OPTION NO. 13
AIR SOUTH, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Agreement is made as of August 23, 1994 and between AIR SOUTH,
INC., an Illinois corporation (the "Company") and Donald Baker (the
WHEREAS, the Board of Directors of the Company (the "Board") has been
determined that the Optionee is a full or part time employee of the Company or
a subsidiary; and
WHEREAS, the Board considers it desirable and in the Company's best
interests that the Optionee be given, as an incentive to contribute to its
success and prosperity, and to encourage the Optionee to remain in its employ,
an option to purchase shares of the Common Stock of the Company in accordance
with the Company's Incentive Stock Option Plan (the "Plan");
NOW, THEREFORE, it is agreed between the parties as follows:
1. Option Grant. The Company hereby grants to the Optionee the right,
privilege and option to purchase up to 40,000 shares of its Common Stock at a
purchase price of One Dollar ($1.00) per share, in the manner and subject to
the conditions provided herein (the "Option"). This option shall expire on
August 23, 2004 (the "Expiration Date").
2. Vesting. Subject to earlier termination as provided herein, the
extent to which the Option shall be exercisable shall be as follows:
[X] 33.33% of the total number of shares for each year of a three year
period following the date hereof throughout which the Optionee
serves the Company as an officer or employee, as follows:
[X] 13,333 shares after August 23, 1995
[X] 13,333 shares after August 23, 1996
[X] 13,334 shares after August 23, 1997
[X] -0- shares after August 23, 1998
[X] -0- shares after August 23, 1999
To the extent not exercised, the number of shares as to which the Option
is exercisable shall accumulate and be exercisable, in whole or in part, until
the termination of the Option as set forth in Section 4 hereof, but in no event
later than ten (10) years from the date of this Agreement.
3. Exercise. The Option shall be exercisable upon delivery of
written notice, in the form attached hereto as Exhibit A, to the Board at the
Company's principal place of business, specifying the number of shares of
Common Stock to be purchased and the amount to be paid therefor, and
accompanied by cash or check payable to the order of the Company in an amount
equal to the purchase price of the shares. The Company shall thereafter
immediately make delivery of such shares, bearing the legend set forth
hereafter in section 8.
4. Exercise Period. The exercise period of Options granted hereunder
shall terminate upon the first to occur of the following events:
(a) Three (3) months after voluntary or involuntary termination
of employment of the Optionee by the Company other than by reason of death,
total disability or approved leave of absence;
(b) twelve (12) months following the death of the Optionee while
(c) twelve (12) months following the termination of services by
the Optionee in the event of disability of the Optionee within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1954, as amended; or
(d) the Expiration Date set forth in Section 1 of this Agreement;
(e) ten (10) years from the date of this Agreement.
5. Stock Dividends, Splits. In the event that additional shares
of Common Stock are issued pursuant to a stock split, stock dividend,
recapitalization, reclassification or other change in the capital structure of
the Company, the number of shares of Common Stock covered by the Option granted
hereunder shall be increased proportionately, with no increase in the total
purchase price of the shares then so covered. In the event that the shares of
Common Stock of the Company from time to time issued and outstanding are
reduced by a combination of shares, recapitalization, reclassification or other
change in the capital structure of the Company, the number of shares of Common
Stock covered by the Option granted hereunder shall be reduced proportionately,
with no reduction in the total price of the shares then so covered. All such
adjustments shall be made by the Board, whose determination upon the same shall
be final and binding upon the Optionee. No fractional shares shall be issued,
and any fractional shares resulting from such computations shall be eliminated
from the adjusted Option. No adjustment shall be made for cash dividends or
the issuance to stockholders of rights to subscribe for additional Common Stock
or other securities.
6. Non-Transferable. This Agreement, and the Option rights and
privileges conferred hereunder, shall not be transferred, assigned, pledged,
hypothecated in any way (whether by operation of law or otherwise), or
otherwise disposed of, except by will and the laws of descent and distribution,
shall not be subject to execution, attachment or similar process, and shall be
exercisable, during his lifetime, only by the Optionee.
7. Investment Purposes Only. All shares acquired by the
Optionee pursuant to this Agreement shall be acquired for investment purposes
only for the account of the Optionee and not
with any intention or purpose of resale or further distribution thereof by the
Optionee. Such shares may not be resold except in compliance with the
Securities Act of 1933 or an exemption therefrom. Nothing contained herein
shall require the Company to register under the Securities Act of 1933 either
the Plan, this option or any securities issued or issuable pursuant to this
8. Legend. All share certificates transferred to the Optionee
pursuant to an exercise of the option granted hereunder shall bear on their
face the following legend:
The transfer and sale of these shares is governed by the terms of the
Air South Incentive Stock Option Agreement between the Company and the
Shareholder and the Air South Incentive Stock Option Plan, copies of
which are on file with the Secretary of the Company.
and such other legends as the Company deems appropriate.
9. Transferees. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, permitted successors and permitted assigns.
10. No Employment Contract. Neither the execution of this
Agreement nor the issuance of shares pursuant to the exercise of any Option
granted hereunder shall be construed as giving the Optionee any legal or
equitable right against the Company or its subsidiaries except as specifically
provided for herein, or the right to be retained in employment, service or as a
member of the Board, and the Optionee shall remain subject to discharge or
removal to the same extent as if this Agreement had not been executed by the
11. Governing Law. This Agreement shall be construed and
interpreted, and its validity, effect and rights hereunder shall be determined
at all times in accordance with the laws of the State of South Carolina.
12. Plan Controls. The Optionee, for himself, his heirs,
executors, administrators, permitted successors and permitted assigns,
administrators, permitted successors and permitted
assigns, acknowledges and agrees that (i) he has received a copy of the Plan,
and (ii) he has read and understands fully the Plan and that, in the event of
any inconsistency between the terms of this Agreement and the Plan the
provisions of the Plan shall control.
AIR SOUTH, INC.
Patrick J. O'Shea
Title: President & Chief Executive Officer
NOTICE OF EXERCISE
INCENTIVE STOCK OPTION PLAN
AIR SOUTH, INC.
The undersigned Optionee hereby exercises Option No. 13, granted on
August 23, 1994 ("Date of Grant"), to purchase ___________ shares of Common
Stock (no par value) of Air South, Inc. (the "Company") at a price of $1.00 per
share under the Company's Incentive Stock Option Plan (the "Plan") and herewith
encloses _______ check in the amount of $__________ payable to Air South, Inc.
in full payment therefor.
The undersigned Optionee hereby represents and certifies that ________ is
purchasing these securities for ________ own account for investment and not
with a view to the resale or distribution thereof.
Date ________________________, 199___ Signed:____________________________