FIELDS AIRCRAFT SPARES, INC.
SHARE OPTION CONTRACT
Option No. 1 - ______
This SHARE OPTION CONTRACT ("Contract") is entered into as of
April 2, 1997 ("Grant Date") by and between ___________ (hereinafter called the
"Participant") and FIELDS AIRCRAFT SPARES, INC., a Utah corporation (hereinafter
called the "Company").
WHEREAS, Participant is an employee and/or director of the
Company or its subsidiaries; and
WHEREAS, the grant of this Contract to the Participant and the
execution of a Contract in the form hereof has been duly authorized by the Board
of Directors of the Company.
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants contained herein and other good and valuable considerations,
agree as follows:
1. Grant. The Company hereby grants Participant an option (the
"Options") to purchase _____ common shares, no par value, of the Company
("Option Shares"), at a price of Six Dollars and Twenty-Five Cents ($6.25) per
share (the "Option Price"), and agrees to cause certificates for any Option
Shares purchased hereunder to be delivered to the Participant upon payment of
the aggregate Option Price in full, all subject, however, to the terms and
conditions hereinafter set forth.
2. Vesting.
(a) The Options shall vest and become fully exercisable as to
the Option Shares upon all of the following conditions being met:
(i) the Company shall have sales of at least
$10,000,000 in any 12-month period subsequent to the Grant
Date;
(ii) condition (i) must have occurred if at all by
June 30, 1999; and
(iii) the Options shall vest as to 50% of the total
number of Option Shares, or _____ shares, on the last business
day prior to the first anniversary of the Grant Date if the
Participant is still an employee or director, and as to the
remaining 50% of the total number of Option Shares, or
_____ shares, on the last business day prior to the second
anniversary of the Grant Date if the Participant is still an
employee or director.
(b) In the event of a Change of Control, the Options that have
not otherwise terminated pursuant to the terms of this Contract shall
become fully vested on the date of such Change of Control. For purposes
of this Contract, "Change of Control" shall mean the occurrence of any
one of the following:
(i) the Company enters into an agreement or
reorganization, merger or consolidation pursuant to which the
Company is not the surviving corporation;
(ii) the Company sells substantially all of its
assets;
(iii) in excess of 75% of the outstanding securities
of the Company are acquired, in one transaction or a series of
transactions, by a single purchaser or group of related
purchasers; or
(iv) in excess of 50% of the outstanding securities
of the Company are acquired in one transaction or a series of
transactions, by a single purchaser or group of related
purchasers, and the Company's Board of Directors, within 90
days before or after such acquisition, deems such acquisition
to be a "Change of Control" for purposes of this Contract.
3. Term. The term in which the Options are exercisable shall
commence upon the vesting of the Options and shall expire on the third
anniversary of the Grant Date. The Participant may exercise the Options at any
time during such period. If the Participant's employment or directorship with
the Company or its subsidiaries is terminated either voluntarily by the
Participant or for cause by the Company or its subsidiaries, any Option held by
such Participant on the date of such termination of employment or directorship
will terminate thirty (30) days after such date of termination, or on the
expiration of the stated term of such Option if earlier, and may not be
exercised thereafter.
For purposes of this paragraph, the following shall constitute
"cause":
(i) Participant shall have committed an intentional act or
acts of fraud, embezzlement or theft constituting a felony and
resulting or intended to result directly or indirectly in gain or
personal enrichment for Participant at the expense of the Company or
its subsidiaries; or
(ii) The Participant's intentional and willful refusal to
perform the duties associated with Participant's position with the
Company or its subsidiaries.
If the Participant's employment or directorship with the Company or its
subsidiaries is terminated by the Company or its subsidiaries for other than
"cause", Participant will retain the Options granted under this Contract subject
to the same vesting requirements and exercise period as set forth herein.
In the event of a Participant's termination of employment or
directorship by reason of death and provided Participant has been an employee or
director for 6 months from the Grant Date, and provided that the conditions set
forth in 2(a)(i) and (ii) are met, 50% of all Options held by such Participant
shall vest prorata based on the total months of service rendered since the Grant
Date compared to 12 months and 50% of all Options held by such Participant shall
vest prorata based on the total months of service rendered since the Grant Date
compared to 24 months. Options may thereafter be exercised by the legal
representative of the Participant's estate until the earlier of one year after
the date of death or the stated term of the Option.
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In the event of a Participant's disability, any Option held by such
Participant will continue to vest during the period of time that the disabled
Participant receives disability benefits from the Company, its insurance carrier
or the state and is not gainfully employed elsewhere. When the Participant
becomes totally and permanently disabled and disability benefits cease, all
Options which have not vested shall immediately vest in full as to passage of
time conditions only and may be exercised by the Participant until the earlier
of one year after such date or the satisfactions of vesting conditions other
than the passage of time or the expiration of the stated term of such Option. If
the Participant dies during any such one-year period, any unexercised Options
shall be subject to the provisions of the previous paragraph.
4. Exercise Procedure.
(a) Subject to the terms and conditions set forth herein,
Options may be exercised in whole or in part, by giving written notice
of exercise to the Company specifying the number of Option Shares to be
purchased and the Option Price therefor. The Options may be exercised
only in multiples of 100 Option Shares unless such exercise is as to
the remaining balance of the Options.
(b) Payment of the Option Price may be made in one of the
following ways:
(i) in cash or by check payable to the Company;
(ii) to the extent determined by the Board of
Directors of the Company in their sole discretion in common
shares duly owned by the Participant (and for which the
Participant has good title, free and clear of any liens and
encumbrances); or
(iii) to the extent determined by the Board of
Directors of the Company in their sole discretion, by
reduction in the number of common shares issuable upon such
exercise, based, in each case, on the fair market value of the
common shares on the last business day preceding the date of
exercise.
(c) Upon payment in full of the Option Price and satisfaction
of the other conditions provided herein, a stock certificate
representing the number of common shares to which the Participant is
entitled shall be issued and delivered to the Participant.
5. Restricted Securities. Participant acknowledges that the
Options have not been registered under the Securities Act of 1933 or applicable
state "blue sky" laws, and the Option Shares, if and when issued, will be
"restricted securities" or unregistered securities. Participants are acquiring
the Options and will acquire the Option Shares for investment purposes and not
with a view towards distribution. The Company may require each person acquiring
Option Shares pursuant to an Option under this Contract to represent to the
Company in writing that the Participant is acquiring the Option Shares without a
view to distribution thereof.
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All certificates representing Option Shares delivered under
this Contract shall be subject to stop transfer orders and other restrictions as
the Company may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange or
stock market upon which the Option Shares are then listed or traded, any
applicable Federal or state securities law, and any applicable corporate law.
The certificates representing the Option Shares may include any legend that the
Company deems appropriate to reflect any restrictions on transfer.
6. Tax Matters. The Options are intended to be non-qualified
stock options under applicable tax laws and regulations.
7. Subsequent Adjustments. If all or any portion of the
Options shall be exercised subsequent to any share dividend, split-up,
recapitalization, merger, consolidations, combination or exchange of shares,
separation, reorganization, or liquidation of the Company occurring after the
date hereof, as a result of which shares of any class shall be issued in respect
to outstanding common shares of the Company or such common share shall be
changed into the same or a different number of shares of the same or another
class or classes, Participant, upon exercise of the Options, or portion thereof,
shall receive, for the aggregate price upon such exercise of the Options, the
aggregate number and class of shares which, if common share as authorized at the
date hereof had been purchased or awarded at the date hereof for the same
aggregate price (on the basis of the per share Option Price of the Options set
forth herein) and had not been disposed of, such person or persons would be
holding, at the time of such exercise, as a result of such share dividends,
split-ups, capitalization, mergers, consolidations, combinations, or exchanges
of shares, separations, reorganizations, or liquidation; provided, however, that
no fractional shares shall be issued upon any such exercise and the aggregated
price paid shall be appropriately reduced for any fractional share not issued.
This section does not give Participant any right to receive additional options
as a result of the issuance of additional shares of the Company or the increase
in the authorized capital of the Company.
8. Delivery of Option Shares. Upon each exercise of the
Options, or portion thereof, the Company as promptly as practicable shall mail
or deliver to the Participant a share certificate or certificates representing
the shares then purchased or awarded, and shall pay all stamp taxes payable in
connection therewith. The issuance of such shares and delivery of the
certificate or certificates therefor shall, however, be subject to any delay
necessary to complete (a) the listing of such shares on any stock exchange upon
which shares of the same class are then listed and (b) such registration or
qualification of such shares under any state or Federal law, rule or regulation
as the Company may determine to be necessary or advisable.
9. Transferability. Except as otherwise provided in this
Contract, Options granted hereunder and the rights and privileges conferred
thereby shall not be sold, transferred, assigned, or otherwise disposed of in
any way (whether by operation of law or otherwise) other than to the estate of
Participant as a result of the death of Participant, and shall not be subject to
execution, attachment, or similar process. Upon any attempt to transfer, assign,
or otherwise dispose of such Option, right, or privilege contrary to the
provisions hereof, or upon the levy of any attachment or similar process
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thereon, such Option and the rights and privileges conferred hereby shall
immediately terminate and the Option shall immediately be forfeited to the
Company.
10. Rights. Participant shall have no rights as a shareholder
with respect to any Option Shares to be issued upon exercise of any portion of
the Options until the Options, or portion thereof, have been exercised and
Option Shares issued to Participant. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other property) or
distributions or other rights for which the record date is prior to the date
such Option Shares are issued, except as provided above.
11. Governing Law. This Contract shall be governed by and
construed in accordance with the laws of the State of Utah.
12. Tax Liabilities. Participant is responsible for payment of
all state, local and federal income and any other taxes in connection with the
issuance and/or exercise of the Options. Participant hereby authorizes the
Company to withhold from the Participant's wages or salary for application to
payment of such taxes any amounts the Company deems necessary to comply with
Federal, state or local tax law. In the event Participant sells any common
shares issued pursuant to the Options within one year from the date of exercise
or within two years after the Date of Grant, participant agrees to notify the
Company promptly of the amount of taxable compensation realized by reason of
such sale for income tax purposes.
13. Effect on Retirement. No Option under this Contract shall
be deemed compensation for purposes of computing benefits under any retirement
plan nor affect any benefits under any other benefit plan now or hereafter in
effect under which the availability or amount of benefits is related to the
level of compensation.
14. Miscellaneous. If any part of this Contract shall be
determined to be invalid or void in any respect, such determination shall not
affect, impair, invalidate, or nullify the remaining provisions of this Contract
which shall continue in full force and effect.
This Contract shall be binding upon and inure to the benefit
of any successor or successors of the Company.
This Contract may be executed in one or more counterparts. All
of such counterparts shall constitute one and the same agreement and shall
become effective when one or more counterparts of this Contract have been signed
by the Company and the Participant.
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EXECUTED as of the date first above written.
FIELDS AIRCRAFT SPARES, INC.
By:__________________________________
The undersigned Participant hereby acknowledges receipt of an
executed original of this Share Option Contract and accepts the Options granted
thereunder.
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___________________, Participant
Address:_______________________________
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