As filed on May 4, 1998 Registration No. ___-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
MIDWAY AIRLINES CORPORATION
---------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3915637
- ------------------------------- --------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
300 West Morgan Street, Suite 1200, Durham, North Carolina 27701
----------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
MIDWAY AIRLINES CORPORATION EXECUTIVE OFFICERS STOCK OPTION AGREEMENTS
MIDWAY AIRLINES CORPORATION 1997 STOCK OPTION PLAN
--------------------------------------------------
(Full Title of the Plans)
Jonathan S. Waller
Senior Vice President, General Counsel and Secretary
Midway Airlines Corporation
300 West Morgan Street, Durham, North Carolina 27701
(919) 956-4810
--------------
(Name, Address and Telephone Number of Agent for Service)
<TABLE>
<CAPTION>
<S> <C>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------
Title of Securities to Amount to be Registered Proposed Maximum Proposed Maximum Amount of
be Registered Offering Price per Aggregate Offering Registration Fee
Share(1) Price
- ---------------------------------------------------------------------------------------------------------------------
Common Stock 1,562,500 shares $19.44 $30,371,094.00 $8,960.00
$.01 par value
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The offering price for such shares is estimated pursuant to Rule
457(c) and (h) solely for the purpose of calculating the registration fee and is
based upon the average of the high and low prices of the Registrant's Common
Stock as reported on the Nasdaq National Market for April 28, 1998.
----------------
<PAGE>
PART II
Item 3. Incorporation of Documents By Reference.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents filed with the Securities and Exchange
Commission (the "Commission"):
(a) The description of the Registrant's common stock $.01 par value
("Common Stock") contained in the Registrant's Registration Statement on Form
S-1 (Reg. No. 333-37375), filed by the Registrant with the Commission on
December 5, 1997; and
(b) Annual Report on Form 10-K filed by the Company with the Commission
on March 31, 1998.
All documents filed by the Registrant with the Commission under
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") after the date of this Registration Statement and before the
filing of a post-effective amendment which indicates that all securities offered
hereunder pursuant to the Midway Airlines Corporation 1997 Stock Option Plan or
the Midway Airlines Corporation Executive Officers Stock Option Agreements have
been sold or which deregisters all securities then remaining unsold, will be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the Common Stock has been passed upon for the Company
by Jonathan S. Waller, its Senior Vice President, General Counsel and Secretary.
Mr. Waller beneficially owns or has rights with respect to options to purchase
27,999 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Delaware General Corporation Law authorizes corporations to limit
or eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breach of directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the corporation,
directors must exercise an informed business judgment based on all material
information reasonably available to them. Absent the limitations authorized by
such legislation, directors are accountable to corporations and their
stockholders for monetary damages for conduct constituting gross negligence in
the exercise of their duty of care. Although the Delaware General Corporation
Law does not change directors' duty of care, it enables corporations to limit
available relief to equitable remedies such as injunction or rescission. The
Registrant's Certificate of Incorporation limits the liability of the
Registrant's directors to the Registrant or its stockholders to the fullest
extent permitted by the Delaware General Corporation Law. Specifically,
directors of the Registrant will not be personally liable for monetary damages
for breach by directors of their fiduciary duty as directors, except for
liability (i) for any breach of the director's duty of loyalty to the
2
<PAGE>
Registrant or its stockholders, (ii) for acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
The inclusion of this provision in the Certificate of Incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefitted the Registrant and its
stockholders.
Item 8. Exhibits.
See Exhibit Index on page 7.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the
"Securities Act");
(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
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report under Section 13(a) or 15(d) of the
3
<PAGE>
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report under Section 15(d) of the Exchange Act) 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.
(h) Filing of Registration Statement on Form S-8.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 with respect to shares of Common
Stock offered under the 1997 Stock Option Plan and the Executive Officers Stock
Option Agreements and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Durham, State of North Carolina on May 1, 1998.
MIDWAY AIRLINES CORPORATION
By: /s/ Jonathan S. Waller
--------------------------
Jonathan S. Waller
Senior Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in their indicated capacities on May 1, 1998.
<TABLE>
<CAPTION>
<S> <C>
Signature Capacity
--------- --------
*
-----------------------
Robert R. Ferguson, III Chairman, President and Chief Executive
Officer (Principal Executive Officer)
*
-----------------------
Steven Westberg Senior Vice President and Chief Financial
Officer (Principal Financial and Accounting
Officer)
*
-----------------------
W. Greyson Quarles Director
*
-----------------------
Gregory J. Robitaille Director
*
-----------------------
Howard Wolf Director
</TABLE>
* Jonathan S. Waller, by signing his named hereto, signs this Registration
Statement on behalf of the persons indicated above pursuant to Power's of
Attorney duly executed by such persons, in the City of Durham, State of North
Carolina, as of this 1st day of May, 1998.
5
<PAGE>
By: /s/ Jonathan S. Waller
----------------------
Jonathan S. Waller
Attorney-in-Fact
6
<PAGE>
EXHIBIT INDEX
-------------
The following exhibits are filed as part of this Registration
Statement:
Exhibit Number Exhibit
- -------------- -------
4.1 Provisions of Articles of Incorporation of the
Registrant setting forth rights of holders of Common
Stock are incorporated by reference to Exhibit 3.1 to
the Registrant's Registration Statement on Form S-1
(Registration Statement No. 333-37375).
4.2 Provisions of Bylaws of the Registrant setting forth
rights of holders of Common Stock are incorporated by
reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (Registration
Statement No. 333-37375).
5 Legal opinion of Jonathan S. Waller, Senior Vice
President, General Counsel and Secretary of the
Registrant.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Jonathan S. Waller (included in the
opinion filed as Exhibit 5).
24 Power of Attorney.
99.1 Midway Airlines Corporation 1997 Stock Option Plan.
99.2 Option to Purchase Shares of Common Stock of Midway
Airlines Corporation dated February 11, 1997 issued
by Midway in favor of Steven Westberg, incorporated
by reference to Exhibit 10.43 to the Registrant's
Registration Statement on Form S-1 (Registration
Statement No. 333-37375).
99.3 Option to Purchase Shares of Common Stock of Midway
Airlines Corporation dated February 11, 1997 issued
by Midway in favor of Jonathan S. Waller,
incorporated by reference to Exhibit 10.44 to the
Registrant's Registration Statement on Form S-1
(Registration Statement No. 333-37375).
99.4 Option to Purchase Shares of Common Stock of Midway
Airlines Corporation dated February 11, 1997 issued
by Midway in favor of Joanne Smith, incorporated by
reference to Exhibit 10.45 to the Registrant's
Registration Statement on Form S-1 (Registration
Statement No. 333-37375).
99.5 Option to Purchase Shares of Common Stock of Midway
Airlines Corporation dated February 11, 1997 issued
by Midway in favor of Thomas Duffy, Jr., incorporated
by reference to Exhibit 10.46 to the Registrant's
Registration Statement on Form S-1 (Registration
Statement No. 333-37375).
7
<PAGE>
99.6 Option to Purchase Shares of Common Stock of Midway
Airlines Corporation dated February 11, 1997 issued
by Midway in favor of David Vance, incorporated by
reference to Exhibit 10.47 to the Registrant's
Registration Statement on Form S-1 (Registration
Statement No. 333-37375).
As permitted by Item 601(b)(4) of Regulation S-K, the Company has not
filed with this Registration Statement certain instruments defining the rights
of holders of long-term debt of the Company, if any, because the total amount of
securities authorized under any of such instruments does not exceed 10% of the
total assets of the Company and its subsidiaries on a consolidated basis. The
Company agrees to furnish a copy of any such agreements to the Securities and
Exchange Commission upon request.
8
<PAGE>
Exhibit 5
[ON LETTERHEAD OF MIDWAY AIRLINES CORPORATION]
May 1, 1998
Midway Airlines Corporation
300 West Morgan Street,
Suite 1200
Durham, North Carolina 27701
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I have acted as counsel for Midway Airlines Corporation, a Delaware corporation
(the "Company"), in connection with the proposed issuance by the Company of up
to 1,562,500 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), under the Midway Airlines Corporation Executive Officers Stock
Option Agreements and the Midway Airlines Corporation 1997 Stock Option Plan
(the "Plans"), which Common Stock is being registered pursuant to the filing of
a Registration Statement on Form S-8 under the Securities Act of 1933.
I have examined the Certificate of Incorporation of the Company, its Bylaws, the
Plans and such other corporate records, certificates, documents and matters of
law as I have deemed necessary to render this opinion.
Based on the foregoing, I am of the opinion that the shares of Common Stock
issued or to be issued under the Plans are duly authorized, validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibits 5 and 23.2 to the
Registration Statement for the Plans.
Very truly yours,
/s/ Jonathan S. Waller
- ----------------------
Jonathan S. Waller
Senior Vice President,
General Counsel and Secretary
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference, in the Registration Statement
(Form S-8 No. ) pertaining to the Midway Airlines Corporation Executive Officers
Stock Option Agreements and the Midway Airlines Corporation 1997 Stock Option
Plan, of our report dated February 10, 1998, with respect to the financial
statements and schedules of the Midway Airlines Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Raleigh, North Carolina
May 1, 1998
<PAGE>
Exhibit 24
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
undersigned officers and/or directors of Midway Airlines Corporation (the
"Company"), hereby appoint Jonathan S. Waller as attorney-in-fact with full
power of substitution and resubstitution to sign for the undersigned and in the
name of the undersigned in any and all capacities with respect to the
registration on Form S-8 of 1,562,500 shares of Common Stock of the Company
under the Midway Airlines Corporation Executive Officers Stock Option Agreements
and the Midway Airlines Corporation 1997 Stock Option Plan (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission"), and
to sign any and all amendments (including post-effective amendments) thereto and
any and all applications or other documents to be filed with the Commission
pertaining to the Registration Statement, and to grant unto the attorney-in-fact
and agent the full power and authority to do and perform each and every act and
thing required to be done, as fully to all intents and purposes as the
undersigned could do if personally present. The undersigned hereby ratifies and
confirms all that the attorney-in-fact and agent or its substitutes may lawfully
do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
<S> <C>
Signature Title Date
- --------- ----- ----
/s/ Robert R. Ferguson May 1 , 1998
- ------------------------------------ Chairman of the Board, President --------------------------
Robert R. Ferguson, III and Chief Executive Officer
(Principal Executive Officer)
/s/ Steven Westberg May 1 , 1998
- ------------------------------------ Senior Vice President and --------------------------
Steven Westberg Chief Financial Officer and
(Principal Financial and
Accounting Officer)
/s/ W. Greyson Quarles Director March 30 , 1998
- ------------------------------------ --------------------------
W. Greyson Quarles
/s/ Gregory J. Robitaille Director March 30 , 1998
- ------------------------------------ --------------------------
Gregory J. Robitaille
/s/ Howard Wolf Director March 17 , 1998
- ------------------------------------ --------------------------
Howard Wolf
</TABLE>
<PAGE>
MIDWAY AIRLINES CORPORATION
1997 STOCK OPTION PLAN
1. Establishment and Effective Date. Midway Airlines Corporation, a
Delaware corporation (the "Corporation"), hereby establishes a stock option plan
to be known as the Midway Airlines Corporation 1997 Stock Option Plan" (the
"Plan"). The Plan shall become effective on the effective date of the initial
public offering of the Corporation's common stock, par value $.01 ("Common
Stock"), subject to the consummation of such initial public offering. Upon
approval by the Board of Directors of the Corporation (the "Board"), awards may
be made as provided herein, subject to such consummation. In the event that such
initial public offering is not consummated, any such awards shall be cancelled
and all rights of individuals with respect to such awards shall thereupon cease.
2. Purpose. The Corporation desires to attract and retain the best
available employees, officers, directors and consultants for itself and its
Subsidiaries and to encourage the highest level of performance by such
individuals in order to serve the best interests of the Corporation and its
shareholders. The Plan is expected to contribute to the attainment of these
objectives by offering eligible individuals the opportunity to acquire stock
ownership interests in the Corporation, and to thereby provide them with
incentives to put forth maximum efforts for the success of the Corporation and
its Subsidiaries. The term "Subsidiary" as used herein means each corporation
which meets the definition of "subsidiary corporation" contained in Section
424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
3. Form of Awards. Stock options awarded under the Plan may be either
incentive stock options meeting the requirements of Section 422 of the Code
("ISOs") or options that do not meet the requirements of Section 422 of the Code
("NSOs"). Unless otherwise indicated, references in the Plan to "Options" shall
include both ISOs and NSOs. An Option (or a portion thereof) that is not
designated as an ISO, or that does not satisfy all of the requirements of
Section 422 of the Code, and any Option granted to an individual who is not an
employee or officer of the Corporation or a Subsidiary, shall not constitute an
ISO.
4. Maximum Shares Available. The maximum aggregate number of shares of
Common Stock available for award under the Plan is 557,255, subject to
adjustment pursuant to Section 11. Shares of Common Stock issued pursuant to the
Plan may be either authorized but unissued shares or issued shares reacquired by
the Corporation. In the event that any Option under the Plan expires unexercised
or is terminated, surrendered or cancelled without being exercised in whole or
in part for any reason, then the shares of Common Stock covered by such Option
may, at the discretion of the Committee (as defined below), be made available
for subsequent awards under the Plan, upon such terms as the Committee may
determine.
5. Administration.
(a) Committee. The Plan shall be administered by a committee (the
"Committee") consisting of two or more members of the Board; provided, however,
that with respect to any
<PAGE>
Option grant to an Optionee (as defined in Section 6) who is subject to Section
16 of the Securities Exchange Act of 1934, as amended (the "Act"), (A) the
members of the Committee shall each be a "Non-Employee Director" as defined in
Rule 16b-3(b)(3) under the Act, or (B) the full Board shall act in lieu of the
Committee hereunder.
(b) Powers of Committee. Subject to the express provisions of the Plan,
the Committee shall have the power and authority (i) to grant Options and to
determine the exercise price of such Options, the term of each such Option, the
number of shares of Common Stock to be covered by each such Option and any
vesting standards applicable to each such Option; (ii) to designate Options as
ISOs or NSOs; and (iii) to determine the employees, officers, directors and
consultants to whom, and the time or times at which, Options shall be granted.
(c) Delegation. The Committee may delegate to one or more of its
members or to any other person or persons such ministerial duties as it may deem
advisable; provided, however, that the Committee may not delegate any of its
responsibilities hereunder if such delegation will cause the Plan to fail to
comply with Rule 16b-3(d) under the Act. The Committee may also employ
attorneys, consultants, accountants or other professional advisors and shall be
entitled to rely upon the advice, opinions or valuations of any such advisors.
(d) Interpretations. The Committee shall have sole discretionary
authority to interpret the terms of the Plan, to adopt and revise rules,
regulations and policies to administer the Plan and to make any other factual
determinations which it believes to be necessary or advisable for the
administration of the Plan. All actions taken and interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Corporation, all Optionees who have received awards under the Plan and
all other interested persons.
(e) Liability; Indemnification. No member of the Committee, nor any
individual to whom ministerial duties have been delegated, shall be personally
liable for any action, interpretation or determination made with respect to the
Plan or awards made thereunder, and each member of the Committee shall be fully
indemnified and protected by the Corporation with respect to any liability he or
she may incur with respect to any such action, interpretation or determination,
to the extent permitted by applicable law and to the extent provided in the
Corporation's Certificate of Incorporation and Bylaws, as amended from time to
time.
6. Eligibility. Options may be granted to employees, officers,
directors and consultants of the Corporation and its Subsidiaries; provided,
however, that ISOs may not be granted to any individual who is not an employee
or officer of the Corporation or its Subsidiaries. In determining the
individuals to whom Options shall be granted and the number of shares to be
covered by each Option, the Committee shall take into account the nature of the
services rendered by such individuals, their present and potential contribution
to the success of the Corporation and its Subsidiaries and such other factors as
the Committee in its sole discretion shall deem relevant. Any individual who is
granted an Option under the Plan is referred to as an
2
<PAGE>
"Optionee."
7. Terms and Conditions of Options.
(a) Grant of Options. Options may be granted under this Plan for the
purchase of shares of Common Stock. Options shall be granted in such form and
upon such terms and conditions as the Committee shall from time to time
determine.
(b) Written Agreement. Each award of Options shall be evidenced by a
written agreement, executed by the Optionee and the Corporation, and containing
such restrictions, terms and conditions, if any, as the Committee may require
(the "Option Agreement"). In the event of any conflict between an Option
Agreement and the Plan, the terms of the Plan shall govern.
(c) Option Price. The price at which a share of Common Stock may be
purchased pursuant to the exercise of an Option shall be determined by the
Committee at the Date of Grant; provided, however, that with respect to ISOs,
the option price shall not be less than one hundred (100) percent of the Fair
Market Value (as defined in Section 14(b) of the Common Stock subject to such
Option on the Date of Grant (as defined in Section 14(a). Options granted
concurrently with the Corporation's initial public offering shall have an
exercise price equal to the initial public offering price.
(d) Term of Options. The term of each Option granted under the Plan
shall be established by the Committee. Except as otherwise provided in Section
8(a) with respect to ten (10) percent stockholders of the Corporation, the term
of each ISO shall not exceed ten (10) years from the Date of Grant.
(e) Exercise of Options; Vesting. No Option shall be exercisable until
it has vested. Unless otherwise provided in an Option Agreement, each Option
shall vest and become exercisable to the extent of twenty (20) percent of the
number of shares originally covered thereby on the first anniversary of the Date
of Grant of such Option and to the extent of an additional twenty (20) percent
on the second, third, fourth and fifth anniversaries of the Date of Grant. The
Committee may, in its discretion, accelerate the exercisability of any Option at
any time.
(f) Exercise of Options. Options may be exercised by an Optionee by
giving written notice to the Committee stating the number of shares of Common
Stock with respect to which the Option is being exercised and tendering payment
therefor. Payment for the Common Stock issuable upon exercise of the Option
shall be made in full in cash or, if the Committee, in its sole discretion,
permits in shares of Common Stock (valued at Fair Market Value on the date of
exercise). As soon as reasonably practicable following such exercise, a
certificate representing the shares of Common Stock purchased, registered in the
name of the Optionee, shall be delivered to the Optionee
3
<PAGE>
8. Special Rules Applicable to ISOs.
(a) Ten Percent Stockholder. Notwithstanding any other provisions of
this Plan to the contrary, an individual may not receive an ISO under the Plan
if such individual, on the Date of Grant, owns (after application of the rules
contained in Section 424(d) of the Code) stock possessing more than ten (10)
percent of the total combined voting power of all classes of stock of the
Corporation or its Subsidiaries, unless (i) the option price for such ISO is at
least one hundred and ten (110) percent of the Fair Market Value of the Common
Stock subject to such ISO on the Date of Grant and (ii) such ISO is not
exercisable after the date five (5) years from its Date of Grant.
(b) Limitation on Grants. The aggregate Fair Market Value (determined
with respect to each ISO at the time such ISO is granted) of the shares of
Common Stock with respect to which ISOs are exercisable for the first time by an
Optionee during any calendar year (under this Plan or any other plan of the
Corporation or a Subsidiary) shall not exceed one hundred thousand dollars
($100,000). Any portion of an Option which exceeds this annual limit shall be a
NSO.
(c) Limitations on Time of Grant. No grant of an ISO shall be made
under this Plan more than ten (10) years after the earlier of the date of
adoption of the Plan by the Board or the date the Plan is approved by the
Corporation's stockholders.
9. Nontransferability of Options.
No Option may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will, the
applicable laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code), and no Option shall
be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of an not
specifically permitted herein shall be null and void and without effect. An
Option may be exercised only by the Optionee during his or her lifetime and,
following the Optionee's death, may be exercised only as provided in Section
10(c).
10. Effect of Termination of Employment on Options.
(a) Termination of Employment. In the event that an Optionee's
employment or service as a non-employee director or consultant with the
Corporation or a Subsidiary shall be terminated (for reasons other than death or
disability) or in the event such Optionee shall resign from employment or
service as a non-employee director or consultant, vested Options held by such
Optionee may be exercised (to the extent that the Optionee was entitled to do so
at the time such employment or services ended) at any time within thirty (30)
days after such employment or services ended, unless, in the case of an NSO, the
exercise period is extended by the Committee; provided, however, if the
Corporation severs the employment relationship or the performance of services by
Optionee for "Cause" (as hereinafter defined), the Optionee's right to exercise
vested
4
<PAGE>
options shall terminate simultaneously with such severance of employment
or services. In no event, however, may the Option be exercised after the
expiration date of the Option as designated by the Committee pursuant to Section
7(d).
(b) Disability. In the event that an Optionee's employment or service
as a non-employee director or consultant with the Corporation or one of its
Subsidiaries shall be terminated as a result of the disability of the Optionee
(within the meaning of Section 22(e)(3) of the Code), vested Options may be
exercised (to the extent that the Optionee was entitled to do so on the date he
or she terminated employment or ceased serving as a non-employee director or
consultant) at any time during the first twelve (12) months after such Optionee
terminated employment or ceased serving as a non-employee director or
consultant, unless, in the case an NSO, the exercise period is extended by the
Committee. In no event, however, may the Option be exercised after the
expiration date of the Option as designated by the Committee pursuant to Section
7(d).
(c) Death. If an Optionee shall die while employed by or serving as a
non-employee director or consultant of the Corporation or one of its
Subsidiaries or within three (3) months after the termination of such employment
or cessation of such director's term or service as a consultant, vested Options
may be exercised to the extent that the Optionee was entitled to do so at the
time of his or her death by the Optionee's estate or by the person who acquires
the right to exercise such Option on his or her death by bequest or inheritance.
Such exercise may occur at any time within one (1) year after the date of the
Optionee's death, unless, in the case of an NSO, the exercise period is extended
by the Committee. In no event, however, may the Option be exercised after the
expiration date of the Option as designated by the Committee pursuant to Section
7(d).
(d) Nonvested Options. Unless accelerated in accordance with Section
7(d), unvested Options shall terminate immediately upon the Optionee's
termination of employment or cessation of service as a non-employee director or
consultant with the Corporation and its Subsidiaries for any reason whatsoever,
including death or disability.
(e) Cause. For purposes of the Plan, "Cause" shall mean (i) the
commission by Optionee of a felony involving moral turpitude, (ii) the gross
negligence, misconduct or the breach by Optionee of any statutory or common law
duty of Optionee to the Company or (iii) any other act, omission to act,
statement or event which the Committee determines sufficient to constitute
"Cause" hereunder or as it may announce from time to time.
11. Adjustment upon Changes in Capitalization. Notwithstanding any
other provision of the Plan, the Committee may at any time make or provide for
such adjustments to the Plan, to the number and class of shares available
thereunder or to any outstanding Options as it shall deem appropriate to prevent
dilution or enlargement of rights, including adjustments in the event of changes
in the number of shares of outstanding Common Stock by reason of stock
dividends, split-ups, recapitalizations, mergers, consolidations, combinations
or exchanges of shares, separations, reorganizations, liquidations and the like.
5
<PAGE>
12. Amendment and Termination of Plan. Subject to any approval of the
shareholders of the Corporation that may be required (or, in the opinion of the
Committee, appropriate) under law or the rules of any securities exchange on
which the shares of Common Stock are listed or similar entity, the Committee may
at any time amend, suspend or terminate the Plan. No amendment, suspension or
termination of the Plan shall materially and adversely alter or impair any
Option previously granted under the Plan without the consent of the holder
thereof. No amendment requiring shareholder approval under Treasury Regulation
Section 1.162-27 or Section 422 of the Code shall be valid unless such
shareholder approval is secured as provided therein.
13. Miscellaneous Provisions.
(a) Date of Grant. "Date of Grant" shall refer to the date on which any
Option is granted to an Optionee as set forth in the Option Agreement.
(b) Fair Market Value. "Fair Market Value" of a share of Common Stock
as of any date shall mean the average of the high "bid" and low "asked" prices
of the shares during the three (3) most recent days on which the shares were
traded, as reported on the principal exchange on which the shares are listed.
(c) Tax Withholding. The Corporation shall have the right to require
Optionees or their beneficiaries or legal representatives to remit to the
Corporation an amount sufficient to satisfy Federal, state and local withholding
tax requirements, or to deduct from all payments under this Plan amounts
sufficient to satisfy all withholding tax requirements. Whenever payments under
the Plan are to be made to an Optionee in cash, such payments shall be net of
any amounts sufficient to satisfy all Federal, state and local withholding tax
requirements. The Committee may, in its discretion, permit an Optionee to
satisfy his or her tax withholding obligation either by (i) surrendering shares
owned by the Optionee or (ii) having the Corporation withhold from shares
otherwise deliverable to the Optionee. Shares surrendered or withheld shall be
valued at their Fair Market Value as of the date on which income is required to
be recognized for income tax purposes. In the case of an award of ISOs, the
foregoing right shall be deemed to be provided to the Optionee at the time of
such award.
(d) Compliance With Section 16(b). In the case of an Optionee who is or
may be subject to Section 16 of the Act, it is the intent of the Corporation
that the Plan and any award granted hereunder satisfy and be interpreted in a
manner that satisfies the applicable requirements of Rule 16b-3, so that such
person will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 of the Act and will not be subjected to liability thereunder.
If any provision of the Plan or any award would otherwise conflict with the
intent expressed herein, that provision, to the extent possible, shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any remaining irreconcilable conflict with such intent, such provision shall be
deemed void as applicable to an Optionee who is or may be subject to Section
6
<PAGE>
16 of the Act.
(e) Successors. The obligations of the Corporation under the Plan shall
be binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of the Corporation, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Corporation. The Corporation shall make appropriate
provision for the preservation of Optionees' rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.
(f) No Right to Employment. Nothing in the Plan or in any Option
Agreement entered into pursuant to Section 7(b), nor the grant of any Option,
shall confer upon any individual any right to continue in the employ of the
Corporation or a Subsidiary or to be entitled to any remuneration or benefits
not set forth in the Plan or such Option Agreement or interfere with or limit
the right of the Corporation or a Subsidiary to modify the terms of or terminate
such individual's employment at any time.
(g) Notices. Notices required or permitted to be made under the Plan
shall be sufficiently made if sent by registered or certified mail addressed (a)
to the Optionee at the Optionee's address as set forth in the books and records
of the Corporation or its Subsidiaries, or (b) to the Corporation or the
Committee at the principal office of the Corporation.
(h) Severability. In the event that any provision of the Plan shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
(i) Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
by its duly authorized officers this ____________ day of __________, 1997.
MIDWAY AIRLINES CORPORATION
By:
----------------------
Its: President
7
<PAGE>
MIDWAY AIRLINES CORPORATION
1997 STOCK OPTION PLAN
<PAGE>
<TABLE>
<CAPTION>
MIDWAY AIRLINES CORPORATION
1997 STOCK OPTION PLAN
TABLE OF CONTENTS
PAGE
<S> <C>
1. Establishment and Effective Date.........................................................................1
2. Purpose..................................................................................................1
3. Form of Awards...........................................................................................1
4. Maximum Shares Available.................................................................................1
5. Administration...........................................................................................2
6. Eligibility..............................................................................................2
7. Terms and Conditions of Options..........................................................................3
8. Special Rules Applicable to ISOs.........................................................................4
9. Nontransferability of Options............................................................................4
10. Effect of Termination of Employment on Options...........................................................4
11. Adjustment upon Changes in Capitalization................................................................5
12. Amendment and Termination of Plan........................................................................6
13. Miscellaneous Provisions.................................................................................6
</TABLE>
