AMENDMENT TO STOCK OPTION AGREEMENT
Exhibit
99d(iv)
AMENDMENT
TO
This
Amendment to Stock Option Agreement (the “Amendment”) is made as of September
13,
2006,
between Central Freight Lines, Inc., a Nevada corporation (the “Company”), and
Xxxxxx X. Xxxxx (the “Optionee”).
Recitals:
A. The
Company and Optionee are parties to a Stock Option Agreement, dated August
3,
2002 (the “Option Agreement”), wherein the Company granted to Optionee an Option
to acquire 1,260,000 shares of the Company’s Class A Common Stock. As of the
date of this Amendment, Optionee has exercised the Option with respect to
756,000 shares of Common Stock, and the Option remains in effect with respect
to
504,000 shares of Common Stock. Capitalized terms used but not defined in this
Amendment have the meanings assigned to them in the Option
Agreement.
B. The
Company has entered into an Agreement and Plan of Merger, dated as of January
30, 2006, as amended (the “Merger Agreement”), with North American Truck Lines,
LLC and Green Acquisition Company (“Green”), pursuant to which Green will merge
into the Company, with the Company continuing as the surviving corporation
in
the merger (the “Merger”).
C. Pursuant
to the Merger Agreement, the Option held by Optionee will continue in full
force
and effect subject to the amendments described herein.
D. In
order
to facilitate the Merger and the transactions contemplated by the Merger
Agreement, the Company and Optionee desire to enter into this
Amendment.
Agreements:
In
consideration of the foregoing and the mutual covenants and agreements set
forth
herein, the parties agree as follows:
SECTION
1: Effectiveness.
This
Amendment shall become effective only upon the closing of the transactions
contemplated by the Merger Agreement and the effectiveness of the Merger (the
“Effective Time”). If for any reason the Merger is not consummated, this
Amendment shall be void and of no force or effect.
SECTION
2. Amendments.
The
Option Agreement is amended, effective as of the Effective Time, as
follows:
(a) The
number of shares of Common Stock subject to the Option shall be 504,000 and
the
Purchase Price shall be $1.35
per
share.
(b) 429,934
of the Option Shares shall be fully vested at the Effective Time, and the
remaining 74,066 of the Option Shares shall be fully vested on the earliest
to
occur of January 7, 2007, the date that Optionee’s employment with the
Company is terminated for any reason, voluntarily or involuntarily, or as
provided in Sections 7 or 8 of the Option Agreement. All vested Option Shares
may be exercised by Optionee as provided in Section 3 of the Option
Agreement.
(c) Section
8
of the Option Agreement shall be amended by adding the following to the end
thereof:
"Notwithstanding
the foregoing, in the event of an Offer (as such term is defined in the
Stockholders' Agreement dated as of [________], 2006 among Central Freight
Lines, Inc., Xxxxx Xxxxx ("Moyes") and each of the individuals and entities
listed on Schedules A and B to such agreement (the "Stockholders' Agreement")),
Moyes may require the Optionee to have all or a portion (determined in
accordance with Section 4(d) of the Stockholders' Agreement) of the vested
Option Shares (including Option Shares that vest as a result of the consummation
of such Offer) then held by the Optionee be canceled in exchange for a payment
in cash by the Third Party (as such term is defined in the Stockholders'
Agreement) of an amount equal to the excess (if any) of the per share price
stated in the Notice (as defined in the Stockholders' Agreement) provided to
the
Optionee pursuant to Section 4(a) of the Stockholders' Agreement over the
Purchase Price for each such Option Share so canceled (the "Offer
Consideration"). In the event Moyes elects to have the Optionee have all of
the
vested Option Shares then held by the Optionee canceled in exchange for the
Offer Consideration, any Option Shares held by the Optionee that are not then
exercisable shall terminate and be canceled immediately upon consummation of
such Offer. In the event of an Offer for less than all of the shares of Common
Stock held by Moyes, Moyes may require the Optionee to have a pro rata portion
of the vested Option Shares then held by the Optionee canceled in exchange
for
the Offer Consideration. For the avoidance of doubt, such cancellation of vested
Option Shares shall occur within fifteen (15) business days following the date
the Notice of such Offer is provided to the Optionee. Upon payment of the Offer
Consideration to the Optionee, the Optionee’s rights as to the portion of the
Option Shares which is the subject of such payment shall be deemed satisfied
in
full. The failure of Moyes to exercise his rights pursuant to this Section
8
with respect to one Offer shall not preclude later exercise of such rights
with
respect to another Offer."
(d) Sections
13 and 16 of the Option Agreement shall be void and deemed deleted from the
Option Agreement.
SECTION
3. Stockholders’
Agreement.
At the
closing of transactions contemplated by the Merger Agreement and as a condition
thereof, Optionee shall execute and deliver to the Company a counterpart of
the
Stockholders’ Agreement in the form attached to this Amendment as Exhibit
A.
2
SECTION
4. Effect
of Amendment.
Except
as modified by this Amendment, the Option Agreement and all the covenants,
agreements, terms, provisions and conditions thereof shall remain in full force
and effect and are hereby ratified and affirmed. For greater certainty, the
Company reaffirms that the Option is intended to qualify as an ISO, and this
Amendment shall be interpreted consistently with that intention. In the event
of
any inconsistency or conflict between the terms and provisions of the Option
Agreement and this Amendment, the terms and provisions of this Amendment shall
govern and be binding. On and after the date hereof, but subject to the
provisions of Section 1, any reference to the Option Agreement shall mean the
Option Agreement as amended hereby.
SECTION
5. Governing
Law.
This
Amendment and the legal relations between the parties hereto shall be governed
by and construed in accordance with the substantive laws of the State of Nevada,
without giving effect to the conflicts of laws principles thereof.
SECTION
6. Headings.
The
descriptive headings contained in this Amendment are for convenience of
reference only and shall not affect in any way the meaning or interpretation
of
this Amendment.
SECTION
7. Entire
Agreement.
This
Amendment contains the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to such subject matter.
SECTION
8. Counterparts.
This
Amendment may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Facsimile execution and delivery of this Amendment is legal, valid
and binding for all purposes.
3
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
written above.
|
CENTRAL
FREIGHT LINES, INC.
|
||
|
By:
|
/s/ Xxxxxxx X. Xxxx | |
|
Name:
Xxxxxxx X. Xxxx
|
||
|
Title:
Senior Vice President and Chief Financial Officer
|
||
| /s/ Xxxxxx X. Xxxxx | ||
|
Xxxxxx
X. Xxxxx
|
||
