EXHIBIT 4.1
HUB GROUP, INC.
2002 LONG-TERM INCENTIVE PLAN
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HUB GROUP, INC.
Certificate
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I, -------, -------- of Hub Group, Inc., having in my custody and
possession the corporate records of said corporation, do hereby certify that
attached hereto is a true and correct copy of the Hub Group, Inc. 2002
Long-Term Incentive Plan as in effect as of _____________, 2002.
WITNESS my hand this day of --------- , 2002.
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As Aforesaid
SECTION 1 GENERAL..................................................1
1.1 Purpose......................................................1
1.2 Defined Terms................................................1
1.3 Participation................................................1
1.4 Operation and Administration.................................2
SECTION 2 OPTIONS..................................................2
2.1 Definitions..................................................2
2.2 Eligibility..................................................2
2.3 Price........................................................2
2.4 Exercise.....................................................3
2.5 Post-Exercise Limitations....................................3
2.6 Expiration Date..............................................4
2.7 Reload of Option.............................................4
2.8 Dividend Equivalents.........................................4
SECTION 3 STOCK APPRECIATION RIGHTS................................4
3.1 Definition...................................................4
3.2 Eligibility..................................................5
3.3 Exercise.....................................................5
3.4 Settlement of Award..........................................5
3.5 Post-Exercise Limitations....................................5
3.6 Expiration Date..............................................6
3.7 Dividend Equivalents.........................................6
SECTION 4 RESTRICTED STOCK.........................................6
4.1 Definition...................................................6
4.2 Eligibility..................................................6
4.3 Terms and Conditions of Awards...............................6
SECTION 5 PERFORMANCE UNITS........................................7
5.1 Definition...................................................7
5.2 Eligibility..................................................7
5.3 Terms and Conditions of Awards...............................8
5.4 Payment......................................................8
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5.5 Termination During Performance Period........................8
SECTION 6 DIRECTORS AUTOMATIC OPTION GRANT.........................8
6.1 Definition...................................................8
6.2 Participation................................................8
6.3 Price........................................................9
6.4 Exercise.....................................................9
6.5 Expiration Date..............................................0
SECTION 7 OPERATION AND ADMINISTRATION............................10
7.1 Effective Date..............................................10
7.2 Shares Subject to Plan and Other Limitations................10
7.3 Adjustments to Shares.......................................12
7.4 Limit on Distribution.......................................14
7.5 Settlement of Awards........................................14
7.6 Liability for Cash Payments.................................15
7.7 Performance-Based Compensation..............................15
7.8 Withholding.................................................15
7.9 Transferability.............................................15
7.10 Administration..............................................16
7.11 Notices.....................................................16
7.12 Form and Time of Elections..................................16
7.13 Agreement With Company......................................16
7.14 Limitation of Implied Rights................................16
7.15 Benefits Under Qualified Retirement Plans...................17
7.16 Evidence....................................................17
7.17 Gender and Number...........................................17
7.18 Defined Terms...............................................17
SECTION 8 COMMITTEE...............................................19
8.1 Selection of Committee......................................19
8.2 Powers of Committee.........................................19
8.3 Delegation by Committee.....................................20
8.4 Information to be Furnished to Committee....................20
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8.5 Liability and Indemnification of Committee..................21
SECTION 9 CHANGE IN CONTROL.......................................21
9.1 Acceleration of Awards......................................21
9.2 Definition of Change in Control.............................21
SECTION 10 AMENDMENT AND TERMINATION...............................22
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HUB GROUP, INC.
2002 LONG-TERM INCENTIVE PLAN
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SECTION 1
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GENERAL
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1.1 Purpose. The Hub Group, Inc. 2002 Long-Term Incentive Plan (the
"Plan") has been established by Hub Group, Inc. (the "Company") to:
attract and retain key executive and managerial employees;
attract and retain the services of experienced and
knowledgeable directors;
motivate participating employees, by means of appropriate
incentives, to achieve long-range goals;
provide incentive compensation opportunities that are
competitive with those of other corporations; and
further identify Participants' interests with those of the
Company's other shareholders through compensation that is based
on the Company's common stock;
and thereby to promote the long-term financial interest of the
Company and the Related Companies, including the growth in value of
the Company's equity and enhancement of long-term shareholder
return.
1.2 Defined Terms. Capitalized terms used herein which are not otherwise
defined in the Plan shall have the meaning set forth
in subsection 7.19 hereof.
1.3 Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among
the employees of the Employer who are key executives or managerial
employees, those persons who will be granted one or more Awards under
the Plan, and thereby become "Participants" in the Plan. Subject to the
terms and conditions of the Plan, the Board, after recommendation of
the Directors who are not Eligible Directors, shall determine and
designate, from time to time, from among the Eligible Directors of the
Company those Eligible Directors who will be granted Options under the
Plan, and thereby become "Participants" in the Plan. In the discretion
of the Committee, and subject to the terms of the Plan, a Participant
may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant; provided,
however, that Participants who are Eligible Directors may only be
granted Options under Sections 2 and 6 of the Plan and the right to
receive an Option under Section 6 shall be subject to the limitations
of that Section. Except as otherwise provided by the Committee (or the
Board with respect to an Award to an Eligible Director) and consented
to by the Participant, or except as otherwise provided in the Plan or
Award Agreement, an Award under the Plan shall not affect any previous
Award under the Plan or an award under any other plan maintained by the
Company or the Related Companies.
1.4 Operation and Administration. The operation and administration of the
Plan, including the Awards made under the Plan, shall be subject to
the provisions of Section 7.
SECTION 2
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OPTIONS
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2.1 Definitions. The grant of an Option under this Section 2 entitles the
Participant to purchase shares of Stock at a price fixed at the time
the Option is granted, or at a price determined under a method
established at the time the Option is granted, subject to the terms of
this Section 2. Options granted under this Section 2 may be either
Incentive Stock Options or Non-Qualified Stock Options, as determined
in the discretion of the Committee; provided, however, that any Option
granted to an Eligible Director shall be a Non-Qualified Stock Option;
and provided further that, an Incentive Stock Option may be granted
only to employees of the Company and its Affiliates.
2.2 Eligibility. The Committee (or the Board in the case of Options granted
to Eligible Directors) shall designate the Participants to whom Options
are to be granted under this Section 2 and shall determine the number
of shares of Stock to be subject to each such Option. Consistent with
the requirements of section 422 of the Code, to the extent that the
aggregate fair market value of Stock with respect to which Incentive
Stock Options are exercisable for the first time by any individual
during any calendar year (under all plans of the Company and all
Affiliates of the Company) exceeds $100,000, such options shall be
treated as Non-Qualified Stock Options.
2.3 Price. The determination and payment of the purchase price of a
share of Stock under each Option granted under this Section
2 shall be subject to the following:
The purchase price shall be established by the Committee (or
the Board in the case of Options granted to Eligible Directors)
or shall be determined by a method established by the Committee
(or the Board in the case of Options granted to Eligible
Directors) at the time the Option is granted; provided,
however, that in no event shall such price be less than the
greater of (i) 100% of the Fair Market Value of a share of
Stock as of the date on which the Option is granted; or (ii)
the par value of a share of Stock on such date.
Subject to the following provisions of this subsection 2.3, the
full purchase price of each share of Stock purchased upon the
exercise of any Option shall be paid at the time of such
exercise (except that, in the case of a cashless exercise
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arrangement described in paragraph 2.3(d), payment may be made
as soon as practicable after the exercise) and, as soon as
practicable thereafter, a certificate representing the shares
so purchased shall be delivered to the person entitled thereto.
The purchase price shall be payable in cash or in shares of
Stock (valued at Fair Market Value as of the day of exercise),
or in any combination thereof, as determined by the Committee
(or the Board in the case of Options granted to Eligible
Directors).
A Participant may elect to pay the purchase price upon the
exercise of an Option through the following cashless exercise
procedures: The Participant shall notify the Corporate
Secretary of the intent to exercise. Written instructions will
then be prepared and delivered to the Company and the broker
indicating the Participant's cashless election and instructing
the Company to deliver to the broker the Stock issuable upon
exercise. The exercise of the Option will be executed on the
same day that the broker is able to sell the stock. The broker
will then withhold from the proceeds of the sale and deliver to
the Company an amount, in cash, equal to the Option purchase
price. An additional amount for federal and state tax
withholdings, not to exceed the statutory minimum required tax
withholding, may also be withheld and delivered to the Company
at the Participant's election.
2.4 Exercise. Except as otherwise expressly provided in the Plan, an
Option granted under this Section 2 shall be exercisable
in accordance with the following terms of this subsection 2.4:
The terms and conditions relating to exercise of an Option
shall be established by the Committee (or the Board in the case
of Options granted to Eligible Directors), and may include,
without limitation, conditions relating to completion of a
specified period of service or achievement of performance
standards prior to exercise of the Option.
No Option may be exercised by a Participant: (i) prior to the
date on which the Participant completes one continuous year of
employment with the Company or any Related Company or one
continuous year of service as an Eligible Director, as
applicable, after the date as of which the Option is granted
(provided, however, that the Committee (or the Board in the
case of Options granted to Eligible Directors) may permit
earlier exercise following the Participant's Date of
Termination or Termination of Service, as applicable, by reason
of death or Disability); or (ii) after the Expiration Date
applicable to that Option.
The exercise of an Option will result in the surrender of the
corresponding rights under a tandem Stock Appreciation Right,
if any.
2.5 Post-Exercise Limitations. The Committee (or the Board in the case of
Options granted to Eligible Directors), in its discretion, may impose
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such restrictions on shares of Stock acquired pursuant to the exercise
of an Option granted under this Section 2 (including Stock acquired
pursuant to the exercise of a tandem Stock Appreciation Right) as it
determines to be desirable, including, without limitation, restrictions
relating to disposition of the shares and forfeiture restrictions based
on service, performance and such other factors as the Committee (or the
Board in the case of Options granted to Eligible Directors) determines
to be appropriate.
2.6 Expiration Date. The "Expiration Date" with respect to an Option
granted under this Section 2 means the date established as the
Expiration Date by the Committee (or the Board in the case of Options
granted to Eligible Directors) at the time of the grant; provided,
however, that the Expiration Date with respect to any Option shall not
be later than the earliest to occur of:
the ten-year anniversary of the date on which the Option is
granted;
if the Participant's Date of Termination or Termination of
Service, as applicable, occurs by reason of Retirement, death
or Disability, the one-year anniversary of such Date of
Termination or Termination of Service; or
if the Participant's Date of Termination or Termination of
Service, as applicable, occurs for reasons other than
Retirement, death or Disability, 60 days following such Date of
Termination or Termination of Service.
2.7 Reload of Option. In the event the Participant exercises an Option
granted under this Section 2 and pays all or a portion of the purchase
price in Stock, in the manner permitted by subsection 2.3, such
Participant may, in the Committee's discretion (or the Board's
discretion in the case of Options granted to Eligible Directors), be
issued a new Option to purchase additional shares of Stock equal to the
number of shares of Stock surrendered to the Company in such payment.
Such new Option shall have a purchase price equal to the Fair Market
Value per share on the date such new Option is granted, shall first be
exercisable six months from the date of grant of the new Option and
shall have an Expiration Date that is the same date as the Expiration
Date of the original Option so exercised by payment of the purchase
price in shares of Stock.
2.8 Dividend Equivalents. The Committee (or the Board in the case of
Options granted to Eligible Directors) may award Dividend Equivalents
with respect to Options. The award of Dividend Equivalents shall permit
the Participant to earn an amount equal to the dividends payable with
respect to the number of shares of Stock subject to the Option for the
period the Option is outstanding and unexercised. The right to payment
of such earned Dividend Equivalents shall be subject to such
restrictions and limitations as may be imposed by the Committee (or the
Board in the case of Options granted to Eligible Directors).
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SECTION 3
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STOCK APPRECIATION RIGHTS
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3.1 Definition. Subject to the terms of this Section 3, a "Stock
Appreciation Right" granted under the Plan entitles the Participant to
receive, in cash or Stock (as determined in accordance with subsection
3.4), value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time of
exercise; over (b) a specified price which shall not be less than 100%
of the Fair Market Value of the Stock at the time the Stock
Appreciation Right is granted, or, if granted in tandem with an Option,
the purchase price with respect to shares under the tandem Option.
3.2 Eligibility. Subject to the provisions of the Plan, the Committee shall
designate the Participants to whom Stock Appreciation Rights are to be
granted under the Plan, shall determine the exercise price or a method
by which the exercise price shall be established with respect to each
such Stock Appreciation Right, and shall determine the number of shares
of Stock on which each Stock Appreciation Right is based. A Stock
Appreciation Right may be granted in connection with all or any portion
of a previously or contemporaneously granted Option or not in
connection with an Option. If a Stock Appreciation Right is granted in
connection with an Option, then, in the discretion of the Committee,
the Stock Appreciation Right may, but need not be granted in tandem
with the Option.
3.3 Exercise. The exercise of Stock Appreciation Rights shall be subject
to the following:
If a Stock Appreciation Right is not in tandem with an Option,
then the Stock Appreciation Right shall be exercisable in
accordance with the terms established by the Committee at the
time of grant; provided, however, that except as otherwise
expressly provided in the Plan or in the Award Agreement, no
Stock Appreciation Right may be exercised by a Participant (i)
prior to the date on which he completes one continuous year of
employment with the Company or any Related Company after the
date as of which the Stock Appreciation Right is granted
(provided, however, that the Committee may permit earlier
exercise following the Participant's Date of Termination by
reason of death or Disability); or (ii) after the Expiration
Date applicable to that Stock Appreciation Right.
If a Stock Appreciation Right is in tandem with an Option, then
the Stock Appreciation Right shall be exercisable at the time
the tandem Option is exercisable. The exercise of a Stock
Appreciation Right will result in the surrender of the
corresponding rights under the tandem Option.
3.4 Settlement of Award. Upon the exercise of a Stock Appreciation Right,
the value to be distributed to the Participant, in accordance with
subsection 3.1, shall be distributed in shares of Stock (valued at
their Fair Market Value at the time of exercise), in cash, or in a
combination thereof, in the discretion of the Committee.
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3.5 Post-Exercise Limitations. The Committee, in its discretion, may impose
such restrictions on shares of Stock acquired pursuant to the exercise
of a Stock Appreciation Right as it determines to be desirable,
including, without limitation, restrictions relating to disposition of
the shares and forfeiture restrictions based on service, performance
and such other factors as the Committee determines to be appropriate.
3.6 Expiration Date. If a Stock Appreciation Right is in tandem with an
Option, then the "Expiration Date" for the Stock Appreciation Right
shall be the Expiration Date for the related Option. If a Stock
Appreciation Right is not in tandem with an Option, then the
"Expiration Date" for the Stock Appreciation Right shall be the date
established as the Expiration Date by the Committee; provided, however,
that subject to the following provisions of this subsection 3.6, the
Expiration Date with respect to any Stock Appreciation Right shall not
be later than the earliest to occur of:
the ten-year anniversary of the date on which the Stock
Appreciation Right is granted;
if the Participant's Date of Termination occurs by reason of
Retirement, death or Disability, the one-year anniversary of
such Date of Termination.
if the Participant's Date of Termination occurs by reason other
than Retirement, death, or Disability, 60 days following such
Date of Termination.
3.7 Dividend Equivalents. The Committee may award Dividend Equivalents with
respect to Stock Appreciation Rights. The award of Dividend Equivalents
shall permit the Participant to earn an amount equal to the dividends
payable with respect to the number of shares of Stock that are subject
to the Stock Appreciation Rights for the period the Stock Appreciation
Rights are outstanding and unexercised. The right to payment of such
earned Dividends Equivalents shall be subject to such restrictions and
limitations as may be imposed by the Committee.
SECTION 4
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RESTRICTED STOCK
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4.1 Definition. Subject to the terms of this Section 4, Awards of
"Restricted Stock" under the Plan are grants of Stock to Participants,
the vesting of which is subject to such conditions as may be
established by the Committee.
4.2 Eligibility. The Committee shall designate the Participants to whom
Restricted Stock is to be granted, and the number of shares of Stock
that are subject to each such Award.
4.3 Terms and Conditions of Awards. Shares of Restricted Stock granted to
Participants under the Plan shall be subject to the following terms
and conditions:
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Restricted Stock granted to Participants may not be sold,
assigned, transferred, pledged or otherwise encumbered, except
as hereinafter provided, for a period of not less than one year
after the time of the grant of such Stock (the "Restricted
Period"). Except for such restrictions, the Participant as
owner of such shares shall have all the rights of a
shareholder, including but not limited to the right to vote
such shares and, except as otherwise provided by the Committee,
the right to receive all dividends paid on such shares. The
Committee may, in its discretion, at any time after the date of
the award of Restricted Stock, adjust the length of the
Restricted Period to account for individual circumstances of a
Participant or group of Participants, but in no case shall the
length of the Restricted Period be less than one year.
Except as otherwise determined by the Committee, a Participant
whose Date of Termination occurs prior to the end of the
Restricted Period for any reason shall forfeit all shares of
Restricted Stock remaining subject to any outstanding
Restricted Stock Award.
The Committee may, in its discretion, condition the vesting of
shares of Restricted Stock on the achievement of performance
goals.
Each certificate issued in respect of shares of Restricted
Stock granted under the Plan shall be registered in the name of
the Participant and, at the discretion of the Committee, each
such certificate may be deposited in a bank designated by the
Committee. Each such certificate shall bear the following (or a
similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the Hub Group,
Inc. 2002 Long-Term Incentive Plan and an agreement entered
into between the registered owner and Hub Group, Inc. A copy of
such plan and agreement is on file in the office of the
Secretary of Hub Group, Inc., 3050 Highland Parkway, Downers
Grove, Illinois 60515."
Subject to the limitations of the Plan and the Award of
Restricted Stock, at the end of the Restricted Period for
Restricted Stock, such Restricted Stock will be transferred
free of all restrictions to a Participant (or his or her legal
representative, beneficiary or heir).
SECTION 5
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PERFORMANCE UNITS
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5.1 Definition. Subject to the terms of this Section 5, the Award of
"Performance Units" under the Plan entitles the Participant to receive
value for the units at the end of a Performance Period to the extent
provided under the Award. The number of units earned, and value
received for them, will be contingent on the degree to which the
performance measures established at the time of the initial Award are
met.
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5.2 Eligibility. The Committee shall designate the Participants to whom
Performance Units are to be granted, and the number of units to be the
subject to each such Award.
5.3 Terms and Conditions of Awards. For each Participant, the Committee
will determine the number of units granted; the value of units, which
may be stated either in cash or in shares of Stock; the performance
measures used for determining whether the Performance Units are earned;
the Performance Period during which the performance measures will
apply; the relationship between the level of achievement of the
performance measures and the degree to which Performance Units are
earned; whether, during or after the Performance Period, any revision
to the performance measures or Performance Period should be made to
reflect significant events or changes that occur during the Performance
Period; and the number of earned Performance Units that will be paid in
cash and/or shares of Stock.
5.4 Payment. The Committee will compare the actual performance to the
performance measures established for the Performance Period and
determine the number of Performance Units to be paid and their value.
Payment for units earned shall be wholly in cash, wholly in Stock or in
a combination of the two, in a lump sum or installments, and subject to
vesting requirements and such other conditions as the Committee shall
determine. The Committee will determine the number of earned units to
be paid in cash and the number to be paid in Stock. For Performance
Units valued when granted in shares of Stock, one share of Stock will
be paid for each unit earned, or cash will be paid for each unit earned
equal to either (a) the Fair Market Value of a share of Stock at the
end of the Performance Period or (b) the value of the Stock determined
based on the average Fair Market Value for a number of days determined
by the Committee. For Performance Units valued when granted in cash,
the value of each unit earned will be paid in its initial cash value,
or shares of Stock will be distributed based on the cash value of the
units earned divided by (a) the Fair Market Value of a share of Stock
at the end of the Performance Period or (b) the value of a share of
Stock determined based on the average Fair Market Value for a number of
days determined by the Committee.
5.5 Termination During Performance Period. If a Participant's Date of
Termination occurs during a Performance Period with respect to any
Performance Shares granted to him, the Committee may determine that the
Participant will be entitled to receive all or any portion of the
Performance Shares that he would otherwise receive, and may accelerate
the determination and payment of the value of such Performance Shares
or make such other adjustments as the Committee, in its sole
discretion, deems desirable.
SECTION 6
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DIRECTORS AUTOMATIC OPTION GRANT
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6.1 Definition. The grant of an Option under this Section 6 entitles the
Participant to purchase shares of Stock at a price fixed at the time
the Option is granted. An Option granted under this Section 6 shall not
affect any Award previously granted under the Plan or an award under
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any other plan maintained by the Company or the Related Companies. An
Option granted under this Section 6 shall be a Non-Qualified Stock
Option.
6.2 Participation. As of the first business day immediately following the
date on which a person first becomes an Eligible Director, such person
shall be granted an Option to purchase 12,000 shares of Stock (as
adjusted pursuant to subsection 7.3), provided such Eligible Director
has not previously received an Award under this Section 6 or a
comparable provision of a Prior Plan. Any Eligible Director who, as of
the Effective Date, has been granted an option under a comparable
provision of a Prior Plan which option is outstanding as of the
Effective Date (a "Prior Award") shall be granted an Option to purchase
12,000 shares of Stock (as adjusted pursuant to subsection 7.3) as of
the date such Prior Award becomes fully exercisable; provided, however,
that no award shall be granted to any person pursuant to this sentence
unless, as of the date of such Award would be made, the Eligible
Director's Termination of Service has not occurred.
6.3 Price. The determination and payment of the purchase price of a share
of Stock under each Option granted pursuant to this Section 6 shall be
subject to the following:
The purchase price shall be the greater of (a) 100% of the Fair
Market Value of a share of Stock as of the date on which such
Option is granted; or (b) the par value of a share of such
Stock on such date.
The full purchase price of each share of Stock purchased upon
the exercise of any Option shall be paid at the time of such
exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in paragraph 6.3(d),
payment may be made as soon as practicable after the
exercise)and, as soon as practicable thereafter, a certificate
representing the shares so purchased shall be delivered to the
person entitled thereto.
The purchase price shall be payable in cash or in shares of
Stock (valued at Fair Market Value as of the day of exercise),
or in any combination thereof.
A Participant may elect to pay the purchase price upon the
exercise of an Option granted pursuant to this Section 6
through the following cashless exercise procedures: The
Participant shall notify the Corporate Secretary of the intent
to exercise. Written instructions will then be prepared and
delivered to the Company and the broker indicating the
Participant's cashless election and instructing the Company to
deliver to the broker the Stock issuable upon exercise. The
exercise of the Option will be executed on the same day that
the broker is able to sell the stock. The broker will then
withhold from the proceeds of the sale and deliver to the
Company an amount, in cash, equal to the Option purchase price.
An additional amount for federal and state tax withholdings,
not to exceed the statutory minimum required tax withholding,
may also be withheld and delivered to the Company at the
Participant's election.
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6.4 Exercise. An Option granted under this Section 6 shall be first
exercisable with respect to each 1/3 of the number of shares of Stock
subject to the Option on the date of each of the first, second and
third annual anniversaries of the date as of which the Option is
granted, respectively, but only if the Participant continues to serve
as a Director until such annual anniversary (or is employed by the
Company or any Related Company until such anniversary). Notwithstanding
the foregoing, if the Participant's Termination of Service occurs by
reason of death or Disability, 100% of an Option granted to a
Participant under this Section 6 will become fully exercisable upon the
Participant's Termination of Service. An Option granted under this
Section 6 will not be exercisable after the Expiration Date applicable
to that Option, and all rights to purchase shares of Stock pursuant to
the Option shall cease as of the Option's Expiration Date.
6.5 Expiration Date. The "Expiration Date" with respect to an Option
granted under this Section 6 means the earliest to occur
of:
the ten-year anniversary of the date on which the Option is
granted;
if the Participant's Termination of Service occurs by reason of
death, Disability or Retirement, the one-year anniversary of
his Termination of Service; and
if the Participant's Termination of Service occurs for reasons
other than Retirement, death or Disability, the three-month
anniversary of his Termination of Service.
A Participant shall not be permitted to exercise an Option granted
under this Section 6 after the Participant's Termination of Service
except to the extent that the Option is exercisable immediately prior
to such cessation. For purposes of this subsection 6.5, if, at the time
of a Participant's Termination of Service, he is employed by the
Company or a Related Company, then the Expiration Date of the
Participant's Option under this subsection 6.5 shall be determined by
substituting, in paragraphs 6.5(b) and (c), the Participant's Date of
Termination.
SECTION 7
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OPERATION AND ADMINISTRATION
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7.1 Effective Date. Subject to the approval of the shareholders of the
Company, the Plan was adopted by the Board effective _____________,
2002 (the "Effective Date"). The Plan shall be unlimited in duration
and, in the event of Plan termination, shall remain in effect as long
as any Awards under it are outstanding; provided, however, that no
Awards may be granted under the Plan on a date that is more than ten
years from the date the Plan is adopted.
7.2 Shares Subject to Plan and Other Limitations. The shares of Stock for
which Awards may be granted under the Plan shall be subject to the
following:
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The shares of Stock with respect to which Awards may be made
under the Plan shall be shares of Stock currently authorized
but unissued or currently held or, to the extent permitted by
applicable law, subsequently acquired by the Company as
treasury shares, including shares of Stock purchased in the
open market or in private transactions.
Subject to the provisions of subsection 7.3, the number of
shares of Stock which may be issued with respect to Awards
under the Plan shall not exceed _____________ shares in the
aggregate.
To the extent provided by the Committee (or the Board in the
case of any Option granted to an Eligible Director pursuant to
Section 2), any Award may be settled in cash rather than shares
of Stock. To the extent any shares of Stock covered by an Award
are not delivered to a Participant or beneficiary because the
Award expires, is forfeited or is canceled, or because the
shares of Stock are not delivered because the Award is settled
in cash or used to satisfy the applicable tax withholding
obligation, such shares of Stock shall not be deemed to have
been delivered for purposes of determining the maximum number
of shares of Stock available for delivery under the Plan.
If the exercise price of any Option granted under the Plan is
satisfied by tendering shares of Stock to the Company (by
either actual delivery or by attestation), only the number of
shares of Stock issued net of the shares of Stock tendered
shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery under
the Plan.
Subject to paragraph 7.3, the following additional maximums are
imposed under the Plan:
The maximum number of shares of Stock that may be covered
by Awards granted to any one employee pursuant to Section
2 (relating to Options) and Section 3 (relating to Stock
Appreciation Rights) during any one-year Company fiscal
year period shall not exceed ___________ shares of Stock,
reduced by the sum of (A) the number of shares of Stock
subject to all other prior Awards of Options and Stock
Appreciation Rights under the Plan within the one-year
Company fiscal year period that includes the date of the
Award; and (B) the number of shares of Stock subject to
all other prior stock options and stock appreciation
rights granted to the employee under other plans or
arrangements of the Employer within the one-year Company
fiscal year period that includes the date of the Award.
In the case of Awards, other than Options and Stock
Appreciation Rights, granted under the Plan, which Awards
are intended to be "performance-based compensation" (as
that term is used for purposes of Code section 162(m)), no
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more than shares of Stock and, if such Awards are
denominated in cash value, no more than
$__________________, may be subject to such Awards granted
to any one individual during any one-year Company fiscal
year period that includes the date of the Award. If, after
shares have been earned, the delivery is deferred, any
additional shares attributable to dividends or other
amounts attributable to earnings during the deferral
period shall be disregarded.
If an Option is in tandem with a Stock Appreciation Right,
such that the exercise of the Option or Stock Appreciation
Right with respect to a share of Stock cancels the tandem
Stock Appreciation Right or Option, respectively, with
respect to such share, the tandem Option and Stock
Appreciation Rights with respect to each share of Stock
shall be counted as covering only one share of Stock for
purposes of applying the limitations of this Section 7.2.
Subject to the provisions of subsection 7.3, the
determination made under the foregoing provisions of this
paragraph (e) shall be based on the shares subject to the
Awards at the time of grant, regardless of when the Awards
become exercisable.
7.3 Adjustments to Shares.
If the Company shall effect any subdivision or consolidation of
shares of Stock or other capital readjustment, payment of stock
dividend, stock split, combination of shares or
recapitalization or other increase or reduction of the number
of shares of Stock outstanding without receiving compensation
therefor in money, services or property, then the Committee
shall adjust (i) the number of shares of Stock available under
the Plan; (ii) the number of shares available under any
individual or other limits; (iii) the number of shares of Stock
subject to outstanding Awards and the number of shares of Stock
subject to future automatic grant as provided in Section 6; and
(iv) the per-share price under any outstanding Award and the
per-share purchase price under any future automatic grant as
provided in Section 6 to the extent that the Participant is
required to pay a purchase price per share with respect to the
Award.
If the Company is reorganized, merged or consolidated or is
party to a plan of exchange with another corporation, pursuant
to which reorganization, merger, consolidation or plan of
exchange the shareholders of the Company receive any shares of
stock or other securities or property, or the Company shall
distribute securities of another corporation to its
shareholders, there shall be substituted for the shares subject
to outstanding Awards an appropriate number of shares of each
class of stock or amount of other securities or property which
were distributed to the shareholders of the Company in respect
of such shares, subject to the following:
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If the Committee determines that the substitution
described in accordance with the foregoing provisions of
this paragraph (b) would not be fully consistent with the
purposes of the Plan or the purposes of the outstanding
Awards under the Plan, the Committee may make such other
adjustments to the Awards to the extent that the Committee
determines such adjustments are consistent with the
purposes of the Plan and of the affected Awards.
All or any of the Awards may be canceled by the Committee
on or immediately prior to the effective date of the
applicable transaction, but only if the Committee gives
reasonable advance notice of the cancellation to each
affected Participant, and only if either: (A) the
Participant is permitted to exercise the Award for a
reasonable period prior to the effective date of the
cancellation; or (B) the Participant receives payment or
other benefits that the Committee determines to be
reasonable compensation for the value of the canceled
Awards.
Upon the occurrence of a reorganization of the Company or
any other event described in this paragraph (b), any
successor to the Company shall be substituted for the
Company to the extent that the Company and the successor
agree to such substitution.
Upon (or, in the discretion of the Committee, immediately prior
to) the sale to (or exchange with) a third party unrelated to
the Company of all or substantially all of the assets of the
Company, all Awards shall be canceled. If Awards are canceled
under this paragraph (c) then, with respect to any affected
Participant, either:
the Participant shall be provided with reasonable advance
notice of the cancellation, and the Participant shall be
permitted to exercise the Award for a reasonable period
prior to the effective date of the cancellation; or
the Participant shall receive payment or other benefits
that the Committee determines to be reasonable
compensation for the value of the canceled Awards.
The foregoing provisions of this paragraph (c) shall also apply
to the sale of all or substantially all of the assets of the
Company to a related party, if the Committee determines such
application is appropriate.
In determining what action, if any, is necessary or appropriate
under the foregoing provisions of this subsection 7.3, the
Committee shall act in a manner that it determines to be
consistent with the purposes of the Plan and of the affected
Awards and, where applicable or otherwise appropriate, in a
manner that it determines to be necessary to preserve the
benefits and potential benefits of the affected Awards for the
Participants and the Employer.
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The existence of this Plan and the Awards granted hereunder
shall not affect in any way the right or power of the Company
or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, any
merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or
affecting the Company's Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer
of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
Except as expressly provided by the terms of this Plan, the
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for
cash or property or for labor or services, either upon direct
sale, upon the exercise of rights or warrants to subscribe
therefor or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall
not affect, and no adjustment by reason thereof shall be made
with respect to Awards then outstanding hereunder.
Awards under the Plan are subject to adjustment under this
subsection 7.3 only during the period in which they are
considered to be outstanding under the Plan, with the
determination of whether an Award is outstanding to be made by
the Committee.
7.4 Limit on Distribution. Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:
Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Stock under
the Plan or make any other distribution of benefits under the
Plan unless such delivery or distribution would comply with all
applicable laws and the applicable requirements of any
securities exchange or similar entity.
In the case of a Participant who is subject to Section 16(a)
and 16(b) of the Securities Exchange Act of 1934, the Committee
may, at any time, add such conditions and limitations to any
Award to such Participant, or any feature of any such Award, as
the Committee, in its sole discretion, deems necessary or
desirable to comply with Section 16(a) or 16(b) and the rules
and regulations thereunder or to obtain any exemption
therefrom.
7.5 Settlement of Awards. Except as otherwise provided in the Plan or in an
Award Agreement, the obligation to make payments and distributions with
respect to Awards may be satisfied through cash payments, the delivery
of shares of Stock, the granting of replacement Awards, or any
combination thereof as the Committee (or the Board in the case of any
Option granted to an Eligible Director pursuant to Section 2) shall
14
determine. Satisfaction of any such obligations under an Award may be
subject to such conditions, restrictions and contingencies as the
Committee (or the Board in the case of any Option granted to an
Eligible Director pursuant to Section 2) shall determine. The Committee
(or the Board in the case of any Option granted to an Eligible Director
pursuant to Section 2) may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of interest
or dividend equivalents, and may include converting such credits into
deferred Stock equivalents.
7.6 Liability for Cash Payments. Subject to the provisions of this Section
7, a Participant's employer shall be liable for payment of cash due
under the Plan with respect to such Participant to the extent that such
benefits are attributable to the services rendered for that employer by
the Participant. Any disputes relating to liability of an employers for
cash payments shall be resolved by the Committee.
7.7 Performance-Based Compensation. To the extent that the Committee
determines that it is necessary or desirable to conform any Awards
under the Plan with the requirements applicable to "Performance-Based
Compensation," as that term is used in Code Section 162(m)(4)(C), it
may, at or prior to the time an Award is granted, take such steps and
impose such restrictions with respect to such Award as it determines to
be necessary to satisfy such requirements, including without
limitation:
The establishment of performance goals that must be satisfied
prior to the payment or distribution of benefits under such
Awards.
The submission of such Awards and performance goals to the
Company's shareholders for approval and making the receipt of
benefits under such Awards contingent on receipt of such
approval.
Providing that no payment or distribution be made under such
Awards unless the Committee certifies that the goals and the
applicable terms of the Plan and Agreement reflecting the
Awards have been satisfied.
To the extent that the Committee determines that the foregoing
requirements relating to Performance-Based Compensation do not apply to
Awards under the Plan because the Awards constitute Options or Stock
Appreciation Rights, the Committee may, at the time the Award is
granted, conform the Awards to alternative methods of satisfying the
requirements applicable to Performance-Based Compensation.
7.8 Withholding. All Awards and other payments under the Plan are subject
to withholding of all applicable taxes, which withholding obligations
may be satisfied, with the consent of the Committee, through the
surrender of shares of Stock which the Participant already owns, or to
which a Participant is otherwise entitled under the Plan; provided,
however, that withholding through the surrender of shares may not
exceed the amount necessary to satisfy the statutory minimum required
tax withholding.
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7.9 Transferability. Awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution. To the extent that the Participant who receives an Award
under the Plan has the right to exercise such Award, the Award may be
exercised during the lifetime of the Participant only by the
Participant. Notwithstanding the foregoing provisions of this
subsection 7.9, the Committee may permit awards under the Plan to be
transferred to or for the benefit of the Participant's family, subject
to such limits as the Committee may establish.
7.10 Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in the Committee in
accordance with Section 8.
7.11 Notices. Any notice or document required to be filed with the Committee
under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee, in care of the
Company, at its principal executive offices. The Committee may, by
advance written notice to affected persons, revise such notice
procedure from time to time. Any notice required under the Plan (other
than a notice of election) may be waived by the person entitled to
notice.
7.12 Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted
modification or revocation thereof, shall be in writing filed with the
Committee at such times, in such form, and subject to such restrictions
and limitations, not inconsistent with the terms of the Plan, as the
Committee shall require.
7.13 Agreement With Company. At the time of an Award to a Participant under
the Plan, the Committee will require a Participant to enter into an
Award Agreement with the Company in a form specified by the Committee,
evidencing the Award under the Plan, agreeing to the terms and
conditions of the Plan and agreeing to such additional terms and
conditions, not inconsistent with the Plan, as the Committee may, in
its sole discretion, prescribe.
7.14 Limitation of Implied Rights.
Neither a Participant nor any other person shall, by reason of
the Plan, acquire any right in or title to any assets, funds or
property of the Employer whatsoever, including, without
limitation, any specific funds, assets, or other property which
the Company or any Related Company, in their sole discretion,
may set aside in anticipation of a liability under the Plan. A
Participant shall have only a contractual right to the amounts,
if any, payable under the Plan, unsecured by any assets of the
Employer. Nothing contained in the Plan shall constitute a
guarantee by the Company or any Related Company that the assets
of the Employer shall be sufficient to pay any benefits to any
person.
Neither the Plan nor Awards granted under the Plan shall confer
any right upon a Participant to continue as an employee or
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Director for any period of time or give any Participant any
right or claim to any benefit under the Plan, unless such right
or claim has specifically accrued under the terms of the Plan.
Subject to the provisions of Section 4 (relating to Restricted
Stock Awards), no Award under the Plan shall confer upon the
holder thereof any right as a shareholder of the Company prior
to the date on which he fulfills all service requirements and
other conditions for receipt of shares of Stock under the Plan.
7.15 Benefits Under Qualified Retirement Plans. Awards to a Participant
(including the grant and the receipt of benefits) under the Plan shall
be disregarded for purposes of determining the Participant's benefits
under any Qualified Retirement Plan.
7.16 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
7.17 Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the
plural and the plural shall include the singular.
7.18 Defined Terms. For purposes of the Plan, the terms listed below shall
be defined as follows:
Affiliate. The term "Affiliate" means any entity which is a
parent corporation (as defined in section 424(e) of the Code)
or a subsidiary corporation (as defined in section 424(f) of
the Code).
Award. The term "Award" shall mean any award or benefit granted
to any Participant under the Plan, including, without
limitation, the grant of Options, Stock Appreciation Rights,
Restricted Stock, Performance Units, and Dividend Equivalents.
Award Agreement. "Award Agreement" shall mean an agreement
evidencing the grant of an Award hereunder as described in
Section 7.13.
Board. The term "Board" shall mean the Board of Directors of
the Company.
Code. The term "Code" means the Internal Revenue Code of 1986,
as amended. A reference to any provision of the Code shall
include reference to any successor provision of the Code.
Committee. The term "Committee" means the committee designated
in accordance with Section 8 to administer the Plan.
Date of Termination. A Participant's "Date of Termination"
shall be the date that his employment with the Employer
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terminates for any reason; provided that a Date of Termination
shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Related Company or
between two Related Companies; and further provided that a
Participant's employment shall not be considered terminated
while the Participant is on a leave of absence from the
Employer approved by the Participant's employer.
Director. The term "Director" means a member of the Board of
Directors of the Company.
Disability. A Participant shall be considered to have a
"Disability" during the period in which he is unable, by reason
of a medically determinable physical or mental impairment, to
engage in any substantial gainful activity, which condition, in
the opinion of a physician selected by the Committee, is
expected to have a duration of not less than 120 days.
Eligible Director. Each Director who is not an employee of the
Company or any Related Company.
Employer. The Company and all Related Companies.
Exchange Act. The term "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
Fair Market Value. The "Fair Market Value" of a share of Stock
of the Company as of any date shall be the closing market
composite price for such Stock as reported for the NASDAQ Stock
Exchange on that date or, if Stock is not traded on that date,
on the next preceding date on which Stock was traded.
Incentive Stock Option. An Option that is intended to satisfy
the requirements applicable to an "incentive stock option"
described in section 422(b) of the Code.
Non-Qualified Option. An Option that is not intended to be an
"incentive stock option" as that term is described in section
422(b) of the Code.
Option. The term "Option" shall mean any Incentive Stock Option
or Non-Qualified Stock Option granted under the Plan.
Performance-Based Compensation. The term "Performance-Based
Compensation" shall have the meaning ascribed to it in section
162(m)(4)(C) of the Code.
Prior Plans. The term "Prior Plans" means the Hub Group, Inc.
1997 Long-Term Incentive Plan, the Hub Group, Inc.1996 Long-Term
Incentive Plan, and the Hub Group 1999 Long-Term Incentive Plan.
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Qualified Retirement Plan. The term "Qualified Retirement Plan"
means any plan of the Company or a Related Company that is
intended to be qualified under section 401(a) of the Internal
Revenue Code of 1986, as amended.
Related Companies. The term "Related Company" means (i) any
corporation, partnership, joint venture or other entity during
any period in which it owns, directly or indirectly, at least
thirty percent of the voting power of all classes of stock of
the Company (or successor to the Company) entitled to vote; and
(ii) any corporation, partnership, joint venture or other
entity during any period in which either:
(A) it is effectively controlled by; or
(B) at least thirty percent of its voting or profits interest
is owned, directly or indirectly, by;
the Company, any entity that is a successor to the Company or
any entity that is a Related Company by reason of clause (i)
next above.
Retirement. "Retirement" in the case of a Participant who is
not an Eligible Director shall mean the occurrence of the
Participant's Date of Termination for reasons other than death
or Disability on or after the date on which the Participant (i)
attains age 55, or (ii) attains age 50 and has completed at
least 10 continuous years of service with the Company and the
Employer. "Retirement" in the case of a Participant who is an
Eligible Director shall mean the occurrence of the Eligible
Director's Termination of Service on or after his attainment of
age 65 for reasons other than death or Disability.
SEC. "SEC" shall mean the Securities and Exchange Commission.
Stock. The term "Stock" shall mean shares of common stock of
the Company.
Termination of Service. The term "Termination of Service" shall
mean the date on which an individual ceases to be a Director.
SECTION 8
---------
COMMITTEE
---------
8.1 Selection of Committee. The Committee shall be selected by the Board,
and shall consist of not less than two members of the Board, or such
greater number as may be required for compliance with SEC Rule 16b-3
and the requirements of section 162(m) of the Code and regulations
thereunder.
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8.2 Powers of Committee. The authority to manage and control the
operation and administration of the Plan shall be vested in
the Committee, subject to the following:
Subject to the provisions of the Plan, the Committee will have
authority and discretion to select employees to receive Awards,
to determine the time or times of receipt, to determine the
types of Awards and the number of shares covered by the Awards,
to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards, and to
cancel or suspend Awards. In making such Award determinations,
the Committee may take into account the nature of services
rendered by the respective employee, his present and potential
contribution to the Company's success and such other factors as
the Committee deems relevant.
Subject to the provisions of the Plan, the Committee will have
authority and discretion to determine the extent to which
Awards under the Plan will be structured to conform to the
requirements applicable to Performance-Based Compensation as
described in Code section 162(m), and to take such action,
establish such procedures, and impose such restrictions at the
time such Awards are granted as the Committee determines to be
necessary or appropriate to conform to such requirements.
The Committee will have the authority and discretion to
conclusively interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any agreements made
pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the
Plan.
Any interpretation of the Plan by the Committee and any
decision made by it under the Plan is final and binding on all
persons.
Except as otherwise expressly provided in the Plan, where the
Committee is authorized to make a determination with respect to
any Award, such determination shall be made at the time the
Award is made, except that the Committee may reserve the
authority to have such determination made by the Committee in
the future (but only if such reservation is made at the time
the Award is granted and is expressly stated in the Agreement
reflecting the Award).
8.3 Delegation by Committee. Except to the extent prohibited by the
provisions of Rule 16b-3, the rules relating to Performance-Based
Compensation, applicable state law, the applicable rules of any stock
exchange, or any other applicable rules, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its responsibilities
and powers to any person or persons selected by it. Any such allocation
or delegation may be revoked by the Committee at any time.
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8.4 Information to be Furnished to Committee. The Employer shall furnish
the Committee with such data and information as may be required for it
to discharge its duties. The records of the Employer as to an
employee's or Participant's employment, termination of employment,
leave of absence, reemployment and compensation shall be conclusive on
all persons unless determined to be incorrect. Participants and other
persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable
to carry out the terms of the Plan.
8.5 Liability and Indemnification of Committee. No member or authorized
delegate of the Committee shall be liable to any person for any action
taken or omitted in connection with the administration of the Plan
unless attributable to his own fraud or willful misconduct; nor shall
the Employer be liable to any person for any such action unless
attributable to fraud or willful misconduct on the part of a director
or employee of the Employer. The Committee, the individual members
thereof, and persons acting as the authorized delegates of the
Committee under the Plan, shall be indemnified by the Employer against
any and all liabilities, losses, costs and expenses (including legal
fees and expenses) of whatsoever kind and nature which may be imposed
on, incurred by or asserted against the Committee or its members or
authorized delegates by reason of the performance of a Committee
function if the Committee or its members or authorized delegates did
not act dishonestly or in willful violation of the law or regulation
under which such liability, loss, cost or expense arises. This
indemnification shall not duplicate but may supplement any coverage
available under any applicable insurance.
SECTION 9
---------
CHANGE IN CONTROL
------------------
9.1 Acceleration of Awards. Subject to the provisions of subsection 7.3
(relating to the adjustment of shares), and except as otherwise
provided in the Plan or the Award Agreement reflecting the applicable
Award, upon the occurrence of a Change in Control:
All outstanding Options (regardless of whether in tandem with
SARs) shall become fully exercisable.
All outstanding SARs (regardless of whether in tandem with
Options) shall become fully exercisable.
All Restricted Stock and Performance Units shall become fully
vested.
9.2 Definition of Change in Control. For purposes of the Plan, the term
"Change in Control" means a change in the beneficial ownership of the
Company's voting stock or a change in the composition of the Board
which occurs as follows:
Any "person" (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act is or becomes a beneficial owner,
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directly or indirectly, of stock of the Company representing 30
percent or more of the total voting power of the Company's then
outstanding stock.
A tender offer (for which a filing has been made with the SEC
which purports to comply with the requirements of Section 14(d)
of the Exchange Act and the corresponding SEC rules) is made
for the stock of the Company, which has not been negotiated and
approved by the Board. In case of a tender offer described in
this paragraph (b), the Change in Control will be deemed to
have occurred upon the first to occur of (i) any time during
the offer when the person (using the definition in (a) above)
making the offer owns or has accepted for payment stock of the
Company with 25 percent or more of the total voting power of
the Company's stock, or (ii) three business days before the
offer is to terminate unless the offer is withdrawn first, if
the person making the offer could own, by the terms of the
offer plus any shares owned by this person, stock with 50
percent or more of the total voting power of the Company's
stock when the offer terminates.
Individuals who were the Board's nominees for election as
directors of the Company immediately prior to a meeting of the
shareholders of the Company involving a contest for the
election of directors shall not constitute a majority of the
Board following the election.
SECTION 10
----------
AMENDMENT AND TERMINATION
-------------------------
The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 7.3 (relating to certain adjustments to shares), no
amendment or termination may materially adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the
date such amendment is adopted by the Board.
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