SMITHWAY MOTOR XPRESS CORP.
OUTSIDE DIRECTOR STOCK OPTION AGREEMENT
THIS OUTSIDE DIRECTOR STOCK OPTION AGREEMENT ("Agreement") is made as
of July 27, 2000 ("Grant Date"), between Smithway Motor Xpress Corp., a Nevada
corporation (the "Company"), and the undersigned, a non-employee director of the
Company (the "Optionee").
BACKGROUND
The Company has determined that to reward its non-employee directors
for their contributions to the profitable growth of the Company, the Company
should provide such directors a chance to participate financially in the success
of the Company by developing an equity interest in it. By this Agreement, the
Company and the Optionee desire to establish the terms upon which the Company is
willing to grant to the Optionee, and upon which the Optionee is willing to
accept from the Company, an option to purchase shares of Class A Common Stock of
the Company ("Common Stock").
AGREEMENTS
1. Grant of Stock Option. Subject to the terms and conditions in this
Agreement, the Company grants to the Optionee the right and option (the
"Option") to purchase from the Company all or any part of an aggregate four
thousand (4,000) shares of Common Stock, authorized but unissued or, at the
option of the Company, treasury stock if available (the "Option Shares"). The
exercise price for the Option Shares shall be $2.60 per share (the "Purchase
Price"), which is 85% of the closing price of the Common Stock on the Grant
Date, as reported by The Nasdaq Stock Market.
2. Exercise of Option. Subject to the terms and conditions of this
Agreement, the Option may be exercised only by completing and signing a written
notice in substantially the following form:
I hereby exercise [all/part of] the option granted to me by
Smithway Motor Xpress Corp. on July 27, 2000, and elect to
purchase _____________________ shares of the Company's Class A
Common Stock for $2.60 per share.
3. Exercise and Term of Options. The term of the Option shall be six
(6) years from the Grant Date. The Option may be exercised in whole or in part
with respect to vested shares at any time during the term of the Option. No
fractional shares will be issued upon exercise of the Option and, if the
exercise results in a fractional interest, an amount will be paid in cash equal
to the value of such fractional interest based on the fair market value of the
Common Stock on the date of exercise. The Option shall be deemed to be exercised
upon receipt by the Company from the Optionee of written notice of exercise as
set forth in Section 2, accompanied by full payment for the shares subject to
such exercise. To the extent permitted by law, and consistent with Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
Optionee, in lieu of paying the Purchase Price in full in cash, may make payment
in Common Stock already owned by the Optionee, or in the value of surrendered
options to purchase Common Stock which are then exercisable, valued at fair
market value on the date of exercise, as partial or full payment of the Purchase
Price. As soon as practicable after receipt of full payment, the Company
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shall deliver to the Optionee a certificate or certificates representing the
acquired shares of Common Stock.
4. Vesting. The Option shall be 100% vested on the Grant Date.
5. Termination of Option. The Option, to the extent not already
exercised, shall terminate upon the first to occur of the following dates:
(a) Termination as a Director. If the Optionee ceases to be a
director, unless such cessation occurs due to death or disability, then
the Option shall terminate on the date thirty days after the date the
Optionee ceases to be a director.
(b) Disability. In the event the Optionee is unable to
continue to be a member of the Board of Directors of the Company (the
"Board") as a result of his permanent and total disability (as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended),
he may exercise the Option at any time within twelve (12) months
following the date he ceased to be a director, but only to the extent
he was entitled to exercise it on the date he ceased to be a director.
To the extent that he was not entitled to exercise the Option on the
date he ceased to be a director, or if he does not exercise such Option
(which he was entitled to exercise) within the time specified herein,
the Option shall terminate.
(c) Death. Unless otherwise provided in this Agreement, if the
Optionee dies during the term of the Option, the Option may be
exercised at any time within twelve (12) months following the date of
death, but only to the extent the Optionee was entitled to exercise the
Option on the date of death. To the extent the decedent was not
entitled to exercise the Option on the date of death, or if the
Optionee's estate, or person who acquired the right to exercise the
Option by bequest or inheritance, does not exercise such Option (which
he was entitled to exercise) within the time specified herein, the
Option shall terminate.
6. Adjustments. In the event of any stock split, reverse stock split,
stock dividend, business combination, reclassification, or similar event, the
number of Optioned Shares and the Purchase Price per share shall be
proportionately and appropriately adjusted without any change in the aggregate
Purchase Price to be paid therefor upon exercise of the Option. The
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding.
7. Acceleration Upon Certain Changes. In the event of the proposed
dissolution or liquidation of the Company, all Options will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. The Board may, in its sole discretion in such instances,
declare that any Option shall terminate as of a date fixed by the Board. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
8. Notices. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Chief Executive
Officer at 2031 Quail Avenue, Fort Dodge, Iowa 50501, or at its then current
corporate headquarters. Notice to be given to the Optionee shall be addressed to
him or her by hand delivery or at his or her then current residential address as
appearing on the Company's records. Notice shall be deemed duly given when
enclosed in a properly sealed envelope and deposited by certified mail, return
receipt requested, in a post office or branch post office regularly maintained
by the United States Government.
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9. Optionee Not a Stockholder. The Optionee shall not be deemed for any
purposes to be a stockholder of the Company with respect to any of the Option
Shares except to the extent that the Option has been exercised, payment made,
and a stock certificate issued.
10. Disputes or Disagreements. The Optionee agrees, for himself and his
personal representatives, that any disputes or disagreements which arise under
or as a result of or pursuant to this Agreement shall be determined by the Board
in its sole discretion, and that any interpretation by the Board of the terms of
this Agreement shall be final, binding, and conclusive.
11. Non-Transferability. The Option granted pursuant to this Agreement
is not transferable by the Optionee other than by will, under the laws of
descent and distribution, or pursuant to a qualified domestic relations order,
and is exercisable during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative. Any transfer contrary to this
Section 11 shall nullify the Option.
12. Tax Withholding. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the delivery
of the Option Shares under this Agreement after giving the person entitled to
receive the Option Share notice as far in advance as practical, and the Company
may defer making delivery of the Option Shares if any such tax may be pending
unless and until indemnified to its satisfaction.
13. Amendment of this Agreement. The Board may, without receiving
further consideration from the Optionee, amend this Agreement in response to
changes in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Agreement or to comply with stock
exchange or market system rules or requirements.
14. Conditions Upon Issuance of Shares.
(a) Common Stock shall not be issued pursuant to the exercise
of the Option unless the exercise of the Option and the issuance and
delivery of Common Stock pursuant thereto shall comply with all
relevant provisions of law, including, without limitation the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange or market system upon which the Common Stock may be listed,
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) As a condition to the exercise of an Option, the Company
may require the Optionee to represent and warrant at the time of any
such exercise that the shares of Common Stock are being purchased only
for investment and without any present intention to sell or distribute
such shares if, in the opinion of counsel for the Company, such a
representation is required or advisable.
(c) If the Board finds it desirable because of legal or
regulatory requirements to reduce the period during which Options may
be exercised, the Board may, in its discretion and without the
Optionee's consent, so reduce such period on not less than fifteen (15)
days' written notice to the Optionee. Inability of the Company to
obtain authority from a regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary or
advisable to the lawful issuance and sale of any Common Stock
hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Common Stock as to which such requisite
authority shall not have been obtained.
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15. Legend on Stock Certificates: Unless Common Stock issued under this
Agreement has been previously registered, issued Common Stock shall bear the
following or similar legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "1933 Act") or under
the securities laws of any state and may not be transferred, assigned,
sold, or hypothecated unless a registration statement under the 1933
Act and the applicable state laws shall be in effect with respect
thereto or an opinion of counsel satisfactory to the corporation shall
be received to the effect that registration under the 1933 Act and
applicable state securities laws is not required."
SMITHWAY MOTOR XPRESS CORP.,
a Nevada corporation
By:---------------------------------------
William G. Smith, Chairman, President,
and Chief Executive Officer
OPTIONEE
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(Signature)
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(Print Name)
