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Amendment Dated as of May 21, 1999 To
Non-Employee Director Stock Option Plans of
The Fairchild Corporation
The Fairchild Corporation (the "Corporation") has entered into
various stock option plans for its non-employee directors (the
"NED Plans").
Each NED Plan is hereby amended to add the following provisions:
DEFERRAL OF COMPENSATION
1. Defined Terms.
1.1 "Award" means an award of stock options to a Non-
Employee Director under the Corporation's NED Plans.
1.2 "Committee" means the full Board of Directors
(excluding the participation of Non-Employee Directors)
or a committee of three of more Directors (excluding
Non-Employee Directors).
1.3 "Deferral Date" means, in connection with any Deferred
Compensation Unit, the date on which any deferred
compensation with respect thereto would have been paid
if no deferral election had been made.
1.4 "Deferred Compensation Plan" means the Corporation's
Stock Option Deferral Plan dated February 9, 1998 (as
amended from time to time). Generally, participation
in the Deferred Compensation Plan shall be limited to
Executive Officers and Directors who are deemed
"Accredited Investors" for purposes of Federal
Securities Laws.
1.5 "Deferred Compensation Units" means the right of a Non-
Employee Director to receive distributions of deferred
compensation pursuant to the Deferred Compensation Plan
in the form of Shares, determined in accordance with
the terms of the Deferred Compensation Plan and this
Amendment to the NED Plans, and based on the Fair
Market Value of Shares on the Deferral Date.
1.6 "Dividend Equivalents" means the right of a Non-
Employee Director to receive Shares equal to:
(i) the per Share cash dividends declared by the
Corporation from time to time,
(ii) multiplied by the number of Deferred Compensation
Units credited to the account of the Non-Employee
Director as of each applicable dividend record date,
(iii) divided by the Fair Market Value on the related
dividend payment date.
1.7 "Fair Market Value" means with respect to the
Corporation's Shares the closing price of the Shares as
of the date on which the value is to be determined, as
reported on the New York Stock Exchange Composite Tape
or such other source of quotation for, or reports of,
trading activity in Shares as the Committee may from
time to time select.
1.8 "NED Plans" means all of the Corporation's stock option
plans for Non-Employee Directors, including individual
stock option awards to Non-Employee Directors.
1.9 "Non-Employee Director" means any director of the
Corporation who is not also an employee or executive
officer of the Corporation or any of its subsidiaries.
1.10 "Shares" means shares of the Corporation's Class A
Common Stock.
2. Deferred Compensation Units
2.1 Granting of Deferred Compensation Units: To the extent
elected by any Non-Employee Director and permitted by
the Deferred Compensation Plan, the Committee may award
Deferred Compensation Units to any Non-Employee
Director in lieu of all or any portion of the gain that
would otherwise be recognized by such Non-Employee
Director upon exercise of a stock option. All Deferred
Compensation Units shall be subject to the terms of
this Amendment to the NED Plans and the Deferred
Compensation Plan.
2.2 Effect of Grants: The number of Shares distributable
to Non-Employee Directors pursuant to each Deferred
Compensation Unit shall be charged against the maximum
number of Shares of Common Stock that may be issued
under the NED Plans at any time. The number of Shares
distributable to Non-Employee Directors pursuant to
Dividend Equivalents shall not be charged against the
number of Shares issuable under the NED Plans.
2.3 Accounting; Fractional Units:
(a) The number of Deferred Compensation Units credited to
the account of any Non-Employee Director shall be
rounded to the nearest one-thousandth of a Unit. The
account to which Deferred Compensation Units are
credited shall be an unsecured general obligation of
the Corporation. The Corporation will maintain records
of the number of Deferred Compensation Units for the
account of each Non-Employee Director, in part, to
prevent an issuance of shares of Common Stock in excess
of the authorized shares.
(b) Notwithstanding paragraph (a) above, upon distribution
of any Shares represented by Deferred Compensation
Units, the number of shares shall be rounded downward
to the nearest whole share and no fractional shares
shall be issued. Fractional Units remaining after the
final distribution to any Non-Employee Director shall
be cancelled without obligation to the Non-Employee
Director.
2.4 Exercise of Rights Under Awards:
Shares used to pay the purchase price on the exercise of
Awards subject to the Deferred Compensation Plan, shall have
been held by the Non-Employee Director for a period of not
less than six months (or such longer period as may be
required under the terms of the Award).
Except as amended hereby, the NED Plans shall remain in full
force and effect.
This Amendment to the NED Plans is effective as of May 21, 1999.