EXHIBIT 10.2(b)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of
____________ (the "Grant Date") to document a stock option grant effective
___________ (the "Effective Date") between Central Freight Lines, Inc., a Nevada
corporation (the "Company"), and ______________________, a key employee of an
operating subsidiary of the Company (the "Optionee").
BACKGROUND
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"). The option is granted
under the Company's Incentive Stock Plan (the "Plan") adopted by the Board of
Directors and Stockholders effective May 6, 1997, and assumed by the Company
from Central Freight Lines, Inc., a Texas corporation, on December 31, 2000.
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
<> shares of 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 ("ISO"), as such term is defined under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The exercise price of the Option
Shares shall be $_____ per share (the "Purchase Price").
2. Exercise of Option. Subject to the terms and conditions of this
Agreement and the Plan, the vested portion of 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
Central Freight Lines, Inc., a Nevada corporation, 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.
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b. At the sole discretion of the Board, 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 Board, 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.
d. At the sole discretion of the Board, in any combination of
Sections 3.a., 3.b., and 3.c. above.
The Board 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 Board
will consider the restrictions of Rule 16b-3 of the Exchange Act or any
successor rule.
4. Vesting and Exercisability of Option. Subject to the provisions of
Sections 5, 7, and 8 hereof, the Option shall vest and may be exercised by the
Optionee in whole or in part from time to time, but only in accordance with the
following schedule:
Cumulative Percentage of Option Shares Vested and as
Date to which Option may be Exercised
---- --------------------------------
First Anniversary of Effective Date 20%
Second Anniversary of Effective Date 40%
Third Anniversary of Effective Date 60%
Fourth Anniversary of Effective Date 80%
Fifth Anniversary of Effective Date 100%
Not withstanding anything herein to the contrary, no vesting shall occur in the
event of termination of Optionee's Continuous Status as an Employee 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 Board, (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 b., c., and d., respectively;
b. Thirty (30) days after voluntary termination;
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c. Three years after termination due to retirement with the
consent of the Board 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);
d. Twelve (12) months after the Optionee's death; or
e. Notwithstanding any other provision herein, the date ten years
after 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 Shares 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 Board as to the terms of any of the foregoing adjustments
shall be final, binding, and conclusive.
7. Liquidation, Sale of Assets, or Merger. In the event of a proposed
dissolution or liquidation of the Company, the Option shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided 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 become immediately exercisable with
respect to all then outstanding Option Shares (whether or not vested) and the
Optionee may elect, during the period commencing on the date that such sale or
merger is consummated and ending at the closing of business on the thirtieth
(30th) day following the date of such sale or merger, to exercise the Option in
whole or in part. In the event the thirtieth (30th) day referred to in this
Section 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.
8. Acquisition. If any person, corporation, or other entity or group
thereof other than Xxxxx Xxxxx, Xxxxxx Xxxxx, and entities or trusts controlled
by either (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 Exchange Act 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 the right to cast more than 51% 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 Section 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 President at 0000 X.
Xxxx Xxxxx, Xxxx, Xxxxx 00000, or at
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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 and may be exercised during the life of the Optionee only by the
Optionee, unless otherwise set forth in the Plan.
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 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.
13. 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 Section 13. At the Board'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 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 Board may
consider the Optionee's preference in making such determination, but the
Optionee acknowledges that the Board is under no obligation to follow or even
consider Optionee's preference, and that the Board will consider the Section 16
restrictions of the Exchange Act, including the holding period, advance notice
and election windows required for any withholding of shares to be exempt.
14. Right of First Refusal. The Optionee may sell or transfer any or all of
the Common Stock owned by him or her to any person who makes a good faith, bona
fide offer therefor, but prior to an initial public offering of the Common Stock
of the Company, the Company shall have the right of first refusal to purchase
such Common Stock from the Optionee as set forth below. The Optionee shall give
prior notice in writing (the "Offer Notice") to the Company of each intended
sale or transfer, which Offer Notice shall contain all the terms of the proposed
transfer or disposition,
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including, without limitation, the name and address of the prospective
transferee, the purchase price and other terms and conditions of payment, and
the number of shares of Common Stock to be disposed of by the Optionee (such
shares being referred to herein as the "Offered Stock"). The Optionee shall
specifically represent and warrant in such Offer Notice that the above terms
reflect an actual bona fide offer that the Optionee intends to accept, subject
to compliance with the terms of this Agreement. The Company shall have a prior
right to purchase the Offered Stock on the terms and conditions set forth in
this Section 14. The price and terms to the Company under this right of first
refusal shall be the price and terms set forth in the Offer Notice.
a. By notice (the "Company Notice") to the Optionee given not
more than thirty (30) days after the date of the mailing of
the Offer Notice, the Company shall specify if it desires to
purchase all, but not less than all, of the Offered Stock.
b. If, after following the procedures outlined in Section 14.a.
above, the Offered Stock is not subscribed for by the Company,
the Optionee, for a period of sixty (60) days following
expiration of the thirty (30) day period provided in Section
14.a., shall then be free to sell the Offered Stock, free and
clear of all the restrictions contained in this Agreement, but
only to the purchaser named in the Offer Notice and only upon
the terms specified therein. If the Optionee fails to
consummate such sale to such purchaser on such terms and
conditions within such sixty (60) day period, any sale or
other transfer by the Optionee to any person shall again be
subject to the right of first refusal specified in this
Section 14.
c. If the Company subscribes for the Offered Stock, then such
Offered Stock shall be sold to the Company. On a date no later
than fifteen days (15) days following the date of the Company
Notice the Company shall deliver to the Secretary of the
Company for delivery to the Optionee upon delivery of the
certificates provided herein, together with stock powers
attached thereto, the amount of the purchase price for the
Offered Stock.
d. The Company's right of first refusal with respect to the
Offered Stock shall expire on the date of the initial public
offering of the Common Stock of the Company, and thereafter
any right of the Company to repurchase its outstanding stock
shall be governed by federal and state securities laws.
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.
CENTRAL FREIGHT LINES, INC., OPTIONEE
a Nevada corporation
By: _________________________________________ ______________________________
Xxxxxx X. Xxxxx, Chief Executive Officer
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