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NEW YORK AIRWAYS, INC.
NOTES REGARDING BALANCE SHEET (Continued)

Subsequent to September 30, 1952, 15,000 additional shares of Capital Stock were reserved pursuant to the Employees' Stock Option Plan adopted by the Board of Directors of the Corporation on December 10, 1952 and approved by the stockholders on December 22, 1952. Pursuant to this Plan options for 10,000 shares of Capital Stock have been granted. The options permit the purchase of Capital Stock of the Corporation at a price determined by a disinterested committee of the Corporation's Board of Directors (but at not less than 95% of the fair market value of the Capital Stock determined by the committee as of the date fixed by the committee as the effective date of the options). Under each option, at the end of each year after the effective date of his option that the optionee remains in the employ of the Corporation, he becomes eligible to purchase 20% of the shares covered by such option. All options expire, unless previously exercised,at the expiration of six years from the date they become effective. However, in the event of termination of employment otherwise than by reason of death of the employee, such options must be exercised within ninety days after such termination of employment; in the event of the death of the optionee the option is exercisable for one year following the death of the optionee to extent that it was exercisable during the optionee's life.

The authorized Capital Stock was increased, effective on December 23, 1952, from 200,000 to 300,000 shares, all of a par value of $1.00 per share.

7. Commitments in the form of purchase orders placed or contracts made prior to September 30, 1952, aggregated approximately $840,000.00. Of this amount $779,807.62 represented the aggregate purchase price of five Model S-55 Sikorsky helicopters (including spare parts and accessories) against which deposits and advances of $133,621.45 had been made to September 30, 1952. With respect to two of these helicopters contracted for at a price of $141,750.00 each, the purchase agreements as amended stipulate that the buyer may terminate the agreements at any time prior to January 31, 1953. Deposits totaling $20,000.00 have been made with respect to these two helicopters, subject to recovery of the amount so deposited if the contract is terminated. A purchase agreement, for two additional helicopters at a price of $141,750.00 each, was executed on October 15, 1952. This agreement also provides that the Corporation may cancel the contract and recover any deposits made thereagainst, such cancellation privilege to be exercised prior to March 1, 1953. During October and November, 1952, the Corporation received delivery of the first three helicopters ordered (including certain accessories) which required disbursements of cash aggregating $325,549.00 in addition to $107,100.00 of advances and deposits applied on account of the purchase price.

Other known contingent liabilities did not involve amounts large enough to be significant.

STATEMENT OF PROFIT AND LOSS AND EARNED SURPLUS
For the Nine Months ended September 30, 1952
[[2 column table]]

| Interest income | $ 1,483.33 |
| Interest expense | 2,330.00 |
| Net profit (loss) for the period | $ (846.67) |
| Earned surplus, January 1, 1952 | None |
| Earned surplus (deficit), September 30, 1952—per Balance Sheet | $ (846.67) |

[[note]] Note—There were no charges or credits in the Profit and Loss or Earned Surplus accounts prior to January 1, 1952. The Corporation had not yet started operations on September 30, 1952, but was continuing, in its pre-operating status, to do necessary development work. [[/note]]

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