EXHIBIT 99.1
1998 STOCK INCENTIVE PLAN
OF
TRANSIT GROUP, INC.
1. PURPOSE
The purpose of the 1998 Stock Incentive Plan of Transit Group, Inc. (the
"Plan") is to encourage and enable selected employees, directors and independent
contractors of Transit Group, Inc. (the "Corporation") and its related
corporations to acquire or to increase their holdings of common stock of the
Corporation (the "Common Stock") and other proprietary interests in the
Corporation in order to promote a closer identification of their interests with
those of the Corporation and its shareholders, thereby further stimulating their
efforts to enhance the efficiency, soundness, profitability, growth and
shareholder value of the Corporation. This purpose will be carried out through
the granting of benefits (collectively referred to herein as "Awards") to
selected employees, independent contractors and directors, including the
granting of incentive stock options ("Incentive Options"), nonqualified stock
options ("Nonqualified Options"), stock appreciation rights ("SARs"), restricted
stock awards ("Restricted Stock Awards"), and restricted units ("Restricted
Units") to such participants. Incentive Options and Nonqualified Options shall
be referred to herein collectively as "Options." Restricted Stock Awards and
Restricted Units shall be referred to herein collectively as "Restricted
Awards."
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors of the
Corporation (the "Board" or the "Board of Directors") or, upon its delegation,
by the Compensation Committee of the Board of Directors (the "Committee"). For
the purposes herein, the term "Administrator" shall refer to the Board and, upon
its delegation of all or part of its authority to administer the Plan, the
Committee.
(b) Any action of the Administrator with respect to the Plan may be taken
by a written instrument signed by all of the members of the Board or Committee,
as appropriate, and any such action so taken by written consent shall be as
fully effective as if it had been taken by a majority of the members at a
meeting duly held and called. Subject to the provisions of the Plan, and unless
authority is granted to the chief executive officer as provided in Section 2(c),
the Administrator shall have full and final authority in its discretion to take
any action with respect to the Plan including, without limitation, the authority
(i) to determine all matters relating to Awards, including selection of
individuals to be granted Awards, the types of Awards, the number of shares of
the Common Stock, if any, subject to an Award, and all terms, conditions,
restrictions and limitations of an Award; (ii) to prescribe the form or forms of
the agreements evidencing any Awards granted under the Plan; (iii) to establish,
amend and rescind rules and regulations for the administration of the Plan; and
(iv) to construe and interpret the Plan and agreements evidencing Awards granted
under the Plan, to establish and interpret rules and regulations for
administering the Plan and to make all other determinations deemed necessary or
advisable for administering the Plan. The Administrator shall also have
authority, in its sole discretion, to accelerate the date that any Award which
was not otherwise exercisable or vested shall become exercisable or vested in
whole or in part without any obligation to accelerate such date with respect to
any other Award granted to any recipient. In addition, the Administrator shall
have the authority and discretion to establish terms and conditions of Awards as
the Administrator determines to be necessary
or appropriate to conform to the applicable requirements or practices of
jurisdictions outside of the United States.
(c) Notwithstanding Section 2(b), the Administrator may delegate to the
chief executive officer of the Corporation the authority to grant Awards, and to
make any or all of the determinations reserved for the Administrator in the Plan
and summarized in Section 2(b) herein with respect to such Awards, to any
individual who, at the time of said grant or other determination, (i) is not
deemed to be an officer or director of the Corporation within the meaning of
Section 16 of the Exchange Act, and (ii) is otherwise eligible under Section 5.
To the extent that the Administrator has delegated authority to grant Awards
pursuant to this Section 2(c) to the chief executive officer, references to the
Administrator shall include references to such person, subject, however, to the
requirements of the Plan, Rule 16b-3 and other applicable law.
3. EFFECTIVE DATE
The effective date of the Plan shall be March 1, 1998 (the "Effective
Date"). Awards may be granted under the Plan on and after the effective date,
but no Awards will be granted after February 29, 2008.
4. SHARES OF STOCK SUBJECT TO THE PLAN; AWARD LIMITATIONS
(a) Subject to adjustments as provided in this Section 4, the number of
shares of Common Stock that may be issued pursuant to Awards shall be the sum of
(i) 2,000,000 plus (ii) one percent (1%) of the total issued and outstanding
shares of Common Stock determined as of December 31 for each year that the Plan
is in effect. Such shares shall be authorized but unissued shares or treasury
shares of the Corporation or shares purchased on the open market.
Notwithstanding the foregoing, the maximum number of shares of Common Stock that
may be issued pursuant to Incentive Options shall be 2,000,000 shares.
(b) The Corporation hereby reserves sufficient authorized shares of Common
Stock to meet the grant of Awards hereunder. Any shares subject to an Award
which is subsequently forfeited, expires or is terminated may again be the
subject of an Award granted under the Plan. To the extent that any shares of
Common Stock subject to an Award are not delivered to a Participant (or his
beneficiary) because the Award is forfeited or canceled or because the Award is
settled in cash, such shares shall not be deemed to have been issued for
purposes of determining the maximum number of shares of Common Stock available
for issuance under the Plan. If the option price of an Option granted under the
Plan is satisfied by tendering shares of Common Stock, only the number of shares
issued net of the shares of Common Stock tendered shall be deemed issued for
purposes of determining the maximum number of shares of Common Stock available
for issuance under the Plan.
(c) If there is any change in the shares of Common Stock because of a
merger, consolidation or reorganization involving the Corporation or a related
corporation, or if the Board of Directors of the Corporation declares a stock
dividend or stock split distributable in shares of Common Stock, or if there is
a change in the capital stock structure of the Corporation or a related
corporation affecting the Common Stock, the number of shares of Common Stock
reserved for issuance under the Plan shall be
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correspondingly adjusted, and the Administrator shall make such adjustments to
Awards or to any provisions of this Plan as the Administrator deems equitable to
prevent dilution or enlargement of Awards or otherwise advisable.
5. ELIGIBILITY
An Award may be granted only to an individual who satisfies the following
eligibility requirements on the date the Award is granted:
(a) The individual is either (i) an employee of the Corporation or a
related corporation, (ii) a director of the Corporation or a related
corporation, or (iii) an independent contractor, consultant or advisor
(collectively, "independent contractors") providing services to the Corporation
or a related corporation. For this purpose, an individual shall be considered
to be an "employee" only if there exists between the individual and the
Corporation or a related corporation the legal and bona fide relationship of
employer and employee.
(b) With respect to the grant of Incentive Options, the individual does not
own, immediately before the time that the Incentive Option is granted, stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or a related corporation. Notwithstanding
the foregoing, an individual who owns more than ten percent of the total
combined voting power of the Corporation or a related corporation may be granted
an Incentive Option if the option price (as determined pursuant to Section 6(b)
herein) (the "Fair Market Value"), is at least 110% of the Fair Market Value of
the Common Stock (as defined in Section 6(b) herein), and the option period (as
defined in Section 6(c) herein) does not exceed five years. For this purpose,
an individual will be deemed to own stock which is attributable to him under
Section 424(d) of the Internal Revenue Code of 1986, as amended (the "Code").
(c) The individual, being otherwise eligible under this Section 5, is
selected by the Administrator as an individual to whom an Award shall be granted
(a "Participant").
6. OPTIONS
(a) Grant of Options: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant Options to such
eligible individuals in such numbers, upon such terms and at such times as the
Administrator shall determine. Both Incentive Options and Nonqualified Options
may be granted under the Plan. To the extent necessary to comply with Section
422 of the Code and related regulations, (i) if an Option is designated as an
Incentive Option but does not qualify as such under Section 422 of the Code, the
Option (or portion thereof) shall be treated as a Nonqualified Option; and (ii)
the provisions relating to the grant and terms of Incentive Options (including
but not limited to the provisions in Section 4(a) herein regarding the maximum
number of shares available for issuance pursuant to such Incentive Options)
shall be deemed to be a separate plan.
(b) Option Price: The price per share at which an Option may be exercised
(the "option price") shall be established by the Administrator at the time the
Option is granted and shall be set forth in the terms of the agreement
evidencing the grant of the Option; provided, that (i) in the case of an
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Incentive Option, the option price shall be no less than the Fair Market Value
per share of the Common Stock on the date the Option is granted and (ii) in no
event shall the option price per share of any Option be less than the par value
per share of the Common Stock. In addition, the following rules shall apply:
(i) An Incentive Option shall be considered to be granted on the date
that the Administrator acts to grant the Option, or on any later date
specified by the Administrator as the effective date of the Option. A
Nonqualified Option shall be considered to be granted on the date the
Administrator acts to grant the Option or any other date specified by the
Administrator as the date of grant of the Option.
(ii) For the purposes of the Plan, the Fair Market Value of the shares
shall be determined in good faith by the Administrator in accordance with
the following provisions: (A) if the shares of Common Stock are listed for
trading on the New York Stock Exchange or the American Stock Exchange, the
Fair Market Value shall be the closing sales price per share of the shares
on the New York Stock Exchange or the American Stock Exchange (as
applicable) on the date immediately preceding the date the Option is
granted, or, if there is no transaction on such date, then on the trading
date nearest preceding the date the Option is granted for which closing
price information is available, and, provided further, if the shares are
quoted on the Nasdaq National Market or the Nasdaq SmallCap Market of the
Nasdaq Stock Market but are not listed for trading on the New York Stock
Exchange or the American Stock Exchange, the Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system on the date immediately preceding the
date the Option is granted for which such information is available; or (B)
if the shares of Common Stock are not listed or reported in any of the
foregoing, then the Fair Market Value shall be determined by the
Administrator in accordance with the applicable provisions of Section
20.2031-2 of the Federal Estate Tax Regulations, or in any other manner
consistent with the Code and accompanying regulations.
(iii) In no event shall there first become exercisable by an employee
in any one calendar year Incentive Options granted by the Corporation or
any related corporation with respect to shares having an aggregate Fair
Market Value (determined at the time an Incentive Option is granted)
greater than $100,000.
(c) Option Period and Limitations on the Right to Exercise Options
(i) The term of an Option (the "Option Period") shall be determined by
the Administrator at the time the Option is granted. With respect to
Incentive Options, such period shall not extend more than ten years from
the date on which the Option is granted. Any Option or portion thereof not
exercised before expiration of the option period shall terminate. The
period during which an Option may be exercised shall be determined by the
Administrator at the time the Option is granted.
(ii) An Option may be exercised by giving written notice to the
Corporation at such place as the Corporation shall direct. Such notice
shall specify the number of shares to be purchased pursuant to an Option
and the aggregate purchase price to be paid therefor, and shall
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be accompanied by the payment of such purchase price. Such payment shall be
in the form of (A) cash; (B) shares of Common Stock owned by the
Participant at the time of exercise; (C) shares of Common Stock withheld
upon exercise; (D) delivery of written notice of exercise to the
Corporation and delivery to a broker of written notice of exercise and
irrevocable instructions to promptly deliver to the Corporation the amount
of sale or loan proceeds to pay the option price; or (E) a combination of
the foregoing methods, as elected by the Participant. Shares tendered or
withheld in payment on the exercise of an Option shall be valued at their
Fair Market Value on the date of exercise, as determined by the
Administrator by applying the provisions of Section 6(b)(ii).
(iii) Notwithstanding Section 6(c)(i) herein, no Option granted to a
Participant who was an employee at the time of grant shall be exercised
unless the Participant is, at the time of exercise, an employee as
described in Section 5(a), and has been an employee continuously since the
date the Option was granted, subject to the following:
(A) An Option shall not be affected by any change in the terms,
conditions or status of the Participant's employment, provided that
the Participant continues to be an employee of the Corporation or a
related corporation.
(B) The employment relationship of a Participant shall be treated
as continuing intact for any period that the Participant is on
military or sick leave or other bona fide leave of absence, provided
that the period of such leave does not exceed ninety days, or, if
longer, as long as the Participant's right to reemployment is
guaranteed either by statute or by contract. The employment
relationship of a Participant shall also be treated as continuing
intact while the Participant is not in active service because of
disability. The Administrator shall determine whether a Participant
is disabled within the meaning of this paragraph.
(C) Unless an individual option agreement provides otherwise, if
the employment of a Participant is terminated because of disability,
or if the Participant dies while he is an employee, the Option may be
exercised only to the extent exercisable on the date of the
Participant's termination of employment or death while employed (the
"termination date"), except that the Administrator may in its
discretion accelerate the date for exercising all or any part of the
Option which was not otherwise exercisable on the termination date.
The Option must be exercised, if at all, prior to the first to occur
of the following, whichever shall be applicable: (X) the close of the
period of twelve months next succeeding the termination date; or (Y)
the close of the option period. In the event of the Participant's
death, such Option shall be exercisable by such person or persons as
shall have acquired the right to exercise the Option by will or by the
laws of intestate succession.
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(D) Unless an individual option agreement provides otherwise, if
the employment of the Participant is terminated for any reason other
than disability or death or for "cause," his Option may be exercised
to the extent exercisable on the date of such termination of
employment, except that the Administrator may in its discretion
accelerate the date for exercising all or any part of the Option which
was not otherwise exercisable on the date of such termination of
employment. The Option must be exercised, if at all, prior to the
first to occur of the following, whichever shall be applicable: (X)
the close of the period of 90 days next succeeding the termination
date; or (Y) the close of the option period. If the Participant dies
following such termination of employment and prior to the earlier of
the dates specified in (X) or (Y) of this subparagraph (D), the
Participant shall be treated as having died while employed under
subparagraph (C) immediately preceding (treating for this purpose the
Participant's date of termination of employment as the termination
date). In the event of the Participant's death, such Option shall be
exercisable by such person or persons as shall have acquired the right
to exercise the Option by will or by the laws of intestate succession.
(E) Unless an individual option agreement provides otherwise, if
the employment of the Participant is terminated for "cause," his
Option shall lapse and no longer be exercisable as of the effective
time of his termination of employment, as determined by the
Administrator. For purposes of this subparagraph (E) and subparagraph
(D), the Participant's termination shall be for "cause" if such
termination results from the Participant's (X) dishonesty; (Y) refusal
to perform his duties for the Corporation; or (Z) engaging in conduct
that could be materially damaging to the Corporation without a
reasonable good faith belief that such conduct was in the best
interest of the Corporation. The determination of "cause" shall be
made by the Administrator and its determination shall be final and
conclusive.
(F) Notwithstanding the foregoing, the Administrator shall have
authority, in its discretion, to extend the period during which an
Option may be exercised; provided that, in the event that any such
extension shall cause an Incentive Option to be designated as a
Nonqualified Option, no such extension shall be made without the prior
written request and consent of the Participant.
(iv) Notwithstanding Section 6(c)(i), herein, unless an individual
option agreement provides otherwise, an Option granted to a Participant who
was a director of the Corporation or a related corporation at the time of
grant may be exercised only to the extent exercisable on the date of the
Participant's termination of service to the Corporation or a related
corporation (unless the termination was for cause), and must be exercised,
if at all, prior to the first to occur of the following, as applicable: (X)
the close of the period of one year next succeeding the termination date;
or (Y) the close of the option period. If the services of such a
Participant are terminated for cause (as defined in Section 6(c)(iii)(E)
herein), his Option shall lapse and no longer be
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exercisable as of the effective time of his termination of services, as
determined by the Administrator. Notwithstanding the foregoing, the
Administrator may in its discretion accelerate the date for exercising all
or any part of an Option which was not otherwise exercisable on the
termination date or extend the period during which an Option may be
exercised, or both.
(v) Notwithstanding Section 6(c)(i), herein, unless an individual
option agreement provides otherwise, an Option granted to a Participant who
was an independent contractor of the Corporation or a related corporation
at the time of grant (and who does not thereafter become an employee, in
which case he shall be subject to the provisions of Section 6(c)(iii)
herein) may be exercised only to the extent exercisable on the date of the
Participant's termination of service to the Corporation or a related
corporation (unless the termination was for cause), and must be exercised,
if at all, prior to the first to occur of the following, as applicable: (X)
the close of the period of 90 days next succeeding the termination date; or
(Y) the close of the option period. If the services of such a Participant
are terminated for cause (as defined in Section 6(c)(iii)(E) herein), his
Option shall lapse and no longer be exercisable as of the effective time of
his termination of services, as determined by the Administrator.
Notwithstanding the foregoing, the Administrator may in its discretion
accelerate the date for exercising all or any part of an Option which was
not otherwise exercisable on the termination date or extend the period
during which an Option may be exercised, or both.
(vi) A Participant or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject to
an Option unless and until certificates for such shares are delivered to
him or them under the Plan.
(vii) Nothing in the Plan shall confer upon the Participant any right
to continue in the service of the Corporation or a related corporation as
an employee, director, or independent contractor or to interfere in any way
with the right of the Corporation or a related corporation to terminate the
Participant's employment or service at any time.
(viii) A certificate or certificates for shares of Common Stock
acquired upon exercise of an Option shall be issued in the name of the
Participant (or his beneficiary) and distributed to the Participant (or his
beneficiary) as soon as practicable following receipt of notice of exercise
and payment of the purchase price.
(d) Nontransferability of Options
(i) Incentive Options shall not be transferable other than by will or
the laws of intestate succession. Nonqualified Options shall not be
transferable other than by will or the laws of intestate succession except
as may be permitted by the Administrator in a manner consistent with the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"). The designation of a beneficiary does not constitute a
transfer. An Option shall be exercisable during the Participant's lifetime
only by him or by his guardian or legal representative.
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(ii) If a Participant is subject to Section 16 of the Exchange Act,
shares of Common Stock acquired upon exercise of an Option may not, without
the consent of the Administrator, be disposed of by the Participant until
the expiration of six months after the date the Option was granted.
7. STOCK APPRECIATION RIGHTS
(a) Grant of SARs: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant SARs to such
eligible individuals, in such numbers, upon such terms and at such times as the
Administrator shall determine. SARs may be granted to an optionee of an Option
(hereinafter called a "Related Option") with respect to all or a portion of the
shares of Common Stock subject to the Related Option (a "Tandem SAR") or may be
granted separately to an eligible key employee (a "Freestanding SAR"). Subject
to the limitations of the Plan, SARs shall be exercisable in whole or in part
upon notice to the Corporation upon such terms and conditions as are provided in
the agreement relating to the grant of the SAR.
(b) Tandem SARs: A Tandem SAR may be granted either concurrently with the
grant of the Related Option or (if the Related Option is a Nonqualified Option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such Related Option. Tandem SARs shall be exercisable only at
the time and to the extent that the Related Option is exercisable (and may be
subject to such additional limitations on exercisability as the Administrator
may provide in the agreement), and in no event after the complete termination or
full exercise of the Related Option. For purposes of determining the number of
shares of Common Stock that remain subject to such Related Option and for
purposes of determining the number of shares of Common Stock in respect of which
other Awards may be granted, a Related Option shall be considered to have been
surrendered upon the exercise of a Tandem SAR to the extent of the number of
shares of Common Stock with respect to which such Tandem SAR is exercised. Upon
the exercise or termination of a Related Option, the Tandem SARs with respect
thereto shall be canceled automatically to the extent of the number of shares of
Common Stock with respect to which the Related Option was so exercised or
terminated. Subject to the limitations of the Plan, upon the exercise of a
Tandem SAR, the Participant shall be entitled to receive from the Corporation,
for each share of Common Stock with respect to which the Tandem SAR is being
exercised, consideration equal in value to the excess of the Fair Market Value
of a share of Common Stock on the date of exercise over the Related Option price
per share; provided, that the Administrator may, in any agreement granting
Tandem SARs, establish a maximum value payable for such SARs.
(c) Freestanding SARs: Unless an individual agreement provides otherwise,
the base price of a Freestanding SAR shall be not less than 100% of the Fair
Market Value of the Common Stock (as determined in accordance with Section
6(b)(ii) herein) on the date of grant of the Freestanding SAR. Subject to the
limitations of the Plan, upon the exercise of a Freestanding SAR, the
Participant shall be entitled to receive from the Corporation, for each share of
Common Stock with respect to which the Freestanding SAR is being exercised,
consideration equal in value to the excess of the Fair Market Value of a share
of Common Stock on the date of exercise over the base price per share of such
Freestanding SAR; provided, that the Administrator may, in any agreement
granting Freestanding SARs, establish a maximum value payable for such SARs.
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(d) Exercise of SARs:
(i) Subject to the terms of the Plan, SARs shall be exercisable in
whole or in part upon such terms and conditions as are provided in the
agreement relating to the grant of the SAR. The period during which an SAR
may be exercisable shall not exceed ten years from the date of grant or, in
the case of Tandem SARs, such shorter option period as may apply to the
Related Option. Any SAR or portion thereof not exercised before expiration
of the period stated in the agreement relating to the grant of the SAR
shall terminate.
(ii) SARs may be exercised by giving written notice to the Corporation
at such place as the Administrator shall direct. The date of exercise of
the SAR shall mean the date on which the Corporation shall have received
proper notice from the Participant of the exercise of such SAR.
(iii) No SAR may be exercised unless the Participant is, at the time
of exercise, an eligible Participant, as described in Section 5, and has
been a Participant continuously since the date the SAR was granted, subject
to the provisions of Sections 6(c)(iii), (iv) and (v) herein.
(e) Consideration; Election: The consideration to be received upon the
exercise of the SAR by the Participant shall be paid in cash, shares of Common
Stock (valued at Fair Market Value on the date of exercise of such SAR in
accordance with Section 6(b)(ii) herein) or a combination of cash and shares of
Common Stock, as elected by the Administrator, subject to the terms of the Plan,
the applicable agreement and applicable laws or rules. The Corporation's
obligation arising upon the exercise of the SAR may be paid currently or on a
deferred basis with such interest or earnings equivalent as the Administrator
may determine. A certificate or certificates for shares of Common Stock acquired
upon exercise of an SAR for shares shall be issued in the name of the
Participant (or his beneficiary) and distributed to the Participant (or his
beneficiary) as soon as practicable following receipt of notice of exercise. No
fractional shares of Common Stock will be issuable upon exercise of the SAR and,
unless otherwise provided in the applicable agreement, the Participant will
receive cash in lieu of fractional shares.
(f) Limitations: The applicable SAR agreement shall contain such terms,
conditions and limitations consistent with the Plan as may be specified by the
Administrator. Unless otherwise so provided in the applicable agreement or the
Plan, any such terms, conditions or limitations relating to a Tandem SAR shall
not restrict the exercisability of the Related Option.
(g) Nontransferability:
(i) SARs shall not be transferable other than by will or the laws of
intestate succession. The designation of a beneficiary does not constitute
a transfer. SARs may be exercised during the Participant's lifetime only by
him or by his guardian or legal representative.
(ii) If the Participant is subject to Section 16 of the Exchange Act,
shares of Common Stock acquired upon exercise of an SAR may not, without
the consent of the
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Administrator, be disposed of by the Participant until the expiration of
six months after the date the SAR was granted.
8. RESTRICTED AWARDS
(a) Grant of Restricted Awards: Subject to the limitations of the Plan,
the Administrator may in its sole and absolute discretion grant Restricted
Awards to such individuals in such numbers, upon such terms and at such times as
the Administrator shall determine. A Restricted Award may consist of a
Restricted Stock Award or a Restricted Unit, or both. Restricted Awards shall be
payable in cash or whole shares of Common Stock (including Restricted Stock), or
partly in cash and partly in whole shares of Common Stock, in accordance with
the terms of the Plan and the sole and absolute discretion of the Administrator.
The Administrator may condition the grant or vesting, or both, of a Restricted
Award upon the continued service of the Participant for a certain period of
time, attainment of such performance objectives as the Administrator may
determine, or upon a combination of continued service and performance
objectives. The Administrator shall determine the nature, length and starting
date of the period during which the Restricted Award may be earned (the
"Restriction Period") for each Restricted Award. In the case of Restricted
Awards based upon performance criteria, or a combination of performance criteria
and continued service, the Administrator shall determine the performance
objectives to be used in valuing Restricted Awards and determine the extent to
which such Awards have been earned. Performance objectives may vary from
participant to participant and between groups of participants and shall be based
upon such Corporation, business unit and/or individual performance factors and
criteria as the Administrator in its sole discretion may deem appropriate,
including, but not limited to, earnings per share, return on equity, return on
assets or total return to shareholders. The Administrator shall determine the
terms and conditions of each Restricted Award, including the form and terms of
payment of Awards. The Administrator shall have sole authority to determine
whether and to what degree Restricted Awards have been earned and are payable
and to interpret the terms and conditions of Restricted Awards and the
provisions herein.
(b) Earning of Restricted Awards: Unless the applicable agreement provides
otherwise, a Restricted Award granted to a Participant shall be deemed to be
earned as of the first to occur of the completion of the Restriction Period,
retirement, displacement, death or disability of the Participant, or
acceleration of the Restricted Award, provided that, in the case of Restricted
Awards based upon performance criteria or a combination of performance criteria
and continued service, the Administrator shall have sole discretion to determine
if, and to what degree, the Restricted Awards shall be deemed earned at the end
of the Restriction Period or upon the retirement, displacement, death or
disability of the Participant. In addition, the following rules shall also
apply to the earning of Restricted Awards:
(i) Completion of Restriction Period: For this purpose, a Restricted
Award shall be deemed to be earned upon completion of the Restriction
Period (except as otherwise provided herein for performance-based
Restricted Awards). In order for a Restricted Award to be deemed earned,
the Participant must have been continuously employed or in service during
the Restriction Period. Continuous employment or service shall mean
employment with or service to any combination of the Corporation and one or
more related corporations, and a temporary leave of absence with consent of
the Corporation shall not be deemed to be a break in continuous employment
or service.
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(ii) Retirement of the Participant: For this purpose, the Participant
shall be deemed to have retired as of the earlier of (A) his normal
retirement date under the retirement plan established by the Corporation
for its employees which is applicable to the Participant, or (B) his
retirement date under a contract, if any, between the Participant and the
Corporation providing for his retirement from the employment of the
Corporation or a related corporation prior to such normal retirement date,
or (C) a mutually agreed upon early retirement date under such retirement
plan of the Corporation between the Participant and the Corporation.
(iii) Displacement of the Participant: For this purpose, the
Participant shall be deemed to have been displaced in the event of the
termination of the Participant's employment or service due to the
elimination of the Participant's job or position without fault on the part
of the Participant.
(iv) Death or Disability of the Participant: Except as otherwise
provided herein for performance-based Restricted Awards, if the Participant
shall terminate continuous employment or service because of death or
disability before a Restricted Award is otherwise deemed to be earned
pursuant to this Section 8(b), the Participant shall be deemed to have
earned a percentage of the Award (rounded to the nearest whole share in the
case of Restricted Awards payable in shares) determined by dividing the
number of his full years of continuous employment or service then completed
during the Restriction Period with respect to the Award by the number of
years of such Restriction Period.
(v) Acceleration of Restricted Awards by the Administrator:
Notwithstanding the provisions of this Section 8(b), the Administrator, in
its sole and absolute discretion, may accelerate the date that any
Restricted Award granted to the Participant shall be deemed to be earned in
whole or in part, without any obligation to accelerate such date with
respect to other Restricted Awards granted to the Participant or to
accelerate such date with respect to Restricted Awards granted to any other
Participant, or to treat all Participants similarly situated in the same
manner.
(c) Forfeiture of Restricted Awards: If the employment or service of a
Participant shall be terminated for any reason, and the Participant has not
earned all or part of a Restricted Award pursuant to the terms herein, such
Award to the extent not then earned shall be forfeited immediately upon such
termination and the Participant shall have no further rights with respect
thereto.
(d) Share Certificates; Dividend and Voting Rights:
(i) Unless an individual agreement provides otherwise, certificates
representing Restricted Stock shall be issued in the name of the
Participant as soon as practicable following determination of the
Restricted Awards payable in Restricted Stock by the Administrator, and
shares represented by such certificates shall be deemed to be issued and
outstanding for all purposes. Each such certificate shall have attached
thereto a stock power which shall be executed in blank by the Participant
entitled to such certificate, and such certificate with the executed stock
power attached shall be immediately delivered to the Administrator (or its
designee) to be held for the Participant until such shares have been earned
(in which event the
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certificate representing the shares shall be transferred to the Participant
or his beneficiary or personal representative) or forfeited (in which event
the shares shall become available for other Awards), as provided in this
Section 8.
(ii) Unless the applicable agreement provides otherwise, a
Participant shall have all rights and incidents of ownership with respect
to Restricted Stock subject to a Restricted Award and held for his account,
including the right to receive dividends when paid by the Corporation and
to have full voting rights with respect to such Restricted Stock held for
his account by the Corporation on the record date, even though the
Restricted Stock with respect to which such dividends are paid or vote
exercised shall not have been earned and shall be subject to forfeiture.
Any securities of the Corporation distributed in a transaction described in
Section 4(c), or otherwise, with respect to Restricted Stock held for a
participant by the Corporation shall be delivered to the Corporation to be
held with and as a part of such Award, subject to being earned or forfeited
as provided in Section 8, as if such distributed securities were a part of
the original Award.
(e) Nontransferability:
(i) The recipient of a Restricted Award shall not sell, transfer,
assign, pledge or otherwise encumber shares subject to the Award until the
Restriction Period has expired or until all conditions to vesting have been
met.
(ii) Restricted Awards shall not be transferable other than by will or
the laws of intestate succession. The designation of a beneficiary does
not constitute a transfer.
(iii) If a Participant of a Restricted Award is subject to Section 16
of the Exchange Act, shares of Common Stock subject to such Award may not,
without the consent of the Administrator, be sold or otherwise disposed of
within six months following the date of grant of such Award.
9. WITHHOLDING
The Corporation shall withhold all required local, state and federal taxes
from any amount payable in cash with respect to an Award. The Corporation shall
require any recipient of an Award payable in shares of the Common Stock to pay
to the Corporation in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the Corporation to such
authority for the account of such recipient. Notwithstanding the foregoing, the
recipient may satisfy such obligation in whole or in part, and any other local,
state or federal income tax obligations relating to such an Award, by electing
(the "Election") to have the Corporation withhold shares of Common Stock from
the shares to which the recipient is entitled. The number of shares to be
withheld shall have a Fair Market Value as of the date that the amount of tax to
be withheld is determined (the "Tax Date") as nearly equal as possible to (but
not exceeding) the amount of such obligations being satisfied. Each Election
must be made in writing to the Administrator in accordance with election
procedures established by the Administrator.
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10. SECTION 16(B) COMPLIANCE
It is the general intent of the Corporation that transactions under the
Plan which are subject to Section 16 of the Exchange Act shall comply with Rule
16b-3 under the Exchange Act. Notwithstanding anything in the Plan to the
contrary, the Administrator, in its sole and absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan to participants who are officers or directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other participants.
11. NO RIGHT OR OBLIGATION OF CONTINUED EMPLOYMENT
Nothing contained in the Plan shall require the Corporation or a related
corporation to continue the employment or service of a Participant, nor shall
any such individual be required to remain in the employment or service of the
Corporation or a related corporation. Except as otherwise provided in the Plan,
Awards granted under the Plan to employees of the Corporation or a related
corporation shall not be affected by any change in the duties or position of the
participant, as long as such individual remains an employee of, or in service
to, the Corporation or a related corporation.
12. UNFUNDED PLAN; RETIREMENT PLANS
(a) 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
Corporation or any related corporation, including, without limitation, any
specific funds, assets or other property which the Corporation or any related
corporation, in their discretion, may set aside in anticipation of a liability
under the Plan. A participant shall have only a contractual right to the Common
Stock or amounts, if any, payable under the Plan, unsecured by any assets of the
Corporation or any related corporation. Nothing contained in the Plan shall
constitute a guarantee that the assets of such corporations shall be sufficient
to pay any benefits to any person.
(b) In no event shall any amounts accrued, distributable or payable under
the Plan be treated as compensation for the purpose of determining the amount of
contributions or benefits to which any person shall be entitled under any
retirement plan sponsored by the Corporation or a related corporation that is
intended to be a qualified plan within the meaning of Section 401(a) of the
Code.
13. AMENDMENT AND TERMINATION OF THE PLAN
The Plan may be amended or terminated at any time by the Board of Directors
of the Corporation; provided, that (i) such amendment or termination shall not,
without the consent of the recipient of an Award, adversely affect the rights of
the recipient with respect to an outstanding Award; and (ii) approval of an
amendment by the shareholders of the Corporation shall be required to the
extent, if any, that shareholder approval of such amendment is required by
applicable law, rule or regulation.
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14. RESTRICTIONS ON SHARES
The Corporation may impose such restrictions on any shares representing
Awards hereunder as it may deem advisable, including without limitation
restrictions under the Securities Act, under the requirements of any stock
exchange or similar organization and under any blue sky or state securities laws
applicable to such shares. Notwithstanding any other Plan provision to the
contrary, the Corporation shall not be obligated to issue, deliver or transfer
shares of Common Stock under the Plan or make any other distribution of benefits
under the Plan, or take any other action, unless such delivery, distribution or
action is in compliance with all applicable laws, rules and regulations
(including but not limited to the requirements of the Securities Act). The
Corporation may cause a restrictive legend to be placed on any certificate
issued pursuant to an Award hereunder in such form as may be prescribed from
time to time by applicable laws and regulations or as may be advised by legal
counsel.
15. APPLICABLE LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of Georgia.
16. SHAREHOLDER APPROVAL
The Plan is subject to approval by the shareholders of the Corporation,
which approval must occur, if at all, within 12 months of the effective date of
the Plan. Awards granted prior to such shareholder approval shall be
conditioned upon and shall be effective only upon approval of the Plan by such
shareholders on or before such date.
17. CHANGE OF CONTROL
(a) Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change of Control (as defined in Section 17(b) herein):
(i) All Options and SARs outstanding as of the date of such Change of
Control shall become fully exercisable, whether or not then otherwise
exercisable.
(ii) Any restrictions including but not limited to the Restriction
Period applicable to any Restricted Award shall be deemed to have expired,
and such Restricted Awards shall become fully vested and payable to the
fullest extent of the original grant of the applicable Award.
(iii) Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the
Corporation or a related corporation, the Administrator may, in its sole
and absolute discretion, determine that any or all Awards granted pursuant
to the Plan shall not vest or become exercisable on an accelerated basis,
if the Board of Directors of the surviving or acquiring corporation, as the
case may be, shall have taken such action, including but not limited to the
assumption of Awards granted under the Plan or the grant of substitute
awards (in either case, with substantially similar terms as Awards granted
under the Plan), as in the opinion of the Administrator is equitable or
appropriate to protect the
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rights and interests of participants under the Plan. For the purposes
herein, if the Committee is acting as the Administrator authorized to make
the determinations provided for in this Section 17(a)(iii), the Committee
shall be appointed by the Board of Directors, two-thirds of the members of
which shall have been directors of the Corporation prior to the merger,
share exchange, reorganization or other business combinations affecting the
Corporation or a related corporation.
(b) For the purposes herein, a "Change of Control" shall be deemed to have
occurred on the earliest of the following dates:
(i) The date any entity or person that is not a shareholder on the
effective date of the Plan shall have become the beneficial owner of, or
shall have obtained voting control over, thirty percent (30%) or more of
the outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation approve a definitive
agreement (A) to merge or consolidate the Corporation with or into another
corporation, in which the Corporation is not the continuing or surviving
corporation or pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other property of
another corporation, other than a merger or consolidation of the
Corporation in which holders of Common Stock immediately prior to the
merger or consolidation have the same proportionate ownership of Common
Stock of the surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all or
substantially all the assets of the Corporation; or
(iv) The date there shall have been a change in a majority of the
Board of Directors of the Corporation within a 12-month period unless the
nomination for election by the Corporation's shareholders of each new
director was approved by the vote of two-thirds of the directors then still
in office who were in office at the beginning of the 12-month period.
(For purposes herein, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such term
is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
other than the Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or any
subsidiary thereof, and the term "beneficial owner" shall have the meaning
given the term in Rule 13d-3 under the Exchange Act.)
18. CERTAIN DEFINITIONS
In addition to other terms defined in the Plan, the following terms shall
have the meaning indicated:
(a) "Agreement" means any written agreement or agreements between the
Corporation and the recipient of an Award pursuant to the Plan relating to the
terms, conditions and restrictions of Options, SARs, Restricted Awards and any
other Awards conferred herein.
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(b) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or which has lasted or can
be expected to last for a continuous period of not less than twelve months.
(c) "Parent" or "Parent Corporation" shall mean any corporation (other than
the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock possessing
50% or more of the total combined voting power of all classes of stock in
another corporation in the chain.
(d) "Predecessor" or "Predecessor Corporation" means a corporation which
was a party to a transaction described in Section 424(a) of the Code (or which
would be so described if a substitution or assumption under that Section had
occurred) with the Corporation, or a corporation which is a parent or subsidiary
of the Corporation, or a predecessor of any such corporation.
(e) "Related Corporation" means any parent, subsidiary or predecessor of
the Corporation.
(f) "Restricted Stock" shall mean shares of Common Stock which are subject
to Restricted Awards payable in shares, the vesting of which is subject to
restrictions set forth in the Plan or the agreement relating to such Award.
(g) "Subsidiary" or "Subsidiary Corporation" means any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the
Corporation if each corporation other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in another corporation in the chain.
IN WITNESS WHEREOF, this 1998 Stock Incentive Plan of Transit Group, Inc.,
is, by the authority of the Board of Directors of the Corporation, executed in
behalf of the Corporation, the 10 day of February, 1998.
TRANSIT GROUP, INC.
By: /s/ Philip A. Belyew
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Name: Philip A. Belyew
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Title: President and Chief Executive Officer
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ATTEST:
/s/ Wayne N. Nellums
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Secretary
[Corporate Seal]
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