As filed with the Securities and Exchange Commission on July 1, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRECISION STANDARD, INC.
(Exact name of Registrant as specified in its charter)
COLORADO 84-0985295
(State of Incorporation) (I.R.S. Employer ID No.)
1225 17th Street, Suite 1800, Denver, Colorado 80202
(Address of Principal Offices)
PRECISION STANDARD, INC.
NONQUALIFIED STOCK OPTION PLAN
AND
PRECISION STANDARD, INC.
INCENTIVE STOCK OPTION AND APPRECIATION RIGHTS PLAN
(Full Title of the Plan)
Matthew L. Gold, President
Precision Standard, Inc.
1225 17th Street, Suite 1800
Denver, Colorado 80202
(Name and address of Agent for Service)
(303) 292-6565
(Telephone number, including area code of Agent for Service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount maximum maximum aggregate Amount of
securities to be offering price offering Registration
Registered Registered Per Share(1) price(1) Fee
Common Stock
$0.0001 Par
Value 1,000,000 $1.25 $1,250,000 $397.23
(1) The price of $1.25 per share, which is the last price reported to The
Nasdaq Stock Market on June 30, 1997, is set forth solely for
purposes of calculating the filing fee.
REGISTRATION OF ADDITIONAL SHARES
The Registrant incorporates by reference the contents of the
earlier Registration Statement, No. 33-79676, for the registration of
500,000 additional shares for the Registrant's Nonqualified Stock Option
Plan and 500,000 additional shares for the Registrant's Incentive Stock
Option and Appreciation Rights Plan which additional shares were approved
by the shareholders of the Registrant on May 29, 1996.
Item 8 EXHIBITS.
4.1 Amended and First Restated Articles of Incorporation of the
Company filed as Exhibit 3.1 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1988
and incorporated herein by reference.
4.2 Amended and First Restated Bylaws of the Company filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988 and incorporated
herein by reference.
4.3 Second Amended and Restated Credit Agreement between
Precision Standard, Inc. and Bank of America National Trust
and Savings Association entered into as of December 31,
1996 filed as Exhibit 4.1 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 1997
and incorporated herein by reference.
4.4 Second Amended and Restated Senior Subordinated Loan
Agreement between Precision Standard, Inc. and Bank of
America National Trust and Savings Association entered into
as of December 31, 1996 filed as Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997 and incorporated herein by
reference.
4.5 Amended and Restated Warrant issued by Precision Standard,
Inc. to the Bank of America National Trust and Savings
Association entered into as of December 31, 1996 filed as
Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1997 and
incorporated herein by reference.
4.6 Precision Standard, Inc. Nonqualified Stock Option Plan
4.7 Precision Standard, Inc. Incentive Stock Option and
Appreciation Rights Plan
5 Opinion of Gorsuch Kirgis L.L.C. regarding legality of
shares being issue.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Gorsuch Kirgis L.L.C. (contained in its opinion
as Exhibit 5.1).
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 Denver, State of Colorado, on
this 30th day of June, 1997.
PRECISION STANDARD, INC.
By: /s/ Matthew L. Gold
Matthew L. Gold, President
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.
SIGNATURE TITLE DATE
/s/Matthew L. Gold Chairman, President, June 30, 1997
Matthew L. Gold Chief Executive Officer
and Director
(Principal Executive Officer)
/s/Timothy A. RabonVice President and Treasurer June 30, 1997
Timothy A. Rabon (Principal Financial and
Accounting Officer)
/s/Donald C. Hannah Director June 30, 1997
Donald C. Hannah
/s/George E. R. Kinnear II Director June 30, 1997
George E. R. Kinnear II
/s/J. Ben Shapiro Director June 30, 1997
J. Ben Shapiro, Jr.
/s/Thomas C. Richards Director June 30, 1997
Thomas C. Richards
EXHIBIT INDEX
No. Description Method of Filing
4.6 Precision Standard, Inc.
Nonqualified Stock
Option Plan Filed herewith electronically
4.7 Precision Standard, Inc.
Incentive Stock Option
and Appreciation Rights Plan Filed herewith electronically
5 Opinion of Gorsuch Kirgis L.L.C.
regarding legality of shares
being issued Filed herewith electronically
23.1 Consent of Coopers & Lybrand
L.L.P. Filed herewith electronically
23.2 Consent of Arthur Andersen LLP Filed herewith electronically
PRECISION STANDARD, INC.
NONQUALIFIED STOCK OPTION PLAN
March 29, 1996
As Amended April 1, 1997
Section 1. PURPOSE. The purpose of the PRECISION STANDARD, INC.
(the "Company") Nonqualified Stock Option Plan (the "Plan") is to provide
incentives for selected persons to promote the financial success and
progress of the Company by granting such persons awards ("Awards") of
incentives in the form of options to purchase shares of the Company's
Common Stock ("Options"), stock appreciation rights ("SARs"), and Common
Stock of the Company ("Stock Grants"). An Award may consist of one or a
combination of such incentives and may be made at any time or from time to
time.
Section 2. GENERAL PROVISIONS.
A. ADMINISTRATION. The Plan shall be administered by
the Compensation Committee, which shall be comprised of two or more
independent outside directors appointed by the Board of Directors (the
"Committee"). Notwithstanding the foregoing, if it would be consistent
with all applicable laws, including, without limitation, Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"), and the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations promulgated thereunder (including, without limitation,
the regulations relating to Section 162(m) of the Code), then the Plan may
be administered by the Board of Directors, and if so administered all
subsequent references to the Committee shall refer to the Board of
Directors. Any action of the Committee shall be taken by majority vote or
the unanimous written consent of the Committee members.
B. AUTHORITY OF THE COMMITTEE. Subject to other
provisions of the Plan, and with a view towards furtherance of its
purpose, the Committee shall have sole authority and absolute discretion:
1. to construe and interpret the Plan;
2. to define the terms used herein;
3. to prescribe, amend and rescind rules and
regulations relating to the Plan;
4. to determine the persons to whom Awards are
granted;
5. to determine the time or times at which Awards
shall be granted;
6. to determine the number of shares subject to
each Award;
7. to determine all of the other terms and
conditions of the Options, SARs, and Stock Grants awarded hereunder; and
8. to make all other determinations necessary or
advisable for the administration of the Plan and to do everything
necessary or appropriate to administer the Plan.
All decisions, determinations and interpretations made by the Committee
shall be binding and conclusive on all participants in the Plan and on
their legal representatives, heirs and beneficiaries.
C. MAXIMUM NUMBER OF SHARES SUBJECT TO THE PLAN. The
maximum aggregate number of shares of Common Stock subject to the Plan
shall be 1,500,000, subject to adjustment as provided in Section 2.G of
the Plan. The Common Stock subject to the Plan may be divided among the
various types of Awards as the Committee determines in its sole discretion
from time to time. For purposes of calculating the maximum number of
shares of Common Stock which may be issued under the Plan, (a) all shares
underlying an Option (including the shares, if any, withheld for tax
withholding requirements) shall be counted when cash is used as full
payment for shares issued upon exercise of the Option; (b) in the case of
net exercise of an Option, only the net shares issued (including the
shares, if any, withheld for tax withholding requirements) shall be
counted when shares of Common Stock are used as full or partial payment
for shares issued upon exercise of an Option; (c) all shares underlying an
SAR (including the shares, if any, withheld for tax withholding
requirements) shall be counted upon exercise of an SAR; and (d) all shares
issued pursuant to a Stock Grant (including the shares, if any, withheld
for tax withholding requirements) shall be counted when the shares are no
longer subject to any conditions, such as a vesting schedule, and
certificates representing such shares have been issued and delivered. If
any Options or SARs granted under the Plan expire or terminate for any
reason before they have been exercised, the shares subject to such Options
or SARs shall again be available under the Plan.
D. ELIGIBILITY AND PARTICIPATION. Subject to the terms
of the Plan, Awards may be granted to such employees, officers, directors,
consultants and independent contractors of the Company or any Parent,
Subsidiary or Affiliate of the Company, as defined below, as the Committee
may select from time to time in its sole discretion. Employees of the
Company are eligible to receive Awards for no more than an aggregate of
750,000 shares of the Company's Common Stock per employee under the Plan.
The Committee, in its sole discretion, shall determine the number of
shares of the Company's Common Stock covered by any Award made to
executive officers or other employees under the Plan. Grants to non-
employee directors of the Company may only be made pursuant to formula
grants in the manner and amounts set forth in Section 7 hereof, provided
that, if, and to the extent that, the Committee or the Board of Directors
could exercise authority to determine the amount, price and timing of
grants hereunder to its members, consistent with all applicable laws,
including, without limitation Rule 16b-3, grants to non-employee directors
may be made by the Committee or the Board of Directors as permitted by
law. A person may be granted more than one Award under the Plan. As used
in the Plan, the following terms shall have the following meanings:
1. "PARENT" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if,
at the time of the granting of an Award, each of such corporations other
than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
2. "SUBSIDIARY" means any corporation (other than
the Company) in an unbroken chain of corporations beginning with the
Company if, at the time of granting of an Award, each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
3. "AFFILIATE" means any corporation that directly,
or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, another corporation, where
"control" (including the terms "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to cause the
direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise.
4. "COMMON STOCK" means shares of the Company's
$.0001 par value common stock, or such other shares as are substituted
pursuant to Section 2.G hereof.
E. EFFECTIVE DATE OF PLAN. The Plan was adopted by the
Company in September 1989 and was amended April 17, 1992 and May 17, 1994.
On March 18, 1996, the Committee adopted the most recent amendments to the
Plan, which shall be submitted to the shareholders of the Company for
their approval and adoption at a meeting to be held on May 29, 1996, or at
any adjournment thereof. The shareholders shall be deemed to have
approved and adopted these most recent amendments to the Plan only if they
are approved and adopted at a meeting of the shareholders duly held by
vote taken in the manner required by the laws of the State of Colorado.
F. TERMINATION AND AMENDMENT OF PLAN. The Plan shall
terminate on July 10, 1999. No Options, SARs, or Stock Grants shall be
granted under the Plan after that date. Subject to the limitation
contained in Section 2.H of the Plan, the Board or the Committee may at
any time amend or revise the terms of the Plan, including the form and
substance of the Options, SARs, and Stock Grants granted hereunder,
provided that no such amendment or revision shall (i) increase the maximum
aggregate number of shares that may be issued pursuant to Awards granted
under the Plan, except as permitted under Section 2.G of the Plan; or (ii)
effect any change to the Plan which is required to be approved by
shareholders by law, including without limitation the regulations
promulgated under Section 162(m) of the Code.
G. ADJUSTMENTS. If the outstanding shares of Common
Stock are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum
number and kind of shares as to which Options, SARs, and Stock Grants may
be granted under the Plan. A corresponding adjustment shall be made to
the number or kind of shares allocated to unexercised Options and SARs, or
portions thereof, and to unvested Options, SARs, and Stock Grants granted
prior to any such change. Any such adjustment in outstanding Options or
SARs shall be made without change in the aggregate purchase price
applicable to the unexercised portion of such Options or SARs, but with a
corresponding adjustment in the price for each share covered by the
Options or SARs.
H. PRIOR OPTIONS AND OBLIGATIONS. No amendment,
suspension or termination of the Plan shall, without the consent of the
person who has received an Award, alter or impair any of that person's
Options or obligations under any Award granted under the Plan prior to
that amendment, suspension or termination.
I. PRIVILEGES OF STOCK OWNERSHIP. Notwithstanding the
exercise of any Option or SAR, or the receipt of any Stock Grant, granted
pursuant to the terms of the Plan, no person shall have any of the rights
or privileges of a shareholder of the Company with respect to any shares
of stock until certificates representing such shares have been issued and
delivered. No shares shall be required to be issued and delivered upon
exercise of any Option or SAR, or pursuant to a Stock Grant, until there
has been compliance with all of the requirements of law and of all
regulatory agencies having jurisdiction over the issuance and delivery of
the securities.
J. RESERVATION OF SHARES OF COMMON STOCK. During the
term of the Plan, the Company will at all times reserve and keep available
such number of shares of its Common Stock as shall be sufficient to
satisfy the requirements of the Plan. In addition, the Company will from
time to time, as is necessary to accomplish the purposes of the Plan, seek
or obtain from any regulatory agency having jurisdiction any requisite
authority in order to issue shares of common stock hereunder. The
inability of the Company to obtain from any regulatory agency having
jurisdiction the authority deemed by the Company's counsel to be necessary
to the lawful issuance of any Award or shares of its stock hereunder shall
relieve the Company of any and all liability with respect to the
nonissuance of the Award or the shares of Common Stock as to which the
requisite authority shall not have been obtained.
K. TAX WITHHOLDING. The exercise of any Option or SAR,
and the receipt of any Stock Grant, is subject to the condition that if at
any time the Company shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding obligations under any
state or federal law is necessary or desirable as a condition of, or in
connection with, such exercise or delivery or purchase of shares pursuant
thereto, then in such event, the exercise of an Option or SAR, or the
receipt of a Stock Grant, shall not be effective unless such withholding
shall have been effected or obtained in a manner acceptable to the
Company.
L. FAIR MARKET VALUE. The "fair market value" of the
Common Stock means (a) if there is an established market for the Company's
Common Stock on a stock exchange, in an over-the-counter market or
otherwise, the mean of the highest and lowest quoted selling prices on the
valuation date, or (b) if there were no such sales on the valuation date,
then in accordance with Treasury Regulation Section 20.2031-2 or successor
regulations. With respect to the grant of Options or SARs, unless
otherwise specified by the Committee at the time of grant, or in the Plan
(as in the case of automatic grants to non-employee directors pursuant to
Section 7 hereof), the valuation date for purposes of determining fair
market value shall be the date of grant. The Committee may, however,
specify in any grant of an Option or SAR that, instead of the date of
grant, the valuation date shall be a valuation period of up to ninety (90)
days preceding the date of grant, and fair market value for purposes of
such grant shall be the average over the valuation period of the mean of
the highest and lowest quoted selling prices on each date on which sales
were made in the valuation period, provided, however, that if the
Committee fails to specify a valuation period and there were no sales on
the date of grant then fair market value shall be determined as if the
Committee had specified a thirty (30) day valuation period for such
determination, unless there is no established market for the Company's
Common Stock in which case determination of fair market value shall be in
accordance with clause (b) above.
Section 3. OPTIONS.
A. OPTION PRICE. The option price for shares acquired
pursuant to the exercise of any Option, in whole or in part, shall be
determined by the Committee at the time of the grant of the Option. Such
option price may be less than the fair market value of the Company's
Common Stock on the date of grant, but in no event shall the option price
be less than fifty percent (50%) of the fair market value of the Common
Stock on the date of grant. The foregoing notwithstanding, the option
price of Options granted to officers or directors shall be 100% of the
fair market value of the Company's Common Stock on the date of grant.
B. EXERCISE OF OPTIONS. Each Option shall be
exercisable in one or more installments during its term, and the right to
exercise may be cumulative, as determined by the Committee. No Option may
be exercised for a fraction of a share of Common Stock. The option price
shall be paid at the time of exercise of the Option in cash or shares of
the Company's Common Stock, or in a combination thereof. If permitted by
the Committee, payment may also be made by delivering a properly executed
notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds attributable to
the purchased shares needed to pay the exercise price. If any portion of
the purchase price at the time of exercise is paid in shares of Common
Stock, those shares shall be tendered at their fair market value on the
date of exercise. The Committee may also permit a participant to effect a
net exercise of an Option without tendering any shares of the Company's
Common Stock as payment for the Option. In such an event, the participant
will be deemed to have paid for the exercise of the Option with shares of
the Company's stock and shall receive from the Company a number of shares
equal to the difference between the shares that would have been tendered
and the number of Options exercised. The Committee may in its discretion
and subject to ratification by the entire Board of Directors, loan one or
more participants all or a porion of the exercise price, together with the
amount of any tax liability incurred by the participant as a result of the
exercise of the Option, for up to three (3) years with interest payable at
the prime rate quoted in the Wall Street Journal on the date of exercise.
Non-employee directors may receive such loans for the exercise of their
Options without Committee approval or Board ratification.
C. ACCELERATION OF OPTIONS. Notwithstanding the first
sentence of Section 3.B of the Plan, if the Company or its shareholders
enter into an agreement to dispose of all or substantially all of the
assets or stock of the Company by means of a sale, merger or other
reorganization, liquidation, or otherwise, any Option granted pursuant to
the Plan shall become immediately exercisable with respect to the full
number of shares subject to that Option during the period commencing as of
the date of the agreement to dispose of all or substantially all of the
assets or stock of the Company and ending when the disposition of assets
or stock contemplated by that agreement is consummated or the Option is
otherwise terminated in accordance with its provisions or the provisions
of the Plan, whichever occurs first; provided that no Option shall be
immediately exercisable under this Section on account of any agreement of
merger or other reorganization where the shareholders of the Company
immediately before the consummation of the transaction will own at least
50% of the total combined voting power of all classes of stock entitled to
vote of the surviving entity (whether the Company or some other entity)
immediately after the consummation of the transaction. In the event the
transaction contemplated by the agreement referred to in this Section is
not consummated, but rather is terminated, canceled or expires, the
Options granted pursuant to the Plan shall thereafter be treated as if
that agreement had never been entered into.
D. WRITTEN NOTICE REQUIRED. Any Option granted
pursuant to the Plan shall be exercised when written notice of that
exercise has been given to the Company at its principal office by the
person entitled to exercise the Option and full payment for the shares
with respect to which the Option is exercised has been received by the
Company.
Section 4. RELOAD OPTIONS. Concurrently with the award of Options
under the Plan, the Committee may authorize reload options ("Reload
Options") to purchase, for cash or shares, the number of shares of Common
Stock used to exercise the underlying Option.
A. RELOAD OPTION AMENDMENT. Each notice evidencing the
grant of an Option shall state whether the Committee has authorized Reload
Options with respect to the underlying Option. Upon the exercise of an
underlying Option, the Reload Option will be evidenced by an amendment to
the notice of grant of the underlying Option. Reload Options shall be
subject to the terms and conditions in the underlying option agreement and
shall be subject to the terms and conditions set forth in the Plan.
B. RELOAD OPTION PRICE. The option price per share of
Common Stock deliverable upon exercise of a Reload Option shall be the
fair market value of a share of Common Stock on the date of exercise of
the underlying Option.
C. TERM AND EXERCISE. Each Reload Option is fully
exercisable from the date of exercise of the underlying Option and shall
remain exercisable for the remaining term of the underlying Option.
Reload Options may be exercised in the same manner as the underlying
Options in accordance with the Plan.
D. TERMINATION OF EMPLOYMENT. No additional Reload
Options shall be granted to participants in the Plan when an Option or
Reload Option is exercised pursuant to the terms of the Plan following
termination of the participant's employment or the cessation of the
participant's service to the Company as a director, consultant or
independent contractor.
Section 5. STOCK APPRECIATION RIGHTS. The Committee may, from time
to time in its sole discretion, grant SARs in addition to or in
conjunction with Options granted hereunder, either at the time of the
grant of the Options or at any subsequent time during the term of the
Options. Subject to the terms of the Plan, the Committee shall determine
and designate the recipients of SARs, the dates SARs are granted, the
number of shares subject to SARs, the duration of each SAR, and whether
SARs are alternative to any previously or contemporaneously granted Option
or Reload Option ("Related Options"). SARs shall be subject to the terms
and conditions and evidenced by agreements in the form determined from
time to time by the Committee.
A. VALUE OF SARS. SARs shall entitle their holders to
receive a number of shares of the Company's Common Stock equal to (i) the
excess of the fair market value of a share of the Company's Common Stock
on the date of exercise over a specified price fixed by the Committee,
which price may not be less than 100% of the fair market value of a share
of Common Stock on the date of the grant, multiplied by (ii) the number of
shares as to which the holder is exercising the SAR.
B. DURATION. The term of an SAR granted as an
alternative to an Option will be the same as the term of its Related
Option; upon exercise of the SAR, the Related Option will terminate, and
upon exercise of the Related Option, the SAR will terminate. The term of
an SAR granted in addition to and separately from any Option shall be
specified by the Committee at the time such SAR is granted.
C. EXERCISE OF SARS. SARs may be exercised according
to their terms by providing written notice to the Company at any time
prior to the expiration of the SAR. No SAR may be exercised for a
fraction of a share of Common Stock. If the SAR is alternative to an
Option, the Related Option shall be deemed terminated to the extent the
SAR is exercised.
Section 6. STOCK GRANTS. The Committee may, from time to time in
its sole discretion, grant shares of the Company's Common Stock under the
Plan. Such Stock Grants may be awarded with or without conditions, such
as vesting schedules or performance requirements. Recipients of Stock
Grants will not be required to pay for the acquisition of the Company's
Common Stock but will be subject to tax consequences and resale
restrictions.
Section 7. GRANTS TO OUTSIDE DIRECTORS. Except as provided in
Section 2.D hereof, the Committee shall have no discretion to determine
the amount, price or timing of grants of Awards to directors who are not
employees of the Company. Grants of Awards hereunder to directors who are
not employees of the Company shall be granted on December 10 of each year
without further action by the Committee. Each such grant shall be for one
share of Common Stock for each two dollars of director's compensation to
include retainer plus four Board meetings paid to the director during the
calendar year, but not to include any additional compensation for
committee meetings attended not held in conjunction with Board meetings or
for additional Board meetings attended beyond four; such amount to be
reduced accordingly if less than four Board meetings attended. The
exercise price for Options granted to outside directors shall be 100% of
the fair market value of the Common Stock on the date of grant calculated
in accordance with Section 2.L hereof with a valuation period of thirty
(30) days. Each Option granted in accordance with this Section shall
include authorization for a Reload Option in accordance with Section 4 of
the Plan.
Section 8. TERMS AND CONDITIONS MAY DIFFER. The terms and
conditions of Awards granted under the Plan may differ as the Committee
shall in its discretion determine so long as all Awards satisfy the
requirements of the Plan.
Section 9. DURATION OF OPTIONS AND SARS. Each Option and each SAR
granted pursuant to the Plan shall expire on the date determined by the
Committee which shall be not later than ten years after the date of grant
and shall be subject to early termination as provided in the Plan.
Subject to the foregoing, Options granted to outside directors pursuant to
Section 7 hereof shall be fully vested on the date of grant and shall be
exercisable for a period of ten years.
Section 10. LIMITATIONS ON ACQUIRING VOTING STOCK. No Award may be
granted to persons who are not officers or directors of the Company if
such Award would cause that person to hold, beneficially or of record, in
excess of 5% of the outstanding voting stock of the Company.
Section 11. COMPLIANCE WITH SECURITIES LAWS. Shares of Common Stock
shall not be issued with respect to any Award granted under the Plan
unless the issuance and delivery of the shares pursuant thereto shall
comply with all relevant provisions of state and federal law, including
without limitation the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. Further, each recipient of an Award hereunder shall consent
to the imposition of a legend on the certificate representing the shares
of Common Stock issued hereunder restricting the transferability of such
shares as required by law, the Award, or by the Plan.
Section 12. EMPLOYMENT. Each recipient of an Award, if requested by
the Committee, must agree in writing as a condition of the granting of his
or her Award, to remain in the employ of the Company or to remain as a
consultant to the Company, or any of its Subsidiaries, following the date
of the granting of that Award for a period or periods specified by the
Committee, which period(s) shall in no event exceed an aggregate of four
years. Nothing in the Plan or in any Award granted hereunder shall confer
upon any Award recipient any right to continued employment or retainer by
the Company or any of its Subsidiaries, or limit in any way the right of
the Company or any Subsidiary at any time to terminate or alter the terms
of that employment or consulting arrangement.
Section 13. RIGHTS UPON TERMINATION OF EMPLOYMENT, DIRECTOR,
CONSULTANT OR INDEPENDENT CONTRACTOR STATUS. If an Award recipient ceases
to be employed by the Company or ceases to serve as a director, consultant
or independent contractor of the Company, or any Subsidiary, for any
reason other than death or retirement, his or her Award shall terminate
one year from the date of the Award recipient ceases to be employed by or
serve as a director, consultant or independent contractor of the Company;
provided that the Committee may, in its discretion, allow Options and SARs
to remain exercisable (to the extent exercisable on the date of
termination of employment or retainer) for up to one additional year for
each year of service to the Company by the Award recipient (up to a
maximum of five years after the date of termination), unless the Option,
SAR, or the Plan otherwise provides for earlier termination; and provided
further that, for purposes of determining when a director no longer serves
the Company, the period during which post-retirement or similar benefits
are paid to the director by the Company shall be deemed to be continued
service.
Section 14. RIGHTS UPON DEATH. Except as otherwise limited by the
Committee at the time of the grant of an Option or SAR, if the recipient
dies while he or she is an employee, director or consultant of the Company
or any Subsidiary, his or her Options and SARs shall remain exercisable
for one year after the date of death, unless the Options, SARs, or the
Plan otherwise provide for earlier termination. During such exercise
period after death, Options and SARs may be fully exercised, to the
extent that they remain unexercised on the date of the recipient's death,
by the person or persons to whom the recipient's rights to the Options or
SARs shall pass by will or by laws of descent and distribution.
Section 15. WAIVER OF VESTING RESTRICTIONS IN THE EVENT OF
RETIREMENT. Notwithstanding any provision of the Plan, in the event an
Award recipient retires as an employee or director of the Company, or any
Subsidiary, the Committee shall have the discretion to waive any vesting
restrictions on the retiree's Options, SARs, or Stock Grants.
Section 16. AWARDS NOT TRANSFERABLE. Awards granted pursuant to the
Plan may not be sold, pledged, assigned or transferred in any manner
otherwise than by will or the laws of descent and distribution. During
the lifetime of the Award recipient, Options and SARs may only be
exercised by that recipient or by his or her guardian or legal
representative.
Section 17. REPORTS TO SHAREHOLDERS. Upon written request, the
Company shall furnish to each Award recipient a copy of its most recent
Form 10-K Annual Report and each quarterly report to shareholders issued
since the end of the Company's most recent fiscal year.
Adopted by the Board of Directors and approved by the shareholders of the
Company on September 8, 1989. Amended and restated on June 1, 1992 and
March 11, 1994. Further amended and restated on March 29, 1996, and
approved by the shareholders of the Company on May 29, 1996. Amended on
April 1, 1997 and approved by the shareholders of the Company on May 12,
1997.
PRECISION STANDARD, INC.
Matthew L. Gold, President
PRECISION STANDARD, INC.
INCENTIVE STOCK OPTION AND APPRECIATION RIGHTS PLAN
March 11, 1994
As Amended April 1, 1997
1. PLAN. Options to purchase and appreciation rights for
shares of the Corporation's common stock may be granted in accordance with
this Plan to key employees (within the meaning of Section 416(i)(1)(A) of
the Code) of the Corporation and its Subsidiaries selected by the
Committee.
2. DEFINITIONS. The "Code" means the Internal Revenue Code of
1986, as it may be amended from time to time.
The "Committee" means a committee which shall be comprised
of two or more independent outside directors designated by the Board of
Directors of the Corporation, provided that, if the Plan is administered
by the Board of Directors in accordance with Section 8 hereof, then
Committee shall mean the Board of Directors.
"Common Stock" means shares of the common stock, $.0001 par
value per share of the Corporation, or such other shares as are
substituted pursuant to paragraph 7(f).
The "Corporation" means Precision Standard, Inc.
The "fair market value" of the Common Stock means (a) if
there is an established market for the Corporation's Common Stock on a
stock exchange, in an over-the-counter market or otherwise, the mean of
the highest and lowest quoted selling prices on the valuation date; or (b)
if there were no such sales on the valuation date, then in accordance with
Treasury Regulation Section 20.2031-2 or successor regulations. Unless
otherwise specified by the Committee at the time of grant, the valuation
date for purposes of determining fair market value shall be the date of
grant. The Committee may, however, specify in any grant of an options or
stock appreciation right that, instead of the date of grant, the valuation
date shall be a valuation period of up to ninety (90) days preceding the
date of grant, and fair marker value for purposes of such grant shall be
the average over the valuation period of the mean of the highest and
lowest quoted selling prices on each date on which sales were made in the
valuation period, provided, however, that if the Committee fails to
specify a valuation period and there were no sales on the date of grant
then fair market value shall be determined as if the Committee had
specified a thirty (30) day valuation period for such determination,
unless there is no established market for the Corporation's Common Stock
in which case the determination of fair market value shall be in
accordance with clause (b) above.
"Subsidiary" means any corporation in which the Corporation
owns, directly or indirectly, stock possessing 50% or more of the total
combined voting power.
3. LIMITATION ON AGGREGATE SHARES. The number of shares of
Common Stock for which options and appreciation rights may be granted
under this Plan and which may be issued upon exercise or payment shall not
exceed, in the aggregate, 1,500,000 shares. For purposes of calculating
the maximum number of shares of Common Stock which may be issued under the
plan, (a) all shares issued (including the shares, if any, withheld for
tax withholding requirements) shall be counted when cash is used as full
payment for shares issued upon exercise of an option; (b) only the shares
issued (including the shares, if any, withheld for tax withholding
requirements) as a result of an exercise of appreciation rights shall be
counted; and (c) only the net shares issued (including the shares, if any,
withheld for tax withholding requirements) shall be counted when shares of
Common Stock are used as full or partial payment for shares issued upon
exercise of an option. If any options or appreciation rights expire
unexercised or are canceled, terminated or forfeited in any manner without
the issuance of Common Stock or payment, the shares for which the options
and appreciation rights were granted shall again be available under this
Plan. The 1,500,000 shares of Common Stock may be either authorized and
unissued shares, treasury shares, or a combination thereof.
4. OPTIONS. Options to be granted under this Plan shall be
incentive stock options (within the meaning of Section 422 of the Code).
Subject to the terms of this Plan, the Committee shall determine and
designate the recipients of options, the dates options are granted, the
number of shares of Common Stock subject to option, the options prices,
and the duration of options. The option price per share of Common Stock
shall be fixed by the Committee at not less than 100% of the fair market
value per share of Common Stock on the date of grant. Options may not be
granted to any employee who at the time the option is granted owns more
than 10% of the total combined voting power of all classes of stock of the
Corporation or of its parent or subsidiary except that options may be
granted to such persons if the option price is at least 110% of the fair
market value and the option by its terms is not exercisable more than five
years from the date it is granted. Employees of the Corporation will be
eligible to receive options for no more than an aggregate of 750,000
shares per employee under this Plan. To the extent required by the Code,
the aggregate fair market value (determined at the time the option is
granted) of the Common Stock for which incentive stock options are
exercisable for the first time by an option holder during any calendar
year (under all plans of the Corporation and its subsidiaries) shall not
exceed $100,000. Options granted under this Plan shall be subject to
terms and conditions and evidenced by agreements in the form determined
from time to time by the Committee and shall be subject to the terms and
conditions in paragraph 7.
a. TERM OF OPTIONS. No incentive stock option shall be
exercisable more than ten years after the date of grant. Subject to the
five-year limitation for 10% shareholders provided in paragraph 4, options
granted to employees who are directors of the Corporation shall be fully
vested on the date of grant and shall be exercisable for a period of ten
years.
b. EXERCISE OF OPTIONS. Options shall be exercised by
written notice to the Corporation (to the attention of the Corporate
Secretary) accompanied by payment in full of the option price. Payment of
the option price may be made, at the discretion of the optionee (i) in
cash (including check, bank draft, or money order), (ii) by delivery of
Common Stock (valued at the fair market value thereof on the date of
exercise) or (iii) by delivery of a combination of cash and Common Stock.
The Committee may, in its discretion and subject to ratification of the
entire Board of Directors, loan one or more participants all or a portion
of the exercise price for up to three (3) years with interest payable at
the prime rate quoted in the Wall Street Journal on the date of exercise.
The Committee my also permit a participant to effect a
net exercise of an option without tendering any shares of the
Corporation's stock as payment for the option. In such an event, the
participant will be deemed to have paid for the exercise of the option
with shares of the Corporation's stock and shall receive from the
Corporation a number of shares equal to the difference between the shares
that would have been tendered and the number of options exercised.
The Committee may also cause the Corporation to enter
arrangements with one or more licensed stock brokerage firms whereby
participants may exercise options without payment therefor but with
irrevocable orders to such brokerage firm to immediately sell the number
of shares necessary to pay the exercise price for the option and the
withholding taxes, if any, and then to transmit the proceeds from such
sales directly to the Corporation in satisfaction of such obligations.
The Committee may, in order to prevent any possible
violation of law, require the option price to be paid in cash. The right
to alternative methods of payment of the option price may be limited or
denied in any option agreement.
An option shall not be exercisable (i) after the
expiration of ten years from the date it is granted; (ii) unless the
person exercising the option has been, at all times, during the period
beginning with the date of grant of the option and ending on a date three
months prior to the date of exercise employed by the Corporation except
that, in the case of a disabled recipient the period is extended to twelve
months prior to the date of exercise and in the case of the death of a
recipient, within one year after the date of death (but in no event after
the option has expired).
5. RELOAD OPTIONS. Concurrently with the award of options to
any participant under this Plan, the Committee may authorize reload
options to purchase for cash or shares a number of shares of Common Stock.
The number of reload options shall equal the number of shares of Common
Stock used to exercise the underlying option. The grant of a reload
option shall be effective upon the exercise of the underlying option,
through the use of shares of Common Stock held by the optionee for at
least 12 months. Notwithstanding the fact that the underlying option is
an incentive stock option (within the meaning of Section 422 of the Code),
a reload option is not intended to qualify as an incentive stock option
(within the meaning of Section 422 of the Code).
a. RELOAD OPTION AMENDMENT. Each notice evidencing the
grant of an option shall state whether the Committee has authorized reload
options with respect to the underlying option. Upon the exercise of an
underlying option, the reload option will be evidenced by an amendment to
the notice of grant of the underlying option. Reload options shall be
subject to the terms and conditions in the underlying option agreement and
shall be subject to the terms and conditions in paragraph 7.
b. RELOAD OPTION PRICE. The option price per share of
Common Stock deliverable upon exercise of a reload option shall be the
fair market value of a share of Common Stock on the date of exercise of
the underlying option.
c. TERM AND EXERCISE. Each reload option is fully
exercisable from the date of exercise of the underlying option and shall
remain exercisable for the remaining option term of the underlying option.
Reload options may be exercised in the same manner as the underlying
options in accordance with paragraph 4(b).
d. TERMINATION OF EMPLOYMENT. No additional reload
options shall be granted to any participant under this Plan when an option
or reload option is exercised pursuant to the terms of this Plan following
termination of the participant's employment with the Corporation.
6. APPRECIATION RIGHTS. Subject to the terms of this Plan,
the Committee shall determine and designate the recipients of appreciation
rights, the dates appreciation rights are granted, the number of shares
subject to appreciation rights, the duration of appreciation rights, and
whether appreciation rights are alternative to any previously or
contemporaneously granted option or reload option (a "Related Option").
Employees of the Corporation will be eligible to receive appreciation
rights for no more than an aggregate of 750,000 shares per employee under
this Plan. Appreciation rights granted to employees who are directors
shall be fully vested on the date of grant and shall be exercisable for a
period of ten years. Appreciation rights shall be subject to the terms
and conditions and evidenced by agreements in the form determined from
time to time by the Committee and shall be subject to the terms and
conditions in paragraph 7.
a. NATURE OF APPRECIATION RIGHT. An appreciation right
shall entitle its holder to receive from the Corporation, at the time of
its exercise, an amount equal to the excess of the fair market value (at
the date of exercise) of a share of Common Stock over a specified price
fixed by the Committee which shall not be less than 100% of the fair
market value of a share of Common Stock on the date of grant) multiplied
by the number of shares as to which the holder is exercising the
appreciation right. For an appreciation right that is alternative to a
Related Option, the specified price shall be the option price. The amount
payable to the holder may be paid by the Corporation in Common Stock
(valued at its fair market value on the date of exercise), cash or a
combination of both, subject, in the case of cash or a combination of
Common Stock and cash, to the consent of the Committee.
b. EXERCISE. An appreciation right shall be exercised by
written notice to the Corporation (to the attention of the Corporate
Secretary) at any time prior to its stated expiration (which shall not be
more than ten years after the date of grant). If the appreciation right
is alternative to a Related Option, the Related Option shall be deemed
canceled to the extent the appreciation right is exercised.
7. ADDITIONAL PROVISIONS.
a. ADDITIONAL CONDITIONS. The Committee may at the time
of granting any option or appreciation right and at any time thereafter
impose additional conditions, provisions and limitations to the options or
appreciation rights which the Committee deems advisable, including, but
not limited to, limitations on the period within which the option or
appreciation right shall be exercisable and the maximum amount of
appreciation to be recognized with regard to any appreciation right.
b. LISTING, REGISTRATION, AND COMPLIANCE WITH LAWS AND
REGULATIONS. If the Committee determines, in its discretion, that the
listing, registration, or qualification of the shares subject to the
option or appreciation right upon any securities exchange or automated
quotation service or under any state or federal securities or other law or
regulation, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to or in connection with
the granting of an option or appreciation right or the issue or purchase
of shares thereunder, no option or appreciation right may be exercised or
paid in Common Stock in whole or in part unless the listing, registration,
qualification, consent or approval has been effected or obtained free of
any conditions not acceptable to the Committee. The holder of the option
or appreciation right will supply the Corporation with certificates,
representations, and information that the Corporation requests and shall
otherwise cooperate with the Corporation in obtaining the listing,
registration, qualification, consent or approval. In the case of officers
and other persons subject to Section 16(b) of the Securities Exchange Act
of 1934, the Committee may at any time impose any limitations upon the
exercise of an option or appreciation right which, in the Committee's
discretion, are necessary or desirable in order to comply with Section
16(b) and the rules and regulations thereunder. If the Corporation, as
part of an offering of securities or otherwise, finds it desirable,
because of federal or state regulatory requirements, to reduce the period
during which any options or appreciation rights may be exercised, the
Committee may, in its discretion and without the holders' consent, reduce
the holders' exercise period on not less than 15 days written notice to
the holders.
c. CASH PAYMENTS. Options and appreciation rights may,
in the Committee's discretion, provide that the holder, as soon as
practicable after the holder exercises the option or appreciation right in
whole or in part, will receive a cash payment in an amount that the
Committee may determine, but not more than: (i) in the case of an option
exercise, the excess of the fair market value of a share of Common Stock
(on the date the holder recognizes taxable income) over the option price
multiplied by the number of shares as to which the option is exercised,
and (ii) in the case of an appreciation rights exercise, the fair market
value (on the date or dates the holder recognizes taxable income) of the
Common Stock and other consideration issued to the holder.
d. NONTRANSFERABILITY. Options and appreciation rights
may not be transferred other than by will or the laws of descent and
distribution and, during the lifetime of the person to whom they are
granted, may be exercised only by such person, or such person's guardian
or legal representative.
e. ADJUSTMENT FOR CHANGE IN COMMON STOCK. In the event
of a stock dividend or stock split, or combination or other reduction in
the number of issued shares, the Committee shall, in order to prevent the
dilution or enlargement of rights under options or appreciation rights,
make adjustments in the number and type of shares authorized by this Plan,
the number and type of shares covered by, or for which payments are
measured, outstanding options and appreciation rights and the prices
specified therein that it determines to be appropriate and equitable. In
the event of a merger, consolidation, reorganization, recapitalization or
exchange of substantially all assets or dissolution of the Corporation,
the rights under options and appreciation rights outstanding under this
Plan will terminate, except to the extent and subject to such adjustments
as may be provided, in order to prevent the dilution or enlargement of
rights under options or appreciation rights, (i) by the Committee, (ii) in
the terms of the merger, consolidation, reorganization, recapitalization,
or plan for dissolution or sale or exchange of the assets, or (iii) in the
form of agreement covering any option or appreciation right.
8. ADMINISTRATION. This Plan shall be administered by the
Committee. The Committee shall have full power to construe and interpret
this Plan and options and appreciation rights granted under this Plan, to
establish and amend rules for its administration, to grant options and
appreciation rights under this Plan, and to correct any defect or omission
or reconcile any inconsistency in this Plan or in any option or
appreciation right to the extent the Committee deems desirable to carry
this Plan or any option or appreciation right into effect. The Committee
may, with the consent of the person entitled to exercise any outstanding
option or appreciation right, amend an option or appreciation right,
including reducing the exercise price of any option or appreciation right
to not less than the fair market value of the Common Stock at the time of
the amendment and extending the term thereof.
All actions taken and decisions made by the Committee
pursuant to this Plan shall be binding and conclusive on all persons
interested in this Plan. The Committee may from time to time authorize
the Chairman of the Board or the President of the Corporation to determine
the dates on which options or appreciation rights shall be granted to
persons designated by the Committee (other than officers or directors of
the Corporation or any subsidiary) for the number of shares as the
Committee shall have designated, at prices determined by or in a manner
specified by the Committee.
Notwithstanding the foregoing, if it would be consistent
with all applicable laws, including, without limitation, Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Rule
16b-3") and the Code and the regulations promulgated thereunder
(including, without limitation, the regulations relating to Section
162(m) of the Code) then the Plan may be administered by the Board of
Directors.
9. TERMINATION AND AMENDMENT. The Board of Directors or the
Committee at any time may suspend or terminate this Plan and make
additions or amendments that it deems advisable under this Plan, except
that they may not, without further approval by the Corporation's
stockholders, (a) increase the maximum number of shares for which options
or appreciation rights may be granted under this Plan, except pursuant to
paragraph 7(f) above, (b) effect any change to the Plan which is required
to be approved by shareholders by law, including without limitation, the
regulations promulgated under Sections 442 and 162(m) of the Code. No
option or appreciation rights shall be granted hereunder after July 10,
1999. No amendment, suspension or termination of this Plan shall, without
the consent of the person who has received an option or appreciation
right, alter or impair any of that person's rights or obligations under
any option or appreciation right granted under this Plan prior to such
amendment, suspension or termination.
10. TAXES. The Corporation shall be entitled, if necessary or
desirable, to withhold (or secure payment from the Plan participant in
lieu of withholding) the amount of any withholding or other tax due from
the Corporation for any amount payable and/or shares issuable under this
Plan, and the Corporation may defer payment or issuance unless indemnified
to its satisfaction.
11. SHAREHOLDER ADOPTION. This Amended and Restated Incentive
Stock Option and Appreciation Rights Plan (the "Amended and Restated
Plan") shall be submitted to the shareholders of the Corporation for their
approval and adoption at a meeting to be held on May 17, 1994, or at any
adjournment thereof. The shareholders shall be deemed to have approved
and adopted this Amended and Restated Plan only if it is approved and
adopted at a meeting of the shareholders duly held by vote taken in the
manner required by the laws of the State of Colorado.
Adopted by the Board of Directors and approved by the
shareholders of the Corporation on September 8, 1989. Amended and
restated on June 1, 1992. Further amended and restated on March 11, 1994.
Amended March 29, 1996 by the Compensation Committee and approved by the
shareholders of the Company on May 29, 1996. Amended April 1, 1997 by the
Compensation Committee and approved by the shareholders of the Company on May
12, 1997.
PRECISION STANDARD, INC.
Matthew L. Gold, President
GORSUCH KIRGIS L.L.C.
Attorneys at Law
Suite 1100
1401 Seventeenth Street
Denver, Colorado 80202
Telephone (303) 299-8900
Fax (303) 298-0215
July 1, 1997
Precision Standard, Inc.
1225 17th Street, Suite 1800
Denver, Colorado 80202
Re: Registration Statement on Form S-8
Gentlemen:
We are counsel to Precision Standard, Inc., a Colorado corporation
(the "Company"), in connection with the preparation of a registration
statement on Form S-8 as filed with the Securities and Exchange Commission
on July 1, 1997 (the "Registration Statement"), relating to the proposed
offering by the Company of up to an additional 1,000,000 shares of Common
Stock pursuant to the Company's Nonqualified Stock Option Plan and
Incentive Stock Option and Appreciation Rights Plan (the "Plans").
In this connection, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such corporate records,
certificates and written or oral statements of officers, legal counsel and
accountants of the Company and of public officials, and other documents
that we have considered necessary and appropriate, and, based thereon, we
advise you that in our opinion:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Colorado.
2. The shares offered by the Company, when issued pursuant to and
in accordance with the Plans will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
GORSUCH KIRGIS L.L.C.
/s/Gorsuch Kirgis L.L.C.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Precision Standard, Inc. on Form S-8 of our report dated March 31,
1996, except for Notes 6, 7, and 13 as to which the date is April 15,
1996, on our audits of the consolidated financial statements and financial
statement schedules of Precision Standard, Inc. as of December 31, 1995,
and for the years ended December 31, 1995 and 1994. We also consent to
the reference to our firm under the caption "Experts."
/s/Coopers & Lybrand L.L.P.
Birmingham, Alabama
June 26, 1997
ARTHUR
ANDERSEN
Arthur Andersen LLP
Suite 3100
1225 17th Street
Denver CO 80202-5531
303 295-1900
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Precision Standard, Inc. and Subsidiaries:
As independent public accountants, we hereby consent to the
incorporation by reference in the Company's registration
statement filed on Form S-8 of our report dated March 31, 1997,
included in Precision Standard Inc.'s Form 10-K for the year
ended December 31, 1996 and to all references to our Firm
included in the registration statement.
/s/Arthur Andersen LLP
Denver, Colorado
June 27, 1997
