CAROLINA FREIGHT CORPORATION AND SUBSIDIARIES
1994 NONQUALIFIED STOCK OPTION PLAN
1. Purpose. This 1994 Nonqualified Stock Option Plan (the
"Plan") is intended to advance the interests of Carolina Freight
Corporation (the "Company"), its subsidiaries and its
shareholders by providing certain key employees an added sense of
proprietorship and personal involvement in the development and
financial success of the Company and to encourage such employees
to remain with and devote their best efforts to the Company. It
is also intended that options issued pursuant to the Plan (the
"Options") shall satisfy the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
2. Administration. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company
(the "Committee") except that no member of the Committee may
exercise discretion with respect to, or participate in, the
administration of the Plan if, at any time during the
twelve-month period prior to any exercise or participation, he or
she has been granted or awarded stock, restricted stock, stock
options, stock appreciation rights or any other derivative
security of the Company or an affiliate thereof under this Plan
or any similar plan of the Company, except as permitted in Rule
16b-3(c)(2)(i)(A) through (D) under the Exchange Act. Members of
the Committee shall be subject to any additional restrictions
necessary to satisfy the requirements for disinterested
administration of the Plan as set forth in Rule 16b-3, as it may
be amended from time to time. Subject to the express provisions
of the Plan, the Committee may interpret the Plan, prescribe,
amend and rescind rules and regulations relating to it, determine
the terms and provisions of awards under the Plan (which need not
be identical) and make such other determinations as it deems
necessary or advisable for the administration of the Plan. The
decisions of the Committee under the Plan shall be conclusive and
binding. No member of the Board of Directors of the Company or
the Committee shall be liable for any action taken, or
determination made, hereunder in good faith.
3. Eligibility. Options to purchase shares of Company
stock shall be made available under this Plan to those employees
who are designated by the Committee from time to time as "key
employees" of the Company or its subsidiaries.
4. Stock Subject to Option. As of the effective date
hereof, there shall be authorized and reserved for issuance upon
the exercise of Options granted under the Plan such number of
shares of the Company's common stock as is determined from time
to time in the discretion of the Committee, provided that no more
than 200,000 shares of such stock shall be subject to the Plan
subject to adjustment as provided in Section 8 below. If any
Option granted under the Plan shall expire or terminate for any
reason, without having been exercised in full, the unpurchased
shares covered by the Option shall be added to the shares
otherwise available for issuance upon the exercise of Options
unless the Plan shall then be terminated. Shares subject to
option may consist of authorized but unissued shares of the
Company.
5. Terms and Conditions of Options. Options granted under
this Plan shall be subject to the following terms and conditions,
and such other terms and conditions not inconsistent with the
Plan as the Committee shall determine to be appropriate.
(a) Number of Shares. Each Option shall specify the
number of shares that may be purchased upon exercise of the
Option, subject to adjustment as provided in Section 8 below,
except that the number of shares in respective Options
extended any one employee shall not exceed 50,000 shares of
Company stock.
(b) Exercise Price. The exercise price shall be the
fair market value of the stock subject to the Option as of the
date of grant. Fair market value for purposes of this paragraph
shall be the closing price of the Company stock on the day of the
grant of the Option.
(c) Right to Exercise and Term. Any Option granted
under this Plan shall be exercisable in accordance with the
following terms and conditions:
(i) An Option granted hereunder shall not be
exercisable prior to the day which is two years after the date of
the grant of the Option (except that in the event of the death or
permanent disability of the person receiving such Option, this
condition shall be deemed automatically waived.) The Option
granted to any employee under this Plan shall vest according to
the following schedule:
Years After Date of Grant Percent Vested
less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
The nonvested portion of an employee's Options shall be
considered forfeited upon termination of his or her employment
with the Company for whatever reason. No Option granted
hereunder shall be exercisable more than ten years from the date
that the Option is granted.
(ii) In the event the employment of an employee
then holding Options hereunder shall terminate by reason of
death, retirement (as defined below), permanent and total
disability (as determined by the long-term disability plan
applicable to such employee), or under such other circumstances
as may be determined by the Committee, the vested portion of said
Options shall be exercisable by the former employee or
his or her successor in interest only during the period of one
year immediately following said termination of employment.
"Retirement" for the purposes of this paragraph is limited to the
voluntary termination of employment occurring at or after
the employee either attains age 65 or attains age 55 with fifteen
years of service. In the event of termination of employment under
circumstances other than as stated above, all Options then held
shall terminate, and shall no longer be exercisable, as of the
date of termination of employment.
(d) Terms of Exercise. Any Option granted under the
Plan may be exercised by the employee, by a legatee or legatees
of such Option under the employee's last will, or by his or her
executors, personal representatives or distributees (the
"Optionee"), (i) by delivering to the Secretary of the
Company written notice of the number of shares of common stock
with respect to which the Option is being exercised, or (ii) by
delivering such notice to a broker-dealer with a copy to the
Secretary of the Company. The purchase price of common stock upon
exercise of any Option shall be paid in full (i) in cash or
certified check by the Optionee, (ii) by a broker-dealer to whom
the Optionee has submitted an exercise notice consisting of a
fully endorsed Option, (iii) in common stock valued at its fair
market value on the date of exercise, (iv) by agreeing to
surrender Options then exercisable by the Optionee valued at the
excess of the aggregate fair market value of the common stock
subject to such Options on the date of exercise over the
aggregate option exercise price of such common stock, (v) by
directing the Company to withhold such number of shares of common
stock otherwise issuable upon exercise of such Option having an
aggregate fair market value on the date of exercise equal to the
exercise price of the Option, or (vi) by such other medium of
payment as the Committee, in its discretion, shall authorize, or
by any combination of (i), (ii), (iii), (iv), (v) and (vi), at
the discretion of the Committee. In the case of payment pursuant
to (ii), (iii), (iv), (v) or (vi) above, the employee's election
must be made on or prior to the date of exercise of the Option
and must be irrevocable. The Company shall issue, in the name of
the employee, stock certificates representing the total number of
shares of common stock issuable pursuant to the exercise of any
Option as soon as reasonably practicable after such exercise.
(e) Withholding Taxes. Upon the exercise of an Option,
the Committee shall have the right to require the Optionee to
remit to the Company in any such manner or combination of manners
as it determines in its sole discretion, an amount sufficient to
satisfy all federal, state and local withholding tax requirements
prior to the delivery by the Company of any certificate for
shares of Common Stock.
6. Transferability Limited. No Option granted under the
Plan shall be transferable by the employee other than by will,
or, if he or she dies intestate, by the laws of descent and
distribution of the state of his domicile at the time of his
death. During the Optionee's lifetime, the Option shall be
exercised only by the Optionee.
7. Termination or Amendment of Plan. The Board of
Directors of the Company expressly retains the right to at any
time terminate, suspend, or amend the Plan, in any respect and as
the Board of Directors deems advisable under circumstances then
prevailing, provided, however, that no amendment hereto shall
expand the number of shares of Company stock subject to the Plan,
nor permit the grant of Options to members of the Committee. The
Board of Directors shall submit any amendments to the
shareholders of the Company for approval to the extent necessary
to maintain compliance with the requirements of Rule 16b-3 of the
Exchange Act.
8. Adjustments Upon Changes in Capitalization;
Acceleration of Exercise Rights. The total amount of shares on
which Options may be granted under the Plan and option rights
(both as to the number of shares and the option exercise price
per share) shall be appropriately adjusted for any increase or
decrease in the number of outstanding shares of common stock of
the Company resulting from payment of a stock dividend on the
common stock, a subdivision or combination of shares of the
common stock or from a reclassification of the common stock, and
(in accordance with the provisions contained in the next
following paragraph) in the event of a merger or consolidation.
After any merger of one or more corporations into the
Company or any subsidiary, any merger of the Company or any
subsidiary into another corporation, any consolidation of the
Company or any subsidiary and one or more other corporations, or
any other corporate reorganization of any form involving the
Company or any subsidiary as a party thereto, which corporate
reorganization involves any exchange, conversion, adjustment or
other modification of the outstanding shares of common stock of
the Company, each employee holding Options at the time of such
corporate reorganization shall, at no additional cost, be
entitled, upon any exercise of his or her Option, to receive, in
lieu of the number of shares as to which such Option shall then
be so exercised, the number and class of shares of stock or other
securities or such other property to which such employee would
have been entitled to pursuant to the terms of the agreement of
merger or consolidation if at the time of such merger or
consolidation such optionee had been a holder of record of a
number of shares of common stock of the Company equal to the
number of shares which then remain exercisable under such Option.
Comparable rights shall accrue to such employee in the event of
successive mergers or consolidations of the character described
above.
The adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its
sole discretion. Any such adjustment may provide for the
elimination of any fractional share that might otherwise become
subject to an Option.
9. Change in Control. In the event of (i) the adoption of
a plan of merger or consolidation of the Company with any other
corporation as a result of which the holders of the voting
capital stock of the Company as a group would receive less than
50% of the voting capital stock of the surviving or resulting
corporation, (ii) the approval by the Board of Directors of the
Company of an agreement providing for the sale or transfer (other
than as security for obligations of the Company) of substantially
all the assets of the Company, or (iii) in the absence of a prior
expression of approval by the Board of Directors of the Company,
the acquisition of more than 20% of the Company's voting capital
stock by any person within the meaning of Section 13(d)(3) of the
Exchange Act; then any Option granted hereunder shall become
immediately exercisable in full, subject to any appropriate
adjustments in the number of shares subject to the Option and the
option exercise price per share, and shall remain exercisable for
the remaining term of such Option, regardless of whether such
Option has been outstanding for six months or of any provision
contained in the individually executed Nonqualified Stock Option
Agreement with respect thereto requiring that the Option or any
portion thereof be outstanding for a minimum amount of time prior
to exercise, subject to all of the terms hereof and the Option
Agreement with respect thereto not inconsistent with this
paragraph.
10. Restrictions on Option Repricing. Except as set forth
in Sections 8 or 9 hereof, in no event shall the Board of
Directors or the Committee authorize any adjustment in the
exercise or purchase price of or the number of shares subject to
an outstanding Option under this Plan, whether by cancellation of
an outstanding Option and a subsequent regranting of an Option,
by amendment or substitution of outstanding Option or by other
means.
11. Applicable Law. This stock option plan is adopted by
the Company in the State of North Carolina and is to be construed
and interpreted in accordance with the laws of North Carolina.