EXHIBIT 10.15
KLLM Transport Services, Inc.
1996 Stock Option Plan
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ARTICLE I
GENERAL
1.1 Purposes of the Plan.
The purposes of the 1996 Stock Option Plan are to assist KLLM
Transport Services, Inc. (the "Company") (and its subsidiaries) in
attracting and retaining key employees of outstanding ability by
offering them an increased incentive to join or continue in the
service of the Company, to increase their efforts for its welfare
by participating in the ownership and growth of the Company, and to
associate the interests of such employees with those of the
Company's stockholders.
1.2 Definitions.
(a) "Acceleration Event" means any event which in the opinion
of the Board of Directors of the Company is likely to lead to
changes in control of share ownership of the Company, whether or
not such change in control actually occurs;
(b) "Board of Directors" or "Board" means the Board of
Directors of the Company;
(c) "Code" means the Internal Revenue Code of 1986, as
amended;
(d) "Common Stock" means voting common stock of the Company;
(e) "Fair Market Value" means such price as is set by the
Company's Board of Directors unless and until the Company sells
stock pursuant to a registration statement under the Securities Act
of 1933, or the Company is registered with the Securities and
Exchange Commission pursuant to Section 12(g) of the Securities
Exchange Act of 1934. Thereafter, it shall mean the closing
"asked" price of the shares in the over-the-counter market on the
day on which such value is to be determined or, if such "asked"
price is not available, the last sales price on such day or, if no
shares were traded on such day, on the next preceding day on which
the shares were traded, as reported by the National Association of
Securities Dealers Automatic Quotation System (NASDAQ) or other
national quotation service. If the shares are listed on a National
Securities Exchange, "fair market value" means the closing price of
the shares on such National Securities Exchange on the day on which
such value is to be determined or, if no shares were traded on such
day, on the next preceding day on which shares were traded, as
reported by National Quotation Bureau, Inc. or other national
quotation service. If the shares are traded on the NASDAQ National
Market System, "fair market value" means the closing price of the
shares on the National Market System on the day on which such value
is to be determined or, if no shares were traded on such day, on
the next preceding day on which shares were traded, as reported by
the NASDAQ National Market System;
(f) "Incentive Stock Option" means an option to purchase
shares of Common Stock which is intended to qualify as an incentive
stock option as defined in Section 422 of the Code;
(g) "Key Employee" means any person, including officers and
directors, in the regular full-time employment of the Company or
its Subsidiaries who, is designated a Key Employee by the Committee
referred to in Section 1.3, and is or is expected to be primarily
responsible for the management, growth, or supervision of some part
or all of the business of the Company or its Subsidiaries. The
power to determine who is and who is not a Key Employee is reserved
solely for the Committee;
(h) "Nonqualified Stock Option" means an option to purchase
shares of Common Stock which is not intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code;
(i) "Option" means an Incentive Stock Option or a
Nonqualified Stock Option;
(j) "Optionee" means a Key Employee to whom an Option is
granted under the Plan;
(k) "Parent" means any corporation which qualifies as a
parent of a corporation under the definition of "parent
corporation" contained in Section 424(e) of the Code;
(l) "Stock Appreciation Right" shall have the meaning stated
in Article IV of the Plan;
(m) "Subsidiary" means any corporation which qualifies as a
subsidiary of a corporation under the definition of "subsidiary
corporation" contained in Section 424(f) of the Code;
(n) "Term" means the period during which a particular Option
may be exercised as determined by the Committee and as provided in
the option agreement;
1.3 Administration of the Plan.
The Plan shall be administered by the Stock Option Committee
(the "Committee") appointed by the Board of Directors consisting of
at least three members from the Board of Directors. No person
while a member of the Committee shall be eligible to participate in
the Plan. Subject to the control of the Board, and without
limiting the generality thereof, the Committee shall have the power
to interpret and apply the Plan and to make regulations for
carrying out its purpose. More particularly, the Committee shall
determine which Key Employees shall be granted Options under the
Plan, the number of shares subject to each Option, the price per
share under each Option, the Term of each Option, and any
restrictions on the exercise of each Option. When granting
Options, the Committee shall designate the Option as either an
Incentive Stock Option or a Nonqualified Stock Option. The
Committee shall also designate whether the Option is granted with
Stock Appreciation Rights. Determinations by the Committee under
the Plan (including, without limitation, determinations of the
person to receive Options, the form, amount and timing of such
Options, and the terms and provisions of such Options and the
agreements evidencing same) need not be uniform and may be made by
it selectively among persons who receive, or are eligible to
receive, Options under the Plan, whether or not such persons are
similarly situated.
1.4 Shares Subject to the Plan.
The total number of shares that may be purchased pursuant to
Options or transferred pursuant to the exercise of Stock
Appreciation Rights under the Plan shall not exceed 200,000 shares
of Common Stock. Shares subject to the Options which terminate or
expire prior to exercise shall be available for future Options.
Shares represented by an unexercised Option surrendered upon
exercise of Stock Appreciation Rights including, without
duplication, any shares issued in payment of any Stock Appreciation
Rights, shall be deducted from the aggregate and shall not be
available for further Options hereunder. Shares issued pursuant to
the Plan may be either unissued shares of Common Stock or
reacquired shares of Common Stock held in treasury.
1.5 Terms and Conditions of Options.
All Options shall be evidenced by agreements in such form as
the Committee shall approve from time to time subject to the
provisions of Article II or Article III, as appropriate, and the
following provisions:
(a) Exercise Price. The exercise price of the Option shall
not be less than the Fair Market Value (as determined by the
Committee) of the Common Stock at the time the Option is granted.
(b) Exercise. The Committee shall determine whether the
Option shall be exercisable in full at any time during the Term or
in cumulative or noncumulative installments during the Term.
(c) Termination of Employment. An Optionee's Option shall
expire on the earlier of the expiration of (i) three months after
the termination of the Optionee's employment for any reason other
than death or disability (as defined in Section 422(c)(6) of the
Code), or (ii) the Term specified in Section 2.1(a) or 3.1(a) as
the case may be. In the event of exercise of the Option after
termination of employment the Optionee may exercise the Option only
with respect to the shares which could have been purchased by the
Optionee at the date of termination of employment. However, the
Committee may, but is not required to, waive any requirements made
pursuant to Section 1.5(b) so that some or all of the shares
subject to the Option may be exercised within the time limitation
described in this subsection. An Optionee's employment shall be
deemed to terminate on the last date for which he receives a
regular wage or salary payment.
(d) Death or Disability. Upon termination of an Optionee's
employment by reason of death or disability (as determined by the
Committee consistent with the definition of Section 422(c)(6) of
the Code), the Option shall expire unless exercised upon the
earlier of the expiration of (i) 12 months of the date of such
termination, or (ii) the Term specified in Section 2.1(a) or 3.1(a)
as the case may be. The Optionee or his successor in interest, as
the case may be, may exercise the Option only as to the shares
which could have been purchased by the Optionee at the date of his
termination of employment. However, the Committee may, but is not
required to, waive any requirements made pursuant to Section 1.5(b)
so that some or all of the shares subject to the Option may be
exercised within the time limitation described in this subsection.
(e) Payment. Payment for shares as to which an Option is
exercised shall be made in such manner and at such time or times as
shall be provided in the option agreement, including cash, Common
Stock of the Company which was previously acquired by the Optionee,
or any combination thereof. The Fair Market Value of the
surrendered Common Stock as of the date of exercise shall be used
in valuing Common Stock used in payment for Options.
(f) Nontransferability. Options granted under the Plan shall
not be transferable other than by will or by the laws of descent
and distribution. During the lifetime of the Optionee, an Option
shall be exercisable only by the Optionee.
(g) Additional Provisions. Each option agreement may contain
such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee may deem appropriate from
time to time.
1.6 Stock Adjustments; Mergers.
(a) Notwithstanding Section 1.4, in the event the outstanding
shares are increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of any other corporation by reason of any merger, sale
of stock, consolidation, liquidation, recapitalization,
reclassification, stock split up, combination of shares, or stock
dividend, the total number of shares set forth in Section 1.4 shall
be proportionately and appropriately adjusted by the Committee. If
the Company continues in existence, (i) the number and kind of
shares that are subject to any Option and the option price per
share shall be proportionately and appropriately adjusted without
any change in the aggregate price to be paid therefor upon exercise
of the Option, and (ii) the Committee may make such adjustments in
the number and kind of Stock Appreciation Rights as it shall deem
appropriate in the circumstances. If the Company will not remain
in existence or substantially all of its voting Common Stock and
Common Stock will be purchased by a single purchaser or group of
purchasers acting together, then the Committee may (i) declare that
all Options and Stock Appreciation Rights shall terminate 30 days
after the Committee gives written notice to all Optionees of their
immediate right to exercise all Options and Stock Appreciation
Rights then outstanding (without regard to limitations on exercise
otherwise contained in the Options), or (ii) notify all Optionees
that all Options and Stock Appreciation Rights granted under the
Plan shall apply with appropriate adjustments as determined by the
Committee to the securities of the successor corporation to which
holders of the numbers of shares subject to such Options and Stock
Appreciation Rights would have been entitled, or (iii) some
combination of aspects of (i) and (ii). The determination by the
Committee as to the terms of any of the foregoing adjustments shall
be conclusive and binding. Any fractional shares resulting from
any of the foregoing adjustments under this section shall be
disregarded and eliminated.
1.7 Acceleration Event.
If an Acceleration Event occurs in the opinion of the Board of
Directors, based on circumstances known to it, the Board of
Directors may direct the Committee to declare that all Options and
Stock Appreciation Rights granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the
respective Option agreements regarding exercisability.
1.8 Notification of Exercise.
Options shall be exercised by written notice directed to the
Secretary of the Company at the principal executive offices of the
Company. Such written notice shall be accompanied by any payment
required pursuant to Section 1.5(e). Exercise by an Optionee's
heir or the representative of his estate shall be accompanied by
evidence of his authority to so act in form reasonably satisfactory
to the Company.
ARTICLE II
INCENTIVE STOCK OPTIONS
2.1 Terms and Conditions of Incentive Stock Options.
In addition to the requirements of Section 1.5, Incentive
Stock Options granted shall be subject to the following
requirements:
(a) Term. Each Incentive Stock Option granted under the Plan
shall be exercisable only during a Term fixed by the Committee;
provided, however, that the Term shall end no later than 10 years
after the date the Incentive Stock Option is granted.
(b) Exercise. Each Incentive Stock Option agreement shall
provide that the aggregate Fair Market Value (determined at the
time the Incentive Stock Option is granted) of the stock with
respect to which Incentive Stock Options are exercisable for the
first time by an Optionee during any calendar year (under all plans
of the Optionee's employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000.
2.2 Continued Employment.
Whether military, government or other service or other leave
of absence shall constitute a termination of employment shall be
determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A
termination of employment shall not occur where the Optionee
transfers from the Company to one of its Subsidiaries or transfers
from a Subsidiary to the Company.
2.3 Special Rule for Ten Percent Shareholder.
If at the time an Incentive Stock Option is granted, an
employee owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of his employer
corporation or of its Parent or any of its Subsidiaries, as
determined using the attribution rules of Section 424(d) of the
Code, then the terms of the Incentive Stock Option shall specify
that the option price shall be at least 110% of the Fair Market
Value of the stock subject to the Incentive Stock Option and such
Incentive Stock Option shall not be exercisable after the
expiration of five years from the date such Incentive Stock Option
is granted.
2.4 Interpretation.
In interpreting this Article II of the Plan, the Committee and
the Board shall be governed by the principles and requirements of
Sections 421, 422 and 424 of the Code, and applicable Treasury
Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 Terms and Conditions of Options.
In addition to the requirements of Section 1.5, Nonqualified
Stock Options shall be subject to the following provisions:
(a) Term. Each Nonqualified Stock Option granted under the
Plan shall be exercisable only during a Term fixed by the
Committee; provided, however, that the Term shall end no later than
ten years and one day after the date the Nonqualified Stock Option
is granted.
(b) Termination of Employment. Notwithstanding the
provisions of Sections 1.5(c) and 1.5(d), the Stock Option
Committee in its discretion may provide, either upon the original
grant of an Option or in an amendment to an Incentive or
Nonqualified Stock Option, that an Option may be exercisable during
a Term that does not expire upon the expiration of three months
following an Optionee's termination of employment (one year in the
case of termination as a result of death or disability), but in no
event later than the Term specified in Section 3.1(a) above.
3.2 Section 83(b) Election.
The Company recognizes that certain persons who receive
Nonqualified Stock Options may be subject to restrictions regarding
their right to trade Common Stock under applicable securities laws.
Such restrictions may cause Optionees exercising such Options not
to be taxable under the provisions of Section 83(c) of the Code.
Accordingly Optionees exercising such Nonqualified Stock Options
may consider making an election to be taxed upon exercise of the
Option under Section 83(b) of the Code and to effect such election
will file such election with the Internal Revenue Service within
thirty (30) days of exercise of the Option and otherwise in
accordance with applicable Treasury Regulations.
ARTICLE IV
STOCK APPRECIATION RIGHTS
4.1 Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights ("SAR") may be granted by the
Committee in connection with the grant of an Option but shall not
be granted unrelated to an Option. All SARs shall be in such form
as the Committee may from time to time determine and shall be
subject to the following terms and conditions:
(a) Term and Exercise. An SAR shall be exercisable only
(i) with the approval of the Committee, (ii) during the Term of the
Option to which it relates, (iii) at such times as the Option to
which it relates is exercisable, and (iv) if the Fair Market Value
of the Common Stock subject to the Option surrendered (on the date
surrendered) minus the aggregate option price of the Common Stock
subject to the Option surrendered is a positive amount.
(b) Payment. In the event the Committee agrees to permit
exercise of the SAR, the Optionee shall surrender to the Company
the right to exercise the Option with respect to a specified number
of shares as to which the Option is then exercisable. In return,
the Optionee shall receive from the Company no more than an amount
payable in cash and/or in shares (as determined by the Committee
after considering the request of the Optionee) equal to the
difference between the Fair Market Value of Common Stock as to
which the Optionee has surrendered the Option and the exercise
price with respect thereto. In the event the Committee determines
to tender shares in full or partial payment of the SAR, the number
of shares to be issued to the Optionee shall be based on the Fair
Market Value of the shares as of the date of exercise of the SAR.
No fractional shares shall be issued to Optionees upon exercise of
an SAR. Instead, the Company shall pay the Optionee the value of
such fractional share based upon the Fair Market Value of a share
on the date the SAR is exercised.
(c) Nontransferability. An SAR granted under the Plan shall
be transferable only when the Option to which it relates is
transferable.
4.2 Other Terms and Conditions.
Option agreements reflecting Stock Appreciation Rights which
are granted under the Plan may contain such other conditions not
inconsistent with the provisions of the Plan as the Committee may
deem appropriate from time to time.
4.3 Notification of Request to Exercise.
The Optionee shall request the Committee's approval to
exercise a Stock Appreciation Right by written notice to the
Secretary of the Company at the principal executive offices of the
Company. Such written notice shall state the number of shares
subject to the Option for which approval of the exercise of the SAR
is requested and the Optionee's preferred form of payment of the
SAR, as hereinafter provided. The Optionee may indicate his or her
preference to receive payment of the SAR in cash or in Common Stock
or in a combination thereof. Notwithstanding anything to the
contrary contained herein, the Committee shall have absolute
discretion in determining whether the request for approval of the
exercise of the SAR shall be approved and, if such approval is
given, whether payment shall be made in cash or Common Stock or in
a combination thereof.
Within 30 days after the delivery to the Secretary of the
Optionee's request to exercise the SAR as provided above, the
Committee shall inform the Optionee in writing of its determination
by personal delivery of such written determination to the Optionee
or by mailing its written determination to the Optionee by
certified or registered mail, return receipt requested. The
Optionee must act on any approved exercise of an SAR within 30 days
after the date of such determination by the Committee (or such
longer period as may be permitted by the Committee) and in
accordance with the terms approved by the Committee. Exercise
shall be by written notice actually delivered, or mailed by
certified or registered mail, return receipt requested, to the
Secretary of the Company at the principal executive offices of the
Company.
4.4 Effect of Exercise.
Upon exercise of a Stock Appreciation Right, the Option to
which it relates shall lapse with respect to the shares as to which
the SAR is exercised, and such shares shall not be available for
further grant of Options, as provided in Section 1.4.
ARTICLE V
ADDITIONAL PROVISIONS
5.1 Stockholder Approval.
The Plan shall be submitted for the approval of the
stockholders of the Company at the first meeting of stockholders
held subsequent to the adoption of the Plan and in all events
within one year of its approval by the Board of Directors. If at
said meeting the stockholders of the Company do not approve the
Plan, the Plan shall terminate.
5.2 Compliance with Other Laws and Regulations.
The Plan, the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such
Options, shall be subject to all applicable Federal and state laws,
rules, and regulations and to such approvals by any government or
regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Common
Stock prior to (a) the listing of such shares on any stock exchange
on which the Common Stock may then be listed and (b) the completion
of any registration or qualification of such shares under any
Federal or state law, or any ruling or regulation of any government
body which the Company shall, in its sole discretion, determine to
be necessary or advisable.
5.3 Amendments.
The Board of Directors may discontinue the Plan at any time,
and may amend it from time to time, but no amendment, without
approval by stockholders, may (a) increase the total number of
shares which may be issued under the Plan or to any individual
under the Plan, (b) reduce the Option price for shares which may be
purchased pursuant to Options under Articles II and III of the
Plan, (c) extend the period during which Options may be granted, or
(d) change the class of employees to whom Options may be granted,
except as provided in Section 1.6. Other than as expressly
permitted under the Plan, no outstanding Option may be revoked or
altered in a manner unfavorable to the Optionee without the consent
of the Optionee.
5.4 No Rights As Shareholder.
No Optionee shall have any rights as a shareholder with
respect to any Share subject to his or her Option prior to the date
of issuance to him or her of a certificate or certificates for such
shares.
5.5 Withholding.
Whenever the Company proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Company shall
have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy any Federal, state or local
withholding tax liability prior to the delivery of any certificate
or certificates for such shares. Whenever under the Plan payments
are to be made in cash, such payments shall be made net of an
amount sufficient to satisfy any Federal, state, or local
withholding tax liability.
5.6 Continued Employment Not Presumed.
This Plan and any document describing this Plan and the grant
of any stock Option or Stock Appreciation Right hereunder shall not
give any Optionee or other employee a right to continued employment
by the Company or its Subsidiaries or affect the right of the
Company or its Subsidiaries to terminate the employment of any such
person with or without cause.
5.7 Effective Date; Duration.
The Plan shall be effective as of the date of its adoption by
the Board of Directors, subject to stockholder approval pursuant to
Section 5.1 and shall expire on April 15, 2006. No Options may be
granted under the Plan after April 15, 2006, but Options granted on
or before that date may be exercised according to the terms of the
option agreements and shall continue to be governed by and
interpreted consistent with the terms hereof.