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EXHIBIT 10.5
FORM OF STOCK OPTION AGREEMENT
RAILAMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT
1. Grant of Option. RailAmerica, Inc. (the "Company") hereby
grants, as of [ ] to [ ] (the "Optionee") an option (the "Option")
to purchase up to [ ] shares of the Company's Common Stock, $.001 par
value per share (the "Shares"), at an exercise price per share equal to $[ ].
2. Exercise Schedule. Except as otherwise provided in Sections 5
or 9 of this Agreement, or in the Plan, the Option shall be exercisable in whole
or in part and cumulatively according to the following schedule:
[__________] Shares [__________]
[__________] Shares [__________]
[__________] Shares [__________]
The Option shall terminate on, and in no event shall the Option be
exercisable after [ ].
3. Method of Exercise. This Option shall be exercisable in whole
or in part in accordance with the exercise schedule set forth in Section 2
hereof by written notice which shall state the election to exercise the Option,
the number of Shares in respect of which the Option is being exercised, and such
other representations and agreements as to the holder's investment intent with
respect to such Shares as may be required by the Company. Such written notice
shall be signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company. The written notice shall be accompanied by
payment of the exercise price. This Option shall be deemed to be exercised after
both (a) receipt by the Company of such written notice accompanied by the
exercise price and (b) arrangements that are satisfactory to the Company in its
sole discretion have been made for Optionee's payment to the Company of the
amount that is necessary to be withheld in accordance with applicable Federal or
state withholding requirements. No Shares will be issued pursuant to the Option
unless and until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock exchange
upon which the Shares then may be traded.
4. Method of Payment. Payment of the exercise price shall be by
any of the following, or a combination thereof, at the election of the Optionee:
(a) cash; (b) check; (c) with Shares that have been held by the Optionee for at
least six months (or such other Shares as the Company determines will not cause
the Company to realize a financial account charge); or (d) such other
consideration or in such other manner as may be determined by the Board or the
Committee in its absolute discretion.
5. Termination of Option. Any unexercised portion of the Option
shall automatically and without notice terminate and become null and void at the
time of the earliest to occur of:
(a) unless the Committee or the Board otherwise
determines in writing in its sole discretion, three months after the date on
which the Optionee's employment with the Company is terminated for any reason
other than by reason of (A) Cause, which, solely for purposes of this Agreement,
shall mean the termination of the Optionee's employment by reason of the
Optionee's willful misconduct or gross negligence, (B) a mental or physical
disability (within the meaning of Section 22(e) of the Internal Revenue Code) of
the Optionee as determined by a medical doctor satisfactory to the Committee or
the Board, or (C) death;
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(b) immediately upon the termination of the Optionee's
employment with the Company for Cause;
(c) twelve months after the date on which the Optionee's
employment with the Company is terminated by reason of a mental or physical
disability (within the meaning of Section 22(e) of the Internal Revenue Code) as
determined by a medical doctor satisfactory to the Committee or the Board;
(d) twelve months after the date of termination of the
Optionee's employment with the Company by reason of the death of the Optionee
(or if later, three months after the date on which the Optionee shall die if
such death shall occur during the one year period specified in paragraph (c) of
this Section 5); or
(e) The Committee of the Board, in its sole discretion
may by giving written notice (the "cancellation notice") cancel, effective upon
the date of the consummation of any Corporate Transaction described in Section
9(b)(iii) of the Plan or the consummation of any reorganization, merger,
consolidation or other transaction in which the Company does not survive, any
Option that remains unexercised on such date. Such cancellation notice shall be
given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
6. Transferability. The Option is not transferable otherwise than
by will or under the laws of descent and distribution, and during the lifetime
of the Optionee the Option shall be exercisable only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
7. Adjustment of Shares.
(a) If at any time while the Option is outstanding, there
shall be any increase or decrease in the number of issued and outstanding shares
of Common Stock of the Company (the "Company Shares") through the declaration of
a stock dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of the Company shares, then and in such event
appropriate adjustment shall be made in the number of Shares and the exercise
price per Share thereof then subject to this Option, so that the same percentage
of the Company's issued and outstanding Company shares shall remain subject to
purchase at the same aggregate exercise price.
(b) The Company may change the terms of this Agreement,
with respect to the option price or the number of Shares subject to this Option,
or both, when, in the Company's sole discretion, such adjustments become
appropriate so as to preserve but not increase benefits under this Agreement.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made to, the number of or exercise price
for Shares then subject to outstanding Options granted under the Agreement
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under this Agreement shall not affect
in any manner the right or power of the Company to make, authorize or consummate
(i) any or all adjustments, recapitalizations, reorganizations or other changes
in the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to the
Option; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
8. No Rights of Stockholders. Neither the Optionee nor any
personal representative (or beneficiary) shall be, or shall have any of the
rights and privileges of, a stockholder of the Company with respect to any
shares of
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Stock purchasable or issuable upon the exercise of the Option, in whole or in
part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option.
(a) This Option shall become immediately fully
exercisable in the event of a "Change in Control" or in the event that the
Committee or the Board exercises its discretion to provide a cancellation notice
with respect to the Option pursuant to Section 5(e) hereof.
(b) For purposes of this provision, the term "Change in
Control" shall mean:
(i) Approval by the shareholders of the Company
of a reorganization, merger, consolidation
or other form of corporate transaction or
series of transactions, in each case, with
respect to which persons who were the
shareholders of the company immediately
prior to such reorganization, merger or
consolidation or other transaction do not,
immediately thereafter, own more than 50% of
the combined voting power entitled to vote
generally in the election of directors of
the reorganized, merged or consolidated
company's then outstanding voting
securities, or a liquidation or dissolution
of the company or the sale of all or
substantially all of the assets of the
Company (unless such reorganization, merger,
consolidation or other corporate
transaction, liquidation, dissolution or
sale is subsequently abandoned); or
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of the
Company (as of the date hereof the
"Incumbent Board") cease for any reason to
constitute at least a majority of the Board
of Directors of the Company, provided that
any person becoming a director subsequent to
the date hereof whose election, or
nomination for election by the Company's
shareholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board (other than
an election or nomination of an individual
whose initial assumption of office is in
connection with an actual or threatened
election contest relating to the election of
the Directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange
Act) shall be, for purposes of this
Agreement, considered as though such person
were a member of the Incumbent Board.
(c) The Company may in its sole discretion accelerate the
date on which this Option may be exercised and may accelerate the vesting of any
Shares subject to this Option or previously acquired by the exercise of any
Option.
10. No Rights to Continued Employment. Neither the Option nor this
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.
11. Amendment. The Company may from time to time amend, suspend or
terminate this Option; provided, however, that no amendment, suspension or
termination of the Option shall substantially impair the rights or benefits of
the Optionee without the consent of the Optionee.
12. Withholding. If at any time specified herein for the making of
any issuance or delivery of the Option or Shares to the Optionee or beneficiary,
any law or regulation of any governmental authority having jurisdiction in the
premises shall require the Company to withhold, or to make any deduction for,
any taxes or take any other action in connection with the issuance or delivery
then to be made, such issuance or delivery shall be deferred until such
withholding or deduction shall have been provided for by the Optionee or
beneficiary, or other appropriate action shall have been taken.
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13. Law Governing. This Agreement shall be governed in accordance
with and governed by the internal laws of the State of Delaware.
14. Interpretation/Provisions of Plan Control. The undersigned
Optionee hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee or the Board upon any questions arising under
the Plan and this Agreement.
15. Notices. Any notice under this Agreement shall be in writing
and shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at [ ], or if the
Company should move its principal office, to such principal office, and, in the
case of the Optionee, to the Optionee's last permanent address as shown on the
Company's records, subject to the right of either party to designate some other
address at any time hereafter in a notice satisfying the requirements of this
Section.
16. Tax Consequences. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There may be a regular federal
income tax liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price. If Optionee is an employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the ___ day of _________, 2000.
COMPANY:
RAILAMERICA, INC.
By:
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[Officer]
Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: OPTIONEE:
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By:
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