-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PDTHtkR9GReJgp9aekZzcngkaDuNoc542lAERC4CsVhltTrVaFU7CVXQPDhDcj7L c+VtwNK/lnor4eYVIjFxFQ== 0001094891-03-000082.txt : 20030409 0001094891-03-000082.hdr.sgml : 20030409 20030409094513 ACCESSION NUMBER: 0001094891-03-000082 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20030409 GROUP MEMBERS: CRESCENDO INVESTMENTS II, LLC GROUP MEMBERS: CRESCENDO PATNERS II, LP. SERIES L GROUP MEMBERS: ERIC ROSENFELD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CPI AEROSTRUCTURES INC CENTRAL INDEX KEY: 0000889348 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 112520310 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-44042 FILM NUMBER: 03643381 BUSINESS ADDRESS: STREET 1: 200A EXECUTIVE DR CITY: EDGEWOOD STATE: NY ZIP: 11717 BUSINESS PHONE: 5165865200 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROSENFELD ERIC CENTRAL INDEX KEY: 0001219603 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O CRESCENDO PARTNERS II LP STREET 2: 350 PARK AVENUE 4TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123197676 SC 13D 1 rosenfeld_cpi.txt ROSENFELD/CPI SCHEDULE 13D SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS TO BE FILED PURSUANT TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a) (Amendment No. __*) CPI AEROSTRUCTURES, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.001 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 125919308 - -------------------------------------------------------------------------------- (CUSIP Number) Eric Rosenfeld c/o Crescendo Partners II L.P. Series L 350 Park Avenue, 4th Floor New York, New York 10022 Telephone: (212) 319-7676 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) April 1, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box X --- Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information that would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 2 of 9 Pages - ------------------------ ------------------- ------------------------ - --------- ---------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Crescendo Partners II, L.P. Series L - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) X (b) __ - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ___ - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------- ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 873,334 Shares NUMBER OF --- -------------------------------------------------------- SHARES BENEFICIALLY 8 SHARED VOTING POWER OWNED BY -0- EACH --- -------------------------------------------------------- REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 873,334 Shares --- -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- --- -------------------------------------------------------- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 873,334 - --------- ---------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) __ - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.1% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - --------- ---------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 3 of 9 Pages - ------------------------ ------------------- ------------------------ - --------- ---------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Crescendo Investments II, LLC - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) X (b) __ - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ___ - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------- ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 873,334 Shares NUMBER OF --- -------------------------------------------------------- SHARES BENEFICIALLY 8 SHARED VOTING POWER OWNED BY -0- EACH --- -------------------------------------------------------- REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 873,334 Shares --- -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- --- -------------------------------------------------------- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 873,334 - --------- ---------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) __ - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.1% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - --------- ---------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 4 of 9 Pages - ------------------------ ------------------- ------------------------ - --------- ---------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Eric Rosenfeld - --------- ---------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) X (b) __ - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) See Item 3 - --------- ---------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ___ - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------- ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 924,334 Shares NUMBER OF --- -------------------------------------------------------- SHARES BENEFICIALLY 8 SHARED VOTING POWER OWNED BY -0- EACH --- -------------------------------------------------------- REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 924,334 Shares --- -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- --- -------------------------------------------------------- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 924,334 - --------- ---------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) __ - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.1% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - --------- ---------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! (1) 873,334 of these shares are held by Crescendo Partners II, L.P. Series L. Mr. Rosenfeld is the Senior Managing Member of Crescendo Investments II, LLC, the sole General Partner of Crescendo Partners II, L.P. Series L. Therefore, Mr. Rosenfeld has the ability to vote and dispose of the shares held by Crescendo Partners II, L.P. Series L, but he disclaims ownership of the shares held by Crescendo Partners II, L.P. Series L, except to the extent of his pecuniary interest therein. - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 5 of 9 Pages - ------------------------ ------------------- ------------------------ This Schedule 13D is filed by Crescendo Partners II, L.P. Series L ("Crescendo Partners II"), Crescendo Investments II, LLC ("Crescendo Investments II") and Eric Rosenfeld ("Rosenfeld" and, together with Crescendo Partners II and Crescendo Investments II, collectively referred to as the "Reporting Persons") with respect to ownership of the common shares of CPI Aerostructures, Inc. The percentage of beneficial ownership reflected in this Schedule 13D is based upon 5,110,852 common shares outstanding as of April 8, 2003. Item 1. Securities and Issuer The class of equity securities to which this statement relates is the common shares, par value $.001 per share ("Common Shares"), of CPI Aerostructures, Inc. ("Issuer"), a New York corporation, whose principal executive offices are located at 200A Executive Drive, Edgewood, New York 11717. The Issuer is engaged in the contract production of structural aircraft parts. Item 2. Identity and Background Crescendo Partners II business address is 350 Park Avenue, 4th Floor, New York, New York 10022. Crescendo Partners II is a limited partnership organized and existing under the laws of Delaware. The principal business of Crescendo Partners II is making investments. Crescendo Investments II business address is 350 Park Avenue, 4th Floor, New York, New York 10022. Crescendo Investments II is a limited liability company organized and existing under the laws of Delaware. The principal business of Crescendo Investments II is to act as the sole general partner of Crescendo Partners II. Rosenfeld is the Senior Managing Member of Crescendo Investments II. Rosenfeld's business address is c/o Crescendo Partners II, L.P. Series L, 350 Park Avenue, 4th Floor, New York, New York 10022. Rosenfeld is a citizen of the United States. Rosenfeld is the President and Chief Executive Officer of Crescendo Partners L.P. The principal business of Crescendo Partners L.P. is making investments. Rosenfeld also serves on the Board of Directors of the Issuer, is a member of the Issuer's Compensation Committee and is Chairman of the Issuer's Strategic Planning Committee. None of the Reporting Persons has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years. None of the Reporting Persons has been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction resulting in any judgment, decree or final order enjoining them from engaging in future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws during the last five years. Item 3. Source and Amount of Funds or Other Consideration Crescendo Partners II acquired (1) 750,000 of the Issuer's Common Shares on February 19, 2003 in the Issuer's public offering; (2) 103,334 of the Issuer's Common Shares on March 18, 2003 in a private transaction; and (3) 20,000 shares of the Issuer's Common Shares on March 26, 2003 in a private transaction. Crescendo Partners II used working capital to make these acquisitions. On April 1, 2003, Rosenfeld was granted options to purchase 5,000 of the Issuer's Common Shares in connection with his directorship. (See Item 4(a)). Rosenfeld did not pay any consideration to acquire these options. In 2002, Rosenfeld and his wife acquired 46,000 shares of the Issuer's Common Shares in open market purchases. The acquisitions were made with personal funds. - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 6 of 9 Pages - ------------------------ ------------------- ------------------------ Item 4. Purpose of Transactions The Reporting Persons made the acquisitions reported on in this Schedule 13D in the ordinary course of their business activities. The Reporting Persons may undertake one or more of the actions set forth below. Each of the Reporting Persons may acquire additional securities or sell securities of the Issuer from time to time in the market or in private transactions. Rosenfeld holds immediately exercisable options to purchase 5,000 of the Issuer's Common Shares, at an exercise price of $6.45 per share until March 31, 2008. These options were granted in connection with his directorship. Other than the rights described above, and except that Rosenfeld automatically will be granted options to purchase additional shares of the Issuer's Common Shares under the Issuer's stock option plans if he continues to serve as a director, none of the Reporting Persons has any agreements to acquire any additional Common Shares at this time. As a director and Chairman of the Issuer's Strategic Planning Committee of the Issuer, Rosenfeld is involved in making material business decisions regarding the Issuer's policies and practices and may be involved in the consideration of various proposals considered by the Issuer's Board of Directors and Strategic Planning Committee. Notwithstanding the foregoing, except as discussed above, none of the Reporting Persons have any plans or proposals to effect an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries, cause a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries, cause any material change in the present capitalization or dividend policy of the Issuer, cause any other material change in the Issuer's business or corporate structure, cause any changes in the Issuer's charter or bylaws or other actions that may impede the acquisition of control of the Issuer by any person, cause a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association, cause a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, or take any other action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer (a) - (b) Crescendo Partners II is the beneficial owner of 873,334 Common Shares of the Issuer. Crescendo Partners II has sole voting and dispositive power over these shares. Crescendo Partners II beneficially owns 17.1% of the Issuer's Common Shares. Crescendo Investments II is the beneficial owner of 873,334 Common Shares of the Issuer. Crescendo Investments II, in its capacity of being the sole general partner of Crescendo Partners II, controls Crescendo Partners II. Accordingly, Crescendo Investments II is the beneficial owner of the shares held by Crescendo Partners II. Crescendo Investments II has sole voting and dispositive power over the shares held by Crescendo Partners II. Crescendo Investments II beneficially owns 17.1% of the Issuer's Common Shares. Rosenfeld is the beneficial owner of 924,334 Common Shares of the Issuer. This amount represents (i) 873,334 of the Issuer's Common Shares held by Crescendo Partners II, (ii) 46,000 of the Issuer's Common Shares held jointly by Rosenfeld and his wife, (iii) 5,000 of the Issuer's Common Shares issuable upon immediately exercisable options held by Rosenfeld. Rosenfeld, being the Senior Managing Member of Crescendo Investments II, exercises control over Crescendo Partners II and Crescendo Investments II. As a result of Rosenfeld's control of Crescendo Partners II and Crescendo Investments II, Rosenfeld has sole voting and dispositive power over the shares held by Crescendo Partners II. Accordingly, Rosenfeld is deemed to be the beneficial owner of the shares held by Crescendo Partners II. However, Mr. Rosenfeld disclaims ownership of the Common Shares held by Crescendo Partners II and Crescendo Investments II, except to the extent of his pecuniary interest therein. Additionally, Rosenfeld has sole voting and dispositive power over the shares held jointly with his wife. Rosenfeld beneficially owns 18.1% of the Issuer's Common Shares. - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 7 of 9 Pages - ------------------------ ------------------- ------------------------ (c) On February 19, 2003, Crescendo Partners II purchased 750,000 of the Issuer's Common Shares in the Issuer's public offering at $4.00 per share, for an aggregate of $3,000,000. On March 17, 2003, Crescendo Partners II entered into an Agreement with Chemical Investments, Inc. to purchase in a private transaction 103,334 Common Shares of the Issuer at $4.75 per share, for an aggregate of $490,836.50. Chemical Investments, Inc. was entitled to piggy-back registration rights, pursuant to two Registration Rights Agreements dated February 26, 2002 and one dated October 7, 1997, with respect to 83,334 of the common shares sold to Crescendo Partners II. By operation of the Registration Rights Agreements, Crescendo Partners II was assigned these registration rights. On March 25, 2003, Crescendo Partners II entered into an Agreement with GE Capital CFE, Inc. to purchase in a private transaction 20,000 Common Shares of the Issuer at $4.75 per share, for an aggregate of $95,000.00. On April 1, 2003, Rosenfeld was granted, in connection with his directorship, immediately exercisable options to purchase 5,000 of the Issuer's Common Shares, at an exercise price of $6.45 per share until March 31, 2008. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to the Securities of the Issuer On March 17, 2003 and March 25, 2003, Crescendo Partners II entered into the Agreements to purchase the Issuer's Common Shares described in Item 5(c) above. Pursuant to one of such agreements, Crescendo Partners II was assigned two Registration Rights Agreements, dated February 26, 2002 and one dated October 7, 1997 described in Item 5(c) above. On April 1, 2003, Rosenfeld entered into a Stock Option Agreement to reflect the stock option grant described in Item 4(a) above. Item 7. Material to be Filed as Exhibits 1. Joint Filing Agreement (a) 2. Stock Option Agreement, dated April 1, 2003, between the Issuer and Rosenfeld. (a) 3. Registration Rights Agreement, dated February 26, 2002, between Issuer and Chemical Investments, Inc. as assigned to Crescendo Partners II, relating 20,000 common shares. (b) 4. Registration Rights Agreement, dated February 26, 2002, between Issuer and Chemical Investments, Inc. as assigned to Crescendo Partners II, relating 30,000 common shares. (b) 5. Registration Rights Agreement, dated October 9, 1997, between Issuer and Chemical Investments, Inc. (formerly known as Chase Equity Securities), as assigned to Crescendo Partners II, relating 33,334 common shares. (b) - ------------------------ ------------------- ------------------------ CUSIP No. 125919308 SCHEDULE 13D Page 8 of 9 Pages - ------------------------ ------------------- ------------------------ (a) Filed herewith. (b) Form of Registration Rights Agreement filed as an exhibit to the Issuer's Registration Statement on Form SB-2 (No. 333-101902) declared effective on February 12, 2003 and incorporated herein by reference. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: April 8, 2003 CRESCENDO PARTNERS II, L.P. SERIES L By: Crescendo Investments II, LLC By: /s/ Eric Rosenfeld _______________________________ Name: Eric Rosenfeld Title: Senior Managing Member CRESCENDO INVESTMENTS II, LLC By: /s/ Eric Rosenfeld _________________________ Name: Eric Rosenfeld Title: Senior Managing Member /s/ Eric Rosenfeld -------------------------------- ERIC ROSENFELD EX-1 3 rosenfeld_cpiexh1.txt JOINT FILING AGREEMENT Exhibit 1 Joint Filing Agreement Agreement dated as of April 8, 2003, among Crescendo Partners II L.P., Series L, Crescendo Investments II LLC and Eric Rosenfeld (collectively, the "Parties"). Each of the Parties hereto represents to the other Parties that it is eligible to use Schedule 13D to report its beneficial interest in shares of common stock, $.001 par value per share, of CPI Aerostructures, Inc. beneficially owned and reported upon in the Schedule 13D of which this agreement is an exhibit ("Schedule 13D") by each of the above named Parties, and each of the above Parties will file the Schedule 13D on behalf of itself. Each of the Parties agrees to be responsible for the timely filing of the Schedule 13D and any and all amendments thereto and for the completeness and accuracy of the information concerning itself contained in the Schedule 13D, and the other Parties to the extent it knows or has reason to believe that any information about the other Parties is inaccurate. CRESCENDO PARTNERS II, L.P. SERIES L By: Crescendo Investments II, LLC By: /s/ Eric Rosenfeld _______________________________ Name: Eric Rosenfeld Title: Senior Managing Member CRESCENDO INVESTMENTS II, LLC By: /s/ Eric Rosenfeld _________________________ Name: Eric Rosenfeld Title: Senior Managing Member /s/ Eric Rosenfeld -------------------------------- ERIC ROSENFELD EX-2 4 rosenfeld_cpiexh2.txt STOCK OPTION AGREEMENT Exhibit 2 STOCK OPTION AGREEMENT AGREEMENT, made as of the 1st day of April, 2003 ("Grant Date") by and between CPI Aerostructures, Inc., a New York corporation ("Company") with principal offices located at 200A Executive Drive Edgewood, New York 11717, and Eric Rosenfeld ("Optionee") with offices located at c/o Crescendo Partners, L.P., 350 Park Avenue, 4th Floor, New York, NY 10022. WHEREAS, the Optionee is presently a director of the Company and the Company is desirous of increasing the incentive of the Optionee to exert his utmost efforts in improving the business of the Company; WHEREAS, on January 1, 2003, pursuant to the terms and conditions of the Company's 1995 Stock Option Plan ("Plan"), the Board of Directors of the Company authorized that each non-employee director be granted immediately exercisable options to purchase 5,000 shares of the authorized but unissued common shares of the Company, $.001 par value ("Common Shares") on April 1st of each year as long as the director is serving as such on such date, conditioned upon the Optionee's acceptance thereof upon the terms and conditions set forth in this Agreement and subject to the terms of the Plan (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Plan); and WHEREAS, the Optionee desires to acquire the Option on the terms and conditions set forth in this Agreement and subject to the terms of the Plan; IT IS AGREED: 1. Grant of Stock Option. The Company hereby grants to the Optionee the right and option ("Option") to purchase all or any part of an aggregate of 5,000 Common Shares ("Option Shares") on the terms and conditions set forth herein and subject to the provisions of the Plan. 2. Non-Incentive Stock Option. The Option represented hereby is not intended to be an Option that qualifies as an "Incentive Stock Option" under Section 422 of the Internal Revenue Code of 1986, as amended. 3. Exercise Price. The exercise price ("Exercise Price") of the Option shall be $6.45 per share, subject to adjustment as hereinafter provided. 1 4. Exercisability. Subject to the terms and conditions of the Plan and this Agreement, this Option is exercisable immediately to the extent of all of the Option Shares, and shall remain exercisable until the close of business on March 31, 2008 ("Exercise Period"). 5. Termination Due to Death. Upon the death of the Optionee, the Option may thereafter be exercised by the legal representative of the estate or by the legatee of the Optionee under the will of the Optionee for a period of one year from the date of such death or until the expiration of the Exercise Period, whichever period is shorter. 6. Withholding Tax. Not later than the date as of which an amount first becomes includible in the gross income of the Optionee for Federal income tax purposes with respect to the Option, the Optionee shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount ("Withholding Tax"). The obligations of the Company under the Plan and pursuant to this Agreement shall be conditional upon such payment or arrangements with the Company and the Company shall, to the extent permitted by law, have the right to deduct any Withholding Taxes from any payment of any kind otherwise due to the Optionee from the Company. 7. Adjustments. In the event of any change in the Common Shares of the Company as a whole occurring as the result of a common stock split, or reverse split, common stock dividend payable on Common Shares, combination or exchange of shares, or other extraordinary or unusual event occurring after the grant of the Option, the Board of Directors shall determine, in its sole discretion, whether such change equitably requires an adjustment in the terms of this Option or the aggregate number of shares reserved for issuance under the Plan. Any such adjustments will be made by the Board of Directors, whose determination will be final, binding and conclusive. 8. Method of Exercise. 8.1. Notice to the Company. The Option shall be exercised in whole or in part by written notice in substantially the form attached hereto as Exhibit A directed to the Company at its principal place of business accompanied by full payment as hereinafter provided of the exercise price for the number of Option Shares specified in the notice and of the Withholding Taxes, if any. 8.2. Delivery of Option Shares. The Company shall deliver a certificate for the Option Shares to the Optionee as soon as practicable after payment therefor. 2 8.3. Payment of Purchase Price. 8.3.1. Cash Payment. The Optionee shall make cash payments by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; the Company shall not be required to deliver certificates for Option Shares until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof. 8.3.2. Cashless Payment. Provided that prior approval of the Company has been obtained, the Optionee may use Common Shares of the Company owned by him or her to pay the purchase price for the Option Shares by delivery of stock certificates in negotiable form which are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances. Common Shares used for this purpose shall be valued at the Fair Market Value. 8.3.3. Payment of Withholding Tax. Any required Withholding Tax may be paid in cash or with Common Shares in accordance with Sections 8.3.1 and 8.3.2. 8.3.4. Exchange Act Compliance. Notwithstanding the foregoing, the Company shall have the right to reject payment in the form of Common Shares if in the opinion of counsel for the Company, (i) it could result in an event of "recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii) such Common Shares may not be sold or transferred to the Company; or (iii) such transfer could create legal difficulties for the Company. 9. Nonassignability. The Option shall not be assignable or transferable, except by will or by the laws of descent and distribution in the event of the death of the Employee. No transfer of the Option by the Employee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the will and such other evidence as the Company may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of the Option. 10. Company Representations. The Company hereby represents and warrants to the Optionee that: (i) the Company, by appropriate and all required action, is duly authorized to enter into this Agreement and consummate all of the transactions contemplated hereunder; and 3 (ii) the Option Shares, when issued and delivered by the Company to the Optionee in accordance with the terms and conditions hereof, will be duly and validly issued and fully paid and non-assessable. 11. Optionee Representations. The Optionee hereby represents and warrants to the Company that: (i) he is acquiring the Option and shall acquire the Option Shares for his own account and not with a view towards the distribution thereof; (ii) he has received a copy of the Plan as in effect as of the date of this Agreement; (iii) he has received a copy of all reports and documents required to be filed by the Company with the Securities and Exchange Commission pursuant to the Exchange Act, within the last 24 months and all reports issued by the Company to its stockholders; (iv) he understands that he must bear the economic risk of the investment in the Option Shares, which cannot be sold by him unless they are registered under the Securities Act of 1933 ("1933 Act") or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act; (v) in his position with the Company, he has had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (iii) above; (vi) he is aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein; and (vii) if, at the time of issuance of the Option Shares, the issuance of such shares have not been registered under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legends: 4 "The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act." "The shares represented by this certificate have been acquired pursuant to a Stock Option Agreement dated as of April 1, 2003, a copy of which is on file with the Company, and may not be transferred, pledged or disposed of except in accordance with the terms and conditions thereof." 12. Restriction on Transfer of Option Shares. 12.1. Anything in this Agreement to the contrary notwithstanding, the Optionee hereby agrees that he or she shall not sell, transfer by any means or otherwise dispose of the Option Shares acquired by him or her without registration under the 1933 Act, or in the event that they are not so registered, unless (i) an exemption from the 1933 Act registration requirements is available thereunder, and (ii) the Optionee has furnished the Company with notice of such proposed transfer and the Company's legal counsel, in its reasonable opinion, shall deem such proposed transfer to be so exempt. 12.2. Anything in this Agreement to the contrary notwithstanding, Optionee hereby agrees that he shall not sell, transfer by any means or otherwise dispose of the Option Shares acquired by him (i) prior to six months after the Grant Date and (ii) except in accordance with Company's policy regarding the sale and disposition of securities owned by Company insiders. 13. Miscellaneous. 13.1. Notices. All notices, requests, deliveries, payments, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be either delivered personally or sent by registered or certified mail, or by private courier to the parties at their respective addresses set forth herein, or to such other address as either party shall have specified by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as provided herein. 13.2. Conflicts with the Plan. In the event of a conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall in all respects be controlling. 13.3. Optionee and Stockholder Rights. The Optionee shall not have any of the rights of a stockholder with respect to the Option Shares until such shares have been issued after the due 5 exercise of the Option. Nothing contained in this Agreement shall be deemed to confer upon Optionee any right to continue to be a director of the Company. 13.4. Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach. 13.5. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be amended except by writing executed by the Optionee and the Company. 13.6. Binding Effect; Successors. This Agreement shall inure to the benefit of and be binding upon the parties hereto and, to the extent not prohibited herein, their respective heirs, successors, assigns and representatives. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns and representatives, any rights, remedies, obligations or liabilities. 13.7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to choice of law provisions). 13.8. Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement. 6 IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first above: CPI AEROSTRUCTURES, INC. By: /s/ Edward J. Fred - ----------------------- Name: Edward J. Fred Title: Chief Executive Officer Optionee: /s/ Eric Rosenfeld - ---------------------------- ERIC ROSENFELD 7 EXHIBIT A FORM OF NOTICE OF EXERCISE OF OPTION - -------------------- DATE CPI AEROSTRUCTURES, INC. 200A Executive Drive Edgewood, New York 11717 Attention: Re: Purchase of Option Shares Gentlemen: In accordance with my Stock Option Agreement dated as of April 1, 2003 with CPI Aerostructures, Inc. ("Company"), I hereby irrevocably elect to exercise the right to purchase _________ common shares, par value $.001 per share of the Company, which are being purchased for investment and not for resale. As payment for my shares, enclosed is (check and complete applicable box[es]): |_| a [personal check] [certified check] [bank check] payable to the order of "CPI Aerostructures, Inc." in the sum of $_________; |_| confirmation of wire transfer in the amount of $_____________; and/or |_| with the consent of the Company, a certificate for _____________ Common Shares of the Company, free and clear of any encumbrances, duly endorsed, having a Fair Market Value (as such term is defined in the 1995 Stock Option Plan of $___________. I hereby represent and warrant to, and agree with, the Company that: (i) I am acquiring the Option Shares for my own account, for investment, and not with a view towards the distribution thereof; (ii) I have received a copy of the Plan and all reports and documents required to be filed by the Company with the Commission pursuant to the Exchange Act within the last 24 months and all reports issued by the Company to its stockholders; (iii) I understand that I must bear the economic risk of the investment in the Option Shares, which cannot be sold by me unless they are registered under the Securities Act of 1933 ("1933 Act") or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act; (iv) I agree that I will not sell, transfer by any means or otherwise dispose of the Option Shares acquired by me hereby except in accordance with Company's policy regarding the sale and disposition of securities owned by Company insiders; 1 (v) in my position with the Company, I have had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (ii) above; (vi) my rights with respect to the Option Shares shall, in all respects, be subject to the terms and conditions of the Company's 1995 Stock Option Plan and the Agreement. (vii) I am aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein; and (viii) if, at the time of issuance of the Option Shares, the issuance of such shares have not been registered under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legends: "The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act." "The shares represented by this certificate have been acquired pursuant to a Stock Option Agreement dated as of April 1, 2003, a copy of which is on file with the Company, and may not be transferred, pledged or disposed of except in accordance with the terms and conditions thereof." Kindly forward to me my certificate at your earliest convenience. Very truly yours, - ------------------------------ --------------------------- (Signature) (Address) - ------------------------------ --------------------------- (Print Name) --------------------------- (Social Security Number) 2 -----END PRIVACY-ENHANCED MESSAGE-----