Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________
MIDWEST EXPRESS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1828757
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6744 South Howell Avenue
Oak Creek, Wisconsin 53154
(Address of principal executive offices) (Zip Code)
Midwest Express Holdings, Inc. 1995 Stock Option Plan
(Full title of the plan)
____________________
Timothy E. Hoeksema
Chairman of the Board, President and Chief Executive Officer
Midwest Express Holdings, Inc.
6744 South Howell Avenue
Oak Creek, Wisconsin 53154
(414) 570-4000
(Name, address and telephone number, including area code,
of agent for service)
__________________________
CALCULATION OF REGISTRATION FEE
Proposed
Title of Maximum Proposed Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered (1) Per Share Price Fee
Common 675,000 $36.6875(3) $24,764,063.00(3) $7,305.40(2)
Stock, shares(2)
$.01 par
value
Preferred 450,000
Share rights (2) (4) (4) (4)
Purchase
Rights
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate number of
additional shares of Common Stock (and related Preferred Share
Purchase Rights) that may become issuable as a result of stock
splits, stock dividends, or similar transactions pursuant to the
anti-dilution provisions of the 1995 Stock Option Plan.
(2) 363,750 shares of Common Stock (and related Preferred Share
Purchase Rights) (as adjusted to reflect the Registrant's three-
for-two stock split effected May 28, 1997), and the corresponding
registration fee of $2,367.51 that has been previously paid by
the Registrant, are being carried forward from Registrant's
earlier Registration Statement on Form S-8, Registration No. 333-
1554.
(3) Estimated pursuant to Rule 457(c) under the Securities Act of
1933 solely for the purpose of calculating the registration fee
based on the average of the high and low prices for Midwest
Express Holdings, Inc. Common Stock on the New York Stock
Exchange consolidated reporting system on January 12, 1998.
(4) The value attributable to the Preferred Share Purchase Rights is
reflected in the market price of the Common Stock to which the
Rights are attached.
_________________________________
Pursuant to Rule 429 under the Securities Act of 1933, the
Prospectus referred to herein also relates to the Registrant's
Registration Statement on Form S-8, Registration No. 333-1554.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified
in Part I are not required to be filed with the Securities and Exchange
Commission (the "Commission") as part of this Form S-8 Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Midwest
Express Holdings, Inc. (the "Company") are hereby incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for its fiscal
year ended December 31, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997.
3. All other reports filed since December 31, 1996 by the
Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended.
4. The description of the Company's Common Stock contained in
Item 4 of the Company's Registration Statement on Form 8-B filed May 2,
1996, including any amendment or report filed for the purpose of updating
such description.
5. The description of the Preferred Share Purchase Rights
contained in Item 1 of the Company's Preferred Share Purchase Rights
Registration Statement on Form 8-A filed February 15, 1996, and any
amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, after the date of filing of this Registration Statement and
prior to such time as the Company files a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in 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.
None.
Item 6. Indemnification of Directors and Officers.
Pursuant to the Wisconsin Business Corporation Law and Bylaws of
the Company, as amended, directors and officers of the Company are
entitled to mandatory indemnification from the Company against certain
liabilities and expenses (i) to the extent such officers or directors are
successful in the defense of a proceeding and (ii) in proceedings in which
the director or officer is not successful in the defense thereof, unless
(in the latter case only) it is determined that the director or officer
breached or failed to perform his duties to the Company and such breach or
failure constituted: (a) a willful failure to deal fairly with the
Company or its shareholders in connection with a matter in which the
director or officer had a material conflict of interest; (b) a violation
of the criminal law, unless the director or officer had reasonable cause
to believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal. profit; or (d) willful
misconduct. It should also be noted that the Wisconsin Business
Corporation Law specifically states that it is the policy of Wisconsin to
require or permit indemnification in connection with a proceeding
involving securities regulation, as described therein, to the extent
required or permitted as described above. Additionally, under the
Wisconsin Business Corporation Law, directors of the Company are not
subject to personal liability to the Company, its shareholders or any
person asserting rights on behalf thereof for certain breaches or failures
to perform any duty resulting solely from their status except in
circumstances paralleling those in subparagraphs (a) through (d) outlined
above. Additional indemnification may be provided by resolution of the
Company's Board of Directors except as prohibited by law.
Expenses for the defense of any action for which indemnification
may be available may be advanced by the Company under certain
circumstances.
The Company maintains a liability insurance policy for its
directors and officers as permitted by Wisconsin law which may extend to,
among other things, liability arising under the Securities Act of 1933, as
amended.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The exhibits filed herewith or incorporated herein by reference
are set forth in the attached Exhibit Index.
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, as amended;
(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;
(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 with or
furnished to the Securities and Exchange Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended, that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended,
that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Milwaukee, State of Wisconsin,
on December 31, 1997.
MIDWEST EXPRESS HOLDINGS, INC.
By: /s/ Timothy E. Hoeksema
Timothy E. Hoeksema
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below as of December 31, 1997, by
the following persons in the capacities indicated. Each person whose
signature appears below constitutes and appoints Timothy E. Hoeksema,
Carol Skornicka and Robert S. Bahlman, and each of them individually, his
or her attorneys-in-fact and agents, with full power of substitution and
resubstitution for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to the Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
/s/ Timothy E. Hoeksema Chairman of the Board,
Timothy E. Hoeksema President, Chief
Executive Officer and
Director (principal
executive officer)
/s/ Brenda F. Skelton Senior Vice President-
Brenda F. Skelton Marketing and Customer
Service and Director
/s/ Robert S. Bahlman Vice President, Chief
Robert S. Bahlman Financial Officer,
Treasurer and Controller
(principal financial
officer and principal
accounting officer)
/s/ John F. Bergstrom Director
John F. Bergstrom
/s/ Oscar C. Boldt Director
Oscar C. Boldt
/s/ James G. Grosklaus Director
James G. Grosklaus
/s/ Richard H. Sonnentag Director
Richard H. Sonnentag
/s/ Frederick P. Stratton, Jr. Director
Frederick P. Stratton, Jr.
/s/ David H. Treitel Director
David H. Treitel
/s/ John W. Weekly Director
John W. Weekly
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(4.1) Article Five of the Company's Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.1 to
the Company's Registration Statement on Form 8-B filed May
2, 1996 (File No. 1-13934))
(4.2) Midwest Express Holdings, Inc. 1995 Stock Option Plan, as
amended February 13, 1997
(4.3) Form of Nonqualified Stock Option (incorporated by
reference to Exhibit 4.4 to the Company's Registration
Statement on Form S-8 filed February 20, 1996 (No. 333-
1554))
(4.4) Articles of Amendment relating to Series A Junior
Participating Preferred Stock (incorporated by reference to
Exhibit 3.3 to the Company's Registration Statement on Form
8-B filed May 2, 1996 (File No. 1-13934))
(4.5) Credit Agreement among Firstar Bank Milwaukee, N.A., M&I
Marshall & Ilsley Bank, Bank One, Milwaukee, N.A. and
Midwest Express Holdings, Inc., dated September 27, 1995
(incorporated by reference to Exhibit 4.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 (File No. 1-13934))
(4.6) Second Amendment to Credit Agreement, dated as of April 30,
1997, amending the Credit Agreement dated September 27,
1995, as amended to date, among Midwest Express Holdings,
Inc., Firstar Bank Milwaukee, N.A., M&I Marshall & Ilsley
Bank, and Bank One, Milwaukee, N.A. (incorporated by
reference to Exhibit 4.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997 (File No.
1-13934))
(4.7) Credit Agreement between Kimberly-Clark Corporation and
Midwest Express Holdings, Inc., dated September 27, 1995
(incorporated by reference to Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 (File No. 1-13934))
(4.8) Rights Agreement, dated February 14, 1996, between Midwest
Express Holdings, Inc. and Firstar Trust Company
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form 8-A filed February 15, 1996
(File No. 1-13934))
(4.9) Amendment to the Rights Agreement, dated April 19, 1996,
between Midwest Express Holdings, Inc. and Firstar Trust
Company (incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement on Form 8-B filed May 2,
1996 (File No. 1-13934))
(5) Opinion of Foley & Lardner
(23.1) Consent of Deloitte & Touche LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit 5 hereto)
MIDWEST EXPRESS HOLDINGS, INC.
1995 STOCK OPTION PLAN
(as amended through February 13, 1997 and adjusted for the
May 1997 stock split)
1. PURPOSE
This 1995 Stock Option Plan (the "Plan") of Midwest Express Holdings,
Inc. (the "Corporation") is intended to encourage those employees who
materially contribute to the success of the Corporation or of an
Affiliate, to acquire an ownership interest in the Corporation, thereby
increasing their motivation for and interest in the Corporation's or
Affiliate's long-term success.
2. EFFECTIVE DATE
The Plan is adopted effective as of September 21, 1995, subject to
approval by the stockholders of the Corporation at the Corporation's 1996
Annual Meeting of Stockholders.
3. DEFINITIONS
"Affiliate" means any company in which the Corporation owns directly
or indirectly 20% or more of the equity interest (collectively, the
"Affiliates").
"Board" means the Board of Directors of the Corporation.
A "Change in Control" shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:
(1) any "Person" (as such term is defined in section 3(a)(9) of
the Exchange Act, as modified and used in sections 13(d) and 14(d)
thereof), other than (A) the Corporation or any of its subsidiaries,
(B) a trustee or other fiduciary holding securities under any
employee benefit plan of the Corporation or any of its subsidiaries,
(C) an underwriter temporarily holding securities pursuant to an
offering of such securities or (D) a corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock in the Corporation
("Excluded Persons"), is or becomes the "Beneficial Owner" (as
defined in rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Corporation or its Affiliates after January 1, 1996
pursuant to express authorization by the Board that refers to this
exception) representing 25% or more of either the then outstanding
shares of Common Stock or the combined voting power of the
Corporation's then outstanding voting securities; or
(2) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on January 1, 1996, constituted the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Corporation, as such
terms are used in Rule 14a-11 of Regulation 14A under the Exchange
Act) whose appointment or election by the Board or nomination for
election by the Corporation's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who
either were directors on January 1, 1996 or whose appointment,
election or nomination for election was previously so approved; or
(3) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation or
approve the issuance of voting securities of the Corporation in
connection with a merger or consolidation of the Corporation (or any
direct or indirect subsidiary of the Corporation) pursuant to
applicable stock exchange requirements, other than (i) a merger or
consolidation that would result in the voting securities of the
Corporation outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 50% of the combined
voting power of the voting securities of the Corporation or such
surviving entity or any parent thereof outstanding immediately after
such merger or consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the Corporation (or
similar transaction) in which no Person (other than an Excluded
Person) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Corporation or its Affiliates after January 1, 1996 pursuant
to express authorization by the Board that refers to this exception)
representing 25% or more of either the then outstanding shares of
Common Stock or the combined voting power of the Corporation's then
outstanding voting securities; or
(4) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or an
agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets (in one transaction or
a series of related transactions within any period of 24 consecutive
months), other than a sale or disposition by the Corporation of all
or substantially all of the Corporation's assets to an entity at
least 75% of the combined voting power of the voting securities of
which are owned by Persons in substantially the same proportions as
their ownership of the Corporation immediately prior to such sale.
Notwithstanding the foregoing, no "Change in Control" shall be
deemed to have occurred if there is consummated any transaction or series
of integrated transactions immediately following which the record holders
of the Common Stock immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate
ownership in an entity that owns all or substantially all of the assets of
the Corporation immediately following such transaction or series of
transactions.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.
"Committee" means the Compensation Committee of the Board, provided
that if the requisite number of members of the Compensation Committee are
not Disinterested Persons, the Plan shall be administered by a committee,
all of whom are Disinterested Persons, appointed by the Board and
consisting of two or more directors with full authority to act in the
matter. From and after September 18, 1996, "Committee" means the
Compensation Committee of the Board, provided that if the requisite number
of members of the Compensation Committee are not Non-Employee Directors,
the Plan shall be administered by a committee, all of whom are Non-
Employee Directors, appointed by the Board and consisting of two or more
directors with full authority to act in the matter. The term "Committee"
shall mean the Compensation Committee or the committee appointed by the
Board, as the case may be.
"Common Stock" means the common stock, par value $0.01 per share, of
the Corporation and shall include both treasury shares and authorized but
unissued shares and shall also include any security of the Corporation
issued in substitution, in exchange for, or in lieu of the Common Stock.
"Disinterested Person" means a person who is so defined for purposes
of rule 16b-3 under the Exchange Act, or any successor provision, and who
is also defined as an "outside director" for purposes of section 162(m) of
the Code or any successor section.
"Exchange Act" means the Securities Exchange Act of 1934 and the
rules and regulations thereunder, as amended from time to time.
"Fair Market Value" means the mean between the high and low sales
price of the Common Stock, on the relevant date as reported on the
composite list used by the Wall Street Journal for reporting stock prices,
or if no such sale shall have been made on that day, on the last preceding
day on which there was such a sale, or if no such prior sale information
is available then as determined by the Committee.
"Incentive Stock Option" means an Option which is so defined for
purposes of section 422 of the Code or any successor section.
"Insider" has the meaning set forth in subsection 12(h) of this Plan.
"Non-Employee Director" means a person who is so defined for purposes
of Rule 16b-3 under the Exchange Act, or any successor provision, and who
is also defined as an "outside director" for purposes of Section 162(m) of
the Code, or any successor section.
"Nonqualified Stock Option" means any Option which is not an
Incentive Stock Option.
"Option" means a right to purchase a specified number of shares of
Common Stock at a fixed option price equal to no less than 100% of the
Fair Market Value of the Common Stock on the date the Option is granted.
"Option Agreement" means an agreement entered into between the
Corporation and a Participant setting forth the terms and conditions
applicable to the Option granted to the Participant.
"Option Price" has the meaning set forth in subsection 6(b) of this
Plan.
"Participant" means an employee who the Committee selects to
participate in and receive Options under this Plan (collectively, the
"Participants").
"Retirement" and "Retire" means the termination of employment on or
after the date the Participant is entitled to receive immediate payments
under a qualified retirement plan of the Corporation or an Affiliate;
provided, however, if the Participant is not eligible to participate under
a qualified retirement plan of the Corporation or its Affiliates then such
Participant shall be deemed to have retired if his termination of
employment is on or after the date such Participant has attained age 55.
"Total and Permanent Disability" means Totally and Permanently
Disabled as defined in the Midwest Express Airlines, Inc. Salaried
Employees Retirement Plan, provided the Committee shall make a
determination of Total and Permanent Disability for any Participant
hereunder.
4. ADMINISTRATION
The Plan and all Options granted pursuant thereto shall be
administered by the Committee. The Committee, in its absolute discretion,
shall have the power to interpret and construe the Plan and any Option
Agreements; provided, however, that no such action or determination may
increase the amount of compensation payable that would otherwise be due in
a manner that would result in the disallowance of a deduction to the
Corporation under section 162(m) of the Code or any successor section.
Any interpretation or construction of any provisions of this Plan or the
Option Agreements by the Committee shall be final and conclusive upon all
persons. No member of the Board or the Committee shall be liable for any
action or determination made in good faith.
Within 60 days following the close of each calendar year that the
Plan is in operation, the Committee shall make a report to the Board
specifying the employees who received Options under the Plan during the
prior year, the number of Options to the individual employees, and the
status of prior Options.
The Committee shall have the power to promulgate Committee Rules and
other guidelines in connection with the performance of its obligations,
powers and duties under the Plan, including its duty to administer and
construe the Plan and Option Agreements.
The Committee may authorize persons other than its members to carry
out its policies and directives subject to the limitations and guidelines
set by the Committee, except that: (a) the authority to grant Options,
the selection of employees for participation and decisions concerning the
timing, pricing and amount of an Option shall not be delegated by the
Committee; (b) the authority to administer Options with respect to persons
who are subject to section 16 of the Exchange Act shall not be delegated
by the Committee; (c) any delegation shall satisfy all applicable
requirements of rule 16b-3 of the Exchange Act, or any successor
provision; and (d) no such delegation shall result in the disallowance of
a deduction to the Corporation under section 162(m) or any successor
section. Any person to whom such authority is granted shall continue to
be eligible to receive Options under the Plan.
5. ELIGIBILITY
The Committee shall from time to time select the Plan Participants
from those employees whom the Committee determines either to be in a
position to contribute materially to the success of the Corporation or
Affiliate or to have in the past so contributed. Only employees
(including officers and directors who are employees) of the Corporation
and its Affiliates are eligible to participate in the Plan.
6. OPTION TERMS
The Committee shall determine and designate from time to time those
Participants to whom Options are to be granted and the number of shares of
Common Stock to be optioned to each. Such Options may be in the form of
Incentive Stock Options or the in the form of Nonqualified Stock Options.
After granting an Option to a Participant, the Committee shall cause to be
delivered to the Participant an Option Agreement evidencing the granting
of the Option. The Option Agreement shall be in such form as the
Committee shall from time to time approve. The terms and conditions of
all Options granted under the Plan need not be the same, but all Options
must meet the applicable terms and conditions specified in subsections
6(a) through 6(i).
(a) Period of Option. The period of each Option shall be (i) 10
years from the date it is granted for a Nonqualified Stock Option or such
other period as may be determined by the Committee subject to a maximum
period of 15 years and (ii) no more than 10 years from the date it is
granted for an Incentive Stock Option.
(b) Option Price. The Option price shall be determined by the
Committee, but shall not in any instance be less than the Fair Market
Value of the Common Stock at the time that the Option is granted (the
"Option Price").
(c) Limitations on Exercise. At any time during the period of the
Option, either (i) the Participant may purchase after the end of the first
year after the granting of the Option up to 30 percent of the shares
covered by the Option; after the end of the second year, an additional 30
percent; and after the end of the third year, the remaining 40 percent of
the total number of shares covered by the Option, or (ii) the Participant
may purchase the percentage of shares each year as otherwise determined by
the Committee at the time the Option is granted; provided, however, that
if the Participant's employment with the Corporation or an Affiliate is
terminated for any reason other than death, Retirement or Total and
Permanent Disability, the Option shall be exercisable only for three
months following such termination and only for the number of shares of
Common Stock which were exercisable on the date of such termination unless
otherwise provided by the Committee. In no event, however, may an Option
be exercised more than 15 years after the date of its grant, if it is a
Nonqualified Stock Option, or 10 years after the date of its grant, if it
is an Incentive Stock Option. Provided, however, that a termination of
employment with the Corporation or an Affiliate to accept immediate
reemployment with the Corporation or an Affiliate shall not be deemed to
be a termination of employment for purposes of the Plan.
(d) Exercise after Death, Retirement and Disability. If a
Participant dies or becomes Totally and Permanently Disabled, without
having exercised the Option in full, the remaining portion of such Option
may be exercised, without regard to the limitations in subsection 6(c),
within a period not to exceed (i) three years from the date of any such
event or (ii) the remaining period of the Option, whichever is earlier.
Upon a Participant's death, the Option may be exercised by the person or
persons to whom such Participant's rights under the Option shall pass by
will or by applicable law or, if no such person has such rights, by his
executor or administrator. If a Participant Retires without having
exercised the Option in full, the remaining portion of such Option may be
exercised, without regard to the limitations in subsection 6(c), within a
period not to exceed (i) five years from the date of such event or (ii)
the remaining period of the Option, whichever is earlier.
(e) Change in Control. In the event of a Change in Control, each
holder of an Option shall have the right at any time thereafter to
exercise the remaining portion of such Option, without regard to the
limitations in subsection 6(c), at any time during the remaining period of
the Option. As of the date of the approval of the Plan by the
stockholders of the Corporation, any outstanding Option previously granted
under the Plan shall be deemed amended to provide to the holder of such
Option the rights under this subsection in the event of a Change in
Control. The Committee may, in its sole and absolute discretion, amend,
modify or rescind the provisions of this subsection if it determines that
the operation of this subsection may prevent a transaction in which the
Corporation or any Affiliate is a party from being accounted for on a
pooling-of-interests basis.
(f) Non-transferability. During the Participant's lifetime, Options
shall be exercisable only by such Participant. Options shall not be
transferable other than by will or the laws of descent and distribution
upon the Participant's death. Notwithstanding anything in this subsection
6(f) to the contrary, the Committee may also grant to designated
Participants the right to transfer such Options, to the extent allowed
under rule 16b-3 of the Exchange Act, subject to terms and conditions of
the Option Agreement and to Committee Rules on the date such right is
granted.
(g) Exercise; Notice Thereof. Options shall be exercised by
delivering to the Corporation, at the office of the Treasurer, written
notice of the number of shares with respect to which Option rights are
being exercised and by paying in full the Option Price of the shares at
the time being acquired. Payment may be made (i) in cash, (ii) by a check
payable to the Corporation, (iii) in shares of Common Stock transferable
to the Corporation and having a Fair Market Value on the transfer date
equal to the amount payable to the Corporation, (iv) by delivery
(including by telecopy) to the Corporation or its designated agent of an
executed irrevocable option exercise form together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of
the shares at the time being acquired and deliver the sale or margin loan
proceeds directly to the Corporation to pay the exercise price, or (v)
through any combination of the foregoing. The date of exercise shall be
deemed to be the date the Corporation receives the written notice and
payment for the shares being purchased. A Participant shall have none of
the rights of a stockholder with respect to shares covered by such Option
until the Participant becomes the record holder of such shares.
(h) Purchase for Investment. It is contemplated that the
Corporation will register shares sold to Participants pursuant to the Plan
under the Securities Act of 1933. In the absence of an effective
registration, however, a Participant exercising an Option hereunder may be
required to give a representation that he/she is acquiring such shares as
an investment and not with a view to distribution thereof.
(i) Limitations on Incentive Stock Option Grants.
(i) An Incentive Stock Option shall be granted only to an
individual who, at the time the Option is granted, does not own stock
possessing more than 10 percent of the total combined voting power of
all classes of stock of the Corporation or Affiliates.
(ii) The aggregate Fair Market Value of all shares with respect
to which Incentive Stock Options are exercisable by a Participant for
the first time during any year shall not exceed $100,000. The
aggregate Fair Market Value of such shares shall be determined at the
time the Option is granted.
(j) Options for Nonresident Aliens. In the case of any Option
awarded to a Participant who is not a resident of the United States or who
is employed by an Affiliate other than an Affiliate that is incorporated,
or whose place of business is, in a State of the United States, the
Committee may (i) waive or alter the conditions set forth in subsections
6(a) through 6(i) to the extent that such action is necessary to conform
such Option to applicable foreign law, or (ii) take any action, either
before or after the award of such Option, which it deems advisable to
obtain approval of such Option by an appropriate governmental entity;
provided, however, that no action may be taken hereunder if such action
would (1) increase any benefits accruing to any Participants under the
Plan, (2) increase the number of securities which may be issued under the
Plan, (3) modify the requirements for eligibility to participate in the
Plan, (4) result in a failure to comply with applicable provisions of the
Securities Act of 1933, the Exchange Act or the Code or (5) result in the
disallowance of a deduction to the Corporation under section 162(m) of the
Code or any successor section.
7. SHARES SUBJECT TO THE PLAN
The number of shares of Common Stock available with respect to
Options granted under this Plan shall not exceed 741,000; provided,
however, that (a) such maximum amount shall be increased on a share-for-
share basis for each share of Common Stock, if any, that the Corporation
repurchases from and after the date of the Corporation's 1997 Annual
Meeting of Shareholders, subject to a maximum increase of 300,000, and (b)
the limitation described in this section shall be subject to the
adjustment provision set forth in section 9 hereof. The shares of Common
Stock subject to the Plan may consist in whole or in part of authorized
but unissued shares or of treasury shares, as the Board may from time to
time determine. Shares subject to Options which become ineligible for
purchase will be available for grant under the Plan to the extent
permitted by section 16 of the Exchange Act (or the rules and regulations
promulgated thereunder) and to the extent determined to be appropriate by
the Committee.
8. INDIVIDUAL LIMITS
The maximum number of shares of Common Stock covered by Options which
may be granted to any Participant within any 2 consecutive calendar year
period shall not exceed 112,500, in the aggregate. If an Option which had
been granted to a Participant is canceled, the shares of Common Stock
which had been subject to such canceled Option shall continue to be
counted against the maximum number of shares for which Options may be
granted to the Participant. In the event that the number of Options which
may be granted is adjusted as provided in the Plan, the above limits shall
automatically be adjusted in the same ratio.
9. CHANGES IN CAPITALIZATION
In the event there are any changes in the Common Stock or the
capitalization of the Corporation through a corporate transaction, such as
any merger, any acquisition through the issuance of capital stock of the
Corporation, any consolidation, any separation of the Corporation
(including a spin-off or other distribution of stock by the Corporation),
any reorganization of the Corporation (whether or not such reorganization
comes within the definition of such term in section 368 of the Code), or
any partial or complete liquidation by the Corporation, recapitalization,
stock dividend, stock split or other change in the corporate structure,
appropriate adjustments and changes shall be made by the Committee, to the
extent necessary to preserve the benefit to the Participant contemplated
hereby, to reflect such changes in (a) the aggregate number of shares
subject to the Plan, (b) the maximum number of shares for which Options
may be granted to any Participant, (c) the number of shares and Option
Price per share of all shares of Common Stock subject to outstanding
options, and (d) such other provisions of the Plan as may be necessary and
equitable to carry out the foregoing purposes, provided, however that no
such adjustment or change may be made to the extent that such adjustment
or change will result in the disallowance of a deduction to the
Corporation under section 162(m) of the Code or any successor section.
10. EFFECT ON OTHER PLANS
All benefits under the Plan shall constitute special compensation and
shall not affect the level of benefits provided to or received by any
Participant (or the Participant's estate or beneficiaries) as part of any
employee benefit plan of the Corporation or an Affiliate. The Plan shall
not be construed to affect in any way a Participant's rights and
obligations under any other plan maintained by the Corporation or an
Affiliate on behalf of employees.
11. TERM OF THE PLAN
No Option may be granted after September 27, 2005 under the Plan, but
Options theretofore granted shall continue in force beyond that date
pursuant to their terms.
12. GENERAL PROVISIONS
(a) No Right of Continued Employment. Neither the
establishment of the Plan nor the payment of any benefits hereunder
nor any action of the Corporation, its Affiliates, the Board of
Directors of the Corporation or its Affiliates, or the Committee
shall be held or construed to confer upon any person any legal right
to be continued in the employ of the Corporation or its Affiliates,
and the Corporation and its Affiliates expressly reserve the right to
discharge any Participant without liability to the Corporation, its
Affiliates, the Board of Directors of the Corporation or its
Affiliates, or the Committee, except as to any rights which may be
expressly conferred upon a Participant under the Plan.
(b) Binding Effect. Any decision made or action taken by the
Corporation, the Board or by the Committee arising out of or in
connection with the construction, administration, interpretation and
effect of the Plan shall be conclusive and binding upon all persons.
(c) Modification of Awards. Subject to the requirements of the
Plan, the Committee may modify or amend any Option or waive any
restrictions or conditions applicable to any Option or the exercise
thereof, and the terms and conditions applicable to any Options may
at any time be amended, modified or canceled by mutual agreement
between the Committee and the Participant or any other persons as may
then have an interest therein, so long as any amendment or
modification does not increase the number of shares of Common Stock
issuable under the Plan. Action may be taken under this section
12(c) notwithstanding expiration of the Plan under section 11.
Notwithstanding anything in this subsection 12(c) to the contrary,
the Committee may not take any action to the extent that such action
would result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section.
(d) Inalienability of Benefits and Interest. Except as
provided in subsection 6(f), no benefit payable or interest in the
Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and any
such attempted action shall be void and no such benefit or interest
shall be in any manner liable for or subject to debts, contracts,
liabilities, engagements, or torts of any Participant or beneficiary.
(e) Law to Govern. All questions pertaining to the
construction, interpretation, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the
internal laws of the state in which the Corporation is incorporated
at the time of the question.
(f) Purchase of Common Stock. The Corporation and its
Affiliates may purchase from time to time shares of Common Stock in
such amounts as they may determine for purposes of the Plan. The
Corporation and its Affiliates shall have no obligation to retain,
and shall have the unlimited right to sell or otherwise deal with for
their own account, any shares of Common Stock purchased pursuant to
this paragraph.
(g) Use of Proceeds. The proceeds received by the Corporation
from the sale of Common Stock pursuant to the exercise of Options
shall be used for general corporate purposes.
(h) Withholding. The Committee shall require the withholding
of all taxes as required by law. A Participant may elect to have any
portion of the federal, state or local income tax withholding
required with respect to an exercise of a Nonqualified Stock Option
satisfied by tendering to the Corporation shares of Common Stock,
which, in the absence of such an election, would have been issued to
such Participant in connection with such exercise. In the event that
the value of the shares of Common Stock tendered to satisfy the
withholding tax required with respect to an exercise exceeds the
amount of such tax, the excess of such market value over the amount
of such tax shall be returned to the Participant, to the extent
possible, in whole shares of Common Stock, and the remainder in cash.
The value of a share of Common Stock tendered pursuant to this
subsection 12(h) shall be the Fair Market Value of the Common Stock
on the date on which such shares are tendered to the Corporation. An
election pursuant to this subjection 12(h) shall be made in writing
and signed by the Participant. An election pursuant to this
subsection 12(h) is irrevocable. A Participant who exercises an
Option and who is required to report to the Securities and Exchange
Commission under section 16(a) of the Exchange Act (an "Insider") may
satisfy the income tax withholding due in respect of such exercise
pursuant to this subsection 12(h) only if the Insider also satisfies
an exemption under section 16(b) of the Exchange Act (or the rules or
regulations promulgated thereunder) for such withholding.
(i) Amendments. The Committee may at any time amend, suspend,
or discontinue the Plan or alter or amend any or all Options and
Option Agreements under the Plan to the extent (1) permitted by law,
(2) permitted by the rules of any stock exchange on which the Common
Stock or any other security of the Corporation is listed, (3)
permitted under applicable provisions of the Securities Act of 1933,
as amended, and the Exchange Act (including rule 16b-3) and (4) that
such action would not result in the disallowance of a deduction to
the Corporation under section 162(m) of the Code or any successor
section (including the rules and regulations promulgated thereunder);
provided,however, that if any of the foregoing requires the approval
by stockholders of any such amendment, suspension or discontinuance,
then the Committee may take such action subject to the approval of
the stockholders. Except as provided in subsections 6(j) and 12(c)
no such amendment, suspension, or termination of the Plan shall,
without the consent of the Participant, adversely alter or change any
of the rights or obligations under any Options or other rights
previously granted the Participant under the Plan.
FOLEY & LARDNER
A T T O R N E Y S A T L A W
FIRSTAR CENTER
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5367
A MEMBER OF GLOBALEX
WITH MEMBER OFFICES IN
MADISON BERLIN
CHICAGO TELEPHONE (414) 271-2400 BRUSSELS
WASHINGTON, D.C. DRESDEN
JACKSONVILLE TELEX 26-819 FRANKFURT
ORLANDO LONDON
TALLAHASSEE (FOLEY LARD MIL) PARIS
TAMPA SINGAPORE
WEST PALM BEACH FACSIMILE (414) 297-4900 STUTTGART
TAIPEI
WRITER'S DIRECT LINE
January 14, 1998
Midwest Express Holdings, Inc.
6744 South Howell Avenue
Oak Creek, Wisconsin 53154
Ladies and Gentlemen:
We have acted as counsel for Midwest Express Holdings, Inc., a
Wisconsin corporation (the "Company"), in conjunction with the preparation
of a Form S-8 Registration Statement (the "Registration Statement") to be
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
675,000 shares of the Company's common stock, $0.01 par value (the "Common
Stock"), and related Preferred Share Purchase Rights (the "Rights"), which
may be issued pursuant to the Midwest Express Holdings, Inc. 1995 Stock
Option Plan, as amended February 13, 1997 (the "Plan"). The terms of the
Rights are as set forth in that certain Rights Agreement, dated as of
February 14, 1996, as amended, by and between the Company and Firstar
Trust Company (the "Rights Agreement").
We have examined: (i) the Plan; (ii) the Registration
Statement; (iii) the Rights Agreement; (iv) the Company's Restated
Articles of Incorporation and Bylaws, as amended to date; (v) resolutions
of the Company's Board of Directors relating to the Plan; and (vi) such
other documents and records as we have deemed necessary to enable us to
render this Opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the
laws of the State of Wisconsin.
2. The Common Stock, when issued and paid for in the manner
set forth in the Plan, will be validly issued, fully paid and
nonassessable and no personal liability will attach to the ownership
thereof, except with respect to wage claims of employees of the Company
for services performed not to exceed six (6) months service in any one
case, as provided in Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law.
3. The Rights to be issued with the Common Stock when issued
pursuant to the terms of the Rights Agreement will be validly issued.
We consent to the use of this opinion as an Exhibit to the
Registration Statement. In giving our consent, we do not admit that we
are "experts" within the meaning of Section 11 of the Securities Act or
within the category of persons whose consent is required by Section 7 of
said Act.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Midwest Express Holdings, Inc. on Form S-8 of our reports
dated January 31, 1997, appearing in and incorporated by reference in the
Annual Report on Form 10-K of Midwest Express Holdings, Inc. for the year
ended December 31, 1996.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Milwaukee, Wisconsin
January 13, 1998
