Appendix A
AMERICAN FREIGHTWAYS CORPORATION
1999 CHAIRMAN STOCK OPTION PLAN
SECTION 1
---------
1. This 1999 Chairman Stock Option Plan (the "Plan") is
intended to attract and retain the services of an experienced and
knowledgeable chairman ("Chairman") of American Freightways
Corporation (the "Company"), for the benefit of the Company and its
shareholders and to provide additional incentive for such person to
continue to work for the best interests of the Company and its
shareholders.
2. ADMINISTRATION. The Board of Directors of the Company
(the "Board of Directors") hereby designates the Compensation
Committee (the "Committee") as the Committee of the Board of
Directors authorized to administer the Plan. The Committee shall
consist of no fewer than two members of the Board of Directors,
each of whom shall be a "disinterested person" within the meaning
of Rule 16b-3 (or any successor rule or regulation), promulgated
under the Securities Exchange Act of 1934, as amended. A majority
of the members of the Committee shall constitute a quorum, and the
act of a majority of the members of the Committee shall be the act
of the Committee. Any member of the Committee may be removed at
any time either with or without cause by resolution adopted by the
Board of Directors, and any vacancy on the Committee may at any
time be filled by resolution adopted by the Board of Directors.
The Committee shall have the power to construe the Plan, to
determine all questions arising thereunder and to adopt and amend
such rules and regulations for the administration of the Plan as it
may deem desirable.
The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under it shall be
final. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any
option granted under it.
3. ELIGIBILITY. The person who has been duly elected and is
then serving as Chairman of the Board of the Company on each
January 1 hereafter shall automatically be granted options to
purchase such number of shares of the Company's Common Stock
(subject to further adjustment as provided in SECTION 3 hereof) as
follows: The Chairman shall be granted options to acquire the
number of shares set forth in Column B which correspond to the
percentage (set forth in Column A) by which the Company's net
income, after taxes, all as determined for financial accounting
reporting purposes ("Net Income"), for the most recently completed
fiscal year exceeded Net Income for the preceding fiscal year.
A B
15 - 17.5% 10,000
17.6 - 20.0% 20,000
20.1 - 25.0% 30,000
25.1 - 29.0% 40,000
29.1 - and above 50,000
The dates on which options are granted hereunder are referred
to herein as the "Grant Date."
Unless a shorter vesting period is determined by the Committee
prior to or at the Grant Date, which determination shall not
require shareholder approval, all options granted to the Chairman
under this SECTION 3 shall vest at the rate of 20% per year
beginning on the first anniversary of the Grant Date.
4. SHARES OF STOCK SUBJECT TO THE PLAN. The shares that may
be issued under the Plan shall be authorized and unissued or
reacquired shares of the Company's common stock (the "Common
Stock"). The aggregate number of shares which may be issued under
the Plan to the Chairman shall not exceed 250,000 shares of Common
Stock, unless an adjustment is required in accordance with SECTION
3.
5. AMENDMENT OR TERMINATION OF THE PLAN. The Committee may,
insofar as permitted by law, from time to time, suspend or
terminate the Plan or revise or amend it in any respect whatsoever,
except that no such amendment shall alter or impair or diminish any
rights or obligations under any option theretofore granted under
the Plan without the consent of the person to whom such option was
granted. In addition no such amendment shall be effective without
shareholder approval if such approval is required in order to
assure the Plan's continued qualification under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended.
The Plan's provisions regarding the formula for determining the
amount, exercise price, and timing of options to be granted under
the Plan shall in no event be amended more than once every six
months, other than to comport with changes in the Internal Revenue
Code of 1986, as amended.
6. APPROVAL OF SHAREHOLDERS. The Plan is effective April
15, 1999, subject to approval by the affirmative votes of the
holders of a majority of the securities of the Company present, or
represented, and entitled to vote at the next succeeding meeting of
shareholders, or any adjournment thereof, duly held in accordance
with Arkansas law. Notwithstanding any contrary provision of the
Plan, no option granted hereunder may become exercisable unless and
until such approval is obtained.
Options may be granted under the Plan until and including
January 1, 2004. Notwithstanding the foregoing, each option
granted under the Plan shall remain in effect until such option has
been satisfied by the issuance of shares or terminated in
accordance with its terms and the terms of the Plan.
7. LIMITATION ON TRANSFERABILITY. Options are not
transferable by the grantee except by will or the laws of descent
and distribution and are exercisable during his lifetime only by
him; provided however, that the Committee shall have the authority,
in its discretion, to grant (or to sanction by way of amendment of
an existing grant) options which may be transferred by the grantee
during his lifetime to any member of his immediate family or to a
trust, limited liability company, family limited partnership or
other equivalent vehicle, established for the exclusive benefit of
grantee and/or one or more members of his immediate family. A
transfer of an option hereunder may only be effected by the Company
at the written request of the grantee and shall become effective
only when recorded in the Company's record of outstanding options.
In the event an option is transferred as contemplated herein, such
option shall continue to be governed by and subject to the terms
and limitations of the Plan and the relevant option agreement,
including limitations on subsequent transfers. As used herein,
"immediate family" shall mean, with respect to the grantee, the
grantee's spouse, and any child, stepchild or grandchild of the
grantee, and shall include relationships arising from legal
adoption.
8. WITHHOLDING TAXES. Whenever shares of Common Stock are
to be issued under the Plan, the Company shall require the optionee
to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such shares.
9. DEFINITION OF "FAIR MARKET VALUE". For the purposes of
this Plan, the term "fair market value," when used in reference to
the date of grant of an option shall be the mean:
If the shares of the Company are listed on a national
securities exchange (including the New York, American or NASDAQ
National Market System) in the United States on the date any Option
is granted, the fair market value per share shall be deemed to be
the average of the high and low sale prices per share of such
shares of the Company on such national securities exchange in the
United States on such date, as published by the Wall Street Journal
or other reliable publication, but if the shares of the Company are
not traded on such date or such national securities exchange is not
open for business on such date, the fair market value per share
shall be the average of such high and low sale prices on the last
preceding date on which such exchange shall have been open for
business and the shares of the Company were traded. If the shares
of the Company are listed on more than one national securities
exchange in the United States on the date any such Option is
granted, the Committee shall determine, in its discretion, which
national securities exchange shall be used for the purpose of
determining the fair market value per share.
If at any date any Option is granted a public market exists
for the shares of the Company but such shares are not listed on a
national securities exchange in the United States, the fair market
value per share shall be deemed to be the mean between the closing
bid and asked quotations in the over-the-counter market for such
Shares of the Company in the United States on the date such Option
is granted. If there are no bid and asked quotations for such
shares on such date, the fair market value per share shall be
deemed to be the mean between the closing bid and asked quotations
in the over-the-counter market in the United States for such shares
of the Company on the closest date preceding the date such Option
is granted, for which such quotations are available.
SECTION 2
---------
STOCK OPTIONS
-------------
1. AWARD OF STOCK OPTIONS. Awards of stock options shall be
made under the Plan under all the terms and conditions contained
herein. Each option granted under the Plan shall be evidenced by
an option agreement duly executed on behalf of the Company and by
the recipient, which option agreements shall comply with and be
subject to the terms and conditions of the Plan. Any option
agreement may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the
Committee.
2. TERM OF OPTIONS AND EFFECT OF TERMINATION.
Notwithstanding any other provision of the Plan, no option granted
under the Plan shall be exercisable after the expiration of ten
years from the date of its grant.
In the event that any outstanding option under the Plan
expires by reason of lapse of time or otherwise is terminated for
any reason, the shares of Common Stock subject to any such option
which have not been issued pursuant to the exercise of the option
shall again become available in the pool of shares of Common Stock
for which options may be granted under the Plan.
3. TERMS AND CONDITIONS OF OPTIONS. Options granted
pursuant to the Plan shall be evidenced by agreements in such form
as the Committee shall from time to time determine, which
agreements shall comply with the following terms and conditions.
A. Number of Shares. Each option agreement shall state the
number of shares to which the option pertains.
B. Option Price. Each option agreement shall state the
option price per share (or the method by which such price shall be
computed), which shall be equal to 100% of the Fair Market Value of
a share of the Common Stock on the date such option is granted.
C. Medium and Time of Payment. The option price shall be
payable upon the exercise of an option in the legal tender of the
United States. Upon receipt of payment, the Company shall deliver
to the optionee (or person entitled to exercise the option) a
certificate or certificates for the shares of Common Stock to which
the option pertains.
D. Exercise of Options. Options granted under the Plan
shall vest and become exercisable in 20% increments per year,
beginning on the first anniversary of the Grant Date of the Option;
provided however, that the Committee, prior to or on the Grant Date
of any option granted hereunder, in its discretion and without need
of shareholder approval, may determine and fix a shorter vesting
period for any such option.
To the extent that an option has become exercisable and
subject to the restrictions and limitations set forth in this Plan
and any option agreement, it may be exercised in whole or such
lesser amount as may be authorized by the option agreement. If
exercised in part, any vested, unexercised portion of an option
shall continue to be held by the optionee and may thereafter be
exercised as provided herein.
E. Termination of Chairman Employment. In the event that an
optionee shall cease to be Chairman of the Company for any reason
other than his termination for cause, his option shall cease to
continue vesting, but vested and exercisable portions shall
continue to be exercisable to the extent it was exercisable at the
date he ceased to be Chairman, for the period specified in the
option agreement. In the event that an optionee ceases to be
Chairman due to his termination for cause, his option shall cease
to continue vesting but vested and exercisable portions shall
continue to be exercisable for 90 days following the date of his
termination, and thereafter shall terminate.
SECTION 3
---------
RECAPITALIZATIONS AND REORGANIZATIONS
-------------------------------------
The number of shares of Common Stock covered by the Plan, the
number of shares and price per share of each outstanding option,
and the number of shares subject to each grant provided for in
SECTION 1 hereof shall be proportionately adjusted for any increase
or decrease in the number of issued and outstanding shares of
Common Stock resulting from a subdivision or consolidation of
shares or the payment of a stock dividend or any other increase or
decrease in the number of issued and outstanding shares of Common
Stock effected without receipt of consideration by the Company.
If the Company shall be the surviving corporation in any
merger or consolidation, each outstanding option shall pertain to
and apply to the securities to which a holder of the same number of
shares of Common Stock that are subject to that option would have
been entitled. A dissolution or liquidation of the Company, or a
merger or consolidation in which the Company is not the surviving
corporation, shall cause each outstanding option to terminate,
unless the
agreement of merger or consolidation shall otherwise
provide; provided that, in the event such dissolution, liquidation,
merger or consolidation will cause outstanding options to
terminate, optionee shall have the right immediately prior to such
dissolution, liquidation, merger or consolidation to exercise his
option in whole or in part without regard to any limitations on the
exercisability of such option other than the expiration date of the
option.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive.
SECTION 4
---------
MISCELLANEOUS PROVISIONS
------------------------
1. RIGHTS AS A SHAREHOLDER. An optionee or a transferee of
an option as such shall have no rights as a shareholder with
respect to any shares covered by an option until the date of the
receipt of payment (including any amounts required by the Company
pursuant to Subsection 8 of SECTION 1) by the Company.
2. PURCHASE FOR INVESTMENT. Unless the shares of Common
Stock to be issued upon exercise of an option granted under the
Plan have been effectively registered under the Securities Act of
1933, as amended (the "Securities Act"), the Company shall be under
no obligation to issue any shares of Common Stock covered by any
option unless the person who exercises such option, in whole or in
part, shall give a written representation and undertaking to the
Company which is satisfactory in form and scope to counsel to the
Company and upon which, in the opinion of such counsel, the Company
may reasonably rely, that he is acquiring the shares of Common
Stock issued to him pursuant to such exercise of the option for his
own account as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares of Common
Stock, and that he will make no transfer of the same except in
compliance with any rules and regulations in force at the time of
such transfer under the Securities Act, or any other applicable
law, and that if shares of Common Stock are issued without such
registration, a legend to this effect may be endorsed upon the
securities so issued.
3. OTHER PROVISIONS. The option agreements authorized under
the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the option or
restrictions required by any applicable securities laws, as the
Committee shall deem advisable.
4. APPLICATION OF FUNDS. The proceeds received by the
Company from the sale of Common Stock pursuant to the exercise of
options will be used for general corporate purposes.
5. NO OBLIGATION TO EXERCISE OPTION. The granting of an
option shall impose no obligation upon the optionee to exercise
such option.
IN WITNESS WHEREOF, AMERICAN FREIGHTWAYS CORPORATION, by its
duly authorized officer, has executed this Plan on the date
indicated below.
Dated ___________ By:________________________________
Officer
Appendix B
AMERICAN FREIGHTWAYS CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, American Freightways Corporation (the "Company"),
desires to adopt the 1999 Employee Stock Purchase Plan (the "Plan")
providing for the grant of options to purchase common stock of the
Company to eligible employees who are employed by the Company or
its subsidiaries;
Now, therefore, the Company hereby establishes the Plan, the
terms of which shall be as follows:
1. Purpose
-------
The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll deductions
and other employee contributions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions
-----------
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the common stock, $.01 par value, of
the Company.
(d) "Company" shall mean American Freightways Corporation, an
Arkansas corporation, and any Designated Subsidiary of the Company.
(e) "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(f) "Eligible Employee" shall mean each person who, on the
applicable Enrollment Date, has been employed for more than thirty
(30) days by the Company or a Designated Subsidiary.
(g) "Enrollment Date" shall mean the first day of each Offering
Period.
(h) "Exercise Date" shall mean the last day of each Offering
Period.
(i) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on a national securities
exchange (including the New York, American or NASDAQ National
Market System) in the United States on the date of such
determination, the Fair Market Value shall be deemed to be the
average of the high and low sale prices per share of such
stock on such national securities exchange in the United
States on such date, as published by the Wall Street Journal
or other reliable publication. If the Common Stock is
listed on more than one national securities exchange
in the United States on the date of such determination,
the Board (or the Committee) shall determine, in its
discretion, which national securities exchange shall be used
for the purpose of determining the Fair Market Value, or;
(2) If on the date of determination a public market exists for the
Common Stock but such stock is not listed on a national
securities exchange in the United States, the Fair Market
Value shall be deemed to be the mean between the closing bid
and asked quotations in the over-the-counter market for such
stock in the United States on the date of determination.
(j) "Offering Period" shall have the meaning provided in Section 4
below.
(k) "Plan" shall mean this Employee Stock Purchase Plan.
(l) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or
on the Exercise Date, whichever is lower; provided, however, that
the Purchase Price may be adjusted by the Board pursuant to Section 20.
(m) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a
Subsidiary.
(n) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. Eligibility
-----------
Each person who is an Eligible Employee on a given Enrollment
Date shall be eligible to participate in the Plan. Any provisions
of the Plan to the contrary notwithstanding, no person shall be
granted an option under the Plan (i) to the extent that,
immediately after the grant, such person (or any other person whose
stock would be attributed to such person pursuant to Section 424(d)
of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent
(5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Subsidiary,
or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its
Subsidiaries accrues at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market
value of the shares at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4. Offering Periods
----------------
Except as otherwise provided below, the Plan shall be
implemented by consecutive offering periods of six (6) months
duration ("Offering Period"), commencing on May 1 and November 1 of
each year (beginning with May 1, 1999) and ending on the first
October 31 and April 30, respectively, occurring thereafter.
Notwithstanding the foregoing, the Board (or the Committee) may
establish a different term for one or more Offering Periods,
including the commencement and ending dates therefor with respect
to future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning
of the first Offering Period to be affected thereafter. In the
event the first day of an Offering Period is not a Trading Day, the
Enrollment Date shall be the first preceding Trading Day. In the
event the last day of an Offering Period is not a Trading Day, the
Exercise Date shall be the first preceding Trading Date.
5. Participation
-------------
(a) An Eligible Employee may become a participant in the Plan by
completing a subscription agreement, in the form of Exhibit A to
this Plan, and filing it with the Company's payroll office not less
than five (5) business days prior to the applicable Enrollment
Date. The subscription agreement will (i) authorize payroll
deductions and state the amount of eligible compensation to be
deducted from the participant's pay, (ii) indicate any additional
amount to be contributed as provided in Section 6(e) below and
(iii) authorize the purchase of shares of Common Stock for the
employee's account in accordance with the terms of the Plan.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the
last payroll in the Offering Period to which such authorization is
applicable, unless sooner terminated by the participant as provided
in Section 10 hereof. In addition, such participant's subscription
agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof or unless
terminated as provided in Section 6(e) hereof.
6. Payroll Deductions and Lump Sum Contributions
---------------------------------------------
(a) At the time a participant files his or her subscription
agreement, he or she may elect to have payroll deductions made on
each payday during the Offering Period, in an amount not exceeding
$2,000.00 divided by the number of pay periods in such Offering
Period. If a participant elects under Sections 6(e) and 5 to make a
lump-sum contribution during an Offering Period, the total payroll
deductions and/or lump-sum contributions may not exceed $2,000.00
for such Offering Period.
(b) All payroll deductions and lump-sum contributions in
accordance with this Section 6 made for or by a participant shall
be credited to his or her account under the Plan.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may decrease (but not
increase) the rate of his or her payroll deductions during the
Offering Period by completing or filing with the Company a new
subscription agreement authorizing a change in payroll deduction
rate. A participant may decrease his or her payroll deduction rate
no more than one (1) time each Offering Period. The change in rate
shall be effective with the first full payroll period following
five (5) business days after the Company's receipt of the new
subscription agreement unless the Company elects to process a given
change in participation more quickly. A participant's subscription
agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof, or except as
provided in Section 6(e).
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3 hereof, a
participant's payroll deductions may be decreased to zero percent
(0%) at any time during an Offering Period. Payroll deductions
shall recommence at the rate provided in such participant's
subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10
hereof.
(e) For any Offering Period, in lieu of or in addition to payroll
deductions allowed hereunder, an Eligible Employee may contribute a
lump-sum amount for the purchase of Common Stock under the Plan.
Such lump-sum amount may be less than, but shall not exceed, the
amount the Eligible Employee has indicated will be made as a lump-
sum contribution on a timely-filed subscription agreement as
provided in Section 5. All lump-sum contributions made pursuant to
this Section 6 must be received by the Company not less than
fifteen (15) days prior to an applicable Exercise Date. In the
event that the aggregate amount of timely-made lump-sum
contributions by a participant during an Offering Period is less
than the amount of lump-sum contributions such participant has
indicated will be made on his or her subscription agreement, the
subscription agreement shall be deemed terminated (but only as to
such lump-sum contribution amount) for succeeding Offering Periods,
and such aggregate amount of timely-made lump-sum contributions
shall be deemed to be the elected amount of lump-sum contributions
for succeeding Offering Periods, unless the participant
discontinues participation in the Plan as provided in Section 10
hereof or unless such participant timely completes and files with
the Company a new subscription agreement in accordance with Section
5.
(f) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under
the Plan is disposed of, the participant must make adequate
provision for the Company's federal, state, or other tax
withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to
meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock
by the participant.
7. Grant of Option
---------------
(a) On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at
the applicable Purchase Price) up to a number of shares of the
Company's Common Stock determined by dividing (i) such Eligible
Employee's payroll deductions accumulated prior to such Exercise
Date (and lump sum contributions received not less than fifteen
(15) days prior to such Exercise Date) and retained in the
participant's account as of the Exercise Date, by (ii) the
applicable Purchase Price; provided that in no event shall an
Eligible Employee be permitted to purchase during each Offering
Period more than four hundred (400) shares (subject to any
adjustment pursuant to Section 19), and provided further that such
purchase shall be subject to the limitations set forth in Section 3
hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering
Period, unless the remaining provisions of this Section 7 shall
apply.
(b) An option shall expire on the date that the employment of the
Eligible Employee with the Company and its Subsidiaries terminates
for any reason other than the death or disability of such Eligible
Employee.
(c) If the employment of the Eligible Employee with the Company
terminates by reason of the death of such Eligible Employee, an
outstanding option held by such employee shall expire on the
Exercise Date for such option.
(d) If the employment of the Eligible Employee with the Company
terminates by reason of the full or permanent disability of such
employee, an outstanding option held by such employee shall become
exercisable on the earlier of (i) the Exercise Date for such option
or (ii) the 90th calendar day following the date on which such
disability occurs (as such date is determined by the Board or the
Committee); thereafter, such option shall terminate and expire.
8. Exercise of Option
------------------
Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the
maximum number of full shares subject to option shall be purchased
for such participant at the applicable Purchase Price with the
accumulated payroll deductions and lump-sum contributions in his or
her account. No fractional shares shall be purchased; any amounts
accumulated in a participant's account which are not sufficient to
purchase a full share shall be retained in the participant's
account for the subsequent Offering Period, subject to earlier
withdrawal by the participant as provided in Section 10 hereof.
During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her, except that the
legal guardian of an incapacitated person may exercise an option
subject to the provisions of Section 7(d).
9. Delivery
--------
As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery
to each participant, as appropriate, the shares purchased upon
exercise of his or her option.
10. Withdrawal
----------
(a) A participant may withdraw all but not less than all the
payroll deductions and lump-sum contributions credited to his or
her account and not yet used to exercise his or her option under
the Plan at any time by giving written notice to the Company in the
form of Exhibit B to this Plan. All of the participant's amounts
credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of
shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless
the participant delivers to the Company a new subscription
agreement.
(b) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in
succeeding Offering Periods which commence after the termination of
the Offering Period from which the participant withdraws.
11. Termination of Employment Other than from Death or Disability
-------------------------------------------------------------
Upon a participant's ceasing to be an Eligible Employee for
any reason other than death or disability, he or she shall be
deemed to have elected to withdraw from the Plan and the payroll
deductions and lump-sum contributions credited to such
participant's account during the Offering Period but not yet used
to exercise the option shall be returned to such participant, and
such participant's option shall be automatically terminated.
12. Interest
--------
No interest shall accrue on the payroll deductions or lump-
sum contributions of a participant in the Plan.
13. Stock.
-----
(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of
shares of the Company's Common Stock which shall be made available
for sale under the Plan shall be one million five hundred thousand
(1,500,000) shares. If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds
the number of shares then available under the Plan, the Company
shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as
it shall determine to be equitable.
(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the
participant and his or her spouse.
14. Administration
--------------
The Plan shall be administered by the compensation committee
(the "Committee") of the Board, consisting of not less than three
(3) members appointed by the Board and serving at the Board's
pleasure. Each member of the Committee shall be a member of the
Board and shall be a "disinterested person" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934 or a successor
rule or regulation. The Committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms
of the Plan, to determine eligibility and to adjudicate all
disputed claims filed under the Plan. Every finding, decision and
determination made by the Committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary
--------------------------
A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the
option is exercised but prior to delivery to such participant of
such shares and cash. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be
required for such designation to be effective.
16. Transferability
---------------
Neither payroll deductions (nor lump-sum contributions)
credited to a participant's account nor any rights with regard to
the exercise of an option or to receive shares under the Plan may
be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution or as
provided in Section 15 hereof) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an
election to withdraw funds from an Offering Period in accordance
with Section 10 hereof.
17. Use of Funds
------------
All payroll deductions or lump-sum contributions received or
held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company shall not be obligated to
segregate such funds.
18. Reports
-------
Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participants
at least annually, which statements shall set forth the amounts of
payroll deductions and lump-sum contributions, the Purchase Price,
the number of shares purchased and the remaining cash balance, if
any.
19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale
--------------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the aggregate number of shares of
Common Stock available for grant as options (as set forth in
Section 13), the aggregate number of shares of Common Stock subject
to each outstanding option, the maximum number of shares each
participant may purchase per Offering Period (pursuant to Section
7), as well as the price per share for shares which have not yet
been exercised shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt
of consideration". Such adjustment shall be made by the
Board,
whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then
in progress shall be shortened by setting a new Exercise Date (the
"New Exercise Date"), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless
provided otherwise by the Board. The New Exercise Date shall be
before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to
the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to
such date the participant has withdrawn from the Offering Period as
provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, each outstanding
option shall be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to
assume or substitute for the option, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the
"New Exercise Date"). The New Exercise Date shall be before the
date of the Company's proposed sale or merger. The Board shall
notify each participant in writing, at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on
the New Exercise Date, unless prior to such date the participant
has withdrawn from the Offering Period as provided in Section 10
hereof.
20. Amendment or Termination
------------------------
(a) The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in
Section 19 hereof, no such termination can affect options
previously granted, provided that an Offering Period may be
terminated by the Board of Directors on any Exercise Date if the
Board determines that the termination of the Offering Period or the
Plan is in the best interests of the Company and its stockholders.
Except as provided in Section 19 and Section 20 hereof, no
amendment may make any change in any option theretofore granted
which adversely affects the rights of any participant. To the
extent necessary to comply with Section 423 of the Code (or any
other applicable law, regulation or stock exchange rule), the
Company shall obtain shareholder approval in such a manner and to
such a degree as required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely
affected," the Board (or the Committee) shall be entitled to change
the Offering Periods, limit the frequency and/or number of changes
in the amount withheld during an Offering Period, establish the
exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or
mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the
participant's compensation or made as lump-sum contributions,
allow, if permissible under relevant law, for the issuance of "net
shares" to participants (representing the participant's gain, if
any, at the end of an Offering Period), and establish such other
limitations or procedures as the Board (or the Committee)
determines in its sole discretion advisable which are consistent
with the Plan.
(c) In the event the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent
necessary or desirable, modify or amend the Plan to reduce or
eliminate such accounting consequence including, but not limited
to:
(i) altering the Purchase Price for any Offering Period including
an Offering Period underway at the time of the change in
Purchase Price;
(ii) shortening any Offering Period so that Offering Period ends on
a new Exercise Date, including an Offering Period underway at
the time of the Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. Notices
-------
All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to
have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the
Company for the receipt thereof.
22. Conditions Upon Issuance of Shares
----------------------------------
Shares shall not be issued with respect to an option unless
the exercise of such option and the issuance and delivery of such
shares pursuant thereto shall comply with all applicable provisions
of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant
at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to
sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Effective Date; Term of Plan
----------------------------
The Plan shall become effective May 1, 1999. Unless
terminated sooner pursuant to the provisions contained herein, the
Plan shall terminate on April 30, 2009.
IN WITNESS WHEREOF, the undersigned has caused this 1999 Employee
Stock Purchase Plan to be executed as of this _____ day of
_________________, 1999.
AMERICAN FREIGHTWAYS CORPORATION
By:_______________________________________
Its:_______________________________________
EXHIBIT A
---------
AMERICAN FREIGHTWAYS CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application (Enrollment Date: __________)
_____ Change in Payroll Deduction Rate and/or Lump-Sum Contributions
1. __________________________________ hereby elects to
participate in the American Freightways Corporation 1999 Employee
Stock Purchase Plan (the "Plan") and subscribes to purchase shares
of the Company's Common Stock in accordance with this Subscription
Agreement and the Employee Stock Purchase Plan.
2. I hereby subscribe to acquire shares in accordance with
the Plan through payroll deductions and/or lump-sum contributions
which I hereby authorize as follows:
a. $________. Withhold this total amount from my
paychecks evenly throughout the six month Offering Period.
b. $________. I will timely make a lump-sum
contribution(s) equal to this amount.
Please note that the sum of a. and b. cannot exceed
$2,000.00.
3. I understand that said payroll deductions shall be
accumulated for the purchase of shares of Common Stock at the
applicable Purchase Price determined in accordance with the Plan.
I understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions and lump-sum contributions will be
used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock
Purchase Plan. I understand that my participation in the Plan is in
all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is
subject to stockholder approval of the Plan.
5. Shares purchased for me under the Employee Stock Purchase
Plan should be issued in the name(s) of (participant or participant
and spouse only): ______________________
6. I understand that if I dispose of any shares received by
me pursuant to the Plan within 2 years after the first day of the
Offering Period during which I purchased such shares, I will be
treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the
excess of the fair market value of the shares at the time such
shares were purchased by me over the price which I paid for the
shares. I hereby agree to notify the Company in writing within 30
days after the date of any disposition of shares and I will make
adequate provision for Federal, state or other tax withholding
obligations, if any, which arise upon the disposition of the Common
Stock. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make
available to the Company
any tax deductions or benefits attributable to sale
or early disposition of Common Stock by me. If I dispose
of such shares at any time after the expiration of the 2-
year holding period, I understand that I will be treated for
federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as
ordinary income only to the extent of an amount equal to the lesser
of (1) the excess of the fair market value of the shares at the
time of such disposition over the purchase price which I paid for
the shares, or (2) 15% of the fair market value of the shares on
the first day of the Offering Period. The remainder of the gain, if
any, recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee
Stock Purchase Plan. The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in the
Plan.
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN
EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY
ME. HOWEVER, IF I HAVE ELECTED TO MAKE A LUMP-SUM CONTRIBUTION(S),
AND I FAIL TO TIMELY MAKE THE FULL AMOUNT AS INDICATED ON THIS
SUBSCRIPTION AGREEMENT, THE AMOUNT(S) OF SUCH LUMP-SUM
CONTRIBUTION(S) ACTUALLY MADE DURING THE OFFERING PERIOD SHALL
BECOME MY DEEMED ELECTED AMOUNT OF LUMP-SUM CONTRIBUTIONS FOR
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: ___________________ _____________________________
Signature of Employee
EXHIBIT B
---------
AMERICAN FREIGHTWAYS CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the
1999 American Freightways Corporation Employee Stock Purchase
Plan which began on ___________ 19____ (the "Enrollment Date")
hereby notifies the Company that he or she hereby withdraws from
the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll
deductions and lump-sum contributions credited to his or her
account with respect to such Offering Period. The undersigned
understands and agrees that his or her options for such Offering
Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be
made for the purchase of shares in the current Offering Period
and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a
new Subscription Agreement.
Name and Address of Participant:
________________________________
________________________________
________________________________
Signature:
________________________________
Date:
_______________________________
Appendix C
AMERICAN FREIGHTWAYS CORPORATION
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
Effective Date: January 23, 1996
and as amended on January 20, 1999
AMERICAN FREIGHTWAYS AMENDED AND RESTATED
1993 STOCK OPTION PLAN
Article Page
------- ----
I. Purposes 1
II. Shares Subject to the Plan 1
III. Administration 2
IV. Eligibility 4
V. Maximum Allotment of Incentive Options 5
VI. Option Price and Payment 5
VII. Use of Proceeds 7
VIII. Term of Options and Limitations on
the Right of Exercise 7
IX. Exercise of Options 7
X. Stock Appreciation Rights 8
XI. Nontransferability of Options and
Stock Appreciation Rights 10
XII. Termination of Employment 10
XIII. Adjustment of Shares; Effect of
Certain Transactions 11
XIV. Right to Terminate Employment 12
XV. Purchase for Investment 12
XVI. Issuance of Certificates;
Legends; Payment of Expenses 13
XVII. Withholding Taxes 14
XVIII. Listing of Shares and Related Matters 14
XIX. Amendment of the Plan 14
XX. Termination or Suspension of the Plan 15
XXI. Governing Law 15
XXII. Effective Date 15
AMERICAN FREIGHTWAYS AMENDED AND RESTATED
1993 STOCK OPTION PLAN
I. PURPOSES
--------
American Freightways Corporation (the "Company") desires to
afford certain of its key employees and key employees of any
subsidiary corporation or parent corporation now existing or
hereafter formed or acquired who are responsible for the continued
growth of the Company an opportunity to acquire a proprietary
interest in the Company, and thus to create in such key employees
an increased interest in and a greater concern for the welfare of
the Company.
The stock options ("Options") and stock appreciation rights
("Rights") offered pursuant to this Freightways Stock Option Plan
(the "Plan") are a matter of separate inducement and are not in
lieu of any salary or other compensation for the services of any
key employee.
The Company, by means of the Plan, seeks to retain the
services of persons now holding key positions and to secure the
services of persons capable of filling such positions.
The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as it may from
time to time be amended (the "Code"), or options that do not meet
the requirements for Incentive Options ("Nonqualified Options"),
but the Company makes no warranty as to the qualification of any
Option as an Incentive Option.
II. SHARES SUBJECT TO THE PLAN
--------------------------
The total number of common shares of the Company which either
may be purchased pursuant to the exercise of Options granted under
the Plan or acquired pursuant to the exercise of Rights granted
under the Plan shall not exceed, in the aggregate, 4,000,000 of the
presently authorized common shares, $.01 par value per share, of
the Company (the "Shares"). Accordingly, the sum of (a) the number
of Shares subject at any one time to Options or Rights granted
under the Plan and (b) the number of Shares then outstanding
pursuant to exercises of Options or Rights granted under the Plan,
shall not exceed 4,000,000 Shares. If and to the extent that
Options granted under the Plan expire or terminate without having
been exercised, new Options or Rights may be granted with respect
to the Shares covered by such expired or terminated Options or
Rights,
provided that the grant and the terms of such new Options
or Rights shall in all respects comply with the provisions of the
Plan. The term "Shares" shall include any securities, cash or
other property into which Shares may be changed through merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of Shares,
exchange of Shares, issuance of rights to subscribe or change in
capital structure. Shares which are subject to Rights and related
Options shall be counted only once in determining whether the
maximum number of Shares which may be purchased or acquired under
the Plan has been exceeded.
Shares which may be acquired under the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the
Company's treasury, or both, at the discretion of the Company.
The Company may, from time to time during the period beginning
February 1, 1993 (the "Effective Date") and ending February 1, 2003
(the "Termination Date"), grant to certain key employees of the
Company, or of any subsidiary corporation or parent corporation of
the Company now existing or hereafter formed or acquired, Options,
Rights or both Options and Rights, under the terms hereinafter set
forth provided, however, that any such grants shall not be
effective until this Plan shall have been approved by stockholder
vote at the 1993 Annual Meeting of Stockholders.
Provisions of the Plan which pertain to Options or Rights
granted to an employee shall apply to Options, Rights or a
combination thereof.
As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming
within the definition of such terms contained in Sections 424(f)
and 424(e) of the Code.
No one person participating in the Plan may receive Options,
Stock Appreciation Rights or any combination thereof for more than
100,000 shares of Company stock in any one year.
III. ADMINISTRATION
--------------
The Board of Directors of the Company (the "Board of
Directors") hereby designates the Compensation Committee (the
"Committee") as the Committee of the Board of Directors authorized
to administer the Plan. The Committee shall consist of no fewer
than two members of
the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 (or any
successor rule or regulation, hereafter "Rule 16b-3") promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of
the Committee shall be the act of the Committee. Any member of the
Committee may be removed at any time either with or without cause
by resolution adopted by the Board of Directors, and any vacancy on
the Committee may at any time be filled by resolution adopted by
the Board of Directors.
Subject to the express provisions of the Plan, the Committee
shall have authority, in its discretion, to determine the employees
to whom Options or Rights shall be granted, the time when such
Options or Rights shall be granted to employees, the number of
Shares which shall be subject to each Option or Right, the purchase
price of each Share which shall be subject to each Option or Right,
the period(s) during which such Options or Rights shall be
exercisable (whether in whole or in part), and the other terms and
provisions thereof. In determining the employees to whom Options
or Rights shall be granted, the Committee shall consider the length
of service, the amount of earnings, the responsibilities and duties
of such employees and such other factors as it reasonably
determines to be relevant to any such employees contribution to the
Company; provided, however, that no employee shall be granted
Incentive Options in any calendar year to purchase shares of stock
in the Company or in any subsidiary corporation or parent
corporation of the Company which exceeds the maximum allotment
prescribed in Article V.
Subject to the express provisions of the Plan, the Committee
also shall have authority to construe the Plan and Options and
Rights granted thereunder, to amend the Plan and Options and Rights
granted thereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and
provisions of the respective Options and Rights (which need not be
identical) and to make all other determinations necessary or
advisable for administering the Plan. Any decision of the
Committee reduced to writing and signed by all members of the
Committee shall be effective as a meeting of the Committee. The
Committee also shall have the authority to require, in its
discretion, that the employee agree, promptly after the grant of an
Option or Right, (i) not to sell or otherwise dispose of Shares
acquired pursuant to the exercise of an Option or Right granted
under the Plan for a period of six (6) months following the date of
grant or exercise of the
Option or Right; and (ii) that in the
event of termination of employment of such employee, other than as
a result of dismissal without cause, such employee will not, for a
period to be fixed at the time of the grant of the Option or Right,
enter into any other employment, or participate directly or
indirectly in any other business or enterprise, which is
competitive with the business of the Company or any subsidiary
corporation or parent corporation of the Company, or enter into any
employment in which such employee will be called upon to utilize
special knowledge and information obtained through employment with
the Company or any subsidiary corporation or parent corporation
thereof. The determination of the Committee on matters referred to
in this Article III shall be conclusive.
Whether or not a Committee is separately designated by the
Board of Directors, any or all powers and functions of the
Committee may at any time and from time to time be exercised by the
Board of Directors; provided, however, that, with respect to the
participation in the Plan of employees who are members of the Board
of Directors, such powers and functions of the Committee may be
exercised by the Board of Directors only if, at the time of such
exercise, each of the members of the entire Board of Directors are
"disinterested persons" within the meaning of Rule 16b-3 (or any
successor rule or regulation) promulgated under the Exchange Act.
The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan
and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. Expenses incurred by the Board of Directors or the
Committee in the engagement of such counsel, consultant or agent
shall be paid by the Company. No member or former member of the
Committee or of the Board of Directors shall be liable for any
action or determination made in good faith with respect to the Plan
or any Option or Right granted hereunder.
IV. ELIGIBILITY
-----------
Options and Rights may be granted only to salaried key
employees of the Company or of any subsidiary corporation or parent
corporation of the Company, except members of the Committee and
except as hereinafter provided, and shall not be granted to any
officer or director who is not also a salaried key employee.
An Incentive Option shall not be granted to any person who, at
the time such Option is granted, owns shares of the Company or any
subsidiary corporation or parent corporation of the Company who
possesses more than ten percent (10%) of the total combined voting
power of all classes of shares of the Company or of any subsidiary
corporation or parent corporation of the Company, unless (i) the
exercise price per share is not less than one hundred and ten
percent (110%) of the fair market value per share on the date such
Option is granted and (ii) such Option by its terms is not
exercisable after the expiration of five (5) years from the date
such Option is granted. In determining share ownership of an
employee, the rules of Section 424(d) of the Code shall be applied,
and the Committee may rely on representations of fact made to it by
the employee and believed by it to be true.
V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS
--------------------------------------
To the extent that the aggregate fair market value of shares
as to which Incentive Options (determined without regard to this
Article V) are exercisable for the first time by an employee during
any calendar year exceeds $100,000, such options shall be treated
as Nonqualified Options.
VI. OPTION PRICE AND PAYMENT
------------------------
The price for each Share purchasable under any Option granted
hereunder shall be such amount as the Committee shall, in its best
judgment, determine on the basis of facts and circumstances to be
not less than (i) one hundred percent (100%) of the fair market
value per Share with respect to Incentive Options, and (ii) one
hundred percent (100% ) of the fair market value per Share with
respect to Nonqualified Options, at the date any such Option is
granted; provided, however, that, in the case of an Incentive
Option granted to a person who, at the time such Option is granted,
owns shares of the Company who possesses more than ten percent
(10%) of the total combined voting power of all classes of shares
of the Company, the purchase price for each share shall be such
amount as the Committee, in its best judgment, shall determine to
be not less than one hundred and ten percent (110%) of the fair
market value per Share at the date the Option is granted.
If the Shares of the Company are listed on a national
securities exchange (including the New York, American or NASDAQ
National Market System) in the United States on the date any Option
is granted, the fair market value per Share shall be deemed to be
the average of the high and
low sale prices per share of such
Shares of the Company on such national securities exchange in the
United States on such date, as published by the Wall Street Journal
or other reliable publication, but if the Shares of the Company are
not traded on such date or such national securities exchange is not
open for business on such date, the fair market value per Share
shall be the average of such high and low sale prices on the last
preceding date on which such exchange shall have been open for
business and the Shares of the Company were traded. If the Shares
of the Company are listed on more than one national securities
exchange in the United States on the date any such Option is
granted, the Committee shall determine, in its discretion, which
national securities exchange shall be used for the purpose of
determining the fair market value per Share.
If at the date any Option is granted a public market exists
for the Shares of the Company but such Shares are not listed on a
national securities exchange in the United States, the fair market
value per Share shall be deemed to be the mean between the closing
bid and asked quotations in the over-the-counter market for such
Shares of the Company in the United States on the date such Option
is granted. If there are no bid and asked quotations for such
Shares on such date, the fair market value per Share shall be
deemed to be the mean between the closing bid and asked quotations
in the over-the-counter market in the United States for such Shares
of the Company on the closest date preceding the date such Option
is granted, for which such quotations are available.
The Company shall cause such Share certificates to be issued
only when it shall have received the full purchase price for the
Shares in cash; provided, however, that in lieu of cash, the holder
of an Option may, if the terms of such Option so provide in the
discretion of the Committee and to the extent permitted by
applicable law, exercise his Option, in whole or in part, by
delivering to the Company common shares of the Company (in proper
form for transfer and accompanied by all requisite stock transfer
tax stamps or cash in lieu thereof) owned by such holder having a
fair market value equal to the cash exercise price applicable to
that portion of the Option being exercised by the delivery of such
shares. The fair market value of the shares so delivered to be
determined on the exercise date in the same manner as provided for
the determination of the fair market value on the date of grant, or
as may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations. For this
provision, the exercise date is the date on which shares are
received pursuant to the Option and payment is made therefor.
VII. USE OF PROCEEDS
---------------
Any cash proceeds of the sale of Shares subject to the Options
granted hereunder are to be added to the general funds of the
Company and used for its general corporate purposes as the Board of
Directors shall determine. Shares received by the Company as
payment, in whole or in part, for the exercise of any Option may,
in the discretion of the Board of Directors, be retained as
treasury shares or returned and cancelled.
VIII. TERM OF OPTIONS AND LIMITATIONS
ON THE RIGHT OF EXERCISE
-------------------------------
Unless the Committee shall determine otherwise (in which
event, the instrument evidencing the Option granted hereunder shall
so specify), and subject to the provisions of Article IV, any
Option granted hereunder shall be exercisable during a period of
not more than ten (10) years from the date of grant of such Option
at such times and in such amounts as the Committee shall determine
at such date of grant.
Any Nonqualified Option granted hereunder shall be exercisable
at such times, in such amounts and during such period or periods as
the Committee, with the Board of Directors approval, shall
determine at the date of the grant of such Option.
The Committee shall have the right to accelerate, in whole or
in part, from time to time, conditionally or unconditionally,
rights to exercise any Option granted hereunder.
To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to
the then unexercised part. If any Option granted hereunder shall
terminate prior to the Termination Date, the Committee shall have
the right to use the Shares as to which such Option shall not have
been exercised to grant one or more additional Options to any
eligible employee, but any such grant of an additional Option shall
be made prior to the close of business on the Termination Date.
In no event shall an Option granted hereunder be exercised for
a fraction of a share.
IX. EXERCISE OF OPTIONS
-------------------
Options granted under the Plan shall be exercised by the
optionee as to all or part of the Shares covered thereby by the
giving of written notice of the exercise thereof to the Corporate
Secretary of the Company at the principal business office of the
Company, specifying the number of Shares to be purchased and
accompanied by payment of the purchase price.
X. STOCK APPRECIATION RIGHTS
-------------------------
In the discretion of the Committee, a Right may be granted (i)
alone, (ii) simultaneously with the grant of an Option (either
Incentive or Nonqualified) and in conjunction therewith or in the
alternative thereto or (iii) subsequent to the grant of a
Nonqualified Option and in conjunction therewith or in the
alternative thereto.
The exercise price of a Right granted alone shall be
determined by the Committee, but shall not be less than one hundred
percent (100%) of the fair market value of one Share on the date of
grant of such Right. A Right granted simultaneously with or
subsequent to the grant of an Option and in conjunction therewith
or in the alternative thereto shall have the same exercise price as
the related Option, shall be transferable only upon the same terms
and conditions as the related Option, and shall be exercisable only
to the same extent as the related Option; provided, however, that a
Right, by its terms, shall be exercisable only when the fair market
value of the Shares subject to the Right exceeds the exercise price
thereof.
Any Right shall be exercisable upon such additional terms and
conditions as may from time to time be prescribed by the Committee.
A Right shall entitle the holder to receive from the Company,
upon a written request filed with the Corporate Secretary of the
Company at its principal offices (the "Request"), a number of
Shares as specified in the Request (with or without restrictions as
to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of
cash, or any combination of Shares and cash, as set forth in the
Request (but subject to the approval of the Committee, in its sole
discretion, at any time up to and including the time of payment, as
to the making of any cash payment), having an aggregate value equal
to the product of (i) the excess of the fair market value on the
day of such Request of one Share over the exercise price per Share
specified in such Right or its related Option, multiplied by (ii)
the number of Shares for which such Right shall be exercised;
provided, however, that the Committee, in its discretion, may
impose a maximum limitation on the amount of cash, the fair market
value of Shares, or a combination thereof, which may be received by
a holder upon exercise of a Right.
Any election by a holder of a Right to receive cash in full or
partial settlement of such Right, and any exercise of such Right
for cash, may be made only by a Request filed with the Corporate
Secretary of the Company either (i) six months prior to the
proposed settlement date for such Right, or (ii) during the period
beginning on the third business day following the date of release
for publication by the Company of quarterly or annual summary
statements of sales and earnings and ending on the twelfth business
day following such date. Within sixty (60) days of the receipt by
the Company of a Request to receive cash in full or partial
settlement of a Right or to exercise such Right for cash, the
Committee shall, in its sole discretion, either consent to or
disapprove, in whole or in part, such Request.
If the Committee disapproves in whole or in part any election
by a holder to receive cash in full or partial settlement of a
Right or to exercise such Right for cash, such disapproval shall
not affect such holder's right to exercise such Right at a later
date, to the extent that such Right shall be otherwise exercisable,
or to elect the form of payment at a later date, provided that an
election to receive cash upon such later exercise shall be subject
to the approval of the Committee. Additionally, such disapproval
shall not affect such holder's right to exercise any related Option
or Options granted to such holder under the Plan.
A holder of a Right shall not receive cash or Shares of the
Company stock in full or partial settlement of such Right, or upon
the full or partial exercise of such Right, if such Right or the
related Option shall have been exercised during the first six (6)
months of its respective term; provided, however, that such
prohibition shall not apply if the holder of such Right dies or
becomes disabled (within the meaning of Section 105(d)(4) of the
Code) prior to the expiration of such six-month period, or if such
holder is not a director, officer or a beneficial owner of more
than ten percent (10%) of any class of equity security of the
Company as described in Section 16(a) of the Exchange Act.
A Right shall be deemed exercised on the last day of its term,
if not otherwise exercised by the holder thereof, provided that the
fair market value of the Shares subject to the Right exceeds the
exercise price thereof on such date.
XI. NONTRANSFERABILITY OF OPTIONS
AND STOCK APPRECIATION RIGHTS
-----------------------------
Neither an Option nor a Right granted hereunder shall be
transferable otherwise than by will or the laws of descent and
distribution, and any Option or Right granted hereunder shall be
exercisable, during the lifetime of the holder, only by such
holder.
XII. TERMINATION OF EMPLOYMENT
-------------------------
If an employee's employment with the Company shall be
terminated by reason of retirement, the Employee shall have the
right to exercise the vested portions of such Option in no event
later than (i) in respect of Incentive Stock Options, 90 days after
the retirement date, and (ii) with respect to other Options the
date the Option would have expired had it not been for such
retirement.
If an employee's employment shall be terminated by reason of
death or disability, the employee shall have the right to exercise
vested portions of such Options for one year following the
termination of the employee's employment. During such one year
period following death or disability, Options held by employee
shall continue to vest. Such vesting shall not continue after such
one year period and Options not vested shall expire and terminate.
If an employee's employment shall terminate for reasons other
than death, disability or retirement, any Option or Right
previously granted to the employee, unless otherwise specified by
the committee in the Option or Right, shall, to the extent not
theretofore vested, terminate and become null and void. Employee
shall be entitled to exercise any vested portion of an Option or
Right for 90 days following termination.
If applicable to an Option or Right granted hereunder,
whenever such Option or Right shall be exercised by the legal
representative of a deceased employee or former employee, or by a
person who acquired an Option or Right granted hereunder by bequest
or inheritance or by reason of the death of any employee or former
employee, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the
right of such legal representative or other person to exercise such
Option or Right.
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at
the time of the termination, the individual was an "employee"
of such corporation for purposes of Section 422(a) of the Code. If an
individual is on leave of absence taken with the consent of the
corporation by which such individual was employed, or is on active
military service, and is determined to be an "employee" for
purposes of the exercise of an Option or Right, such individual
shall not be entitled to exercise such Option or Right during such
period and while the employment relationship is treated as
continuing intact unless such individual shall have obtained the
prior written consent of such corporation, which consent shall be
signed by the Chairman of the Board, the President, a
Vice-President or other duly authorized officer of such
corporation.
A termination of employment shall not be deemed to occur by
reason of (i) the transfer of an employee from employment by the
Company to employment by a subsidiary corporation or a parent
corporation of the Company or (ii) the transfer of an employee from
employment by a subsidiary corporation or a parent corporation of
the Company to employment by the Company or by another subsidiary
corporation or parent corporation of the Company.
XIII. ADJUSTMENT OF SHARES; EFFECT
OF CERTAIN TRANSACTIONS
----------------------------
Notwithstanding any other provision contained herein, in the
event of any change in the Shares subject to the Plan or to any
Option or Right granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares, issuance of rights to subscribe, or change in
capital structure) appropriate adjustments shall be made by the
Committee as to the maximum number of Shares subject to the Plan,
the maximum number of Shares for which Options or Rights may be
granted to any one employee and the number of Shares and price per
Share subject to outstanding Options or Rights which may be granted
to any one employee, and the number of Shares and price per Share
subject to outstanding Options or Rights as shall be equitable to
prevent dilution or enlargement of rights under Options or Rights,
and the determination of the Committee as to these matters shall be
conclusive; provided, however, that (i) any such adjustment with
respect to an Incentive Option and any related Right shall comply
with the rules of Section 424(a) of the Code, and (ii) in no event
shall any adjustment be made which would render any Incentive
Option granted hereunder other than an Incentive Option for
purposes of Section 422 of the Code.
The Committee may determine, in its discretion, that Options
and Rights may become immediately exercisable upon the occurrence
of a transaction involving a "change in control" of the Company,
which transactions shall be as defined in the Option Agreement or
other document pursuant to which Options or Rights are granted. A
"change in control" transaction may include a merger or
consolidation of the Company, a sale of all or substantially all of
its assets, or the acquisition of a significant percentage of the
voting power of the Company, or such other form of transaction as
the Committee determines to constitute a change in control.
The Committee, in its discretion, may also determine that,
upon the occurrence of such a "change in control" transaction, each
Option or Right outstanding hereunder shall terminate within a
specified number of days after notice to the holder, and such
holder shall receive, with respect to each Share subject to such
Option or Right, an amount equal to the excess of the fair market
value of the Shares immediately prior to the occurrence of such
transaction over the exercise price of such Option or Right; such
amount shall be payable in cash, in one or more of the kinds of
property payable in such transaction, or in a combination thereof,
as the Committee in its discretion shall determine.
XIV. RIGHT TO TERMINATE EMPLOYMENT
-----------------------------
The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to
continue the employment of any holder of an Option or Right; it
shall not impose any obligation on the part of any holder of an
Option or Right to remain in the employ of the Company or of any
subsidiary corporation or parent corporation thereof.
XV. PURCHASE FOR INVESTMENT
-----------------------
Except as hereafter provided, the holder of an Option or Right
granted hereunder shall, upon any exercise hereof, execute and
deliver to the Company a written statement, in form satisfactory to
the Company, in which such holder represents and warrants that such
holder is purchasing or acquiring the Shares acquired thereunder
for such holder's own account, for investment only and not with a
view to the resale or distribution of any of such Shares. Any
resale or distribution of such Shares shall be made only pursuant
to either (a) a Registration Statement on an appropriate form under
the Securities Act of 1933, as amended (the "Securities Act"),
which Registration
Statement shall have become effective and is
then current with regard to the Shares being sold, or (b) a
specific exemption from the registration requirements of the
Securities Act, but in claiming such exemption the holder shall,
prior to any offer of sale or sale of such Shares, obtain a prior
favorable written opinion, in form and substance satisfactory to
the Company, from counsel for or approved by the Company, as to the
application of such exemption thereto. The foregoing restriction
shall not apply to (i) issuances by the Company so long as the
Shares being issued are registered under the Securities Act and a
prospectus in respect thereof is current or (ii) reofferings of
Shares by affiliates of the Company (as defined in Rule 405 or any
successor rule or regulation promulgated under the Securities Act)
if the Shares being reoffered are registered under the Securities
Act and a prospectus in respect thereof is current.
XVI. ISSUANCE OF CERTIFICATES;
LEGENDS; PAYMENT OF EXPENSES
----------------------------
Upon any exercise of an Option or Right which may be granted
hereunder and, in the case of an Option, payment of the purchase
price, a certificate or certificates for the Shares as to which the
Option or Right has been exercised shall be issued by the Company
in the name of the person exercising the Option or Right and shall
be delivered to or upon the order of such person or persons, as
permitted by state or federal securities law.
The Company may place such legend or legends upon the
certificates for Shares issued upon exercise of an Option or Right
granted hereunder, and the Committee may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares, as
the Committee, in its discretion, determines to be necessary or
appropriate to (i) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities
Act, (ii) implement the provisions of any agreement between the
Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a
disqualifying disposition, as described in Section 421(b) of the
Code, of Shares transferred upon exercise of an Incentive Option
granted under the Plan.
The Company shall pay all issue or transfer taxes with respect
to the issuance or transfer of shares, as well as all fees and
expenses necessarily incurred by the Company in connection with
such issuance or transfer, except fees and expenses which may be
necessitated by the filing or
amending of a Registration Statement
under the Securities Act, which fees and expenses shall be borne by
the recipient of the Shares unless such Registration Statement has
been filed by the Company for its own corporate purposes (and the
Company so states) in which event the recipient of the Shares shall
bear only such fees and expenses as are attributable solely to the
inclusion of such Shares in the Registration Statement.
All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
XVII. WITHHOLDING TAXES
-----------------
Upon exercise of a Right or an Option and the issuance of
Shares hereunder, the Optionee shall remit to the Company an amount
of cash (in the form of a cashiers' check) sufficient to satisfy
any taxes required by any government to be withheld or otherwise
deducted and paid by the Company in respect of such issuance of
Shares.
XVIII. LISTING OF SHARES AND RELATED MATTERS
-------------------------------------
If at any time the Board of Directors shall determine in its
discretion that the listing, registration or qualification of the
Shares covered by the Plan upon any national 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 sale or purchase of Shares
under the Plan, no Shares shall be delivered unless and until such
listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of
any conditions not acceptable to the Board of Directors.
XIX. AMENDMENT OF THE PLAN
---------------------
The Board of Directors may, from time to time, amend the Plan,
provided that no amendment shall be effective, without the approval
of the holders of a majority of the voting stock of the Company
present in person or by proxy at a meeting thereof (or pursuant to
a written consent in lieu of such a meeting), if such approval is
necessary to maintain compliance with the provisions of Rule 16b-3.
The Committee shall be authorized to amend the Plan and the Options
granted thereunder to permit the Options granted thereunder to
qualify as incentive stock options under
Section 422 of the Code and the Treasury
regulations promulgated thereunder and, to the
extent permitted under applicable laws, rules, and regulations, to
include a cashless exercise provision of Article VI. The rights
and obligations under any Option or Right granted before amendment
of the Plan or any unexercised portion of such Option or Right
shall not be adversely affected by amendment of the Plan or the
Option or Right without the consent of the holder of the Option or
Right.
XX. TERMINATION OR SUSPENSION OF THE PLAN
-------------------------------------
The Board of Directors may at any time suspend or terminate
the Plan. The Plan, unless sooner terminated under Article XXII or
by action of the Board of Directors, shall terminate at the close
of business on the Termination Date. An Option or Right may not be
granted while the Plan is suspended or after it is terminated;
provided, however, that options or rights previously issued and
unexpired shall continue to exist and may be validly exercised,
pursuant to the provisions of the Plan, until each option and/or
right individually expires. Rights and obligations under any
Option or Right granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan,
except upon the consent of the person to whom the Option or Right
was granted. The power of the Committee to construe and administer
any Options or Rights granted prior to the termination or
suspension of the Plan under Article III shall nevertheless
continue after such termination or during such suspension.
XXI. GOVERNING LAW
-------------
The Plan, such Options and Rights as may be granted thereunder
and all related matters shall be governed by, and construed and
enforced in accordance with, the laws of the State of Arkansas from
time to time obtaining.
XXII. EFFECTIVE DATE
--------------
The Plan shall become effective at 3:00 P.M., Central Standard
time, on the Effective Date, the date on which the Plan was adopted
by the Board or Directors. Grants of Option or Rights made prior
to shareholder approval as required under Section II hereof shall
be effective upon the date of such shareholder approval.
CERTIFICATE
-----------
I,_______________, Secretary of American Freightways
Corporation, certify that the foregoing is a true and correct copy
of the American Freightways Corporation Amended and Substituted
Stock Option Plan as adopted by the board of directors of the
corporation _______________, and authorized by its shareholders
_______________.
________________________________