FORM OF OF FROZEN FOOD EXPRESS INDUSTRIES, INC. INCENTIVE OPTION AWARD AGREEMENT
EXHIBIT 10.5
FORM
OF
2005
STOCK INCENTIVE PLAN
OF
FROZEN
FOOD EXPRESS INDUSTRIES, INC.
This
Incentive Option Award Agreement (this “Agreement”) is made and entered into by
and between Frozen Food Express Industries, Inc., a Texas corporation (“FFE” or
the “Corporation”) and _____________________ (the “Optionee”), as of
_______________, 2005 (the “Date of Grant”). If the Optionee is presently or
subsequently becomes employed by a subsidiary of the Corporation, the term
“Corporation” shall be deemed to refer collectively to FFE, and the subsidiary
or subsidiaries which employ the Optionee.
W I T
N E S S E T H:
WHEREAS,
the Corporation has adopted the Frozen Food Express Industries, Inc. 2005 Stock
Incentive Plan (the “Plan”), a copy of which is attached hereto and incorporated
herein by reference, to provide an incentive for key employees and certain
consultants and advisors of the Corporation to remain in the service of the
Corporation and to extend them the opportunity to acquire a proprietary interest
in the Corporation so that they will apply their best efforts for the benefit of
the Corporation; and
WHEREAS,
the committee established pursuant to the Plan (the “Committee”) believes that
the granting of the stock option herein described to the Optionee is consistent
with the stated purposes for which the Plan was adopted;
NOW,
THEREFORE, in consideration of the mutual covenants and conditions hereinafter
set forth and for other good and valuable consideration, the Corporation and the
Optionee agree as follows:
1. Grant
of Option. Under
the terms and conditions of Section 5 of the Plan, FFE hereby grants to the
Optionee the right and option (the “Option”) to purchase an aggregate of
________
shares
(such number being subject to adjustment as provided in Section 9 of the
Plan) of the common stock, $1.50 par value (“Common Stock”), of FFE (“Plan
Shares.”)
Subject
to Paragraph 9 herein, the Option granted hereunder is intended to qualify
as an “incentive stock option” under Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”) and shall be so construed; provided,
however, that nothing in this Agreement shall be interpreted as a
representation, guarantee, or other undertaking on the part of the Corporation
that this Option is or will be determined to be an “incentive stock option”
within such section or any other section of the Code.
2. Exercise
Price. The
price at which the Optionee shall be entitled to purchase the Plan Shares
covered by the Option shall be ________________________/100 U.S.
dollars ($__.__) per Plan Share (the “Exercise Price”).
3. Vesting
and Exercisability of Option. The
Option hereby granted is fully vested upon the Date of Grant. The Option shall
be exercisable commencing on the date that is one (1) year and one (1) day
following the Date of Grant, unless the Optionee’s employment terminates prior
to that date, in which case the provisions of Paragraphs 4(c), (d) and (e)
hereof shall apply. The Option shall remain in force and effect until the close
of business on the Option Expiration Date. The Option Expiration Date shall be
the earliest of (i)
the date that is ten (10) years following the Date of Grant, or (ii) in the
case of the Optionee’s termination of employment, death or disability, the date
specified in Paragraph 4 hereof.
4. Exercise
of Option; Termination of Employment Events.
|
(a) |
The
Optionee may exercise the Option with respect to all or any part of the
Plan Shares covered hereby by delivery to the Committee of written notice
of exercise and payment of the purchase price as provided in
Paragraphs 5 and 6 herein; provided, however, that no Option may be
exercised for a fraction of a Plan Share. |
|
(b) |
An
Option will cease to be exercisable with respect to the Plan Shares when
the Optionee purchases the Plan Shares, or when the Option expires or is
terminated. |
|
(c) |
Upon
termination of the Optionee’s employment for any reason other than the
Optionee’s death or Disability (as defined in the Plan), then the Option
shall be exercisable until the first to occur of (i) the Option Expiration
Date or (ii) ninety (90) days following the date of termination. Any
portion of the Option not exercised upon the expiration of the periods
specified in (i) or (ii) shall be null and
void. |
|
(d) |
Upon
the Optionee’s death during employment, then the Option shall be
exercisable by the Optionee’s legal representatives, legatees or
distributees until the first to occur of (i) the Option Expiration Date or
(ii) one year following the date of death. Any portion of the Option not
exercised upon the expiration of the periods specified in (i) or (ii)
shall be null and void. Except as expressly provided in this Paragraph
4(d), the Option shall not be exercisable after the death of the
Optionee. |
|
(e) |
If
the Optionee’s employment is terminated by reason of Disability, then the
Option shall be exercisable by the Optionee, his guardian or legal
representative, until the first to occur of (i) the Option Expiration Date
or (ii) one year following the date of
termination. |
5. Method
of Exercise. The
Option shall be exercisable only by written notice of exercise (the “Exercise
Notice”) delivered to the Corporation, which notice shall (a) state the
number of Plan Shares with respect to which the Option is being exercised,
(b) be signed by the Optionee or, if the Optionee is dead or disabled, by
the person authorized to exercise the Option, (c) be accompanied by the
Exercise Price for all Plan Shares for which the Option is exercised, and
(d) include such other information, instruments, and documents as may be
required to satisfy any other condition to exercise contained herein. The
Committee may require that the Exercise Notice be provided on a form or forms
prescribed by the Committee.
6. Medium
and Time of Payment. The
Exercise Price shall be payable in full upon the exercise of the Option
(a) in cash or by an equivalent means acceptable to the Committee,
(b) with shares of Common Stock owned by the Optionee for at least six
months and having a Fair Market Value at least equal to the aggregate Exercise
Price payable in connection with such exercise, or (c) by any combination
of clauses (a) and (b). Instead of surrendering shares of Common Stock that the
Optionee has owned for at least six months, the Optionee may attest to the
ownership of those shares on a form provided by the Committee and have the same
number of shares subtracted from the Option shares to be issued to the Optionee.
In addition, at the request of the Optionee and to the extent permitted by
applicable law, the Committee may approve arrangements with a brokerage firm
under which that brokerage firm, on behalf of the Optionee, shall pay to FFE the
Exercise Price of the Option being exercised, and FFE shall promptly deliver the
exercised shares to the brokerage firm (a “Cashless Exercise”). To accomplish
the Cashless Exercise, the Optionee must deliver to FFE an Exercise Notice
containing irrevocable instructions from the Optionee to FFE to deliver the
stock certificates directly to the broker.
7. Nontransferability. The
Option granted by this Agreement shall be exercisable only in accordance with
Paragraph 3 herein and, except as provided in Paragraph 4 hereof, only by
the Optionee during the Optionee’s lifetime and while an employee of the
Corporation. No Option granted by this Agreement is transferable by the Optionee
other than by will or pursuant to applicable laws of descent and distribution.
Except as may be necessary to accomplish the Cashless Exercise, the Option, and
any rights and privileges in connection therewith, cannot be transferred,
assigned, pledged, or hypothecated by the Optionee, or by any other person or
persons, in any way, whether by operation of law, or otherwise, and may not be
subject to execution, attachment, garnishment or similar process. In the event
of any such occurrence, this Agreement will automatically terminate and will
thereafter be null and void. The Optionee may, however, dispose of this Option
in the Optionee’s will or pursuant to a written beneficiary designation executed
by the Optionee. Such a designation must be filed with the Corporation on the
proper form and will be recognized only if it is received at the Corporation’s
headquarters before the Optionee’s death.
8. Delivery
of Plan Shares. No Plan
Shares shall be transferred to the Optionee upon exercise of the Option until
(i) the purchase price is paid in full in the manner herein provided,
(ii) all the applicable taxes required to be withheld have been paid or
withheld in full, (iii) the approval of any governmental authority required
in connection with the Option, or the issuance of Plan Shares thereunder, has
been received by FFE, and (iv) if required by the Committee, the Optionee
has delivered to the Committee assurances in form and content satisfactory to
FFE as provided in Section 10.10 of the Plan.
9. Notice
of Disqualifying Disposition. In
order for FFE to avail itself of any income tax deduction to which it may be
entitled, the Optionee must notify FFE of his disposal of any Plan Shares
purchased pursuant to this Agreement within two (2) years from the Date of Grant
and one (1) year from the date of exercise of this Option. Said notification
shall occur promptly after the disposition and shall include the number of Plan
Shares disposed of, the dates of acquisition and disposition of the Plan Shares,
and the consideration received for such disposition. If in connection with such
disposition FFE becomes liable for withholding taxes and has no amounts owing to
the Optionee with which to discharge its withholding obligation, the Optionee
shall provide FFE with the amount needed to discharge FFE’s withholding
obligation and shall indemnify FFE against any penalties it may incur through
its inability to apply amounts owing the Optionee in discharge of its
withholding obligations.
10. Information
Confidential. As
partial consideration for the granting of the Option, the Optionee agrees that
he will keep confidential all information and knowledge that he has relating to
the manner and amount of his participation in the Plan; provided, however, that
such information may be disclosed as required by law and may be given in
confidence to the Optionee’s spouse, tax and financial advisors, or to a
financial institution to the extent that such information is necessary to obtain
a loan.
11. Definitions;
Copy of Plan. To the
extent not specifically provided herein, all capitalized terms used in this
Agreement shall have the same meaning ascribed to them in the Plan. By the
execution of this Agreement, the Optionee acknowledges receipt of a copy of the
Plan.
12. Administration. This
Agreement is subject to the terms and conditions of the Plan. The Plan will be
administered by the Committee in accordance with its terms. The Committee has
sole and complete discretion with respect to all matters reserved to it by the
Plan and decisions of the Committee with respect to the Plan and to this
Agreement shall be final and binding upon the Optionee and the Corporation. In
the event of any conflict between the terms and conditions of this Agreement and
the Plan, the provisions of the Plan shall control.
13. Continuation
of Employment. This
Agreement shall not be construed to confer upon the Optionee any right to
continue in the employ of the Corporation and shall not limit the right of the
Corporation, in its sole discretion, to terminate the employment of the Optionee
at any time.
14. Obligation
to Exercise. The
Optionee shall have no obligation to exercise any Option granted by this
Agreement.
15. Governing
Law. This
Agreement shall be interpreted and administered under the laws of the State of
Texas (excluding its conflict of law rules) except to the extent such law is
preempted by federal law.
16. Amendments. This
Agreement may be amended only by a written agreement executed by the Corporation
and the Optionee. Any such amendment shall be made only upon the mutual consent
of the parties, which consent (of either party) may be withheld for any
reason.
17. Termination. The
Corporation may terminate the Plan at any time; however, such termination will
not modify the terms and conditions of the Option granted hereunder unless the
Optionee’s prior written consent is obtained.
IN
WITNESS WHEREOF, the Corporation has caused this Agreement to be duly executed
by its officers thereunto duly authorized, and the Optionee has hereunto set his
hand as of the day and year first above written.
FROZEN
FOOD EXPRESS INDUSTRIES, INC.
By: ____________________________
Name: ▇. ▇.
▇▇▇▇▇▇, ▇▇.
Its:
Chairman of the Board
OPTIONEE
_____________________________
_____________________________