STOCK OPTION AGREEMENT
Date of Grant _________:
THIS GRANT, dated as of the date of grant first stated above
(the "Date of Grant"), is delivered by Pioneer Railcorp ("Company") to
(the "Optionee"), who is a director of the Company.
WHEREAS, the Board of Directors of the Company (the "Board") on April 12,
1994, adopted, with stockholder approval, the Pioneer Railcorp Incentive Stock
Option Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options by
the Board to employees and directors of the Company to purchase, or to exercise
certain rights with respect to, shares of the Class A Common Stock of the
Company (the "Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board considers the optionee to be a person who is eligible
for a grant of incentive stock options under the Plan, and has determined that
it would be in the best interest of the Company to grant the incentive stock
options documented herein.
NOW, THEREFORE, the parties agree as follows:
1. Grant of option.
Subject to the terms and conditions hereinafter set forth, the Company
hereby grants to the Optionee, as of the Date of Grant, an option to purchase up
to _____shares of Stock at a price of $___ per share, the fair market value of
the Stock on the Date of Grant. (If the optionee is a ten percent shareholder,
the option price is $___ per share, 110% of the fair market value of the stock
on the date of grant). Such option is hereinafter referred to as the "Option"
and the shares of stock purchasable upon exercise of the option are hereinafter
sometimes referred to as the "Option Shares." The Option is intended by the
parties hereto to be, and shall be treated as, an incentive stock option as such
term is defined under Section 422 of the Internal Revenue Code of 1986.
The number of Option Shares shall be automatically increased by 10% if the
price condition in Section 2 is satisfied on or before December 31, 1995 and
shall be automatically increased by 5% if the price condition in Section 2 is
satisfied after December 31, 1995 but on or before December 31, 1996.
2. Exercise of Option.
No Option may be exercised unless and until the closing price of Stock is
at least $8.00 per share (as reported in the Wall Street Journal) for ten
consecutive days on or before December 31, 1997. Thereafter, Options may be
exercised at any time for five years, provided, however, that the aggregate fair
market value of Stock (as determined as of the Date of Grant) which first
becomes exercisable with respect to any optionee in any calendar year may not
exceed $100,000, regardless of the date the option is granted.
If the Optionee is a ten percent shareholder, any option must be exercised,
if at all, within five (5) yeasrs from the Date of Grant.
3. Termination of option.
(a) The Option and all rights hereunder with respect thereto, to
the extent such rights shall not have been exercised, shall terminate if the
price condition in Section 2 is not satisfied by December 31, 1997 or if and to
the extent the option is not otherwise exercised within five years thereafter.
(b) Upon the Optionee's termination of employment with the Company for any
reason other than death, the Optionee may, for a period of three months
thereafter, exercise any options which were exercisable on the date of
termination. Any option not so exercised shall terminate.
(C) In the event of the death of the optionee while a employee of the Company,
the Option may be exercised by the optionee's legal representative or transferee
within one year following the optionee's death, but only to the extent that the
Option would otherwise have been exercisable during such period by the Optionee.
4. Exercise of Options.
(a) The optionee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable hereunder by giving the
Company written notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to be exercised
and the date of exercise thereof.
(b) Full payment by the Optionee of the option price for the Option Shares
purchased shall be made in cash on or before the exercise date specified in the
notice of exercise.
On the exercise date specified in the optionee's notice or as soon
thereafter as is practicable, the Company shall cause to be delivered to the
ptionee, a certificate or certificates for the Option Shares then being
purchased upon full payment of such option Shares. The obligation of the
Company to deliver Stock shall, however, be subject to the condition that if at
any time the Board shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance or purchase
f Stock thereunder, the Option may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall
have been affected or obtained free of any conditions not acceptable to the
Board.
(C) If the Optionee fails to pay for any of the Option Shares specified in such
notice or fails to accept delivery thereof, the Optionee's right to purchase
such Option Shares may be terminated by the Company. The date specified in the
Optionee's notice as the date of exercise shall be deemed the date of exercise
of the option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall
have been received by such date.
(d) Optionee shall comply with such additional procedures for
exercise of the Option as are from time to time established by the
Board.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of shares,stock
split, spin-off,stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the Board shall
make such adjustment as it deems appropriate in the number and kind of shares of
Stock subject to the Option or in the option price; provided, however that such
adjustment shall give the Optionee any additional benefits under the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock shall be the closing
price per share of Stock on the Chicago Stock Exchange or other recognized
market source, as determined by the Board, on the applicable date of reference
hereunder, or if there is no sale on such date, then the closing price on the
last previous day on which a sale is reported. The fair market value of the
Stock on April 12, 1994 is $3.00 per share.
7. No Rights of Stockholders.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights or privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the option.
8. Non-Transferability of Option.
During the Optionee's lifetime, the option hereunder shall be exercisable
only by the Optionee or any guardian or legal representative of the Optionee,
and the Option shall not be transferable except, in case of the death of the
Optionee, by will or the laws of descent and distribution.
9. Employment Not Affected.
Neither the grant of the option nor its exercise shall be construed as
granting to the optionee any right with respect to continued employment with the
Company.
10. Amendment of option.
The option may be amended by the Board at any time (i) if the Board
determines, in its sole discretion, that amendment is necessary or
advisable in light of the Internal Revenue Code of 1986 or in the
regulations issued thereunder, or any federal or state securities law or
other law or regulation or (ii) other than in the circumstances described
in clause (i), with the consent of the Optionee, unless the amendment would
not adversely affect the Optionee.
11. Notice.
Any notice to the Company provided for in this instrument shall be
addressed to it at its offices at Peoria, Illinois, and any notice to the
Optionee shall be addressed to the Optionee at the current address shown on
the records of the Company. Any notice shall be deemed to by duly given if
and when properly addressed and posted by registered or certified mail,
postage prepaid.
12. Incorporation of Plan by Reference.
The option is granted pursuant to the terms of the Plan, the terms of
which are incorporated herein by reference, and the Option shall in all
respects be interpreted in accordance with the Plan. The Board shall
interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with
respect to any issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance
with the law of the State of Illinois.
OPTIONEE PIONEER RAILCORP
____________ By:______________
Its
