sale in connection with any distribution of the
Shares.

<PAGE> 4

(b) Purchaser (I) is familiar with the business of Mercury,
(II) has had an opportunity to discuss with representatives of Mercury the
condition of any prospects for the continued operation and financing of Mercury
and such other matters as Purchaser has deemed appropriate in considering
whether to invest in the Shares, and (III) has been provided access to all
available information about Mercury requested by Purchaser.

(c) Purchaser understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act") or
registered or qualified under the securities laws of any state and that
Purchaser may not sell or otherwise transfer the Shares unless they are
subsequently registered under the Act and registered or qualified under
applicable state securities laws, or unless an exemption is available which
permits sale or other transfer without such registration and qualification.

(d) Mercury agrees to register the Shares for resale under the
Act on Form S-3 in connection with the next Form S-8 registration statement
filed by Mercury.

7. No Contract of Employment or Bonus. Purchaser acknowledges and
agrees that this Agreement shall not be construed to give the Purchaser any
right to be retained in the employ of Mercury or any subsidiary of Mercury, and
that the right and power of Mercury or any subsidiary to dismiss or discharge
Purchaser (with or without cause) is strictly reserved. Mercury also reserves
the right from time-to-time to modify the bonus plan which applies to Purchaser
and to set bonus goals and targets in the sole discretion of the Compensation
Committee of the Board of Directors of Mercury.

8. Mercury Undertakings. Mercury hereby undertakes to forgive the
remaining unpaid balance of principal and interest on the Note in the event that
Purchaser remains continuously employed by Mercury or any subsidiary of Mercury
through October 10, 2005.

9. Pledge and Escrow.

A. Pledge and Escrow of Shares. Purchaser hereby grants to
Mercury a security interest in the Shares, pledges and hypothecates the Shares
to Mercury, and deposits the certificates evidencing the Shares (the
"Certificates") with Mercury's

<PAGE> 5

Corporate Secretary as collateral security for the payment by Purchaser of the
Note and the full, faithful and timely performance by Purchaser of all of its
other obligations under the Note and this Agreement. The Shares are also
delivered to Mercury's Corporate Secretary pursuant to the terms of this
Agreement to be held in escrow in order to ensure performance of the Repurchase
as and when such right becomes exercisable. The Certificates, together with a
stock assignment duly executed in blank with signatures appropriately guaranteed
or witnessed, are being retained by Mercury's Corporate Secretary, as the
pledgeholder and escrow holder for the Shares.

B. Partial Release. Any shares which vest in accordance with
Section 3 of this Agreement shall be released to Purchaser and shall no longer
be subject to the terms of the pledge and escrow provided in this Agreement.
Shares shall also be transferred to the extent necessary to effect a transfer
permitted pursuant to Section 4 of this Agreement; provided, however, that the
transferee shall execute an agreement comparable to this Agreement with respect
to the transferred Shares.

C. Rights on Default. Upon the occurrence of any a Default as
provided in the Note or following any event which gives rise to the Repurchase,
Mercury shall have the right to repurchase the Shares and cancel the Note in
accordance with the Note and this Agreement. Mercury shall not be entitled to
collect any deficiency with respect to the Note. Purchaser shall have no right
to redeem the Shares by paying amounts otherwise due under the Note.

D. Termination. The pledge and escrow created by this Agreement
shall terminate upon the payment in full of the principal amount and all accrued
interest thereon under the Note. Upon termination of the pledge and escrow
created by this Agreement, Purchaser shall be entitled to the return of the
Certificates and any other collateral security then held by the Corporate
Secretary of Mercury pursuant to this Agreement.

10. Miscellaneous.

<PAGE> 6

(a) Legends on Certificates. Any and all certificates now or
hereafter issued evidencing Shares which have not vested shall have endorsed
upon them a legend substantially as follows:

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS UPON TRANSFER AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THAT CERTAIN STOCK SUBSCRIPTION
AGREEMENT DATED AS OF OCTOBER 10, 1995 BETWEEN MERCURY AIR GROUP, INC.,
A NEW YORK CORPORATION, AND ERIC BEELAR, A COPY OF WHICH AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF MERCURY AIR GROUP, INC.

Such certificates shall also bear such legends and shall be subject to such
restrictions on transfer as may be necessary to comply with all applicable
federal and state securities laws and regulations.

(b) Further Assurances. Each party hereto agrees to perform
any further acts and execute and deliver any document which may be reasonably
necessary to carry out the intent of this Agreement.

(c) Binding Agreement. This Agreement shall bind and inure to
the benefit of the successors and assigns of Mercury and the personal
representatives, heirs and legatees of Purchaser.

(d) Other Restrictions on Transfers. The restrictions on
transfer set forth in this Agreement are in addition to any and all restrictions
imposed pursuant to any applicable state or federal law or regulation.

(e) Notices. Any notice required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given upon
personal delivery or, if mailed, upon the expiration of 48 hours after mailing
by any form of United States mail requiring a return receipt, addressed (I) to
Purchaser at the address set forth on the signature page hereof and (II) to
Mercury Air Group, Inc., 5456 McConnell Avenue, Los Angeles, California 90066. A
party may change its address by giving written notice to the other parties
setting forth the new address for the giving of notices pursuant to this
Agreement.

<PAGE> 7

(f) Amendments. This Agreement may be amended at any time by
the written agreement and consent of the parties hereof.

(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

(h) Disputes. In the event of any dispute among the parties
arising out of this Agreement, the prevailing party shall be entitled to recover
from the nonprevailing party the reasonable expenses of the prevailing party,
including, without limitation, reasonable attorneys' fees.

(i) Entire Agreement. This Agreement, including the agreements
referred to herein, constitute the entire agreement and understanding among the
parties pertaining to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, relating thereto.

(j) Recapitalizations or Exchanges Affecting Mercury's Capital
Stock. The provisions of this Agreement, including the pledge and escrow
arrangement contained in Section 9 hereof, shall apply, to the full extent set
forth herein with respect to the Shares, to any and all shares of capital stock
or other securities or property of Mercury or any successor or assign of Mercury
(whether by merger, consolidation, sale of assets, or otherwise) which may be
issued in respect of, in exchange for, or in substitution of, the Shares
originally issued to Purchaser, by reason of any stock dividend, split, reverse
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise.

(l) Term. This Agreement commences on the date hereof and
terminates upon the earlier of vesting of all Shares or Repurchase of all
Shares.

<PAGE> 8

(m) Counterparts. This Agreement may be executed in two or
more counterparts, all of which, when taken together, shall constitute one and
the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

MERCURY AIR GROUP, INC.

By: ______________________________

Its: _____________________________

PURCHASER
Eric Beelar

-----------------------------------
Signature

-----------------------------------
Name

-----------------------------------
Street Address

-----------------------------------
City State Zip Code

<PAGE> 1
EXHIBIT 4.10

STOCK SUBSCRIPTION AGREEMENT

This Stock Subscription Agreement is made as of January 18, 1996 (the
"Effective Date") by and between Mercury Air Group, Inc., a New York corporation
("Mercury"), and Zahi Vernikovsky (the "Purchaser"), with reference to the
following:

R E C I T A L S

A. Purchaser is Vice President--Mercury Air Cargo, Inc.

C. In order to induce Mercury to sell such shares, Purchaser
desires to have such shares subject to the restrictions and interests created by
this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and mutual
covenants and conditions contained herein, the parties agree as follows:

8. Sale and Purchase of Stock. Mercury hereby agrees to sell to
Purchaser, subject to the conditions and restrictions contained in this
Agreement, and Purchaser hereby agrees to purchase from Mercury, Fifty Thousand
(50,000) shares (the "Shares") of the common stock, par value $.01 ("Common
Stock"), of Mercury, at a price of $8.125 per share for an aggregate purchase
price of Four Hundred Six Thousand Two Hundred Fifty Dollars ($406,250) (the
"Purchase Price"). Purchaser shall pay Forty Thousand Dollars ($40,000) of the
Purchase Price by check payable to Mercury and shall issue a secured promissory
note in the form attached hereto as Exhibit A (the "Note") to Mercury for Three
Hundred Sixty-Six Thousand Two Hundred Fifty Dollars ($366,250), the balance of
the Purchase Price. The Note shall be secured by a pledge of the Shares, the
terms and conditions of which are expressed in this Agreement.

<PAGE> 2

9. Restriction on Transfer of the Shares. Except as otherwise
provided herein, Purchaser may not sell, transfer, assign, pledge, hypothecate
or otherwise dispose of any of the Shares, or any right or interest therein,
during the term of this Agreement. Any purported sale, transfer (including
involuntary transfers initiated by operation of legal process), hypothecation or
disposition of any of the Shares or any right or interest therein, except in
strict compliance with the terms and conditions of this Agreement, shall be null
and void.

10. Repurchase Option Upon Termination.

<PAGE> 3

(d) Exercise of Repurchase Option. The Repurchase Option shall
be exercised by Mercury by delivering to Purchaser the canceled Note and on or
before January 18, 1997 (the vesting of the first installment of the Shares) a
check for an additional Forty-Thousand Dollars ($40,000).

11. Permitted Transfers. Purchaser may, at any time or times,
transfer any or all of the Shares: inter vivos to Purchaser's spouse or issue,
or to a trust for their benefit; provided, however, that such Shares shall not
be transferred until the Permitted Transferee executes a valid undertaking to
Mercury to the effect that the Shares so transferred shall thereafter remain
subject to all of the provisions of this Agreement (including the Repurchase in
the event Purchaser's employment by Mercury is terminated for any reason prior
to the vesting of the Shares) as though the Permitted Transferee were a party to
this Agreement, bound in every respect in the same way as Purchaser. The
restrictions on transfer set forth in this Agreement shall lapse upon vesting
with respect to all vested Shares.

12. Rights as Shareholder. Subject to compliance with the
provisions of this Agreement, Purchaser shall be entitled to vote the Shares and
receive all cash dividends while the Shares are held by Mercury's Corporate
Secretary pursuant to Section 9 of this Agreement; provided, however, that any
dividends or distributions with respect to the Shares in a form other than cash
shall be held by the Corporate Secretary of Mercury.

13. Investment Representations. Purchaser represents and warrants
to Mercury as follows:

(a) Purchaser is acquiring the Shares for his own account and
not with a view to or for sale in connection with any distribution of the
Shares.

<PAGE> 4

(d) Mercury agrees to register the Shares for resale under the
Act on Form S-3 in connection with the next Form S-8 registration statement
filed by Mercury.

14. No Contract of Employment or Bonus. Purchaser acknowledges and
agrees that this Agreement shall not be construed to give the Purchaser any
right to be retained in the employ of Mercury or any subsidiary of Mercury, and
that the right and power of Mercury or any subsidiary to dismiss or discharge
Purchaser (with or without cause) is strictly reserved. Mercury also reserves
the right from time-to-time to modify the bonus plan which applies to Purchaser
and to set bonus goals and targets in the sole discretion of the Compensation
Committee of the Board of Directors of Mercury.

9. Pledge and Escrow.

<PAGE> 5

10. Miscellaneous.

<PAGE> 6

(a) Legends on Certificates. Any and all certificates now or
hereafter issued evidencing Shares which have not vested shall have endorsed
upon them a legend substantially as follows:

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS UPON TRANSFER AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THAT CERTAIN STOCK SUBSCRIPTION
AGREEMENT DATED AS OF JANUARY 18, 1996 BETWEEN MERCURY AIR GROUP, INC.,
A NEW YORK CORPORATION, AND ZAHI VERNIKOVSKY, A COPY OF WHICH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF MERCURY AIR GROUP, INC.

(b) Further Assurances. Each party hereto agrees to perform
any further acts and execute and deliver any document which may be reasonably
necessary to carry out the intent of this Agreement.

(c) Binding Agreement. This Agreement shall bind and inure to
the benefit of the successors and assigns of Mercury and the personal
representatives, heirs and legatees of Purchaser.

<PAGE> 7

(f) Amendments. This Agreement may be amended at any time by
the written agreement and consent of the parties hereof.

(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

(k) Headings. Introductory headings at the beginning of each
section of this Agreement are solely for the convenience of the parties and
shall not be deemed to be a limitation upon or description of the contents of
any such section.
(l) Term. This Agreement commences on the date hereof and
terminates upon the earlier of vesting of all Shares or Repurchase of all
Shares.

<PAGE> 8

(m) Counterparts. This Agreement may be executed in two or
more counterparts, all of which, when taken together, shall constitute one and
the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

MERCURY AIR GROUP, INC.

By: ______________________________

Its: _____________________________

PURCHASER
Zahi Vernikovsky

-----------------------------------
Signature

-----------------------------------
Name

-----------------------------------
Street Address

-----------------------------------
City State Zip Code

<PAGE> 1
EXHIBIT 5.1

May 4, 1999

Mercury Air Group, Inc.
5456 McConnell Avenue
Los Angeles, California 90066

Re: Mercury Air Group, Inc. Form S-8 Registration Statement

Ladies and Gentlemen:

At your request, I have examined the Registration Statement on Form S-8
(the "Registration Statement") which you intend to file with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended, of 1,082,875 shares of common stock, par value $.01 (the
"S-8 Shares"), of Mercury Air Group, Inc., a New York corporation (the
"Company"), which are to be offered and sold by the Company pursuant to the 1998
Directors Stock Option Plan, the 1998 Long-Term Incentive Plan, a Non-Qualified
Stock Option Agreement by and between the Company and S.K. Acquisition, Inc.
dated August 24, 1995 a Non-Qualified Stock Option Agreement by and between the
Company and Mr. Eric Beelar dated October 10, 1995, and a NonQualified Stock
Option Agreement by and between the Company and Mr. Zack Vernikovsky dated
January 18, 1996 (collectively, such agreements and plans are hereinafter
referred to as the "Plans").

I have examined the Company's Certificate of Incorporation and Bylaws;
the Company's minute books; the corporate records in connection with the Plans
and the sale of the S-8 Shares: and such other documents of the Company as I
have considered necessary or appropriate for the purposes of this opinion.

On the basis of such examinations and reviews, I advise you that I am
of the opinion that the S- 8 Shares, when offered and sold in the manner
provided in the Prospectus contained in the Registration Statement, will be
validly issued, fully paid and nonassessable.

This opinion is limited solely to matters of the laws of the State of
California; the general corporation law of the State of New York; and the laws
of the United States of America.

<PAGE> 2

Mercury Air Group, Inc.
May 4, 1999
Page 2

We hereby advise you that Frederick H. Kopko, Jr., a partner of this
law firm, is a director of the Company and holds options to purchase 82,500
shares of Common Stock issued under the 1990 Directors Stock Option Plan. We
hereby consent to the use of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

MCBREEN, MCBREEN & KOPKO

/s/ James R. Stern, Esq.
- ---------------------------

<PAGE> 1

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Mercury Air Group, Inc., on Form S-8 of our report dated September 14, 1998,
appearing in the Annual Report on Form 10-K of Mercury Air Group, Inc. for the
year ended June 30, 1998.

DELOITTE & TOUCHE LLP
Los Angeles, California

May 7, 1999