Exhibit 10(a)
OTR EXPRESS, INC. 1996 STOCK OPTION PLAN
(As Amended and Restated February 2000)
SECTION I. PURPOSE
The purpose of this Plan is to provide an incentive which will attract,
retain, motivate and reward "Key Employees" of the Company and promote the
best interests and long-term performance of the Company by encouraging the
ownership of interests in the Company's stock by such "Key Employees". It is
intended that options may be granted pursuant to this Plan which will qualify
as Incentive Stock Options ("ISO's"), as defined in Section 422 of the
Internal Revenue Code of 1986, as amended ("Code"), and that options may be
granted pursuant to this Plan which will not qualify as ISO's and will be non-
qualified options ("NQO's"). It is also intended that this Plan comply in all
respects with the requirements of Rule 16b-3 under the Securities Exchange Act
of 1934, and any amendment or successor provision thereto ("Rule 16b-3"); any
provision of this Plan deemed not to be in compliance with the requirements of
Rule 16b-3 shall be deemed null and void. This Plan is not intended to
preclude the use of Common Stock for other compensation purposes in line with
the needs and objectives of the Company.
SECTION II. DEFINITIONS
A. "Board of Directors" means the board of directors of the Company.
B. A "Change in Control" shall be deemed to occur (1) upon the
approval by the Board of Directors of the Company (or if approval
of the Board of Directors of the Company is not required as a
matter of law, the stockholders of the Company) of (a) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted into cash, securities,
or other property, other than a consolidation or merger in which
the holders of Common Stock immediately prior thereto will have
the same or proportionate ownership of Common Stock of the
surviving corporation immediately thereafter, (b) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of
the Company, or (c) any plan or proposal for the liquidation or
dissolution of the Company, or (2) when any person or group of
persons acting in concert, other than the Company, any stockholder
at the time of the initial public offering of the Common Stock or
any employee benefit plan or trust maintained by the Company or
any of its Subsidiaries, shall become the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934)
directly or indirectly, of 25% or more of the combined voting
power of the Company's then outstanding stock, without the prior
approval of at least 80% of the members of the Board of Directors
of the Company.
C. "Compensation Committee" means the committee established by the
Board of Directors of the Company pursuant to Section VII.
D. "Common Stock" means the shares of the common stock (including
treasury stock), par value $0.01 per share, of the Company.
E. "Company" means OTR Express, Inc., a Kansas corporation, or any
successor thereto.
F. "Disability" means inability of a Participant to perform his or
her duties as a Key Employee by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months. A Participant
shall not be considered to be permanently and totally disabled
unless the Participant furnishes the Company proof of the
existence thereof in such form and manner, and at such times, as
the Compensation Committee may require.
G. "Fair Market Value," as of a given date, means the fair market
value of one share of Common Stock as determined by the
Compensation Committee in accordance with the provisions of the
Code and the regulations thereunder. If, on or on the trading day
immediately prior to such given date, shares of the Common Stock
have been traded on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), "Fair Market Value" shall
generally be considered to be the last price of the Common Stock
as reported by NASDAQ on such given date or, if none, on the last
day preceding such given date on which a sale of the Common Stock
was so reported.
H. "Key Employee" means a person who is employed in a position of
administrative or managerial responsibility by the Company or a
Subsidiary.
I. "Parent" means any corporation (other than the Company or a
Subsidiary) in an unbroken chain of corporations ending with the
Company or a Subsidiary, owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
J. "Participant" means a Key Employee who is granted a stock
option hereunder.
K. "Plan" means this OTR Express, Inc. 1996 Stock Option Plan.
L. "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if, at
the time of a grant hereunder, each of the corporations, other
than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
M. "Ten Percent Stockholder" means a person who owns, on the date
of grant of an ISO hereunder, more than 10% of the total combined
voting power of all classes of stock of the Company, or its Parent
or Subsidiary.
SECTION III. STOCK
The total amount of stock which may be granted or sold under this Plan
shall not exceed 130,000 shares of the Company"s Common Stock. If an option
expires or is terminated or surrendered without having been fully exercised,
the unpurchased shares of Common Stock subject to the option shall again be
available for the purposes of this Plan.
SECTION IV. ELIGIBILITY
A stock option, or a stock option may be granted under the Plan only to
a Key Employee.
SECTION V. STOCK OPTIONS
A. Option Price. Except as provided below, the purchase price of the
Common Stock under each option granted hereunder shall be as
determined by the Compensation Committee but not less than one
hundred percent (100%) of the Fair Market Value of the Common
Stock at the time of the grant of the option. The purchase price
of Common Stock under each ISO granted to a Ten Percent
Stockholder shall be as determined by the Compensation Committee
but not less that 110% of the Fair Market Value of the Common
Stock at the time of the grant of the ISO.
B. Term and Exercise of Options. The term of each option shall be
not more than ten (10) years from the date of granting thereof and
the term of each ISO granted to a Ten Percent Stockholder shall
not be more than five (5) years from the date of granting thereof.
Within such limits, options will be exercisable at such time or
times, and subject to such restrictions and conditions, as the
Compensation Committee shall, in each instance, approve, which
need not be uniform for all Participants; provided, however, that
except as provided in Subsection D of this Section and Section X,
no option may be exercised at any time unless the Participant is
then an employee of the Company or a Subsidiary and has been
continuously since the granting of the option or was an employee
of the Parent of the Company at the time of grant and has been
continuously employed since that time by either such Parent or by
the Company or a Subsidiary.
C. Non-Transferability of Options. Each option granted under this
Plan shall by its terms be non-transferable by the Participant
other than by will or the laws of descent and distribution. An
option may be exercised, during the lifetime of the Participant,
only by the Participant. Notwithstanding the foregoing, the
Compensation Committee may permit a Participant to transfer an NQO
or cause the Company to grant an NQO that would otherwise be
granted to a Participant, to any one or more of the following: a
Participant's descendant, spouse, descendant of a spouse, spouse
of any of the foregoing, a trust established primarily for the
benefit of any of the foregoing, or of such Participant, or to an
entity which is a corporation, partnership, or limited liability
company (or any other similar entity) the owners of which are
primarily the aforementioned persons or trusts. Any such option so
transferred or granted directly to the aforementioned persons,
trust or entities in respect of a Participant shall be subject to
the provisions of Subsection D concerning the exercisability
during the Participant's employment.
D. Termination of Employment. Except as otherwise provided herein,
if a Participant voluntarily or involuntarily terminates
employment with the Company or any of its Subsidiaries, the
Participant may exercise any option held by such Participant, to
the extent the Participant was entitled to exercise if at the date
of termination of employment, at any time within three (3) months
after the date of such termination, but not after the expiration
of the option; provided, however, if the Participant voluntarily
terminates employment (except upon retirement after age 65), the
Participant may only exercise any such option after such
termination if the Compensation Committee consents to such
exercise. Any option not so exercised shall expire. However,
subject to the provisions of Subsection G of this Section:
1. If a Participant retires after reaching age 65, the
Participant (or the personal representative of the
Participant if the Participant has died) may exercise any or
all of the Participant's unexercised unexpired options,
whether otherwise eligible for immediate exercise by the
terms of the option agreement or not, provided such exercise
is within three (3) months in the case of an ISO or twelve
(12) months in the case of an NQO after the date of the
Participant's retirement but not after the expiration of the
option;
2. If a Participant retires after attaining age 55 but not age
65, the Compensation Committee, in its sole discretion, may
provide that the Participant (or the personal representative
of the Participant if the Participant has died) may exercise
any or all of the Participant's unexercised unexpired
options, whether otherwise eligible for immediate exercise
by the terms of the option agreement or not, provided such
exercise is within three (3) months (or, in the discretion
of the Compensation Committee, twelve (12) months in the
case of an NQO) after the date of the Participant's
retirement, but not after the expiration of the option;
3. If a Participant's employment is terminated by reason of
death, the personal representative of the Participant may
exercise any or all of the Participant's unexercised
unexpired options, whether otherwise eligible for immediate
exercise by the terms of the option agreement or not,
provided such exercise occurs within twelve (12) months of
the date of the Participant's death but not after the
expiration of the option; and
4. If a Participant's employment is terminated by reason of
Disability, the Participant (or the personal representative
of the Participant if the Participant has died) may exercise
any or all of the Participant's unexercised unexpired
options, whether otherwise eligible for immediate exercise
by the terms of the option agreement or not, provided such
exercise is within twelve (12) months of the date of the
Participant's employment termination but not after the
expiration of the option.
Notwithstanding the foregoing, if the employment of any Participant shall
be terminated because of the Participant's violation of law or the
business conduct rules of the Company or for other breach of duty,
all unexercised options of such Participant shall lapse and be
unexercisable on and after the date of termination of the
Participant's employment. The existence or nonexistence of such
violation or breach and the date of termination of employment
shall be determined by the Compensation Committee in its sole
discretion, and such determination shall be final. No change in
the duties of a Participant, while in the employ of the Company, a
Parent or a Subsidiary, or transfer, if still employed after the
transfer by a Company, a Parent or a Subsidiary, shall constitute
a termination of employment.
E. Leaves of Absence. The option agreements issued pursuant to this
Plan may contain such provisions as the Compensation Committee
shall determine with respect to approved leaves of absence.
F. Payment of Option Price. The purchase price is to be paid in full
upon exercise of an option, either (1) in cash, or (2) in the
discretion of the Compensation Committee, in shares of Common
Stock having a Fair Market Value equal to the cash exercise price
of the option being exercised, (3) through such cashless exercise
arrangement as may be approved by the Compensation Committee, or
(4)in the discretion of the Compensation Committee, by any
combination of the payment methods specified in clauses (1) and
(2) hereof; provided, however, that (a) shares of Common Stock
tendered in payment must be either shares owned by the Participant
and registered in the Participant's name and may not include
shares of Common Stock acquired by the Participant through
exercise of an option granted less than six months prior to the
date of exercise of the option being exercised, and (b) no shares
of Common Stock may be tendered in exercise of an ISO if such
shares were acquired by the Participant through the exercise of an
ISO, unless (I) such shares have been held by the Participant for
at least one year; and (ii) at least two (2) years have elapsed
since such ISO was granted. The proceeds received by the Company
upon exercise of an option are to be added to the general funds of
the Company, if cash, or to the shares of the Common Stock held in
treasury, if shares of Common Stock, and used for the corporate
purposes of the Company as the Compensation Committee shall
determine. Subject to the approval of the Compensation Committee,
the Company may loan to any Participant a sum equal to not more
than one hundred percent (100%) of the purchase price of the
shares of Common Stock purchased upon exercise of an option, such
loan to be evidenced by the execution and delivery of a promissory
note. Interest on such unpaid balance of the note shall be at such
rate as the Compensation Committee may determine. The note may,
but need not, provide for its forgiveness as the Participant
continues in employment. The Compensation Committee may, in its
discretion, include within any option agreement, a provision
entitling the Participant to a further option (a "Re-load Option")
in the event the Participant exercises an option by surrendering
other shares of Common Stock in accordance with (2), above. Any
such Re-load Option shall be for the number of shares of Common
Stock surrendered upon exercise under (2), above, and shall
become exercisable upon such terms and conditions as the
Compensation Committee shall determine, but the purchase price
shall be not less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock on the date of exercise
of such option under (2), above.
G. Limitation on Exercise of Options. The maximum aggregate Fair
Market Value determined at the time an ISO is granted) of the
Common Stock with respect to which ISO's are exercisable for the
first time by any Participant during any calendar year (under all
plans of the Company and its Parent and Subsidiaries) shall not
exceed $100,000. If the provisions of this Section limit the
exercisability of certain ISO's which would otherwise become
exercisable on account of an event described in Subsection D of
this Section or Section X, the Compensation Committee, in its sole
discretion, shall determine the times at which such ISO's become
exercisable so that the provisions of this Subsection G are not
violated; provided that in no event shall any ISO be exercisable
more than ten (10) years from the date of granting thereof (five
(5) years in the case of ISO's granted to Ten Percent
Stockholders).
SECTION VI. ADMINISTRATION
This Plan shall be administered by the Compensation Committee. Subject
to the express provisions of this Plan, the Compensation Committee shall have
complete authority to:
A. determine the individuals to whom and the time or times when
options shall be granted;
B. determine the number of shares to be subject to each option, and
the terms and provisions of each option;
C. interpret the Plan;
D. prescribe, amend and rescind rules and regulations relating to the
Plan;
E. cancel, with the consent of a Participant, any option previously
granted to such Participant and to grant a new option in place
thereof; and
F. make all determinations not specifically set forth in (A) through
(E) above which it considers necessary or advisable for the
administration of this Plan.
All determinations by the Compensation Committee with respect to (A)
through (F) above shall be final. In the event the Company or any Subsidiary
enters into a transaction described in Section 424(a) of the Code with any
other corporation, the Compensation Committee may grant options to employees,
former employees of such corporation in substitution of options previously
granted to them by such corporation upon such terms and conditions as shall be
necessary to qualify such grant as a substitution described in Section 424(a)
of the Code.
SECTION VII. COMPENSATION COMMITTEE
The Compensation Committee shall at all times be constituted to comply
with the requirements of Rule 16b-3; as of the date of adoption of this Plan
by the Board of Directors of the Company, Rule 16b-3 requires that the
Compensation Committee shall consist of two (2) or more members of the Board
of Directors each of whom is a "Non-Employee Director" within the meaning of
Rule 16b-3(b)(3). The members of the Compensation Committee shall be
appointed by and shall serve at the pleasure of the Board of Directors, which
may from time to time appoint members in substitution for members previously
appointed and fill vacancies, however caused, in the Compensation Committee.
The Compensation Committee may select one of its members as its Chairman and
shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All recommendations by the
Compensation Committee shall be made by a majority of its members.
SECTION VIII. EFFECT OF CHANGE IN STOCK
Notwithstanding any other provision in the Plan, if there is any change
in the Common Stock of the Company by reason of stock dividends, spinoffs,
split ups, recapitalizations, mergers, consolidations, reorganizations,
combinations or exchanges of shares and the like, the number and class of
shares available for grants of options and the number of shares subject to any
outstanding options, and the price thereof, as applicable, shall be
appropriately adjusted by the Compensation Committee.
SECTION IX. AMENDMENT OR TERMINATION
Unless this Plan shall theretofore have been terminated as hereinafter
provided, this Plan shall terminate, and no stock option shall be granted
hereunder, after ten (10) years from the date of its adoption by the Board of
Directors. Any option, outstanding at the termination of this Plan, shall
continue in full force and effect in accordance with its terms and shall not
be affected by such termination of this Plan. The Board of Directors of the
Company may, at any time prior to that date, terminate this Plan or make such
modifications of the Plan as it may deem advisable; provided, however, that,
if approval by stockholders of the Company of any amendment is required to
comply with Rule 16b-3 or other applicable requirement, such amendment shall
be subject to stockholder approval.
SECTION X. CHANGE OF CONTROL
In the event that a Change of Control of the Company occurs, any then
outstanding stock option held by such Participant shall immediately mature and
vest in full and any such stock option shall be settled by the payment to such
Participant of an amount equal to the excess, if any, of the aggregate Fair
Market Value of the shares subject thereto on the Special Maturity Date as
hereinafter defined, over the aggregate exercise price of such option. For
purposes of an event described in clause (2) of Paragraph B of Section II
above, the Special Maturity Date for purposes hereof shall be the date
securities are first purchased by a tender or exchange offeror, or the date
upon which the Company first receives written notice of acquisition of 25% of
its Common Stock, whichever shall first occur. For purposes of an event
described in Clause (1) of Paragraph B of Section II, the Special Maturity
Date shall be the effective date of such event. Settlement shall be made in
cash within not less than five (5) days following the Participant's
termination of employment.
SECTION XI. WITHHOLDING
The Company, at the time any distribution is made under this Plan,
whether in cash or in shares of stock, may withhold from such payment any
amount necessary to satisfy any federal and state income tax withholding
requirements with respect to such distribution. Such withholding may be in
cash or in shares of stock.
SECTION XII. MISCELLANEOUS
A. Rights to Continued Employment. Nothing in this Plan or in any
option granted pursuant to this Plan shall confer on any
individual any right to continue in the employ of the Company or a
Subsidiary or interfere with the right of the Company or a
Subsidiary to terminate the individual's employment.
B. Retirement Plan Rights. Benefits received under this Plan by a
Participant shall not effect or be used in the calculation of the
Participant's pension or other retirement benefits under any other
plan maintained by the Company.
C. Investment Undertakings. Until and unless the issuance of shares
of Common Stock pursuant to this Plan shall have been registered
pursuant to the Securities Act of 1933 and applicable state
securities laws, each Participant acquiring shares of Common Stock
under this Plan may be required, as a condition precedent to such
issuance, to execute and deliver to the Company a letter or
certificate containing such investment representations, agreements
restricting sale (including, without limitation, provision for
stop transfer orders and restrictive legend on stock certificates)
and confirmation of other relevant facts to support any exemption
from the registration requirements under the Securities Act of
1933 and such state securities laws on which the Company intends
to rely, all as shall be deemed reasonably necessary by counsel
for the Company and in such form as such counsel shall determine.
SECTION XIII. EFFECTIVENESS OF THE PLAN
This amended and restated Plan will be effective upon adoption by the
Board of Directors of the Company, subject, however, to its approval by the
stockholders of the Company given within 12 months after the date the Plan is
adopted by the Board of Directors, at a regular meeting of the stockholders or
at a special meeting of the stockholders duly called and held for such
purpose, or by written consent of the stockholders. Grants of options made
prior to stockholder approval shall be subject to the obtaining of such
approval and if such approval is not obtained as aforesaid, such grants shall
not be effective for any purpose.
The foregoing amendment and restatement was adopted by the Board
of Directors of the Company on February 2, 2000. Stockholder approval was
not required for the amendment to Plan contained herein.
OTR EXPRESS, INC.
By /s/ William P. Ward
William P. Ward, President
