FIELDS AIRCRAFT SPARES, INC.
SHARE OPTION CONTRACT
Option No. 5 - ______
This SHARE OPTION CONTRACT ("Contract") is entered into as of
, 1998 ("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, consultant, or director
of the Company or its subsidiaries;
WHEREAS, the grant of this Contract to the Participant and the
execution hereof has been duly authorized pursuant to the terms of the Company's
1998 Nonqualified Share Option Plan (the "Plan") as of the Grant Date; 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") pursuant to the Plan to purchase _____ common shares, no par value,
of the Company ("Option Shares"), at a price of ______ Dollars and _____ Cents
($ ) 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 and set forth in the Plan.
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
$20,000,000 in any 12- month period subsequent to the Grant
Date;]
[Flightways Manufacturing, Inc. shall have actual sales of at
least $5,000,000 to third party customers, whether shipped
directly or indirectly, in any 12-month period subsequent to
the Grant Date;]
[Skylock Industries shall have actual sales of at least
$3,000,000 to third party customers, whether shipped directly
or indirectly, in any 12-month period subsequent to the Grant
Date;]
(ii) the condition set forth in (i) must have
occurred if at all within two years from the Grant Date; 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] [consultant] [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] [consultant] [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 fifth
anniversary of the Grant Date. The Participant may exercise the Options at any
time during such period. If the Participant's [employment] [consulting]
[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] [consulting] [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
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(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] [directorship] [consulting] 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]
[directorship] [consulting] by reason of death, and provided Participant has
been an employee, director or consultant 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.
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
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(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.
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
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.
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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. Transferability of Options granted
hereunder is limited as set forth in the Plan.
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.
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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.
15. Definitions. Capitalized terms used in this Contract and
that are not otherwise defined herein shall have the meaning set forth in the
Plan. The terms and conditions of the Plan are incorporated herein by reference.
In the event of any inconsistency between this Contract and the Plan, the terms
of the Plan shall govern within the terms permitted by the Plan.
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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