Exhibit 4
PRECISION TUNE
1996 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The 1996 Precision Tune Employee Stock Purchase Plan (the
"Plan") is intended to encourage and facilitate the purchase of the Common Stock
of Precision Auto Care, Inc. (the "Company"), by employees of the Company and
its Designated Subsidiaries, thereby providing employees with a personal stake
in the Company and a long range inducement to remain in the employ of the
Company and its Designated Subsidiaries. It is the intention of the Company to
have the Plan qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). This
document is an amendment and restatement by the Company of the Plan as
originally adopted by WE JAC Corporation. The Company assumed the obligations of
WE JAC Corporation under the Plan pursuant to Section 22.1 of Article XXII of
the Plan of Reorganization and Agreement for Share Exchange Offers by and among
the Corporation, WE JAC Corporation ("WE JAC"), Lube Ventures, Inc., Rocky
Mountain Ventures, Inc., Prema Properties, Ltd., Miracle Industries, Inc.,
Miracle Partners, Inc., Rocky Mountain Ventures II, Inc., Ralston Car Wash,
Ltd., and The Karl Byrer Group, Inc., dated as of August 27, 1997 (the "Share
Exchange Agreement"). The Company succeeded to and assumed all rights,
obligations and liabilities of WE JAC under WE JAC's Precision Tune 1996
Employee Stock Purchase Plan, including (i) the obligation to issue capital
stock pursuant to outstanding options to purchase common stock under the Plan
and (ii) the authority to amend the Plan. The effective date of the Plan as
hereby amended and restated is August 27, 1997.
2. DEFINITIONS.
2.1 Board. The "Board" is the Board of Directors of
the Company.
2.2 Common Stock. The "Common Stock" is Precision
Auto Care, Inc. Common Stock, par value of $0.01 per share.
2.3 Designated Subsidiaries. The "Designated Subsidiaries" are
WE JAC Corporation; Lube Ventures, Inc.; Rocky Mountain Ventures, Inc.; Rocky
Mountain Ventures II, Inc.; Ralston Car Wash, Ltd.; Miracle Partners, Inc.;
Miracle Industries, Inc.; Prema Properties Ltd.; Hydro Spray Car Wash Equipment
Company, Ltd.; Precision Tune Auto Care, Inc.; Worldwide Drying Systems, Inc.;
National 60 Minute Tune, Inc.; PTW, Inc.; KBG, LLC and any subsidiary of the
Company whose Eligible Employees shall be authorized to participate in the Plan
by the Board, so long as such authorization is continued by the Board.
2.4 Eligible Compensation. The "Eligible Compensation"
of each Participant is his or her regular rate of
base compensation for a Grant Period determined as of the first Grant Date of
the Grant Period on which the Participant is an Eligible Employee. "Eligible
Compensation" does not include management incentives, variable commissions,
bonuses, overtime, shift differential, COLA adjustments, extended work-week
premiums, amounts paid or accrued with respect to any qualified or nonqualified
plan of deferred compensation or other employee welfare plan, payments for group
insurance, hospitalization and similar benefits, perquisites reported as income,
reimbursement for expenses and other forms of extraordinary pay. An employee's
base pay shall be calculated by multiplying the employee's normal rate of pay as
of the first Grant Date on which the employee is an Eligible Employee by the
number of pay periods between said Grant Date and the end of the Grant Period.
2.5 Eligible Employee. An "Eligible Employee" is an employee
of the Company or of a Designated Subsidiary; provided, however, that the term
"Eligible Employee" shall not include:
2.5.1 Employees who are scheduled to work less
than twenty (20) hours per week or less than five (5) months
during the Grant Period; or
2.5.2 Any employee who, immediately after a
Grant Date, owns five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or its subsidiaries as determined
pursuant to Section 424(e) and (f) of the Code. For purposes of this Subsection
2.5.2, the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of an employee, and stock which the employee may
purchase under outstanding options, whether or not granted under this Plan,
shall be treated as stock owned by the employee.
2.6 Exercise Dates. The "Exercise Dates" are January
31, April 30, July 31, and October 31 of each year.
2.7 Fair Market Value. The "Fair Market Value" per share on
any Grant Date, on any Exercise Date or for purposes of Section 9.6 hereof, as
the case may be, shall be the fair market value of each share of Common Stock as
determined in good faith by the Board.
2.8 Grant Dates. The "Grant Dates" are November 1, February 1,
May 1, and August 1 of each year.
2.9 Grant Period. Each "Grant Period" shall commence
on November 1st and shall end on October 31st of the following
year.
2.10 Participant. A "Participant" is an Eligible Employee of
the Company or of a Designated Subsidiary who elects to participate in the Plan
by filing an enrollment form with the Company as provided in Section 6.
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2.11 Purchase Price. The "Purchase Price" of a share of Common
Stock purchased pursuant to an option granted under the Plan shall be
eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on
the Grant Date.
2.12 Subsidiary. A "Subsidiary" is a corporation, fifty
percent (50%) or more of the outstanding voting power of all classes of stock of
which at the time of granting of an option under the Plan is owned directly, or
indirectly through a subsidiary, by the Company within the meaning of Section
424(f) of the Code.
3. ADMINISTRATION.
3.1 The Plan shall be administered by a committee (the
"Committee") selected by the Board. The Committee shall consist of not less than
three (3) members who are members of the Board of Directors. An individual will
not be eligible to serve on the Committee if the individual is a Participant.
Each member of the Committee shall serve for a term commencing on a date
specified by the Board and continuing until such member dies, resigns, becomes a
Participant or is removed from office by the Board.
3.2 From time to time the Committee may adopt such rules and
regulations for carrying out the Plan as it may deem proper and in the best
interest of the Company. All determinations of the Committee shall be made by a
majority of its members. The interpretation of any provision of the Plan by the
Committee shall be final and the Board shall adopt and place into effect the
determinations of the Committee.
4. STOCK SUBJECT TO THE PLAN.
The stock subject to options under the Plan shall be
authorized but unissued shares of the Company's Common Stock. The aggregate
amount of stock for which options may be granted under the Plan shall be twenty
thousand (20,000) shares, subject to adjustment in accordance with Section 12.
In the event that an option granted under the Plan to any Participant is
unexercised at the end of a Grant Period as to any shares covered thereby, such
shares thereafter shall be available for the granting of options under the Plan.
5. GRANT OF OPTION.
Options will be granted on the Grant Dates. All Participants
granted options under the Plan shall have the same rights and privileges. On
each Grant Date of the Grant Period, each Participant who is an Eligible
Employee on the Grant Date may elect to be granted an option by the Board to
purchase whole shares of Common Stock. The maximum number of shares of Common
Stock for which each Participant may elect to be granted options during any
Grant Period shall equal ten percent (10%) of the Participant's Eligible
Compensation divided by eighty-five percent (85%) of the Fair Market Value of a
share of Common Stock
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on the first Grant Date of the Grant Period on which the Participant is an
Eligible Employee. In the event that the maximum number of shares to be granted
to all Participants on a Grant Date (determined according to the above formula)
exceeds the total number of shares available for sale under the Plan pursuant to
Section 4, the Committee shall make a pro rota allocation of the available
shares among all Participants on such Grant Date based upon a uniform
relationship to the Eligible Compensation of all Participants in effect on the
Grant Date. The Committee may on the first Grant Date of each Grant Period
decrease the percentage of Eligible Compensation set forth above to calculate
the number of shares of Common Stock for which an Eligible Employee may elect to
be granted options to a minimum of five percent (5%) or increase it to a maximum
of twenty percent (20%). Notwithstanding the foregoing, in the event options are
granted prior to the approval of this Plan by stockholders owning a majority of
the common stock of the Company, such grant is expressly conditioned on
subsequent approval of the Plan by the stockholders. Furthermore, both the grant
and the exercise of any options under this Plan are expressly conditioned on the
effective and continuing registration of this Plan under the Securities Act of
1933 or an available exemption from registration and effective registration or
available exemption from registration under applicable state securities laws.
6. ENROLLMENT, PAYROLL DEDUCTIONS AND CASH PAYMENTS.
6.1 Within the thirty (30) day period prior to each Grant
Date, the Company shall notify all employees of the Company and its Designated
Subsidiaries of the dates of the Grant Period, the Grant Dates and the Exercise
Dates, and furnish them with enrollment forms and other pertinent information.
6.2 An employee who is not a Participant and who will be an
Eligible Employee (as defined in Section 2.5) on any Grant Date of a Grant
Period may become a Participant by completing the enrollment form and forwarding
such form to such employee's appropriate payroll office prior to the Grant Date
on which the employee will be an Eligible Employee.
6.3 An enrollment form will allow an Eligible Employee to
become a Participant by authorizing a regular payroll deduction from the
Participant's Eligible Compensation on each pay day during the Grant Period at a
rate which will result in not less than a Five Dollar ($5.00) deduction per pay
day and which will not exceed ten percent (10%) of the Participant's Eligible
Compensation. An enrollment form shall also provide each Eligible Employee with
the option of becoming a Participant by electing to fund his or her stock
purchase account, in whole or in part, by making a lump sum cash payment
pursuant to the provisions of Section 6.8 hereof.
6.4 A participant's payroll deductions and lump sum cash
payments shall be deposited in the Company's general corporate account and shall
be credited to the Participant's
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stock purchase account under the Plan. No interest shall accrue on the amount
credited to a Participant's stock purchase account. Except as provided in
Sections 6.5 and 6.8, a Participant may not make any separate cash payment into
his or her account. A Participant may change the amount of the payroll deduction
only if the Participant elects to increase or decrease the number of shares of
Common Stock the Participant has an option to purchase during the Grant Period.
6.5 During leaves of absence approved by the Company and
meeting the requirements of Treasury Regulation Section 1.421-7(h)(2), a
Participant may continue participation in the Plan by making cash payments to
the Company on his or her normal pay days equal to the short fall in his or her
stock purchase account caused by such leave of absence.
6.6 Payroll deductions for a Participant for each Grant Period
shall commence on the first pay day following the first Grant Date on which the
Participant is an Eligible Employee and shall end on the last pay day prior to
the end of the Grant Period, unless sooner terminated by the Participant as
provided in Section 8.
6.7 Individual stock purchase accounts will be maintained for
each Participant in the Plan. A statement will be given to each Participant
promptly following each Exercise Date of a Grant Period which sets forth the
amount of the Participant's payroll deductions and any cash payments, the per
share Purchase Price, the number of shares purchased, and the amount of the
remaining balance, if any, credited to the Participant's stock purchase account.
6.8 A Participant may elect to make a lump sum cash payment to
be credited to his or her stock purchase account on or before the last day of a
Grant Period in an amount which, when added to the amount already credited to
his or her stock purchase account for the Grant Period, does not exceed ten
percent (10%) of his or her Eligible Compensation.
7. EXERCISE OF OPTION.
7.1 Each Participant who is an Eligible Employee on an
Exercise Date may elect by written notice to the Company to exercise his or her
option to purchase up to the number of whole shares for which the Participant
then has sufficient credit to his stock purchase account, except that on the
last Exercise Date of a Grant Period each Participant shall be deemed to have
exercised an option to purchase such number of whole shares of Common Stock as
the credit to the Participant's stock purchase account on the Exercise Date will
pay for at the applicable Purchase Price. No fractional shares of Common Stock
shall be purchased. During the Participant's lifetime, the option to purchase
shares of Common Stock under the Plan is exercisable only by the Participant.
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7.2 Any amount remaining credited to a Participant's stock
purchase account on the last Exercise Date of the Grant Period, after the
purchase of shares as provided above, will be refunded to the Participant
promptly.
7.3 No Participant may be granted an option under the Plan
which would permit such employee's rights to purchase stock under all such
employee stock purchase plans of the Company or its Subsidiaries to accrue at a
rate which exceeds $25,000 in Fair Market Value of such stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.
7.4 Shares of Common Stock purchased by a Participant under
the Plan will be issued only in the name of the Participant, or if the
Participant so indicates on his or her enrollment form or in writing, in the
name of the Participant and any other person as joint tenants with rights of
survivorship.
7.5 As promptly as practicable after each Exercise Date of the
Grant Period, the Company shall cause the number of shares purchased by each
Participant to be registered on the stock transfer records of the Company in the
name of the Participant.
8. WITHDRAWAL.
A Participant, at any time and for any reason, may terminate
participation in the Plan by delivering written notice of withdrawal to the
Participant's appropriate payroll office. If a Participant withdraws from the
Plan, the Participant shall not be eligible to again participate in the Plan for
six (6) months thereafter, and the balance in the Participant's stock purchase
account will be promptly refunded after receipt by the Company of the
Participant's notice of withdrawal.
9. TERMINATION OF EMPLOYMENT OR ELIGIBILITY.
9.1 If the employment of a Participant terminates, such
Participant's participation in the Plan automatically and without any act on his
or her part shall terminate as of the date of the termination of his or her
employment. The Company promptly will pay to the Participant the amount credited
to his or her stock purchase account under the Plan (without interest), and
thereupon the Participant's interest in the Plan and any options under the Plan
shall terminate.
9.2 In the event a Participant fails to meet the requirements
of an Eligible Employee under the Plan on any Exercise Date of the Grant Period,
as set forth in Section 2.5, the Participant will be deemed to have withdrawn
from the Plan and the payroll deductions credited to such Participant's account
will be promptly refunded to the Participant and no option to purchase shares of
Common Stock shall be granted to such Participant.
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9.3 A Participant's withdrawal from participation in the Plan
during a Grant Period shall preclude (i) such Participant's eligibility to
participate in the Plan, and (ii) such Participant's eligibility to participate
in any similar plan which has been or may be adopted by the Company, for a
period of six (6) months thereafter.
9.4 Upon the termination of any Participant's employment with
the Company, the Company shall have an option for a period of ninety (90) days
following the date of such termination to purchase all or any shares of the
authorized, issued and outstanding shares of Common Stock then registered in the
terminated Participant's name and acquired under this Plan at the Fair Market
Value of such Common Stock. Each Stockholder hereby agrees that in the event the
Company exercises its option pursuant to this Section 9.4, he or she shall be
bound to take any and all action necessary to enable the Company to purchase
said shares of Common Stock.
10. TRANSFERABILITY.
Neither payroll deductions or cash payments credited to a
Participant's stock purchase account nor any rights with regard to the exercise
of an option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way by the Participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 8.
11. RIGHTS OF A STOCKHOLDER.
Subject to the provisions set forth in Sections 9.6 and 22
hereof, each Participant shall have the rights or privileges of a stockholder of
the Company with respect to shares purchased under the Plan when the shares have
been registered in the name of the Participant on the stock transfer records of
the Company.
12. CAPITAL ADJUSTMENT AFFECTING COMMON STOCK.
In the event of a capital adjustment resulting from a
recapitalization, stock dividend, stock split, reorganization, merger,
consolidation or other change in capitalization affecting the present Common
Stock, the Board may, at its option, terminate the Plan or make appropriate
adjustments in the number and kind of shares which may be issued and sold under
the Plan and may make such other adjustments as it may deem equitable.
13. TERMINATION AND AMENDMENTS TO PLAN.
The Board, at any time, may terminate the Plan or from time to
time, may amend the Plan without the approval of the stockholders of the
Company; provided, however, that no such amendment shall be made without the
stockholders' approval which would (i) cause the Plan to fail to meet the
requirements of an
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"employee stock purchase plan" as defined in Section 423 of the Code, or (ii)
permit a Participant to be a member of the Committee.
14. TERMINATION OF THE PLAN.
Upon termination of the Plan, the amount credited to the stock
purchase accounts for all Participants shall be refunded promptly. The Exercise
Dates may be accelerated by the Company in the event of a termination of the
Plan.
15. NON-GUARANTEE OF EMPLOYMENT.
Nothing in the Plan or in any option granted pursuant to the
Plan shall be construed as a contract of employment between the Company or a
Subsidiary and its employees, or as a contractual right to continue in the
employ of the Company or a Subsidiary, or as a limitation of the right of the
Company or a Subsidiary to discharge its employees at any time.
16. EXCLUSION FROM RETIREMENT AND FRINGE BENEFIT
COMPUTATION.
No portion of the award of options under this Plan shall be
taken into account as "wages," "salary" or "compensation" for any purpose,
whether in determining eligibility, benefits or otherwise, under (i) any
pension, retirement, profit sharing or other qualified or non-qualified plan of
deferred compensation, (ii) any employee welfare or fringe benefit plan
including, but not limited to, group insurance, hospitalization, medical, and
disability, or (iii) any form of extraordinary pay including but not limited to
bonuses, sick pay and vacation pay.
17. LIABILITY LIMITED; INDEMNIFICATION.
17.1 To the maximum extent permitted by Virginia law, neither
the Company, Board or Committee nor any of its members, shall be liable for any
action or determination made with respect to this Plan.
17.2 In addition to such other rights of indemnification that
they may have, the members of the Board and Committee shall be indemnified by
the Company to the maximum extent permitted by Virginia law against any and all
liabilities and expenses incurred in connection with their service in such
capacity.
18. GOVERNMENTAL REGULATIONS.
The Company's obligation to sell and deliver the Common Stock
under the plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of such stock.
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19. APPLICATION OF FUNDS.
Any payroll deductions received or held by the Company under
the Plan may be used for any corporate purpose.
20. OTHER TERMS AND CONDITIONS.
The Committee may impose such other terms and conditions not
inconsistent with the terms of the Plan, as it deems advisable, including,
without limitation, restrictions and requirements relating to (i) the
registration, listing or qualification of the Common Stock, (ii) the grant or
exercise of options, or (iii) the shares of Common Stock acquired under the
Plan. The Committee may require that a Participant notify the Company of any
disposition of shares of Common Stock purchased under the Plan within a period
of two (2) years subsequent to the Grant Date of the options exercised to
purchase those shares.
21. ENDORSEMENT OF CERTIFICATE.
Each certificate of Common Stock of the Company issued to a
Participant pursuant to this Plan shall be endorsed by the Secretary of Company
as follows:
"This certificate is transferable only upon compliance with
the provisions of an employee stock purchase plan, a copy of which is
on file in the office of the Secretary of the Company and is available
upon request of any participant without charge."
22. MISCELLANEOUS.
22.1 The headings in this Plan are for reference purposes only
and shall not affect the meaning or interpretation of the Plan.
22.2 Any provision in this Plan which affects the validity or
qualification of this Plan under Section 423 of the Code shall be deemed null
and void without affecting the remaining provisions of this Plan.
22.3 This Plan shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia, without regard to
principles of conflict of laws.
22.4 All notices and other communications made or given
pursuant to this Plan shall be in writing and shall be sufficiently made or
given if delivered or mailed, addressed to the employee at the address contained
in the records of the Company or to the Company at the Company's principal
office.
22.5 This Plan may be executed in any number of counterparts,
each of which shall be considered an original and all of which taken together
shall constitute one and the same instrument.
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PRECISION AUTO CARE, INC.
By: /s/ John F. Ripley
________________________________
[Corporate Seal] Dated:_____________________
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