Exhibit 10.1

PEMCO AVIATION GROUP, INC.
NONQUALIFIED STOCK OPTION PLAN
As Amended and Restated by the Board of Directors
of Pemco Aviation Group, Inc. on May 14, 2003

Section 1.  Purpose. The purpose of the PEMCO AVIATION GROUP, INC. (the
“Company”) Nonqualified Stock Option Plan (the “Plan”) is to provide incentives
for selected persons to promote the financial success and progress of the
Company by granting such persons awards (“Awards”) of incentives in the form of
options to purchase shares of the Company’s Common Stock (“Options”), stock
appreciation rights (“SARs”), and Common Stock of the Company (“Stock Grants”).
An Award may consist of one or a combination of such incentives and may be made
at any time or from time to time.

Section 2.  General Provisions.

A.  Administration. The Plan shall be administered by the Compensation
Committee, which shall be comprised of two or more independent outside directors
appointed by the Board of Directors (the “Committee”). Notwithstanding the
foregoing, if it would be consistent with all applicable laws, including,
without limitation, Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (“Rule 16b-3”), and the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations promulgated thereunder (including,
without limitation, the regulations relating to Section 162(m) of the Code),
then the Plan may be administered by the Board of Directors, and if so
administered all subsequent references to the Committee shall refer to the Board
of Directors. Any action of the Committee shall be taken by majority vote or the
unanimous written consent of the Committee members.

B.  Authority of the Committee. Subject to other provisions of the Plan, and
with a view towards furtherance of its purpose, the Committee shall have sole
authority and absolute discretion:

1.  to construe and interpret the Plan;

2.  to define the terms used herein;

3.  to prescribe, amend and rescind rules and regulations relating to the Plan;

4.  to determine the persons to whom Awards are granted;

5.  to determine the time or times at which Awards shall be granted;

6.  to determine the number of shares subject to each Award;

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7.  to determine all of the other terms and conditions of the Options, SARs, and
Stock Grants awarded hereunder; and

8.   to make all other determinations necessary or advisable for the
administration of the Plan and to do everything necessary or appropriate to
administer the Plan.

All decisions, determinations and interpretations made by the Committee shall be
binding and conclusive on all participants in the Plan and on their legal
representatives, heirs and beneficiaries.

C.  Maximum Number of Shares Subject to the Plan. The maximum aggregate number
of shares of Common Stock subject to the Plan shall be 2,000,000, subject to
adjustment as provided in Section 2.G of the Plan. The Common Stock subject to
the Plan may be divided among the various types of Awards as the Committee
determines in its sole discretion from time to time. For purposes of calculating
the maximum number of shares of Common Stock which may be issued under the Plan,
(a) all shares underlying an Option (including the shares, if any, withheld for
tax withholding requirements) shall be counted when cash is used as full payment
for shares issued upon exercise of the Option; (b) in the case of net exercise
of an Option, only the net shares issued (including the shares, if any, withheld
for tax withholding requirements) shall be counted when shares of Common Stock
are used as full or partial payment for shares issued upon exercise of an
Option; (c) all shares underlying an SAR (including the shares, if any, withheld
for tax withholding requirements) shall be counted upon exercise of an SAR; and
(d) all shares issued pursuant to a Stock Grant (including the shares, if any,
withheld for tax withholding requirements) shall be counted when the shares are
no longer subject to any conditions, such as a vesting schedule, and
certificates representing such shares have been issued and delivered. If any
Options or SARs granted under the Plan expire or terminate for any reason before
they have been exercised, the shares subject to such Options or SARs shall again
be available under the Plan.

D.  Eligibility and Participation. Subject to the terms of the Plan, Awards may
be granted to such employees, officers, directors, consultants and independent
contractors of the Company or any Parent, Subsidiary or Affiliate of the
Company, as defined below, as the Committee may select from time to time in its
sole discretion. Employees of the Company are eligible to receive Awards for no
more than an aggregate of 500,000 shares of the Company’s Common Stock per
employee under the Plan. If any Options or SARs granted to an employee expire
unexercised or terminate before vesting, they shall not be included in the
foregoing maximum aggregate of 500,000 shares per employee. The Committee, in
its sole discretion, shall determine the number of shares of the Company’s
Common Stock covered by any Award made to executive officers or other employees
under the Plan. Grants to non-employee directors of the Company may only be made
pursuant to formula grants in the manner and amounts set forth in Section 7
hereof, provided that, if, and to the extent that, the Committee or the Board of
Directors could exercise authority to

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determine the amount, price and timing of grants hereunder to its members,
consistent with all applicable laws, including, without limitation Rule 16b-3,
grants to non-employee directors may be made by the Committee or the Board of
Directors as permitted by law. Notwithstanding anything in the Plan to the
contrary, to the extent permitted by law, the Committee or the Board of
Directors may grant Awards under the Plan to such employees, officers,
directors, consultants and independent contractors of the Company or any Parent,
Subsidiary or Affiliate of the Company in such amounts and on such terms and
conditions as the Committee or the Board of Directors may determine to reflect
such individuals’ relative contributions to the Company (to the extent not
already reflected by a previous Award) during the applicable year on a prorated
basis in the event that (a) the Company or its shareholders enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, merger or other reorganization, liquidation, or
otherwise, (b) any such individual ceases during such year to serve the Company
or any Parent, Subsidiary or Affiliate of the Company as an employee, officer,
director, consultant or independent contractor for any reason, or (c) any other
instance or circumstance that the Committee or the Board of Directors deems
advisable; provided, however, that in no event shall any employee of the Company
be eligible to receive more than the foregoing maximum aggregate of 500,000
shares. A person may be granted more than one Award under the Plan. As used in
the Plan, the following terms shall have the following meanings:

1.  “Parent” means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company if, at the time of the granting of an
Award, each of such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

2.  “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
an Award, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

3.  “Affiliate” means any corporation that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, another corporation, where “control” (including the terms “controlled by”
and “under common control with”) means the possession, direct or indirect, of
the power to cause the direction of the management and policies of the
corporation, whether through the ownership of voting securities, by contract or
otherwise.

4.  “Common Stock” means shares of the Company’s $.0001 par value common stock,
or such other shares as are substituted pursuant to Section 2.G hereof.

E.  Effective Date of Plan. The Plan was adopted by the Company on September 8,
1989 and has been amended thereafter from time to time.

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F.  Termination and Amendment of Plan. The Plan shall terminate on September 8,
2009. No Options, SARs, or Stock Grants shall be granted under the Plan after
that date. Subject to the limitation contained in Section 2.H of the Plan, the
Board or the Committee may at any time amend or revise the terms of the Plan,
including the form and substance of the Options, SARs, and Stock Grants granted
hereunder, provided that no such amendment or revision shall (i) increase the
maximum aggregate number of shares that may be issued pursuant to Awards granted
under the Plan, except as permitted under Section 2.G of the Plan; or
(ii) effect any change to the Plan which is required to be approved by
shareholders by law, including without limitation the regulations promulgated
under Section 162(m) of the Code.

G.  Adjustments. If the outstanding shares of Common Stock are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities through merger, consolidation, combination, exchange of shares,
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment shall be
made in the maximum number and kind of shares as to which Options, SARs, and
Stock Grants may be granted under the Plan. A corresponding adjustment shall be
made to the number or kind of shares allocated to unexercised Options and SARs,
or portions thereof, and to unvested Options, SARs, and Stock Grants granted
prior to any such change. Any such adjustment in outstanding Options or SARs
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of such Options or SARs, but with a corresponding adjustment
in the price for each share covered by the Options or SARs.

H.   Prior Options and Obligations. No amendment, suspension or termination of
the Plan shall, without the consent of the person who has received an Award,
alter or impair any of that person’s Options or obligations under any Award
granted under the Plan prior to that amendment, suspension or termination.

I.  Privileges of Stock Ownership. Notwithstanding the exercise of any Option or
SAR, or the receipt of any Stock Grant, granted pursuant to the terms of the
Plan, no person shall have any of the rights or privileges of a shareholder of
the Company with respect to any shares of stock until certificates representing
such shares have been issued and delivered. No shares shall be required to be
issued and delivered upon exercise of any Option or SAR, or pursuant to a Stock
Grant, until there has been compliance with all of the requirements of law and
of all regulatory agencies having jurisdiction over the issuance and delivery of
the securities.

J.  Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times reserve and keep available such number of shares of
its Common Stock as shall be sufficient to satisfy the requirements of the Plan.
In addition, the Company will from time to time, as is necessary to accomplish
the purposes of the Plan, seek or obtain from any regulatory agency having
jurisdiction any requisite authority in order to issue shares of common stock
hereunder. The inability of the Company to obtain from any regulatory agency
having jurisdiction the authority deemed by the Company’s

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counsel to be necessary to the lawful issuance of any Award or shares of its
stock hereunder shall relieve the Company of any and all liability with respect
to the nonissuance of the Award or the shares of Common Stock as to which the
requisite authority shall not have been obtained.

K.  Tax Withholding. The exercise of any Option or SAR, and the receipt of any
Stock Grant, is subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding obligations under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or delivery or purchase
of shares pursuant thereto, then in such event, the exercise of an Option or
SAR, or the receipt of a Stock Grant, shall not be effective unless such
withholding shall have been effected or obtained in a manner acceptable to the
Company.

L.  Fair Market Value. The “fair market value” of the Common Stock means if
there is an established market for the Company’s Common Stock on a stock
exchange, in an over-the-counter market or otherwise, the mean of the highest
and lowest quoted selling prices on the date upon which an Option or SAR is
granted or (b) if there were no such sales on such date, then in accordance with
Treasury Regulation Section 20.2031-2 or successor regulations.

Section 3.  Options.

A.  Option Price. The option price for shares acquired pursuant to the exercise
of any Option, in whole or in part, shall be determined by the Committee at the
time of the grant of the Option. Such option price may be less than the fair
market value of the Company’s Common Stock on the date of grant, but in no event
shall the option price be less than fifty percent (50%) of the fair market value
of the Common Stock on the date of grant. The foregoing notwithstanding, the
option price of Options granted to officers or directors shall be 100% of the
fair market value of the Company’s Common Stock on the date of grant.

B.  Exercise of Options. Each Option shall be exercisable in one or more
installments during its term, and the right to exercise may be cumulative, as
determined by the Committee. No Option may be exercised for a fraction of a
share of Common Stock. The option price shall be paid at the time of exercise of
the Option in cash or shares of the Company’s Common Stock, or in a combination
thereof. If permitted by the Committee, payment may also be made by delivering a
properly executed notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds attributable
to the purchased shares needed to pay the exercise price. If any portion of the
purchase price at the time of exercise is paid in shares of Common Stock, those
shares shall be tendered at their fair market value on the date of exercise. The
Committee may also permit a participant to effect a net exercise of an Option
without tendering any shares of the Company’s Common Stock as payment for the
Option. In such an event, the participant will be deemed to have paid for the
exercise of the Option with

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shares of the Company’s stock and shall receive from the Company a number of
shares equal to the difference between the shares that would have been tendered
and the number of Options exercised. The Committee may in its discretion and
subject to ratification by the entire Board of Directors, loan one or more
participants all or a portion of the exercise price, together with the amount of
any tax liability incurred by the participant as a result of the exercise of the
Option, for up to three (3) years with interest payable at the prime rate quoted
in the Wall Street Journal on the date of exercise. Non-employee directors may
receive such loans for the exercise of their Options without Committee approval
or Board ratification.

C.  Acceleration of Options. Notwithstanding the first sentence of Section 3.B
of the Plan, if the Company or its shareholders enter into an agreement to
dispose of all or substantially all of the assets or stock of the Company by
means of a sale, merger or other reorganization, liquidation, or otherwise, any
Option granted pursuant to the Plan shall become immediately exercisable with
respect to the full number of shares subject to that Option during the period
commencing as of the date of the agreement to dispose of all or substantially
all of the assets or stock of the Company and ending when the disposition of
assets or stock contemplated by that agreement is consummated or the Option is
otherwise terminated in accordance with its provisions or the provisions of the
Plan, whichever occurs first; provided that no Option shall be immediately
exercisable under this Section on account of any agreement of merger or other
reorganization where the shareholders of the Company immediately before the
consummation of the transaction will own at least 50% of the total combined
voting power of all classes of stock entitled to vote of the surviving entity
(whether the Company or some other entity) immediately after the consummation of
the transaction. In the event the transaction contemplated by the agreement
referred to in this Section is not consummated, but rather is terminated,
canceled or expires, the Options granted pursuant to the Plan shall thereafter
be treated as if that agreement had never been entered into.

D.  Written Notice Required. Any Option granted pursuant to the Plan shall be
exercised when written notice of that exercise has been given to the Company at
its principal office by the person entitled to exercise the Option and full
payment for the shares with respect to which the Option is exercised has been
received by the Company.

Section 4.  Reload Options. Concurrently with the award of Options under the
Plan, the Committee may authorize reload options (“Reload Options”) to purchase,
for cash or shares, the number of shares of Common Stock used to exercise the
underlying Option.

A.  Reload Option Amendment. Each notice evidencing the grant of an Option shall
state whether the Committee has authorized Reload Options with respect to the
underlying Option. Upon the exercise of an underlying Option, the Reload Option
will be evidenced by an amendment to the notice of grant of the underlying
Option. Reload Options shall be subject to the terms and conditions in the
underlying option agreement and shall be subject to the terms and conditions set
forth in the Plan.

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B.  Reload Option Price. The option price per share of Common Stock deliverable
upon exercise of a Reload Option shall be the fair market value of a share of
Common Stock on the date of exercise of the underlying Option.

C.  Term and Exercise. Each Reload Option is fully exercisable from the date of
exercise of the underlying Option and shall remain exercisable for the remaining
term of the underlying Option. Reload Options may be exercised in the same
manner as the underlying Options in accordance with the Plan.

D.  Termination of Employment. No additional Reload Options shall be granted to
participants in the Plan when an Option or Reload Option is exercised pursuant
to the terms of the Plan following termination of the participant’s employment
or the cessation of the participant’s service to the Company as a director,
consultant or independent contractor.

Section 5. Stock Appreciation Rights. The Committee may, from time to time in
its sole discretion, grant SARs in addition to or in conjunction with Options
granted hereunder, either at the time of the grant of the Options or at any
subsequent time during the term of the Options. Subject to the terms of the
Plan, the Committee shall determine and designate the recipients of SARs, the
dates SARs are granted, the number of shares subject to SARs, the duration of
each SAR, and whether SARs are alternative to any previously or
contemporaneously granted Option or Reload Option (“Related Options”). SARs
shall be subject to the terms and conditions and evidenced by agreements in the
form determined from time to time by the Committee.

A.  Value of SARs. SARs shall entitle their holders to receive a number of
shares of the Company’s Common Stock equal to (i) the excess of the fair market
value of a share of the Company’s Common Stock on the date of exercise over a
specified price fixed by the Committee, which price may not be less than 100% of
the fair market value of a share of Common Stock on the date of the grant,
multiplied by (ii) the number of shares as to which the holder is exercising the
SAR.

B.  Duration. The term of an SAR granted as an alternative to an Option will be
the same as the term of its Related Option; upon exercise of the SAR, the
Related Option will terminate, and upon exercise of the Related Option, the SAR
will terminate. The term of an SAR granted in addition to and separately from
any Option shall be specified by the Committee at the time such SAR is granted.

C.  Exercise of SARs. SARs may be exercised according to their terms by
providing written notice to the Company at any time prior to the expiration of
the SAR. No SAR may be exercised for a fraction of a share of Common Stock. If
the SAR is alternative to an Option, the Related Option shall be deemed
terminated to the extent the SAR is exercised.

Section 6.  Stock Grants. The Committee may, from time to time in its sole
discretion, grant shares of the Company’s Common Stock under the Plan. Such
Stock Grants may be awarded with or without conditions, such as vesting
schedules or performance requirements.

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Recipients of Stock Grants will not be required to pay for the acquisition of
the Company’s Common Stock but will be subject to tax consequences and resale
restrictions.

Section 7.  Grants to Outside Directors. On the same date in 2001 and each year
thereafter on which the Committee makes its annual grant of Options to the
Company’s officers and other key employees, each director who is not an employee
of the Company shall be granted an Option for 20,000 shares of Common Stock,
without further action by the Committee. The exercise price for Options granted
to outside directors under this Section shall be 100% of the fair market value
of the Common Stock on the date of grant. Each Option granted in accordance with
this Section shall include authorization for a Reload Option in accordance with
Section 4 of the Plan.

Section 8.  Terms and Conditions May Differ. The terms and conditions of Awards
granted under the Plan may differ as the Committee shall in its discretion
determine so long as all Awards satisfy the requirements of the Plan.

Section 9.  Duration of Options and SARs. Each Option and each SAR granted
pursuant to the Plan shall expire on the date determined by the Committee which
shall be not later than ten years after the date of grant and shall be subject
to early termination as provided in the Plan. Subject to the foregoing, Options
granted to outside directors pursuant to Section 7 hereof shall be fully vested
on the date of grant and shall be exercisable for a period of ten years.

Section 10.  Limitations on Acquiring Voting Stock. No Award may be granted to
persons who are not officers or directors of the Company if such Award would
cause that person to hold, beneficially or of record, in excess of 5% of the
outstanding voting stock of the Company.

Section 11.  Compliance with Securities Laws. Shares of Common Stock shall not
be issued with respect to any Award granted under the Plan unless the issuance
and delivery of the shares pursuant thereto shall comply with all relevant
provisions of state and federal law, including without limitation the Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder and
the requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance. Further, each recipient of an Award hereunder shall
consent to the imposition of a legend on the certificate representing the shares
of Common Stock issued hereunder restricting the transferability of such shares
as required by law, the Award, or by the Plan.

Section 12.  Employment. Each recipient of an Award, if requested by the
Committee, must agree in writing as a condition of the granting of his or her
Award, to remain in the employ of the Company or to remain as a consultant to
the Company, or any of its Subsidiaries, following the date of the granting of
that Award for a period or periods specified by the Committee, which period(s)
shall in no event exceed an aggregate of four years. Nothing in the Plan or in
any Award granted hereunder shall confer upon any Award recipient any right to
continued employment or retainer by the Company or any of its Subsidiaries, or
limit in any way the right of the Company or any Subsidiary at any time to
terminate or alter the terms of that employment or consulting arrangement.

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Section 13.  Rights Upon Termination of Employment, Director, Consultant or
Independent Contractor Status. If an Award recipient ceases to be employed by
the Company or ceases to serve as a director, consultant or independent
contractor of the Company, or any Subsidiary, for any reason other than death or
retirement, his or her Award shall terminate one year from the date of the Award
recipient ceases to be employed by or serve as a director, consultant or
independent contractor of the Company; provided that the Committee may, in its
discretion, allow Options and SARs to remain exercisable (to the extent
exercisable on the date of termination of employment or retainer) for up to one
additional year for each year of service to the Company by the Award recipient
(up to a maximum of five years after the date of termination), unless the
Option, SAR, or the Plan otherwise provides for earlier termination; and
provided further that, for purposes of determining when a director no longer
serves the Company, the period during which post-retirement or similar benefits
are paid to the director by the Company shall be deemed to be continued service.

Section 14.  Rights Upon Death. Except as otherwise limited by the Committee at
the time of the grant of an Option or SAR, if the recipient dies while he or she
is an employee, director or consultant of the Company or any Subsidiary, his or
her Options and SARs shall remain exercisable for one year after the date of
death, unless the Options, SARs, or the Plan otherwise provide for earlier
termination. During such exercise period after death, Options and SARs may be
fully exercised, to the extent that they remain unexercised on the date of the
recipient’s death, by the person or persons to whom the recipient’s rights to
the Options or SARs shall pass by will or by laws of descent and distribution.

Section 15.  Waiver of Vesting Restrictions in the Event of Retirement.
Notwithstanding any provision of the Plan, in the event an Award recipient
retires as an employee or director of the Company, or any Subsidiary, the
Committee shall have the discretion to waive any vesting restrictions on the
retiree’s Options, SARs, or Stock Grants.

Section 16.  Awards Not Transferable. Awards granted pursuant to the Plan may
not be sold, pledged, assigned or transferred in any manner otherwise than by
will or the laws of descent and distribution. During the lifetime of the Award
recipient, Options and SARs may only be exercised by that recipient or by his or
her guardian or legal representative.

Section 17.  Reports to Shareholders. Upon written request, the Company shall
furnish to each Award recipient a copy of its most recent Form 10-K Annual
Report and each quarterly report to shareholders issued since the end of the
Company’s most recent fiscal year.

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