NEW CENTURY TRANSPORTATION, INC.
2006 STOCK INCENTIVE PLAN
New Century Transportation, Inc., a Delaware corporation, wishes to attract employees to the
Company, to induce employees to remain with the Company, to encourage them to increase their
efforts to make the Companys business more successful and to enhance equity holder value. In
furtherance thereof; the New Century Transportation, Inc. 2006 Stock Incentive Plan is designed to
provide employees of the Company non-qualified options to acquire Common Stock of the Company and
restricted shares of the Common Stock of the Company.
Whenever used herein and unless otherwise provided in the Holders Award Agreement, the
following terms shall have the meanings set forth below:
1.1. Approved Sale shall have the meaning given such term in the Securities Holders
1.2. Award means a grant of Options or Restricted Stock, or any combination thereof, under
1.3. Award Agreement means the written agreement in the form approved by the Board and
evidencing the grant of an Award, which agreement shall conform to the requirements of the Plan and
may contain such other provisions not inconsistent with the terms of the Plan as the Board shall
1.4. Board means the Board of Directors of the Company. Following the date upon which the
Common Stock of the Company becomes publicly traded so as to render the Company subject to section
162(m) of the Code, the Board shall mean a committee of the Board composed of two or more
directors each of whom shall be a non-employee director as defined in Rule 16b-3 under the 1934
Act and an outside director as defined in Section 162(m) of the Code and the regulations issued
1.5. Cause shall have the meaning given such term in the Securities Holders Agreement.
1.6. Common Stock shall mean the Class A common stock, par value $0.01 per share, of the
1.7. Code means the Internal Revenue Code of 1986, as amended.
1.8. Company means New Century Transportation, Inc., a Delaware corporation.
1.9. Exchange Act means the Securities Exchange Act of 1934, as amended.
1.10. Exercise Price means the price per share at which a share of Common Stock may be
purchased upon exercise of an Option, as it may be adjusted under Section 12.1 of the Plan.
1.11. Fair Market Value shall have the meaning given such term in the Securities Holders
1.12. Holder means any employee of the Company or a Subsidiary to whom an Award is made and
who holds any unexpired Options and/or any Restricted Stock on which the Restricted Period has not
lapsed. Holder includes the Successors of the Holder, if the context requires.
1.13. Option means the right to purchase, at the price and for the term fixed by the Board
in accordance with the Plan, and subject to such other limitations and restrictions in the Plan and
the applicable Award Agreement, a number of shares of Common Stock determined by the Board.
1.14. Person means any individual, partnership, corporation, company, limited liability
company, association, trust, joint venture, unincorporated organization, entity or division, or any
government, governmental department or agency or political subdivision thereof.
1.15. Plan means this New Century Transportation, Inc. 2006 Stock Incentive Plan, as amended
from time to time.
1.16. Restricted Period means the period during which Restricted Stock awarded under the
Plan is subject to forfeiture.
1.17. Restricted Stock means Common Stock granted by the Company to an employee, in
accordance with the Plan and the Special Stock Agreement.
1.18. Securities Act means the Securities Act of 1933, as amended.
1.19. Securities Holders Agreement means the Securities Holders Agreement by and among New
Century Transportation, Inc., NCT Acquisition LLC and the other investors named therein, dated as
of June ___, 2006, as amended from time to time.
1.20. Share means one share of Common Stock.
1.21. Special Stock Agreement means the Special Stock Agreement, dated June ___, 2006 by and
among the Company, on the one hand, and each of Harry Muhlschlegel, Brian Fitzpatrick, Jim
Molinari, Jerry Shields and Dave Russell, on the other hand.
1.22. Subsidiary of any Person (with respect to such Subsidiary, the parent) means any
other Person whose (a) securities having ordinary voting power to elect a majority of its board of
directors or managing or general partners (or other persons having similar functions) or (b) other
ownership interests (including partnership and membership interests) ordinarily constituting a
majority interest in the capital, profits or cash flow of such Person, are at the time,
directly or indirectly, owned or controlled by such parent, or by one or more other
Subsidiaries of such parent, or by such parent and one or more of its other Subsidiaries.
1.23. Successor of the Holder means: (i) the legal representative of the estate of a
deceased Holder or the person, (ii) persons who shall acquire the right to an Award or to exercise
an Option by bequest or inheritance or other transfer or by reason of the death of the Holder or
(iii) persons who shall acquire the right to an Award or to exercise an Option on behalf of the
Holder as the result of a determination by a court or other governmental agency of the incapacity
of the Holder.
1.24. Termination of Service means a Holders termination of employment or other service, as
applicable, with the Company and its Subsidiaries for any reason, including death, disability,
termination by the Company with or without Cause and resignation by the Holder.
EFFECTIVE DATE AND TERMINATION OF PLAN.
2.1. Effective Date of this Plan is June ___, 2006. The Plan shall terminate five years
after its Effective Date and no Award shall be granted hereunder on or after, the fifth anniversary
of the Effective Date of the Plan; provided, however, that the Board may at any time prior to that
date terminate the Plan.
ADMINISTRATION OF PLAN.
3.1. The Plan shall be administered by the Board, who shall have full responsibility and
authority to administer the Plan. The Board shall have full authority to determine to whom Awards
will be granted, the type and amount of Awards to be granted, the terms and conditions of Awards
granted under the Plan and the terms of Award Agreements to be entered into with Holders.
3.2. An Award Agreement shall contain such terms, provisions and conditions not inconsistent
herewith as determined by the Board. The Holder shall take whatever additional actions and execute
whatever additional documents the Board may in its reasonable judgment deem necessary or advisable
in order to carry out or effect one or more of the obligations or restrictions imposed on the
Holder pursuant to the express provisions of the Plan and the Award Agreement.
4.1. Any employee of the Company or a Subsidiary who is designated by the Board as eligible to
participate in the Plan shall be eligible to receive an Award under the Plan.
SHARES SUBJECT TO THE PLAN.
5.1. Subject to adjustments as provided in Section 12.1, as of the effective date of the Plan,
the maximum number of Common Stock available for grant under the Plan as Options shall be 3200, of
which no more than 640 Options may be issued to any one Person in any one year. Subject to
adjustments as provided in Section 12.1, as of the effective date of the Plan, the maximum number
of shares that may be award as Restricted Stock shall be 11,471. Any Common Stock that have been
reserved for issue upon exercise of Options that are later forfeited or for any other reason are
not subject to being issued under the Plan may again be made the subject of Awards under the Plan.
Shares of Restricted Stock that do not vest shall be treated in the manner set forth in the Special
5.2. Securities Holders Agreement: Upon grant of an Award under the Plan, the Holder and any
Successor of the Holder agrees to be bound by the Securities Holders Agreement and to execute a
Joinder to the Securities Holders Agreement in the form attached thereto. Without limiting the
generality of the foregoing, each Holder agrees to any transfer restrictions, repurchase rights and
obligations delineated in the Securities Holders Agreement. Additionally, any amendment to the
Securities Holders Agreement that effects a provision contained herein shall be deemed to be an
amendment to the Plan.
5.3. The certificates (if any) for Common Stock issued hereunder may include any legend which
the Board deems appropriate to reflect any restrictions on transfer hereunder, under the Securities
Holders Agreement or under the Award Agreement, or as the Board may otherwise deem appropriate.
6.1. Grant of Option. Subject to the other terms of the Plan, the Board shall, in its
discretion as reflected by the terms of the applicable Award Agreement: (i) determine and
designate from time to time those eligible employees of the Company and its Subsidiaries to whom
Options are to be granted subject to Section 4.1 hereof, and the number of shares of Common Stock
to be covered under any Award Agreement granted to each such employee, considering the position and
responsibilities of the employee, the nature and value to the Company of the employees present and
potential contribution to the success of the Company whether directly or through a Subsidiary and
such other factors as the Board may deem relevant; (ii) determine the time or times when and the
manner and conditions under which each Option shall be exercisable and the duration of the exercise
period; and (iii) determine or impose other conditions to the grant or exercise of Options under
the Plan as it may deem appropriate.
6.2. Option Price. The Exercise Price for Options shall be determined by the Board in
its sole discretion and shall be reflected in the Award Agreement but shall in no event be less
than the Fair Market Value of a share of the underlying Common Stock on the date the Option is
6.3. Terms of Options. Unless otherwise specified in the Award Agreement, the term of
each Option shall be seven years from the date of grant. Unless earlier expired, forfeited or
otherwise terminated, each Option shall expire in its entirety upon the day after the last day of
its term. The Option shall also expire, be forfeited and terminate at such times and in such
circumstances as otherwise provided hereunder, in the Securities Holders Agreement or under the
6.4. Vesting and Exercisability. Each Option, to the extent that the Holder has not
had a Termination of Service and the Option has not otherwise lapsed, expired, terminated or been
forfeited, shall vest according to the schedule set forth in the Award Agreement. No Option shall
become exercisable until such Option becomes vested.
6.5. Termination of Service. A Holders Option shall immediately terminate and be
cancelled upon Termination of Service of such Holder, except as otherwise provided herein or in the
Award Agreement with such Holder.
6.6. Notice of Exercise.
(a) Subject to vesting and other restrictions provided for hereunder or otherwise imposed in
accordance herewith, an Option may be exercised, and payment in full of the aggregate Exercise
Price made, by a Holder only by written notice (in the form prescribed by the Board) to the Company
specifying the number of Common Stock to be purchased.
(b) Without limiting the scope of the Boards discretion hereunder, the Board may impose such
other reasonable restrictions on the exercise of Options (whether or not in the nature of the
foregoing restrictions) as it may deem necessary or appropriate.
6.7. Form of Payment.
(a) The aggregate Exercise Price shall be paid in full upon the exercise of the Option. The
form of this payment to the Company must be made in cash or by a certified or bank cashiers check
made payable to the Company.
(b) Notwithstanding the foregoing, in lieu of exercising an Option for cash, the Holder, with
the Boards consent, which will not be unreasonably withheld, may elect to receive a number of
shares of Common Stock equal to A divided by B. A equals the number of shares of Common
Stock with respect to which such Option is exercised multiplied by the excess of the then Fair
Market Value of one share of Common Stock at such time over the then Exercise Price per Share, and
B equals the Fair Market Value of one Share at such time.
7.1. Grant of Restricted Stock. With respect to any Award of Restricted Stock, the
Board shall, in accordance with the terms of the Special Stock Agreement, specify (i) the number of
shares of Common Stock subject to the Restricted Stock Award, (ii) the Restriction Period
applicable to the Restricted Stock, and (iii) the events that will give rise to a forfeiture of the
7.2. Dividend and Voting Rights. Unless otherwise determined by the Board, during the
Restriction Period, the Participant shall not have all of the rights of a stockholder, including
the right to vote the shares of Restricted Stock nor receive dividends and other distributions.
NONTRANSFERABILITY OF AWARD.
8.1. Awards may not be pledged, assigned or transferred for any reason during the Holders
lifetime (except for those reasons described in Section 1.22(iii)), and any attempt to do so shall
be void and the relevant Award shall be forfeited. Any Successor of the Holder shall, in all
cases, be subject to the provisions of the Award Agreement and the Securities Holders Agreement
between the Company and the Holder. Notwithstanding the generality of the foregoing, the Board may
(but need not) permit other transfers of Awards where the Board concludes that such transferability
does not result in accelerated U.S. federal income taxation and is otherwise appropriate and
9.1. The Company shall be entitled to withhold from any payments or deemed payments any amount
of tax withholding determined by the Board to be required by law. Without limiting the generality
of the foregoing, the Board may, in its discretion, require an Holder to pay to the Company at such
time as the Board determines the amount that the Board deems necessary to satisfy the Companys
obligation to withhold federal, state or local income or other taxes incurred by reason of the
vesting or exercise of any Award.
REGULATIONS AND APPROVALS.
10.1. The obligation of the Company to issue Common Stock with respect to an Award granted
under the Plan shall be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the Board.
10.2. Without in any manner limiting the Boards authority as set forth in Section 11.1, the
Board may make such changes to the Plan as may be necessary or appropriate to comply with the rules
and regulations of any government authority or to obtain tax benefits applicable to an Award.
10.3. Each grant of Awards is subject to the requirement that, if at any time the Board
determines, in its discretion, that the listing, registration or qualification of Common Stock
issuable pursuant to the Plan is required by 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 issuance of Awards, no issuance of Common Stock shall be
made in whole or in part, unless listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions in a manner acceptable to the Board.
10.4. In the event that the disposition of Common Stock acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act, and is not otherwise
exempt from such registration, such Common Stock shall be restricted against transfer to the extent
required under the Securities Act, and the Board may require any individual receiving Common Stock
pursuant to the Plan, as a condition precedent to receipt of such Common Stock, to represent to the
Company in writing that such Common Stock will be disposed of only if registered for sale under the
Securities Act or if there is an available exemption for such disposition.
INTERPRETATION AND AMENDMENTS, OTHER RULES.
11.1. The Board may make such rules and regulations and establish such procedures for the
administration of the Plan as it deems appropriate. Without limiting the generality of the
foregoing and subject to the other terms of the Plan, the Board may (i) at the time of grant,
determine the extent, if any, to which Awards shall be forfeited (whether or not such forfeiture is
expressly contemplated hereunder); (ii) interpret the Plan and the Award Agreements hereunder, with
such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum
deference permitted by law; and (iii) take any other actions and make any other determinations or
decisions that it deems necessary or appropriate in connection with the Plan or the administration
or interpretation thereof. Unless otherwise expressly provided hereunder or under the Award
Agreement, the Board, with respect to any grant, may exercise its discretion hereunder at the time
of the grant or thereafter. In the event of any dispute or disagreement as to the interpretation
of the Plan or of any rule, regulation or procedure, or as to any question, right or obligation
arising from or related to the Plan, the decision of the Board shall be final and binding upon all
persons. The Board may amend the Plan as it shall deem advisable, except that no amendment may
adversely affect an Holder with respect to an Award previously granted without the Holders
consent, unless such amendments are required in order to comply with applicable laws; provided that
the Board may not make any amendment (other than an amendment contingent on shareholder approval)
in the Plan that would, if such amendment were not approved by a majority of the Companys
stockholders, cause the Plan to fail to comply with any requirement of applicable law or
regulation, unless and until the approval of the Companys stockholders is obtained.
CHANGES IN CAPITAL STRUCTURE; CERTAIN CORPORATE TRANSACTIONS.
12.1. Changes in Capital Structure. In the event of a reorganization,
recapitalization, stock split, spin-off, split-off, split-up, stock dividend, issuance of stock
rights, combination of units, shares or other securities, merger, consolidation or any other change
in the structure of the Company affecting the Common Stock or any other event which in the judgment
of the Board necessitates action by way of adjusting the terms of the outstanding Awards or the
Shares, then the Board, in its full discretion, shall make appropriate adjustment in the number and
kind of shares authorized for use under the Plan and any adjustments to outstanding Awards as it
determines appropriate. The adjustments to outstanding Awards shall include, but not be limited
to, the number of Common Stock covered, the respective prices and/or limitations applicable to the
outstanding Awards. No fractional Shares shall be issued pursuant to such an adjustment.
The Fair Market Value of any fractional Shares resulting from adjustments pursuant to this
Section 12.1 shall, where appropriate, be paid in cash to the Holder. The determinations and
adjustments made by the Board pursuant to this Section 12.1 shall be conclusive.
12.2. Certain Corporate Transactions. In the event (1) the Company is consolidated
with or otherwise combined with or acquired by a person or entity, (2) of a merger of the Company
with or into another corporation, (3) of the sale of all or substantially all of the assets of the
Company on a consolidated basis (4) of a divisive reorganization, liquidation or partial
liquidation of the Company, or (5) of an Approved Sale, unless otherwise provided in an Award
Agreement and subject to the rights and provisions set forth in the Special Stock Agreement, the
Board, at its election may take any of the following actions with respect to an outstanding Award:
(a) accelerate the vesting of such Award and terminate the Award immediately prior to the date
of any such transaction, provided that with respect to Options the Holder shall have been given at
least twenty (20) days written notice of such transaction and of the Boards intention to cancel
any Options that remain unexercised;
(b) terminate the Award immediately prior to the date of any such transaction, provided that
with respect to Options, the Holder shall have been given at least twenty (20) days written notice
of such transaction and of the Boards intention to cancel any Options that remain unexercised;
(c) cancel any Options that remain unexercised in exchange for a payment in cash of an amount
equal to the excess of the Fair Market Value of the Common Stock over the Exercise Price for such
Option. If the Fair Market Value of the Common Stock subject to the Option is less than the
Options Exercise Price, the Award shall be canceled with no further payment due the Holder;
(d) require that the Award be assumed by the successor corporation or that Awards for shares
or other interests in the successor corporation with equivalent Fair Market Value be substituted
for such Award; or
(e) take such other action as the Board shall determine to be reasonable under the
circumstances to permit the Holder to realize the Fair Market Value of the Award.
The application of the foregoing provisions, including, without limitation, the issuance of
any substitute Awards, shall be determined in good faith by the Board in its sole discretion. Any
adjustment may provide for the elimination of fractional Common Stock. In taking any action
described above, the Board may in its discretion determine that the value of a Award equals the
excess of the fair market value of the consideration to be received in the merger, consolidation,
combination, sale, reorganization, liquidation or Approved Sale had the Award been exercised with
respect to such Common Stock immediately prior thereto, over the Award exercise price of such
Award, or such lesser amount as the Board may determine, including, in the case of an unvested
Award, or portion thereof, determining a value of zero.
12.3. Board Authority.
The judgment of the Board with respect to any matter referred to in this Section 12 shall be
conclusive and binding upon each Holder without the need for any amendment to the Plan.
13.1. No Rights to Employment or Other Service. Nothing in the Plan or in any grant
made pursuant to the Plan shall confer on any individual any right to continue in the employ or
other service of the Company or its Subsidiaries or interfere in any way with the right of the
Company or its Subsidiaries and its shareholders to terminate the individuals employment or other
service at any time.
13.2. No Fiduciary Relationship. Nothing contained in the Plan, and no action taken
pursuant to the provisions of the Plan, shall create or shall be construed to create a trust of any
kind, or a fiduciary relationship between the Company or its Subsidiaries, or their officers or the
Board, on the one hand, and the Holder, the Company, its Subsidiaries or any other person or
entity, on the other.
13.3. Notices. All notices under the Plan shall be in writing, and if to the Company,
shall be delivered to the Board or mailed to its principal office, addressed to the attention of
the Board; and if to the Holder, shall be delivered personally, sent by facsimile transmission or
mailed to the Holder at the address appearing in the records of the Company. Such addresses may be
changed at any time by written notice to the other party given in accordance with this Section
13.4. Exculpation and Indemnification. The Company shall indemnify and hold harmless
the members of the Board, from and against any and all liabilities, costs and expenses incurred by
such persons as a result of any act or omission to act in connection with the performance of such
persons duties, responsibilities and obligations under the Plan, to the maximum extent permitted
by law, other than such liabilities, costs and expenses as may result from the gross negligence,
bad faith, willful misconduct or criminal acts of such persons.
13.5. Captions. The use of captions in this Plan is for convenience. The captions
are not intended to provide substantive rights.
13.6. Governing Law. THE PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
JERSEY WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, on behalf of New Century Transportation, Inc. and pursuant to the
direction of the Board, the undersigned hereby adopts the Plan as set forth herein.
||NEW CENTURY TRANSPORTATION, INC.