USFREIGHTWAYS CORPORATION
STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
AMENDED AND RESTATED AS OF MARCH 8, 2001
I.DEFINITIONS AND PURPOSE
A.Definitions:
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Plan, have the following meanings:
1.Affiliate means a corporation which, for purposes of Section 422 of the Code,
is a parent or subsidiary of the Company, direct or indirect.
2.Board means the Board of Directors of the Company.
3.Code means the Internal Revenue Code of 1986, as amended.
4.Committee means the committee to which the Board delegates the power to act
under or pursuant to the provisions of the Plan, or the Board if no committee
is selected.
5.Company means USFreightways Corporation, a Delaware corporation, and includes
any successor or assignee corporation or corporations into which the Company
may be merged, changed, or consolidated; any corporation for whose securities
the securities of the Company shall be exchanged; and any assignee of or
successor to substantially all other assets of the Company.
6.Disability means a permanent and total disability as defined in Section 22(e)
(3) of the Code.
7. Eligible Director means each person who is a director of the Company, and who
is not an employee of the Company or any Affiliate of the Company and who has
not been an employee of the Company or any Affiliate of the Company for all
or any part of the preceding fiscal year. For purposes of the Plan, an
Eligible Director shall be deemed to include the employer of such Eligible
Director, or any delegatee mandated by his employer, if the Eligible Director
is required, as a condition of his employment, to provide that any Option
granted hereunder be made to the employer or its delegatee.
8.Option means a right or option granted under the Plan, which right or option
shall not be intended to qualify as an incentive stock option as defined in
Section 422 of the Code.
9.Option Agreement means an agreement between the Company and a Participant
executed and delivered pursuant to the Plan.
10.Participant means an Eligible Director to whom an Option is granted under
the Plan.
11.Plan means this Stock Option Plan for Non-Employee Directors, as amended from
time to time.
12.Shares means the following shares of the capital stock of the Company as to
which Options have been or may be granted under the Plan: authorized and
unissued common stock, $0.01 par value, treasury shares held by the Company
or any shares of capital stock into which the Shares are changed or for which
they are exchanged within the provisions of Article VI of the Plan.
B.Purpose of the Plan:
The Plan intended to promote the interests of the Company and its stockholders
by attracting and retaining highly qualified independent directors through an
investment interest in the Company's future success.
II.SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Options may be granted from time to
time shall be Six Hundred Thousand (600,000) Shares.
If an Option ceases to be "outstanding", in whole or in part, the Shares which
were subject to such Option, if the Option was not exercised, shall be available
for the granting of other Options. Any Option, if the Option was not exercised,
shall be available for the granting of other Options. Any Option shall be
treated as "outstanding" until such Option is exercised in full, or terminates
or expires under the provisions of the Plan or Option Agreement.
Subject to the provisions of Article VI, the aggregate number of Shares as to
which Options may be granted shall be subject to change only by means of an
amendment of the Plan duly adopted by the Company and approved by the
stockholders of the Company within such time period as may be required by the
Securities Exchange Act of 1934, as amended from time to time.
III.ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. Subject to the provisions of
the Plan, the Committee is authorized to:
A.Interpret the provisions of the Plan or any Option or Option Agreement and to
make all rules and determinations which it deems necessary or advisable for
the administration of the Plan;
B.Determine the Eligible Directors to whom Options shall be granted;
C.Determine the number of Shares for which an Option or Options shall be
granted;
D.Provide for the acceleration of the right to exercise an Option (or any
portion thereof); and
E.Specify the terms and conditions upon which Options may be granted.
The interpretation and construction by the Committee of any provisions of the
Plan or of any Option granted under it shall be final.
IV.ELIGIBILITY FOR PARTICIPATION
Each Participant must be an Eligible Director of the Company at the time an
Option is granted. Each Eligible Director shall be granted, at the later of the
effective date of the Plan or the date such director becomes an Eligible
Director, and at such other time or times as described in Article V, an Option
to purchase Shares under the Plan. In addition to the formula-based Shares set
forth in Article V, the Committee may at any time and from time to time grant
one or more additional Options to one or more Eligible Directors ("Discretionary
Options") and may designate the number of Shares to be subject to each
Discretionary Option so granted, provided however that no grant of a
Discretionary Option to purchase Shares shall permit unrestricted ownership of
Shares by the Eligible Director for at least six (6) months from the date of
grant of the Discretionary Option, unless the Committee determines that the
grant of such Discretionary Option to purchase Shares otherwise satisfies the
then current Rule 16b-3 requirements under the Securities Exchange Act of 1934.
V.TERMS AND CONDITIONS OF OPTIONS
Each Option shall be set forth in an Option Agreement, duly executed on behalf
of the Company and by the participant to whom such Option is granted. Except for
the setting of the Option price under Paragraph A of this Article V, no Option
shall be granted and no purported grant of any Option shall be effective until
such Option Agreement shall have been duly executed on behalf of the Company and
by the Participant. Each such Option Agreement shall be subject to at least the
following terms and conditions:
A.OPTION PRICE:
The exercise price of the Shares covered by each Option granted under the Plan
shall be equal to 100% of the "fair market value" of the Shares on the date of
the granted Option. If the Shares are listed on any national securities
exchange, the fair market value shall be the mean average of the high and low
sales prices, if any, on the largest such exchange on the date of the grant of
the Option, or, if none, on the most recent trade date thirty (30) days or less
prior to the date of the grant of the Option. If the Shares are not then listed
on any such exchange, the fair market value of such Shares shall be the closing
"Ask" prices, if any, as reported on the National Association of Securities
Dealers automated Quotation System ("NASDAQ") for the date of the grant of the
Option, or if none, on the most recent trade date thirty (30) days or less prior
to the date of the grant of the Option for which such quotations are reported.
If the Shares are not then either listed on any such exchange or quoted on N
ASDAQ, the fair market value shall be the mean between the average of the "Bid"
and the average of the "Ask" prices, if any, as reported in the National daily
Quotation Service for the date of the grant of the Option, or, if none, for the
most recent trade date thirty (30) days or less prior to the date of the grant
of the Option for which such quotations are reported.
B.NUMBER OF SHARES:
Each Eligible Director shall automatically, at the later of the effective date
of the Plan or the date such director becomes an Eligible Director, be granted
an Option under this Plan to acquire 10,000 Shares. Upon the fifth and tenth
anniversaries of such initial grant, each Participant shall automatically be
granted Options under this Plan to acquire an additional 10,000 Shares at each
such anniversary, provided the Participant is an Eligible Director at such
anniversary. In addition to the foregoing, each Eligible Director may from time
to time be granted by the Committee, in its discretion, a Discretionary Option.
C.TERM OF OPTION:
No Option granted under the Plan shall be exercisable after the expiration of
ten (10) years from the date of the grant.
D.DATE OF EXERCISE:
1.Options granted to an Eligible Director under the Plan on the Plan's effective
date shall become exercisable cumulatively in accordance with the following
schedule:
Years Elapsed Since Cumulative Number of Shares
Date of Grant For Which Option May Be Exercised
___________ _________________________________
Less than 1 2,000
1 3,600
2 5,200
3 6,800
4 8,400
5 or more 10,000
2.Options granted to an Eligible Director under the Plan after the Plan's
effective date shall become exercisable cumulatively in accordance with the
following schedule:
Years Elapsed Since Cumulative Number of Shares
Date of Grant For Which Option May Be Exercised
___________ _________________________________
Less than 1 0
1 2,000
2 4,000
3 6,000
4 8,000
5 or more 10,000
The foregoing schedules notwithstanding, if a Participant shall cease to be a
director of the Company because of death or Disability, all Shares for which an
Option has been granted shall become immediately exercisable and shall be
exercisable in accordance with Paragraph F.
Not withstanding anything herein to the contrary, upon the authorization of the
grant of a Discretionary Option, or at anytime thereafter, the Committee may
prescribe the date or dates on which the Discretionary Option becomes
exercisable, and may provide that the Discretionary Option become exercisable in
installments over a period of years, or upon the attainment of stated goals.
E.MEDIUM OF PAYMENT:
The Option price shall be paid on the date of purchase specified in the notice
of exercise, as set forth in Paragraph G. It shall be paid in the legal tender
of the United States, or, at the election of the Participant, by surrender to
the Company of previously owned shares with an aggregate fair market value (on
the date of the exercise) equal to the Option price to be paid; provided,
however, that if such shares were acquired pursuant to an incentive stock option
plan (as defined in Code Section 422) of the Company or Affiliate, then the
applicable holding period requirements of said Section 422 have been met with
respect to such shares, and, provided further, that if (i) such shares were
granted pursuant to an option, then such option must have been granted at least
six (6) months prior to the exercise of the Option hereunder; and (ii), such
shares were purchased other than through the grant and exercise of an option,
such shares were owned by the Participant for more than six (6) months prior to
the exercise of the Option hereunder.
F.TERMINATION OF STATUS:
1.In the event that a Participant shall cease to be a director of the Company
for any reason other than death, Disability, or voluntary termination as a
director of the Company on or after the attainment of his or her 65th
birthday, his or her Option shall be exercisable, only to the extent that it
was exercisable at the date he or she ceased to be a director and only until
the first to occur of one (1) year after such date or until the date on which
the Option otherwise expires according to its terms.
2.In the event that a Participant shall cease to be a director of the Company
because of death or Disability, his or her Option may be exercised in its
entirety (notwithstanding the vesting schedule set forth in Paragraph D of
this Article V or in any Option Agreement) within the originally prescribed
term of the Option by the Participant or by any person or persons designated
by the Participant as the executors or administrators of the Participant's
estate, or by any person or persons who shall have acquired the Option
directly from the Participant by his or her will or the applicable law of
descent and distribution.
3.In the event that a Participant shall cease to be a director of the Company
because of voluntary termination as a director of the Company on or after the
attainment of his or her 65th birthday and that Participant has served as a
director of the Company for five (5) years or more, his or her Option may be
exercised in its entirety (notwithstanding the vesting schedule set forth in
Paragraph D of this Article V or in any Option Agreement) within the
originally prescribed term of the Option by the Participant; provided that the
Committee, in its sole discretion, approves the exercise of the Option in its
entirety.
4.In the event that a Participant shall cease to be a director of the Company
because of voluntary termination as a director of the Company on or after the
attainment of his or her 72nd birthday and that Participant has not served as
a director of the Company for five (5) years, his or her Option shall be
exercisable (notwithstanding the vesting schedule set forth in Paragraph D of
this Article V or in any Option Agreement) within the originally prescribed
term of the Option by the Participant, to the extent that (a) it was
exercisable at the date he or she ceased to be a director and (b) if the
Option was exercisable periodically, to the extent of any additional rights
that would have become exercisable (had the Participant not voluntarily
terminated as a director of the Company) during successive one year periods
from the Participant's date of termination for each year the Participant
served as a director of the Company.
G.EXERCISE OF OPTION AND ISSUE OF STOCK:
Option shall be exercised by giving written notice to the Company. Such written
notice shall: (1) be signed by the person exercising the Option, (2) state the
number of Shares with respect to which the Option is being exercised, and (3)
specify a date (other than a Saturday, Sunday or legal holiday) not less than
five (5) nor more than ten (10) days after the date of such written notice, as
the date on which the Shares will be purchased. Such tender and conveyance shall
take place at the principal office of the Company during ordinary business
hours, or at such other hour and place agreed upon by the Company and the person
or persons exercising the Option. On the date specified in such written notice
(which date may be extended by the Company in order to comply with any law or
regulation which requires the Company to take any action with respect to the
Option Shares prior to the issuance thereof, whether pursuant to the provisions
of Article VI or otherwise), the Company shall accept payment for the Option
Shares and shall deliver to the person or persons exercising the Option in
exchange therefor an appropriate certificate or certificates for paid
non-assessable Shares. In the event of any failure to take up and pay for the
number of Shares specified in such written notice on the date set forth therein
(or on the extended date as above provided), the right to exercise the Option
shall terminate with respect to such number of Shares, but shall continue with
respect to the remaining Shares covered by the Option and not yet acquired
pursuant thereto.
H.RIGHTS AS A STOCKHOLDER:
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option except as to such
Shares as have been issued to or registered in the Company's share register in
the name of such Participant upon the due exercise of the Option and tender of
the full Option price.
I.ASSIGNABILITY AND TRANSFERABILITY OF OPTION:
By its terms, an Option granted to a participant shall not be transferable by
the Participant and shall be exercisable, during the Participant's lifetime,
only by such Participant. Such Option shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment, or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Option or of any
rights granted thereunder contrary to the provisions of this Paragraph I, or the
levy of any attachment or similar process upon an Option or such rights, shall
be null and void.
VI.ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding shares of the Company are changed into or
exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization , merger,
consolidation, recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividend payable in capital stock , or the
like, appropriate adjustments to prevent dilution or enlargement of the rights
granted to, or available for, Participants shall be made in the number and kind
of shares for the purchase of which Options may be granted under the Plan, and,
in addition, appropriate adjustment shall be made in the number and kind of
Shares and in the Option price per share subject to outstanding options.
Notwithstanding anything herein to the contrary, in the event of an offer for
the Company's shares, the adoption of a plan of merger or consolidation under
which all of the shares of the Company would be eliminated, or a sale of
substantially all of the Company's assets, a Participant shall be entitled to
exercise immediately all or any portion of the Shares to which he or she
received an Option, regardless of the number of years elapsed since the date of
the grant .
VII.DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in connection with
a transaction to which the preceding Article VI is applicable, all Options
granted hereunder shall terminate and become null and void; provided, however,
that if the rights of a Participant under the applicable Options have not
otherwise terminated and expired, the Participant shall have the right
immediately prior to such dissolution or liquidation to exercise any Option
granted hereunder to the extent that the right to purchase Shares thereunder has
become exercisable as of the date immediately prior to such dissolution or
liquidation.
VIII.TERMINATION OF THE PLAN
The Plan shall terminate fifteen (15) years from the date of its adoption. The
Plan may be terminated at an earlier date by vote of the Board; provided,
however, that any such earlier termination shall not affect any Options granted
or Option Agreements executed prior to the effective date of such termination.
Except as may otherwise by provided for under Articles VI and VII, and
notwithstanding anything in this Plan to the contrary, any Options granted prior
to the effective date of the Plan's termination may be exercised, if otherwise
exercisable until ten (10) years have elapsed from the date the Option is
granted, and the provisions of the Plan with respect to the full and final
authority of the Committee under the Plan shall continue to control.
IX.AMENDMENT OF THE PLAN
The Plan may be amended by the Board and such amendment shall become effective
upon adoption by the Board; provided, however, that any amendment to Article II
above or that otherwise requires the approval of the stockholders of the Company
in accordance with the Rule 16b-3 requirements of the Securities Exchange Act of
1934, as amended from time to time, shall be subject to approval of the
stockholders within the requisite time period of such Act, and provided,
further, that the Plan may not be amended more frequently than once every six
(6) months, unless an amendment is necessary to comply with the Code or the
Employee Retirement Income Security Act of 1974, as amended, and is otherwise
permitted by Rule 16b-3.
X.INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or members of the Committee, the members of the Committee shall be
indemnified by the Company against all reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken by them as
members of the Committee and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that the Committee member
is liable for gross negligence or willful misconduct in the performance of his
or her duties. To receive such indemnification, a Committee member must first
offer in writing to the Company the opportunity, at his own expense, to defend
any such action, suit or proceeding.
XI.RESTRICTIONS
If the Company shall determine, in its discretion, that the Shares under the
Plan must be registered or qualified under any applicable state or federal
securities law before they may be offered or sold to the Participant, or that
the consent or approval of any governmental regulatory body is necessary or
desirable in connection with the issuance of such Shares, such Option may not be
exercised by the Participant unless the Shares have been so registered,
qualified, or listed, or until such consent or approval shall have been
obtained, free of any conditions not acceptable to the Company. The Company
shall use reasonable efforts to qualify the Shares, obtain the benefit of any
applicable exemption from such qualification, or obtain any such consent or
approval, provided that no Participant shall have any right to require the
company to undertake any registration or other action which the Company
determines, in its sole discretion, to be unduly burdensome.
XII.SAVINGS CLAUSE
This Plan intended to comply in all respects with applicable law and
regulations, including Rule 16b-3 of the Securities and Exchange Commission. In
case any one or more provisions of this Plan shall be held invalid, illegal, or
unenforceable in any respect under applicable law and regulation (including Rule
16b-3), the validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby and the invalid, illegal,
or unenforceable provisions shall be deemed null and void; however, to the
extent permitted by law, any provision that could be deemed null and void shall
first be construed, interpreted, or revised retroactively to permit this Plan to
be construed in compliance with all applicable law (including Rule 16b-3) so as
to foster the intent of this Plan. Notwithstanding anything herein to the
contrary, no grant of, or Option to purchase, Shares shall permit unrestricted
ownership of Shares by the Participant for at least six (6) months from the date
of grant or Option to purchase.
XIII.EFFECTIVE DATE
This Plan shall become effective upon adoption by the Board. The adoption of the
Plan shall be subject to subsequent approval by the stockholders of the Company
at the next annual meeting of the company's stockholders unless such approval is
not required by any rules or regulations promulgated by the Securities and
Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934,
as amended from time to time. Notwithstanding the foregoing, if the Plan shall
have been approved by the Board prior to such annual meeting, Options shall be
granted to Eligible Directors prior to the date of such annual meeting in
accordance with Article V, subject to such subsequent stockholder approval but
such Options shall not become exercisable until such approval is obtained or its
is determined that such approval is not required.
XIV.GOVERNING LAW
This Plan shall be governed by the laws of the State of Delaware and construed
in accordance therewith.
Originally adopted and effective on the 29th day of October, 1993 by the Board
of Directors. Amended and restated this 8th day of March 2001 by the Board of
Directors.