Erickson Air-Crane Incorporated Form of Incentive Stock Option Agreement

Exhibit 10.3

Erickson Air-Crane Incorporated
Form of Incentive Stock Option Agreement

This Agreement is between Erickson Air-Crane Incorporated, a Delaware corporation (the “Company”), and        (the “Optionee”), pursuant to the Company’s 2011 Stock Incentive Plan.  The Company and the Optionee agree as follows:

1.                                      Option Grant.  The Company grants to the Optionee on the terms and conditions of this Agreement the right and the option (the “Option”) to purchase all or any part of        shares of the Company’s Common Stock at a purchase price of $       per share.  The terms and conditions of the Option grant set forth in attached Exhibit A are incorporated into and made a part of this Agreement.  The Option is intended to be an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as amended.

2.                                      Grant Date; Expiration Date.   The Grant Date for this Option is       .  The Option continues in effect until the tenth anniversary of the Grant Date (the “Expiration Date”) unless earlier terminated as provided in Sections 2, 7, or 8 of Exhibit A.  The Option is not exercisable on or after the Expiration Date.

3.                                      Exercise of Option.  The Vesting Reference Date of this Option is       . The Option will become exercisable in accordance with Section 1 of Exhibit A.

The parties executed this Agreement in duplicate as of the Grant Date.

Erickson Air-Crane Incorporated

Exhibit A to
Stock Option Agreement

1.                                      Time of Exercise of Option.  Until it expires or terminates as provided in Sections 2, 7, or 8 of this Exhibit A, the Optionee may exercise the Option from time to time to purchase whole shares as to which the Option is exercisable.  The Option becomes exercisable for       % of the shares on each anniversary of the Vesting Reference Date, so that the Option will be fully exercisable on the         anniversary of the Vesting Reference Date.

2.                                      Termination of Employment or Service.

2.1                               General Rule.  Except as provided in this Section 2, the Option may not be exercised unless at the time of exercise the Optionee is employed by or in the service of the Company and has been employed or provided service continuously since the Grant Date. For purposes of this Exhibit A, the Optionee is considered to be employed by or in the service of the Company if the Optionee is employed by or in the service of the Company or any parent or subsidiary of the Company (an “Employer”).

2.2                               Termination Generally.  If the Optionee’s employment or service with the Company terminates for any reason other than because of total disability or death as provided in Sections 2.3 or 2.4, the Option may be exercised at any time before the Expiration Date or the expiration of 30 days after the date of termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option at the date of termination.

2.3                               Termination Because of Total Disability.  If the Optionee’s employment or service with the Company terminates because of total disability, the Option may be exercised at any time before the Expiration Date or before the date three months after the date of termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option at the date of termination.  The term “total disability” means a medically determinable mental or physical impairment that is expecte d to result in death or has lasted or is expected to last for a continuous period of six months or more and that, in the opinion of the Company and one independent physician, causes the Optionee to be unable to perform his or her duties as an employee, director, officer, or consultant of the Employer and unable to be engaged in any substantial gainful activity.  Total disability is deemed to have occurred on the first day after the independent physician furnished his or her written opinion of total disability to the Company and the Company has reached an opinion of total disability.

2.4                               Termination Because of Death.  If the Optionee dies while employed by or in the service of the Company, the Option may be exercised at any time before the Expiration Date or before the date 12 months after the date of death, whichever is

the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option at the date of death and only by the person or persons to whom the Optionee’s rights under the Option pass by the Optionee’s will or by the laws of descent and distribution of the state or country of domicile at the time of death.

2.5                               Leave of Absence.  Absence on leave approved by the Employer or on account of illness or disability is not deemed a termination or interruption of employment or service.  Vesting of the Option continues during a medical, family, or military leave of absence, whether paid or unpaid. Vesting of the Option is suspended during any other unpaid leave of absence.

2.6                               Failure to Exercise Option.  To the extent that following termination of employment or service, the Option is not exercised within the applicable periods described above, all rights to purchase shares pursuant to the Option cease and terminate.

3.                                      Method of Exercise of Option. The Optionee may exercise the Option only by providing written notice to the Company of the Optionee’s binding commitment to purchase shares, specifying the number of shares the Optionee desires to purchase under the Option and the date on which the Optionee agrees to complete the transaction, which may not be more than 30 days after delivery of the notice, and, if required to comply with the Securities Act of 1933, c ontaining a representation that the Optionee’s intends to acquire the shares for investment and not with a view to distribution. On or before the date specified for completion of the purchase, the Optionee must pay the Company the full purchase price of those shares in cash or by check, or in whole or in part in Common Stock of the Company valued at fair market value, but only if the Optionee previously acquired or held that Common Stock for at least six months. The fair market value of Common Stock provided in payment of the purchase price is the closing price of the Common Stock last reported before the Optionee pays in Common Stock or, if earlier, the Optionee commits to pay, if the Common Stock is publicly traded, or another value of the Common Stock as specified by the Company.  The Company shall not issue any shares under the Option until the Optionee pays in full for the shares, including all amounts owed for tax withholding. The Optionee shall, immediately upon notification of the amount du e, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state, and local tax withholding requirements.  If additional withholding is or becomes required (as a result of exercise of the Option or as a result of disposition of shares acquired pursuant to exercise of the Option) beyond any amount deposited before delivery of the certificates, the Optionee shall pay that amount to the Company, in cash or by check, on demand.  If the Optionee fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the Optionee, including salary, subject to applicable law.

4.                                      Disqualifying Disposition.  If the Option is an Incentive Stock Option and if within two years after the Grant Date or within 12 months after the exercise of the Option, the Optionee sells or otherwise disposes of Common Stock acquired on exercise of the Option, the Optionee shall within 30 days of the sale or disposition notify the Company

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in writing of (i) the date of the sale or disposition, (ii) the amount realized on the sale or disposition, and (iii) the nature of the disposition (e.g., sale, gift, etc.).

5.                                      Nontransferability.  The Optionee shall not assign or transfer the Option, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the Optionee’s domicile at the time of death.  During the Optionee’s lifetime, only the Optionee may exercise the Option.

6.                                      Stock Splits, Stock Dividends.  If, after the date of this Agreement, the Company’s outstanding Common Stock is increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, dividend payable in shares, recapitalization, or reclassification, the Company shall adjust (i) the number and kind of shares subject to the Option, or t he unexercised portion of the Option, and (ii) the Option price per share, so that the Optionee’s proportionate interest before and after the occurrence of the event is maintained.   Notwithstanding the foregoing, the Company is not obligated to effect any adjustment that would or might result in the issuance of fractional shares.  Any fractional shares resulting from an adjustment may be disregarded or provided for in any manner determined by the Company. All adjustments made by the Company are conclusive.

7.                                      Mergers, Reorganizations, Etc.  If the Company is a party to a merger; consolidation; plan of exchange; acquisition of property or stock; split-up; split-off; spin-off; reorganization; liquidation; or sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the  assets of the Company (each, a “Transaction”), the Company shall, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating the Option:

7.1                               The Option remains in effect in accordance with its terms.

7.2                               The Option converts into an option to purchase stock in one or more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction.  The Company shall determine the amount, type of securities subject to the Option, and exercise price of the converted Options by taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of the Company’s shares following the Transaction. The converted Option will be vested only to the extent that the vesting requirements relating to the Option have been satisfied.

7.3                               The Company provides a period of 30 days or less before the completion of the Transaction during which the Option may be exercised to the extent then exercisable, and upon the expiration of that period, the Option will immediately terminate.  The Company may, in its sole discretion, accelerate the exercisability of the Option so that the Option is exercisable in full during that period.

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8.                                      Dissolution.  If the Company dissolves, the Company shall provide no more than 30 days before the dissolution of the Company during which the Option may be exercised to the extent then exercisable, and upon the expiration of that period, the Option will immediately terminate.  The Company may, in its sole discretion, accelerate the exercisability of the Option so that the Option is exercisable in full during that period.

9.                                      Conditions on Obligations.  The Company is not obligated to issue shares of Common Stock upon exercise of the Option if the Company is advised by its legal counsel that the issuance would violate applicable state or federal laws, including securities laws.  The Company will use its best efforts to take steps required by state or federal law or applicable regulations in connection with issuance of shares upon exercise of the Option.

10.                               No Right to Employment or Service.  Nothing in the Company’s 2011 Stock Incentive Plan or this Agreement (i) confers upon the Optionee any right to continue in the employment of an Employer or interfere in any way with the Employer’s right to terminate the Optionee’s employment at will at any time, for any reason, with or without cause, or to decrease the Optionee’s compensation or benefits or (ii) confers upon the Optionee any right to be retained or employ ed by the Employer or to the continuation, extension, renewal, or modification of any compensation, contract, or arrangement with or by the Employer.

11.                               Successors of Company.  This Agreement is binding upon and inures to the benefit of any successor of the Company.  However, except as provided in this Agreement, the Optionee may not assign or otherwise transfer the Option.

12.                               Notices.  Notices under this Agreement must be in writing.  Notices are effective when actually delivered or, if mailed, three days after deposit into the United States mail by registered or certified mail, postage prepaid.  Each party shall direct mail to the addresses stated on the face page of this Agreement or to any other address as a party certifies by notice to the other party.

13.                               Rights as a Stockholder.  The Optionee has no rights as a stockholder with respect to any shares of Common Stock until the date the Optionee becomes the holder or record of those shares.  The Company shall not adjust the Option for dividends or other rights for which the record date occurs before the date the Optionee becomes the holder of record.

14.                               Amendments.   The Company may amend this Agreement at any time if the amendment does not adversely affect the Optionee.  Otherwise, this Agreement may not be amended without the written consent of the Optionee and the Company.

15.                               Governing Law.  This Agreement is governed by the laws of the state of Oregon.

16.                               Complete Agreement.  This Agreement constitutes the entire agreement between the Optionee and the Company, both oral and written concerning the matters addressed in this Agreement, and all prior agreements or representations concerning the matters addressed in this Agreement, whether written or oral, express or implied, are terminated and of no further effect.

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