EXHIBIT 10.2

Grantee:

 

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Grant Date:

 

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Address:

 

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Expiration Date:

 

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Base Price per Share:

 

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Number of Shares:

 

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SAR No.:

 

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STOCK APPRECIATION RIGHTS AGREEMENT

                    This Stock Appreciation Rights Agreement ("Agreement") is
made as of the Grant Date set forth above (the "Grant Date") between SPARTAN
MOTORS, INC., a Michigan corporation ("Spartan"), and the grantee named above
("Grantee").

                    The Spartan Motors, Inc. Stock Incentive Plan of 2005 (the
"Plan") is administered by the Compensation Committee of Spartan's Board of
Directors (the "Committee"). The Committee has determined that Grantee is
eligible to participate in the Plan. The Committee has granted stock
appreciation rights to Grantee, subject to the terms and conditions contained in
this Agreement and in the Plan. This Agreement is intended to comply with the
provisions governing stock appreciation rights under Internal Revenue Service
Notice 2005-1 in order to exempt the stock appreciation rights from application
of Section 409A of the Internal Revenue Code ("Section 409A").

                    Grantee acknowledges receipt of a copy of the Plan and
accepts the stock appreciation rights subject to all of the terms, conditions
and provisions of this Agreement and the Plan.

          1.          Grant.  Spartan grants to Grantee stock appreciation
rights (the "Stock Appreciation Rights") with respect to the number of shares of
Spartan's common stock, $.01 par value ("Common Stock") equal to the Number of
Shares set forth above. A Stock Appreciation Right is a right awarded to Grantee
that entitles Grantee to receive Common Stock having a value on the date the
Stock Appreciation Right is exercised equal to the excess of (a) the Market
Value (as defined in the Plan) of a share of Common Stock at the time of
exercise over (b) the Base Price per Share set forth above, which equals the
Market Value of the Common Stock on the Grant Date. The Stock Appreciation
Rights consist of a single Stock Appreciation Right for each share of Common
Stock.

          2.          Price.  The per-share base price of the Stock Appreciation
Rights shall equal the Base Price per Share set forth above (subject to
adjustment as provided in the Plan).

          3.          Term and Vesting.  The right to exercise the Stock
Appreciation Rights shall vest immediately and shall terminate on the Expiration
Date set forth above, unless earlier terminated pursuant to the terms of the
Plan.

          4.          Exercise.  Grantee shall exercise the Stock Appreciation
Rights by giving Spartan a written notice of the exercise of the Stock
Appreciation Rights in the form of Exhibit A to this Agreement and providing any
other documentation that the Committee may require from time to time. The notice
shall set forth the number of shares with respect to which Grantee is exercising
the Stock Appreciation Rights. The notice shall be effective when received at
Spartan's main office. The Stock

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Appreciation Rights will be considered exercised with respect to the number of
shares specified in the notice on the latest of (i) the date of exercise
designated in the notice, (ii) if the date so designated is not a business day,
the first business day following such date or (iii) the earliest business day by
which Spartan has received the notice and all documentation required by the
Committee. Spartan shall deliver to Grantee a certificate or certificates for
the shares received upon exercise of the Stock Appreciation Rights: provided,
however, that the time of delivery may be postponed for such period as may be
required for Spartan with reasonable diligence to comply with any requirements
or provisions of the Securities Act of 1933 or the Securities Exchange Act of
1934, any law, order or regulation of any governmental authority, or any rule or
regulation of, or agreement of Spartan with, any applicable securities exchange
or quotation system. If at any time the number of shares to be received upon
exercise of the Stock Appreciation Rights includes a fractional share, the
number of shares actually issued shall be rounded down to the nearest whole
share. If Grantee fails to accept delivery or tender of all or any of the shares
to be received upon exercise of the Stock Appreciation Rights specified in the
notice, Grantee's right to exercise the Stock Appreciation Rights with respect
to such unaccepted shares shall terminate.

          5.          Withholding.  Spartan shall be entitled to (a) withhold
and deduct from Grantee's future wages (or from other amounts that may be due
and owing to Grantee from Spartan), or make other arrangements for the
collection of, all legally required amounts necessary to satisfy any and all
federal, state, and local withholding and employment-related tax requirements
attributable to the Stock Appreciation Rights under this Agreement, including
without limitation, attributable to the award, vesting or exercise of the Stock
Appreciation Rights; or (b) require Grantee promptly to remit the amount of such
withholding to Spartan before taking any action with respect to the Stock
Appreciation Rights. Grantee acknowledges that Grantee is obligated to pay the
amount of such withholding. Unless the Committee provides otherwise, withholding
may be satisfied by withholding shares to be received upon exercise of the Stock
Appreciation Rights or by delivery to Spartan of previously owned Common Stock.

          6.          Transferability.  The Plan provides that the Stock
Appreciation Rights are generally not transferable by Grantee except by will or
according to the laws of descent and distribution, and are exercisable during
Grantee's lifetime only by Grantee or Grantee's guardian. Spartan may, in the
event it deems the same desirable to assure compliance with applicable federal
and state securities laws, place an appropriate restrictive legend upon any
certificate representing shares received upon exercise of the Stock Appreciation
Rights, and may also issue appropriate stop-transfer instructions to its
transfer agent with respect to such shares.

          7.          Termination of Employment or Director Status.  The Stock
Appreciation Rights shall terminate as provided in the Plan with respect to the
death of Grantee or the termination of the employment or director status (or
both, if applicable) of Grantee with Spartan or any of its subsidiaries.

          8.          Acceleration.  The Stock Appreciation Rights shall be
immediately exercisable in the event of any Change in Control (as defined in the
Plan) of Spartan.

          9.          Shareholder Rights.  Grantee shall have no rights as a
shareholder by reason of the Stock Appreciation Rights or with respect to any
shares to be received upon exercise of the Stock Appreciation Rights until the
date of issuance of a stock certificate to Grantee for such shares.

          10.          Employment by Spartan.  The grant of the Stock
Appreciation Rights shall not impose upon Spartan or any subsidiary any
obligation to retain Grantee in its employ for any given period or upon any
specific terms of employment. Spartan or any subsidiary may at any time dismiss
Grantee from employment, free from any liability or claim under the Plan, except
as otherwise expressly provided in any written agreement with Grantee.

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          11.          Certifications.  Grantee hereby represents and warrants
that Grantee is acquiring the shares to be received upon exercise of the Stock
Appreciation Rights for Grantee's own account and investment and without any
intent to resell or distribute such shares upon such exercise. Grantee shall not
resell or distribute the shares received upon exercise of the Stock Appreciation
Rights except in compliance with such conditions as Spartan may reasonably
specify to ensure compliance with federal and state securities laws.

          12.          Effective Date.  The Stock Appreciation Rights Agreement
shall be effective as of the Grant Date.

          13.          Amendment.  Neither the Stock Appreciation Rights nor
this Agreement shall be modified except in a writing executed by the parties to
this Agreement and except as Spartan, upon advice of legal counsel, determines
is necessary or advisable because of the promulgation of, or change in or of the
interpretation of, any law or governmental rule or regulation, including without
limitation, Section 409A and any applicable federal or state securities laws.

          14.          Agreement Controls.  The Plan is incorporated in this
Agreement by reference. Capitalized terms not defined in this Agreement shall
have those meanings provided in the Plan. In the event of any conflict between
the terms of this Agreement and the terms of the Plan, the terms of this
Agreement shall control.

          15.          Corporate Changes.  In the event of any stock dividend,
stock split or other increase or reduction in the number of shares of Common
Stock outstanding, the number and class of shares that may be received upon
exercise of the Stock Appreciation Rights, and the Base Price per Share, are
subject to adjustment as provided in the Plan; provided however, that no
adjustment shall be contrary to Section 409A or shall be effected in a manner
that would subject Grantee to taxes and penalties under Section 409A.

          16.          Administration.  The Committee has full power and
authority to interpret the provisions of the Plan, to supervise the
administration of the Plan and to adopt forms and procedures for the
administration of the Plan, except as limited by the Plan. All determinations
made by the Committee shall be final and conclusive.

          17.          Illegality.  Grantee shall not exercise the Stock
Appreciation Rights, and Spartan shall not be obligated to issue any shares of
Common Stock to Grantee pursuant to the exercise of the Stock Appreciation
Rights, if the exercise thereof or the issuance of such shares would constitute
a violation by Grantee or Spartan of any provisions of the Securities Act of
1933 or the Securities Exchange Act of 1934, any other law, order or regulation
of any governmental authority, or any rule or regulation of, or agreement of
Spartan with, any applicable securities exchange or quotation system. Spartan
will in no event be obligated to take any affirmative action in order to cause
the exercise of the Stock Appreciation Rights or the resulting issuance of
shares of Common Stock to comply with any such law, order, rule, regulation or
agreement.

          18.          Governing Law.   This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Michigan,
without regard to conflict of law principles. Each party irrevocably submits to
the general jurisdiction of the state and federal courts located in the State of
Michigan in the counties of Kent and Eaton, in any action to interpret or
enforce this Agreement and irrevocably waives any objection to jurisdiction that
such party may have based on inconvenience of forum.

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SPARTAN MOTORS, INC.

 

 

 

 

 

By

 

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James W. Knapp

 

 

Chief Financial Officer

 

 

 

 

 

 

 

GRANTEE

 

 

 

 

 

 

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Signature

 

 

 

 

 

 

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Print or type name

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EXHIBIT A

 

 

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Date

Spartan Motors, Inc.
ATTN: Chief Financial Officer
1165 Reynolds Road
Charlotte, Michigan 48813

Dear _________:

          Effective on ________, 2____, I hereby exercise SAR No. ___ granted to
me on ___________ with respect to ____ shares of Common Stock of Spartan Motors,
Inc., having a base price per share of $____________.

          I hereby represent to you that it is my intention to acquire these
shares for investment and not for resale or distribution.

 

Very truly yours,

 

 

 

 

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Signature of Grantee

 

 

 

 

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Social Security Number

 

 

 

 

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Other Name, if Joint Ownership

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