EXHIBIT 10
CHANGE-IN-CONTROL AGREEMENT
AGREEMENT entered into as of _______________, 200_ by and between
Smithway Motor Xpress Corp., an Iowa corporation (the "Company"), and
_______________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is a key member of the management of the
Company and has heretofore devoted substantial skill and effort to the affairs
of the Company; and
WHEREAS, it is desirable and in the best interests of the Company
and its shareholders to continue to obtain the benefits of the Executive's
services and attention to the affairs of the Company; and
WHEREAS, it is desirable and in the best interests of the Company
and its shareholders to provide inducement for the Executive (A) to remain in
the service of the Company in the event of any proposed or anticipated change in
control of the Company and (B) to remain in the service of the Company in order
to facilitate an orderly transition in the event of a change in control of the
Company; and
WHEREAS, it is desirable and in the best interests of the Company
and its shareholders that the Executive be in a position to make judgments and
advise the Company with respect to proposed changes in control of the Company;
and
WHEREAS, the Executive desires to be protected in the event of
certain changes in control of the Company; and
WHEREAS, for the reasons set forth above, the Company and the
Executive desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the Company and the Executive agree
as follows:
1. Employment. The purpose of this Agreement is to provide Executive with
certain amounts or benefits under certain circumstances and on the terms set
forth herein if an Event shall be deemed to have occurred as contemplated by
Section 2. This Agreement does not otherwise affect the terms of Executive's
employment.
2. Events. No amounts or benefits shall be payable or provided for
pursuant to this Agreement unless an Event shall occur during the Term of this
Agreement.
(a) For purposes of this Agreement, an "Event" shall be deemed to
have occurred if any of the following occur:
(i) Any "person" (as defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended, or any successor
statute thereto (the "Exchange Act")) acquires or becomes a
"beneficial owner" (as defined in Rule 13d-3 or any successor rule
under the Exchange Act), directly or indirectly, of securities of
the Company representing 35% or more of the combined voting power of
the Company's then outstanding securities entitled to vote generally
in the election of directors ("Voting Securities"), provided,
however, that the following shall not constitute an Event pursuant
to this Section 2(a)(i):
(A) any acquisition or beneficial ownership by the
Company or a subsidiary of the Company;
(B) any acquisition or beneficial ownership by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or one or more of its subsidiaries;
(C) any acquisition or beneficial ownership by any
corporation (including without limitation an acquisition in a
transaction of the nature described in Section 2(a)(iii)) with
respect to which, immediately following such acquisition, more
than 65%, respectively, of (x) the combined voting power of
the Company's then outstanding Voting Securities and (y) the
Company's then outstanding common stock (the "Common Stock")
is then beneficially owned, directly or indirectly, by all or
substantially all of the persons who beneficially owned Voting
Securities and Common Stock, respectively, of the Company
immediately prior to such acquisition in substantially the
same proportions as their ownership of such Voting Securities
and Common Stock, as the case may be, immediately prior to
such acquisition;
(D) any acquisition of Voting Securities or Common Stock
directly from the Company;
(E) any acquisition or beneficial ownership of Voting
Securities or Common Stock by Xxxxxxx X. Xxxxx, Xxxxxx X.
Xxxxx or trusts controlled by either;
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(ii) Continuing Directors shall not constitute a majority of
the members of the Board of Directors of the Company. For purposes
of this Section 2(a)(ii), "Continuing Directors" shall mean: (A)
individuals who, on the date hereof, are directors of the Company,
(B) individuals elected as directors of the Company subsequent to
the date hereof for whose election proxies shall have been solicited
by the Board of Directors of the Company or (C) any individual
elected or appointed by the Board of Directors of the Company to
fill vacancies on the Board of Directors of the Company caused by
death or resignation (but not by removal) or to fill newly-created
directorships, provided that a "Continuing Director" shall not
include an individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the threatened election or removal of directors (or other actual or
threatened solicitation of proxies or consents) by or on behalf of
any person other than the Board of Directors of the Company;
(iii) Consummation by the Company of a reorganization, merger
or consolidation of the Company or a statutory exchange of
outstanding Voting Securities of the Company, unless immediately
following such reorganization, merger, consolidation or exchange,
all or substantially all of the persons who were the beneficial
owners, respectively, of Voting Securities and Common Stock
immediately prior to such reorganization, merger, consolidation or
exchange beneficially own, directly or indirectly, more than 65% of,
respectively, (x) the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors and (y) the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger,
consolidation or exchange in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger,
consolidation or exchange, of the Voting Securities and Common
Stock, as the case may be;
(iv) (x) Complete liquidation or dissolution of the Company or
(y) the sale or other disposition of all or substantially all of the
assets of the Company (in one or a series of transactions), other
than to a corporation with respect to which, immediately following
such sale or other disposition, more than 65% of, respectively, (1)
the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors and (2) the then outstanding shares of common stock of
such corporation is then beneficially owned, directly or indirectly,
by all or substantially all of the persons who were the beneficial
owners, respectively, of the Voting Securities and Common Stock
immediately prior to such sale or other disposition in substantially
the same proportions as their ownership,
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immediately prior to such sale or other disposition, of the Voting
Securities and Common Stock, as the case may be.
Notwithstanding anything stated in this Section 2(a), an Event shall not
be deemed to occur with respect to the Executive if (x) the acquisition or
beneficial ownership of the 35% or greater interest referred to in Section
2(a)(i) is by the Executive or by a group, acting in concert, that
includes the Executive or (y) a majority of the then combined voting power
of the then outstanding voting securities (or voting equity interests) of
the surviving corporation or of any corporation (or other entity)
acquiring all or substantially all of the assets of the Company shall,
immediately after a reorganization, merger, consolidation, exchange or
disposition of assets referred to in Section 2(a)(iii) or 2(a)(iv), be
beneficially owned, directly or indirectly, by the Executive or by a
group, acting in concert, that includes the Executive.
(b) For purposes of this Agreement, a "subsidiary" of the Company
shall mean any entity of which securities or other ownership interests
having general voting power to elect a majority of the board of directors
or other persons performing similar functions are at the time directly or
indirectly owned by the Company.
3. Payments and Benefits. If any Event shall occur during the Term of this
Agreement, then the Executive shall be entitled to receive from the Company or
its successor (which term as used herein shall include any person acquiring all
or substantially all of the assets of the Company) a cash payment and other
benefits on the following basis (unless the Executive's employment by the
Company is terminated voluntarily or involuntarily prior to the occurrence of
the earliest Event to occur (the "First Event"), in which case the Executive
shall be entitled to no payment or benefits under this Section 3):
(a) If at the time of, or at any time after, the occurrence of the
First Event and prior to the end of the Transition Period (as defined in
Section 4(e)), the employment of the Executive with the Company is
voluntarily or involuntarily terminated for any reason (unless such
termination is a voluntary termination by the Executive other than a
Constructive Involuntary Termination or is on account of the death or
Disability of the Executive or is a termination by the Company for Cause),
the Executive (or the Executive's legal representative, as the case may
be),
(i) shall be entitled to receive from the Company or its
successor, upon such termination of employment with the Company or
its successor, a cash payment in an amount equal to the Severance
Payment (as defined in Section 4(d)); and
(ii) shall be entitled during the Transition Period to
participate in any health, disability and life insurance plan or
program in which the Executive was
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entitled to participate immediately prior to the First Event as if
he were an employee of the Company during such Transition Period
(except, with respect to health insurance coverage, for those
portions remaining during such Transition Period that duplicate
health insurance coverage that is in place for the Executive under
any other policy provided at the expense of another employer);
provided however, that in the event that the Executive's
participation in any such health, disability or life insurance plan
or program of the Company is barred, the Company, at its sole cost
and expense, shall arrange to provide the Executive with benefits
substantially similar to those which the Executive would be entitled
to receive under such plan or program if he were not barred from
participation.
(b) The payments provided for in this Section 3 shall be reduced by
any other severance pay which the Executive receives from the Company, its
subsidiaries or its successor under any other policy or agreement of the
Company in the event of involuntary termination of Executive's employment.
(c) The Company shall also pay to the Executive all legal fees and
expenses incurred by the Executive as a result of such termination,
including, but not limited to, all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement.
(d) In the event that at any time from the date of the First Event
until the end of the Transition Period,
(i) the Executive shall not be given substantially equivalent
or greater title, duties, responsibilities and authority, in each
case as compared with the Executive's status immediately prior to
the First Event, other than for Cause or on account of Disability;
(ii) the Executive's annual base salary shall be reduced from
the Executive's annual base salary in effect immediately prior to
the First Event;
(iii) the Company shall fail to provide the Executive with
benefits under the Company's pension, profit sharing, retirement,
life insurance, medical, health and accident, disability, bonus and
incentive plans and other employee benefit plans and arrangements
that in the aggregate for all such plans and arrangements are at
least as favorable to the Executive as those benefits covering the
Executive immediately prior to the First Event or shall fail to
provide the Executive with at least the number of paid vacation days
to which the Executive was entitled immediately prior to the First
Event;
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(iv) the Company shall have failed to obtain assumption of
this Agreement by any successor as contemplated by Section 5(b)
hereof;
(v) the Company shall require the Executive to relocate to any
place other than a location within twenty-five miles of the location
at which the Executive performed his primary duties immediately
prior to the First Event; or
(vi) the Company shall require that the Executive travel on
Company business to a substantially greater extent than required
immediately prior to the First Event;
a termination of employment with the Company by the Executive thereafter
shall constitute a Constructive Involuntary Termination.
(e) The Executive shall not be required to mitigate the amount of
any payment or other benefit provided for in Section 3 by seeking other
employment or otherwise, nor (except as specifically provided in Section
3(a)(ii)) shall the amount of any payment or other benefit provided for in
Section 3 be reduced by any compensation earned by the Executive as the
result of employment by another employer after termination, or otherwise.
(f) The obligations of the Company under this Section 3 shall
survive the termination of this Agreement.
4. Definition of Certain Additional Terms.
(a) As used herein, other than in Section 2(a) hereof, the term
"person" shall mean an individual, partnership, corporation, estate, trust
or other entity.
(b) As used herein, the term "Cause" shall mean, and be limited to,
(i) willful and gross neglect of duties by the Executive or (ii) an act or
acts committed by the Executive constituting a felony and substantially
detrimental to the Company or its reputation.
(c) As used herein, the term "Disability" shall mean the Executive's
absence from his duties with the Company on a full time basis for 180
consecutive business days, as a result of the Executive's incapacity due
to physical or mental illness, unless within 30 days after written notice
pursuant to Section 7 hereof is given following such absence, the
Executive shall have returned to the full time performance of his duties.
(d) As used herein, the term "Severance Payment" shall mean an
amount equal to (i) 24 months base salary (excluding bonuses) multiplied
by a fraction, the
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numerator of which is the number of days remaining in the Transition
Period after termination of employment and the denominator of which is the
number of days in the Transition Period, plus (ii) the bonus that the
Executive would have been entitled to assuming that the performance goals
under the Company's bonus program had been met and the Executive had been
employed through the end of the bonus period, multiplied by a fraction,
the numerator of which is the number of days worked in the applicable
bonus period and the denominator of which is the number of days in the
applicable bonus period.
(e) As used herein, the term "Transition Period" shall mean the 24
month period commencing on the date of the earliest to occur of an Event
described in Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv) hereof (the
"Commencement Date") and ending on the 24 month anniversary of the
Commencement Date.
5. Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the successors, legal representatives and assigns of the parties hereto;
provided, however, that the Executive shall not have any right to assign,
pledge or otherwise dispose of or transfer any interest in this Agreement
or any payments hereunder, whether directly or indirectly or in whole or
in part, without the written consent of the Company or its successor.
(b) The Company will require any successor (whether direct or
indirect, by purchase of a majority of the outstanding voting stock of the
Company or all or substantially all of the assets of the Company, or by
merger, consolidation or otherwise), by agreement in form and substance
satisfactory to the Executive, to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness
of any such succession (other than in the case of a merger or
consolidation) shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the
same terms as the Executive would be entitled hereunder if the Executive
terminated his employment on account of a Constructive Involuntary
Termination, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the
date of termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which is required to execute and deliver the agreement
provided for in this Section 5(b) or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
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6. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Iowa.
7. Notices. All notices, requests and demands given to or made pursuant
hereto shall be in writing and shall be delivered or mailed to any such party at
its address which:
(a) In the case of the Company shall be:
Smithway Motor Xpress Corp.
X.X. Xxx 000
0000 Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
(b) In the case of the Executive shall be:
___________________________
___________________________
___________________________
Either party may, by notice hereunder, designate a changed address. Any notice,
if mailed properly addressed, postage prepaid, registered or certified mail,
shall be deemed to have been given on the registered date or that date stamped
on the certified mail receipt.
8. Severability; Severance. In the event that any portion of this
Agreement is held to be invalid or unenforceable for any reason, it is hereby
agreed that such invalidity or unenforceability shall not affect the other
portions of this Agreement and that the remaining covenants, terms and
conditions or portions hereof shall remain in full force and effect, and any
court of competent jurisdiction may so modify the objectionable provision as to
make it valid, reasonable and enforceable. In the event that any benefits to the
Executive provided in this Agreement are held to be unavailable to the Executive
as a matter of law, the Executive shall be entitled to severance benefits from
the Company, in the event of an involuntary termination or Constructive
Involuntary Termination of employment of the Executive (other than a termination
on account of the death or Disability of the Executive or a termination for
Cause) during the term of this Agreement occurring at the time of or following
the occurrence of an Event, at least as favorable to the Executive (when taken
together with the benefits under this Agreement that are actually received by
the Executive) as the most advantageous benefits made available by the Employer
to employees of comparable position and seniority to the Executive during the
two-year period prior to the First Event.
9. Term. This Agreement shall commence on the date of this Agreement and
shall terminate, and the Term of this Agreement shall end, on the later of (A)
December 31, 2006, provided that such period shall be automatically extended for
one year and from year to year
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thereafter until notice of termination is given by the Company or the Executive
to the other party hereto at least 60 days prior to December 31, 2006 or the
one-year extension period then in effect, as the case may be, or (B) if the
Commencement Date occurs on or prior to December 31, 2006 (or prior to the end
of the extension year then in effect as provided for in clause (A) hereof), the
24 month anniversary of the Commencement Date.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Smithway Motor Xpress Corp.
By___________________________
Its_______________________
Executive
_____________________________
[Name]
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