EXHIBIT 10.23
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
[ ]
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made as of [ ] ("Grant
Date") between Smithway Motor Xpress Corp., a Nevada corporation (the
"Company"), and [ ], a key employee of one of the Company's operating
subsidiaries (the "Optionee").
BACKGROUND
The Company has determined that to attract and retain the best
available personnel for positions of substantial responsibility and to provide
successful management of the Company's business in a manner consistent with the
interests of all stockholders, it should offer a compensation package that
provides key employees of the Company a chance to participate financially in the
success of the Company by developing an equity interest in it. To accomplish the
foregoing, the Company adopted its Incentive Stock Plan, as amended (the "Plan")
pursuant to resolutions of the Board of Directors and Stockholders dated March
1, 1995. 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"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed in the
Plan.
AGREEMENTS
1. Grant of Stock Option. Subject to the terms and conditions herein
and in the Plan, the Company grants to the Optionee the right and option (the
"Option") to purchase from the Company all or any part of an aggregate 37,500
shares of Class A Common Stock, authorized but unissued or, at the option of the
Company, treasury stock if available (the "Option Shares"). To the extent
allowable, the grant of Option Shares is intended to qualify as an incentive
stock option, as such term is defined under Section 422 of the Internal Revenue
Code of 1986, as amended. The exercise price for the Option Shares shall be
[ ] per share (the "Purchase Price"), the mean between the lowest reported
bid price and the highest reported asked price of the Class A Common Stock on
[ ].
2. Exercise of Option. Subject to the terms and conditions of this
Agreement and the Plan, 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 [ ], and elect to purchase
_____________________ shares of the Company's Class A Common
Stock for [ ] per share.
3. Payment of Purchase Price. Payment of the Purchase Price may be made
as follows:
a. In United States dollars in cash or by check, bank draft, or
money order payable to the Company;
b. At the sole discretion of the Committee, through the delivery
of shares of Common Stock with an aggregate Fair Market Value at the
date of such delivery equal to the Purchase Price;
c. At the sole discretion of the Committee, through the
surrender of part of the Option or other exercisable options having a
difference between (i) the exercise price of such surrendered Options
and (ii) the Fair Market Value of the Common Stock equal to the
Purchase Price; or
d. At the sole discretion of the Committee, in any combination
of a., b., and c. above.
The Committee in its sole discretion shall determine acceptable methods for
surrendering Common Stock or options as payment upon exercise of the Option and
may impose such limitations and conditions on the use of Common Stock or options
to exercise the Option as it deems appropriate. Among other factors, the
Committee will consider the restrictions of Rule 16b-3 under the Securities
Exchange Act, or any successor rule, including the holding period, advance
notice and election window requirements.
4. Vesting. Subject to the provisions of Paragraphs 5, 7, and 8, the
Option shall vest and become exercisable in whole or in part from time to time,
but only in accordance with the following schedule:
Date Number of Shares Subject to Options as to
which Option may be Exercised
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
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No vesting shall occur in the event of termination of Optionee's status as an
employee of the Company's subsidiary or if the Option has otherwise terminated
under this Agreement prior to such 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. The date on which the Optionee's employment by the Company is
terminated, provided, that if such termination (i) is voluntary, or
(ii) occurs due to (x) retirement with the consent of the Committee,
(y) death, or (z) disability (which for all ISOs shall have the meaning
ascribed in Section 22(e) of the Code) the Option shall terminate as
set forth in Paragraphs c., d., and e., respectively.
b. Immediately upon the occurrence of any Triggering Event (as
defined in Paragraph 13 below);
c. Thirty (30) days after voluntary termination;
d. Three years after termination due to retirement with the
consent of the Committee or disability (provided, that Optionee
recognizes that he or she may not receive ISO tax treatment as to any
part of the Option exercised more than twelve (12) months after
termination of employment due to disability or three (3) months after
termination due to retirement);
e. Twelve (12) months after the Optionee's death; or
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f. Notwithstanding any other provision herein, on February 14,
2013 (being the expiration of a term equal to ten (10) years from the
Grant Date).
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 (including any Option outstanding after termination of
employment or death) 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 Committee
as to the terms of any of the foregoing adjustments shall be conclusive and
binding.
7. Liquidation, Sale of Assets or Merger. In the event of a proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Committee. 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, unless the Committee determines that
the Optionee shall have the right to exercise the Option as to all the Common
Stock subject to the Option. If the Committee makes an Option fully exercisable,
the Committee shall notify the Optionee that the Option shall be fully
exercisable for a period of thirty (30) days from the date of such notice (but
not later than the expiration of the Option term under Paragraph 5.f.), and the
Option will terminate upon the expiration of such period. In the event the
thirtieth (30th) day referred to in this Paragraph 7 shall fall on a day that is
not a business day, then the thirtieth (30th) day shall be the next following
business day.
8. Acquisition. If any person, corporation or other entity or group
thereof other than the Smiths and entities controlled by them (the "Acquiror"),
acquires (an "Acquisition"), other than by merger or consolidation or purchase
from the Company, the beneficial ownership (as that term is used in Section
13(d)(1) of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder) of shares of the Company's stock which, when added to
any other shares, the beneficial ownership of which is held by the Acquiror,
shall have more than 50% of the votes that are entitled to be cast at meetings
of stockholders, any portion of the Option that was not currently exercisable
prior to the date of the Acquisition shall become immediately exercisable and
the Optionee may elect, during the period commencing on the date of the
Acquisition and ending at the closing of business on the thirtieth (30th) day
following the date of the Acquisition, to exercise the Option in whole or in
part. In the event the thirtieth (30th) day referred to in this paragraph 8
shall fall on a day that is not a business day, then the thirtieth (30th) day
shall be deemed to be the next following business day.
9. 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 0000 Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxx 00000, 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 payroll 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.
10. Transferability of Option. The Option shall not be transferable by
the Optionee, otherwise than as set forth in the Plan, and may be exercised
during the life of the Optionee only by the Optionee.
11. 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.
12. 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
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determined by the Committee in its sole discretion, and that any interpretation
by the Committee of the terms of this Agreement shall be final, binding, and
conclusive.
13. Right to Repurchase. Unless approved in writing by the Committee, the
Committee may repurchase the Option Shares for the Purchase Price if a
Triggering Event, as defined below, occurs any time within five years after the
Option for such Option Shares was exercised by Optionee. The Company shall
exercise its rights hereunder by written notification to the Optionee to be
given within 180 days after the Committee becomes aware of the Triggering Event.
A "Triggering Event" shall mean:
a. Optionee voluntarily terminates employment with the Company
or if Optionee's employment is involuntarily terminated for
nonperformance of duties and if Optionee subsequently becomes, directly
or indirectly a sole proprietor, partner, stockholder, officer,
director, employee, independent contractor or consultant of or to any
business which is related to the contract or common carriage of goods;
or
b. Optionee's employment is involuntarily terminated for (or
voluntarily terminates because of) gross misconduct, fraud,
embezzlement, theft or breach of any fiduciary duty to the Company.
14. Refund of Benefit. Unless approved in writing by the Committee, if a
Triggering Event occurs and Optionee has already disposed of all or some of the
Option Shares, the Committee may demand, and Optionee shall pay to the Company,
the difference between the Purchase Price and the Fair Market Value of the
Option Shares on the date of exercise.
15. Withholding. The Optionee acknowledges that under certain
circumstances, including but not limited to a "disqualifying disposition" of an
ISO under Section 422(a)(i) of the Code, Optionee may recognize ordinary income
which, for tax purposes, is considered payment of wages for services. As a
result, the Company may have certain tax withholding and reporting obligations.
The Company shall not be obligated to issue any stock certificate upon the
exercise of the right to purchase, or the transfer of, Option Shares until the
Optionee has delivered sufficient funds to cover all income, FICA, FUTA and
other applicable tax withholding. Optionee shall notify the Company of any
disqualifying disposition of Option Shares (currently, any disposition within
two years of the Grant Date or one year of the exercise date) and take all
actions necessary for the Company to obtain a tax deduction if compensation
income is deemed to result from any exercise or disposition. Optionee shall
indemnify and hold the Company harmless against any loss it may experience as a
result of Optionee's failure to comply with this paragraph. At the Committee's
sole discretion, to satisfy the Company's withholding obligations, the Company
may retain such number of shares of Common Stock subject to the exercised Option
which have an aggregate Fair Market Value (as defined in the Plan) on the date
of exercise equal to the Company's aggregate federal, state, local and foreign
tax withholding obligations as a result of the exercise of the Option by
Optionee. The Committee may consider the Optionee's preference in making such
determination, but the Optionee acknowledges that the Committee is under no
obligation to follow or even consider Optionee's preference, and that the
Committee will consider the Section 16 restrictions, including the holding
period, advance notice and election windows required for any withholding of
shares to be exempt.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Optionee has hereunto affixed
his or her signature.
Smithway Motor Xpress Corp.,
a Nevada corporation
By:
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[ ]
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