Exhibit 4.1
ARIZONA AIRCRAFT SPARES, INC.
EMPLOYEE STOCK INCENTIVE PLAN, AS AMENDED
1. GENERAL PROVISIONS
1.1 Purpose.
The Stock
Incentive Plan (the "Plan") is intended to allow
designated officers, employees and certain non-employees (all
of
whom are sometimes collectively referred to
herein as "Employees")
of Arizona Aircraft Spares, Inc., a Nevada
corporation ("Arizona")
and its Subsidiaries (as that term is
defined below) which it may
have from time to time (Arizona and such
Subsidiaries are referred
to herein as the "Company") to receive
certain options ("Stock
Options") to purchase Arizona common stock, one tenth of
one cent
($0.001) par value ("Common Stock"), and to
receive grants of Common
Stock subject to certain restrictions
("Awards"). As used in
this
Plan, the term "Subsidiary" shall mean each
corporation which is a
"subsidiary corporation" of Arizona within
the meaning of Section
424(f) of the Internal Revenue Code of
1986, as amended (the
"Code"). The purpose of this Plan is to
provide Employees with
equity-based compensation incentives to
make significant and
extraordinary contributions to the
long-term growth and performance
of the Company, and to attract and retain
Employees.
1.2 Administration.
1.2.1
The Plan shall be
administered by the Compensation
Committee (the "Committee") of, or
appointed by, the Board of
Directors of Arizona (the "Board").
The Committee
shall select one
of its members as Chairman and shall act by
vote of a majority of a
quorum, or by unanimous written consent.
A majority of its
members
shall constitute a quorum. The Committee shall be governed by
the
provisions of Arizona Bylaws and of Nevada law
applicable to the
Board, except as otherwise provided herein
or determined by the Board.
1.2.2
The Committee shall
have full and complete authority, in
its discretion, but subject to the express
provisions of the Plan:
to approve the Employees nominated by the
management of the Company
to be granted Awards or Stock Options; to
determine the number of
Awards or Stock Options to be granted to an
Employee; to determine
the time or times at which Awards or Stock
Options shall be granted;
to establish the terms and conditions upon
which Awards or Stock
Options may be exercised; to remove or
adjust any restrictions and
conditions upon Awards or Stock Options; to
specify, at the time of
grant, provisions relating to
exercisability of Stock Options and to
accelerate or otherwise modify the
exercisability of any Stock
Options; and to adopt such rules and
regulations and to make all
other determinations deemed necessary or
desirable for the administration
of the Plan. All interpretations and
constructions of the
Plan by the Committee, and all of its
actions hereunder, shall be
binding and conclusive on all persons for
all purposes.
1.2.3
The Company hereby
agrees to indemnify and hold harmless
each Committee member and each employee of
the Company, and the
estate and heirs of such Committee member
or employee, against all
claims, liabilities, expenses, penalties,
damages or other pecuniary
losses, including legal fees, which such
Committee member or
employee, his or her estate or heirs may
suffer as a result of his
or her responsibilities, obligations or
duties in connection with
the Plan, to the extent that insurance, if
any, does not cover the
payment of such items. No member of the Committee or the
Board
shall be liable for any action or
determination made in good faith
with respect to the Plan or any Award or
Stock Option granted
pursuant to the Plan.
1.3 Eligibility and Participation.
Employees
eligible under the Plan shall be approved by the
Committee from those Employees who, in the
opinion of the management
of the Company, are in positions which
enable them to make
significant contributions to the long-term
performance and growth of
the Company. In selecting Employees to whom
Stock Options or Awards
may be granted, consideration shall be
given to factors such as
employment position, duties and
responsibilities, ability,
productivity, length of service, morale,
interest in the Company and
recommendations of supervisors.
1.4 Shares Subject to the Plan.
The maximum
number of shares of Common Stock that may be issued
pursuant to the Plan shall be One Million
Seven Hundred and Seventy
Thousand (1,770,000) subject to adjustment
pursuant to the
provisions of paragraph 4.1. If shares of Common Stock awarded
or
issued under the Plan are reacquired by the
Company due to a
forfeiture or for any other reason, such
shares shall be cancelled
and thereafter shall again be available for
purposes of the Plan.
If a Stock Option expires, terminates or is
cancelled for any reason
without having been exercised in full, the
shares of Common Stock
not purchased thereunder shall again be
available for purposes of
the Plan.
2. PROVISIONS RELATING TO STOCK
OPTIONS
2.1 Grants of Stock Options.
The Committee
may grant Stock Options in such amounts, at such
times, and to such Employees nominated by
the management of the
Company as the Committee, in its
discretion, may determine. Stock
Options granted under the Plan shall
constitute "incentive stock
options" within the meaning of Section 422
of the Code, if so
designated by the Committee on the date of
grant. The
Committee
shall also have the discretion to grant
Stock Options which do not
constitute incentive stock options, and any
such Stock Options shall
be designated non-statutory stock options
by the Committee on the
date of grant. The aggregate fair market value
(determined as of
the time an incentive stock option is
granted) of the Common Stock
with respect to which incentive stock
options are exercisable for
the first time by any Employee during any
one calendar year (under
all plans of the Company and any parent or
subsidiary of the
Company) may not exceed the maximum amount
permitted under Section
422 of the Code (currently one hundred
thousand dollars
($100,000.00)). Non-statutory stock options shall
not be subject to
the limitations relating to incentive stock
options contained in the
preceding sentence. Each Stock Option shall be
evidenced by a
written agreement (the "Option Agreement")
in a form approved by the
Committee, which shall be executed on
behalf of the Company and by
the Employee to whom the Stock Option is
granted, and which shall be
subject to the terms and conditions of this
Plan. In the
discretion
of the Committee, Stock Options may include
provisions (which need
not be uniform), authorized by the
Committee in its discretion, that
accelerate an Employee's rights to exercise
Stock Options following
a "Change in Control," upon termination of
such Employee employment
by the Company without "Cause" or by the
Employee for "Good Reason,"
as such terms are defined in paragraph 3.1
hereof. The holder of
a
Stock Option shall not be entitled to the
privileges of stock
ownership as to any shares of Common Stock
not actually issued to
such holder.
2.2 Purchase Price.
The purchase
price ("Exercise Price") of shares of Common Stock
subject to each Stock Option ("Option
Shares") shall be fifty cents
($0.50). For an employee holding greater
than ten percent (10%) of
the total voting power of all stock of the
Company, either Common or
Preferred, the Exercise Price of an
incentive stock option shall be
at least one hundred and ten percent (110%)
of the fair market value
of the Common Stock on the date of the
grant of the option.
2.3 Option Period.
The Stock Option
period (the "Term") shall commence on the date
of grant of the Stock Option and shall be
ten (10) years or such
shorter period as is determined by the
Committee.
Each Stock
Option shall provide that it is exercisable
over its term in such
periodic installments as the Committee in
its sole discretion may
determine. Such provisions need not be
uniform. Section 16(b)
of
the Exchange Act exempts persons normally
subject to the reporting
requirements of Section 16(a) of the
Exchange Act ("Section 16
Reporting Persons") pursuant to a qualified
employee stock option
plan from the normal requirement of not
selling until at least six
(6) months and one day from the date the
Stock Option is granted.
2.4 Exercise of Options.
2.4.1
Each Stock Option may
be exercised in whole or in part
(but not as to fractional shares) by
delivering it for surrender or
endorsement to the Company, attention of
the Corporate Secretary, at
the principal office of the Company,
together with payment of the
Exercise Price and an executed Notice and
Agreement of Exercise in
the form prescribed by paragraph 2.4.2.
Payment may be made
(i) in
cash, (ii) by cashier's or certified check,
(iii) by surrender of
previously owned shares of the Company's
Common Stock valued
pursuant to paragraph 2.2 (if the Committee
authorizes payment in
stock in its discretion), (iv) by
withholding from the Option Shares
which would otherwise be issuable upon the
exercise of the Stock
Option that number of Option Shares equal
to the exercise price of
the Stock Option, if such withholding is
authorized by the Committee
in its discretion, or (v) in the discretion
of the Committee, by the
delivery to the Company of the optionee's
promissory note secured by
the Option Shares, bearing interest at a
rate sufficient to prevent
the imputation of interest under Sections
483 or 1274 of the Code,
and having such other terms and conditions
as may be satisfactory to
the Committee.
2.4.2
Exercise of each Stock
Option is conditioned upon the
agreement of the Employee to the terms and
conditions of this Plan
and of such Stock Option as evidenced by
the Employee's execution
and delivery of a Notice and Agreement of
Exercise in a form to be
determined by the Committee in its
discretion. Such
Notice and
Agreement of Exercise shall set forth the
agreement of the Employee
that: (a) no Option Shares will be sold
or otherwise distributed in
violation of the Securities Act of 1933
(the "Securities Act") or
any other applicable federal or state
securities laws, (b) each
Option Share certificate may be imprinted
with legends reflecting
any applicable federal and state securities
law restrictions and
conditions, (c) the Company may comply with
said securities law
restrictions and issue "stop transfer"
instructions to its Transfer
Agent and Registrar without liability, (d)
if the Employee is a
Section 16 Reporting Person, the Employee
will furnish to the
Company a copy of each Form 4 or Form 5
filed by said Employee and
will timely file all reports required under
federal securities laws,
and (e) the Employee will report all sales
of Option Shares to the
Company in writing on a form prescribed by
the Company.
2.4.3
No Stock Option shall
be exercisable unless and until any
applicable registration or qualification
requirements of federal and
state securities laws, and all other legal
requirements, have been
fully complied with. The Company will use reasonable
efforts to
maintain the effectiveness of a
Registration Statement under the
Securities Act for the issuance of Stock
Options and shares acquired
thereunder, but there may be times when no
such Registration Statement
will be currently effective. The exercise of Stock Options
may
be temporarily suspended without liability
to the Company during
times when no such Registration Statement
is currently effective, or
during times when, in the reasonable
opinion of the Committee, such
suspension is necessary to preclude
violation of any requirements of
applicable law or regulatory bodies having
jurisdiction over the
Company. If any Stock Option would expire
for any reason except the
end of its term during such a suspension,
then if exercise of such
Stock Option is duly tendered before its
expiration, such Stock
Option shall be exercisable and exercised
(unless the attempted
exercise is withdrawn) as of the first day
after the end of such
suspension. The Company shall have no
obligation to file any
Registration Statement covering resales of
Option Shares.
2.5 Continuous Employment.
Except as
provided in paragraph 2.7 below, an Employee may not
exercise a Stock Option unless from the
date of grant to the date of
exercise such Employee remains continuously
in the employ of the
Company. For purposes of this paragraph
2.5, the period of
continuous employment of an Employee with
the Company shall be
deemed to include (without extending the
term of the Stock Option)
any period during which such Employee is on
leave of absence with
the consent of the Company, provided that
such leave of absence
shall not exceed three (3) months and that
such Employee returns to
the employ of the Company at the expiration
of such leave of
absence. If such Employee fails to return
to the employ of the
Company at the expiration of such leave of
absence, such Employee's
employment with the Company shall be deemed
terminated as of the
date such leave of absence commenced.
The continuous
employment of
an Employee with the Company shall also be
deemed to include any
period during which such Employee is a
member of the Armed Forces of
the United States, provided that such
Employee returns to the employ
of the Company within ninety (90) days (or
such longer period as may
be prescribed by law) from the date such
Employee first becomes
entitled to discharge. If an Employee does not return to
the employ
of the Company within ninety (90) days (or
such longer period as may
be prescribed by law) from the date such
Employee first becomes
entitled to discharge, such Employee's
employment with the Company
shall be deemed to have terminated as of
the date such Employee's
military service ended.
2.6 Restrictions on Transfer.
Each Stock
Option granted under this Plan shall be transferable
only by will or the laws of descent and
distribution. No
interest
of any Employee under the Plan shall be
subject t
