STOCK OPTION AGREEMENT
Date of Grant June 26, 1996
THIS GRANT, dated as of the date of grant first stated above (the
"Date of Grant"), is delivered by Pioneer Railcorp ("Company") to (the
"Optionee"), who is a director of the Company.
WHEREAS, the Board of Directors of the Company (the "Board") on
May 28, 1996, adopted, with stockholder approval on June 26, 1996, the Pioneer
Railcorp Stock Option Plan (the "Plan");
WHEREAS, the Plan provides for the granting of stock options by
the Board to employees and directors of the Company to purchase, or to exercise
certain rights with respect to, shares of the Class A Common Stock of the
Company (the "Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board considers the optionee to be a person who is
eligible for a grant of stock options under the Plan, and has determined that it
would be in the best interest of the Company to grant stock options documented
herein.
NOW, THEREFORE, the parties agree as follows:
1. Grant of option.
Subject to the terms and conditions hereinafter set forth, the Company hereby
grants to the Optionee, as of the Date of Grant, an option to purchase up to
_____shares of Stock at a price of $___ per share, the fair market value of the
Stock on the Date of Grant. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the option are
hereinafter sometimes referred to as the "Option Shares."
2. Exercise of Option.
The options will be fully vested and exercisable as of July 1, 2001. The vesting
and exercise date of the options will be accelerated to the 10th consecutive
business day that the stock trades at a price of at least $4.50 greater than the
price of the stock on the close of business on June 26, 1996. Vested options may
be exercised in whole or in part within 10 years from the date of grant.
3. Termination of option.
(a) Option shares shall survive only if the option holder's employment remains
active with the Company until the options vest, unless the option holder
dies prior thereto, in which case the holder's estate shall receive a
pro-rata number of shares, based upon the time the employee worked under
the plan. Any vested, unexercised options owned by a holder at death shall
become the property of the holder's estate.
(b) Upon the Optionee's termination of employment with the Company for any
reason other than death, the Optionee may, for a period of six months
thereafter, exercise any options which were exercisable on the date of
termination. Any option not so exercised shall terminate.
4. Exercise of Options.
(a) The optionee may exercise the Option with respect to all or any part of the
number of Option Shares then exercisable hereunder by giving the Company
written notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be exercised and
the date of exercise thereof.
(b) Full payment by the Optionee of the option price for the Option Shares
purchased shall be made in cash on or before the exercise date specified in
the notice of exercise.
On the exercise date specified in the optionee's notice or as soon
thereafter as is practicable, the Company shall cause to be delivered to
the Optionee, a certificate or certificates for the Option Shares then
being purchased upon full payment of such option Shares. The obligation of
the Company to deliver Stock shall, however, be subject to the condition
that if at any time the Board shall determine in its discretion that the
listing, registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the Option or the
issuance or purchase of Stock thereunder, the Option may not be exercised
in whole or in part unless such listing, registration, qualification,
consent or approval shall have been affected or obtained free of any
conditions not acceptable to the Board.
(c) If the Optionee fails to pay for any of the Option Shares specified in such
notice or fails to accept delivery thereof, the Optionee's right to
purchase such Option Shares may be terminated by the Company. The date
specified in the
Optionee's notice as the date of exercise shall be deemed the date of
exercise of the option, provided that payment in full for the Option Shares
to be purchased upon such exercise shall have been received by such date.
(d) Optionee shall comply with such additional procedures for exercise of the
Option as are from time to time established by the Board.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of capital stock of the
Company, the Board shall make such adjustment as it deems appropriate in
the number and kind of shares of Stock subject to the Option or in the
option price; provided, however that such adjustment shall give the
Optionee any additional benefits under the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock shall be the
closing price per share of Stock on the Chicago Stock Exchange, NASDAQ, or
other recognized market source, as determined by the Board, on the
applicable date of reference hereunder, or if there is no sale on such
date, then the closing price on the last previous day on which a sale is
reported. The fair market value of the Stock on June 26, 1996 is $_______
per share.
7. No Rights of Stockholders.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights or privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of
the Option, in whole or in part, prior to the date of exercise of the
option.
8. Non-Transferability of Option.
During the Optionee's lifetime, the option hereunder shall be exercisable
only by the Optionee or any guardian or legal representative of the
Optionee, and the Option shall not be transferable except, in case of the
death of the Optionee, by will or the laws of descent and distribution.
9. Employment Not Affected.
Neither the grant of the option nor its exercise shall be construed as
granting to the optionee any right with respect to continued employment
with the Company.
10. Amendment of option.
The option may be amended by the Board at any time (I) if the Board
determines, in its sole discretion, that amendment is necessary or
advisable in light of the Internal Revenue Code of 1986 or in the
regulations issued thereunder, or any federal or state securities law or
other law or regulation or (ii) other than in the circumstances described
in clause (I), with the consent of the Optionee, unless the amendment would
not adversely affect the Optionee.
11. Notice.
Any notice to the Company provided for in this instrument shall be
addressed to it at its offices at Peoria, Illinois, and any notice to the
Optionee shall be addressed to the Optionee at the current address shown on
the records of the Company. Any notice shall be deemed to by duly given if
and when properly addressed and posted by registered or certified mail,
postage prepaid.
12. Incorporation of Plan by Reference.
The option is granted pursuant to the terms of the Plan, the terms of which
are incorporated herein by reference, and the Option shall in all respects
be interpreted in accordance with the Plan. The Board shall interpret and
construe the Plan and this instrument, and its interpretations and
determinations shall be conclusive and binding on the parties hereto and
any other person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law
of the State of Illinois.
OPTIONEE PIONEER RAILCORP
__________________ By: /s/
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