Document:

Exhibit

LUMENTUM HOLDINGS INC.
EXECUTIVE OFFICER PERFORMANCE-BASED INCENTIVE PLAN
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1    Effective Date. The Plan will become effective upon ratification by an affirmative vote of the holders of a majority of the Shares that are present in person or by proxy and entitled to vote at the 2016 Annual Meeting of Stockholders of the Company.
1.2    Purpose of the Plan. The Plan is intended to increase shareholder value and the success of the Company by motivating key executives (1) to perform to the best of their abilities, and (2) to achieve the Company’s objectives. The Plan’s goals are to be achieved by providing such executives with incentive awards based on the achievement of goals relating to the performance of the Company. The Plan is intended to permit the payment of bonuses that qualify as performance-based compensation under Section 162(m) of the Code.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:
2.1    “Actual Award” means as to any Performance Period, the actual award (if any) payable to a Participant for the Performance Period. Each Actual Award is determined by the Payout Formula for the Performance Period, subject to the Committee’s authority under Section 3.6 to eliminate or reduce the award otherwise determined by the Payout Formula. For purposes of applying the Maximum Award limitation, the Actual Award will be deemed to have been determined on the last day of the applicable Performance Period, so that if there are multiple Performance Periods ending in a particular Fiscal Year, in no event may the Actual Awards with respect to all such Performance Periods in the aggregate exceed the Maximum Award.
2.2    “Affiliate” means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company.
2.3    “Base Salary” means as to any Performance Period, unless the Committee provides otherwise when establishing the Target Award, the Participant’s annualized salary rate on the last day of the Performance Period. Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. For avoidance of doubt, “Base Salary” does not include performance-based cash incentives, commissions, equity compensation, incentive or other compensation.
2.4    “Board” means the Board of Directors of the Company.
2.5    “Change of Control” means
(a)    The acquisition by any person (or related group of persons), whether by tender or exchange offer made directly to the Company’s stockholders, open market purchases or any other transaction or series of transactions, of stock of the Company that, together with stock of the Company held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the then outstanding stock of Company entitled to vote generally in the election of the members of Board;

(b)    a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which both (i) securities representing more than 50% of the total combined voting power of the surviving entity are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934), directly or indirectly, immediately after such merger or consolidation by persons who beneficially owned Company common stock immediately prior to such merger or consolidation and (ii) the members of Board immediately prior to the transaction (the “Existing Board”) constitute a majority of the Board of the surviving entity or its parent entity immediately after such merger or consolidation;
(c)    any reverse merger in which Company is the surviving entity but in which either (i) persons who beneficially owned, directly or indirectly, Company common stock immediately prior to such reverse merger do not retain immediately after such reverse merger direct or indirect beneficial ownership of securities representing more than 50% of the total combined voting power of Company’s outstanding securities or (ii) the members of the Existing Board do not constitute a majority of the Board’s parent entity immediately after such reverse merger; or
(d)    the sale, transfer or other disposition of all or substantially all of the assets of Company (other than a sale, transfer or other disposition to one or more subsidiaries of Company).
Notwithstanding the foregoing, to the extent that any amount constituting nonqualified deferred compensation within the meaning of Section 409A of the Code (including any applicable final, proposed or temporary regulations and other administrative guidance promulgated thereunder) would become payable under this Plan by reason of a Change of Control, such amount shall become payable only if the event constituting a Change of Control would also constitute a change in ownership or effective control of Company or a change in the ownership of a substantial portion of the assets of Company within the meaning of Section 409A of the Code.
2.6     “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.7    “Committee” means the Compensation Committee of the Board, or such other committee as may be designated by the Board to administer the Plan.
2.8    “Company” means Lumentum Holdings Inc., a Delaware corporation, or any successor thereto.
2.9    “Determination Date” means the latest possible date that will not jeopardize a Target Award or Actual Award’s qualification as performance-based compensation under Section 162(m) of the Code.
2.10    “Disability” means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time.
2.11    “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.
2.12    “Fiscal Year” means the fiscal year of the Company.

2.13    “Maximum Award” means as to any Participant for all Performance Periods ending during a Fiscal Year, $2,500,000.
2.14    “Participant” means as to any Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period.
2.15    “Payout Formula” means as to any Performance Period, the formula or payout matrix established by the Committee pursuant to Section 3.4 in order to determine the Actual Awards (if any) to be paid to Participants. The formula or matrix may differ from Participant to Participant.
2.16     “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in its discretion) to be applicable to a Participant for a Target Award for a Performance Period. As determined by the Committee, the Performance Goals for any Target Award applicable to a Participant may provide for a targeted level or levels of achievement using one or more of the following measures: share price, earnings per share, total stockholder return, operating margin, gross margin, return on equity, return on assets, return on investment, operating income, net operating income, pre-tax profit, net income, cash flow, revenue, expenses, earnings before any one or more of share-based compensation expense, interest, taxes, depreciation and amortization, economic value added, market share, personal management objectives, product development, completion of an identified special project, completion of a joint venture or other corporate transaction, and other measures of performance selected by the Committee.  The Performance Goals may differ from Participant to Participant and from award to award. Any criteria used may be (A) measured in absolute terms, (B) measured in terms of growth, (C) compared to another company or companies, (D) measured against the market as a whole and/or according to applicable market indices, (E) measured against the performance of the Company as a whole or a segment of the Company and/or (F) measured on a pre-tax or post-tax basis (if applicable). Further, any Performance Goals may be used to measure the performance of the Company as a whole or a business unit or other segment of the Company, or one or more product lines or specific markets and may be measured relative to a peer group or index. Prior to the Determination Date, the Committee will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant. In all other respects, Performance Goals will be calculated in accordance with the Company’s financial statements, generally accepted accounting principles (“GAAP”), or under a methodology (including non-GAAP adjustments) established by the Committee prior to the Determination Date and which is consistently applied with respect to a Performance Goal in the relevant Performance Period. In addition, the Committee will adjust any performance criteria, Performance Goal or other feature of an Actual or Target Award that relates to or is wholly or partially based on the number of, or the value of, any stock of the Company, to reflect any stock dividend or split, repurchase, recapitalization, combination, or exchange of shares or other similar changes in such stock.
2.17    “Performance Period” means any Fiscal Year or such other period as determined by the Committee in its sole discretion.
2.18    “Plan” means the Lumentum Holdings Inc. Executive Officer Performance-Based Incentive Plan, as amended and restated, as set forth in this instrument and as hereafter amended from time to time.
2.19    “Target Award” means the target award payable under the Plan to a Participant for the Performance Period, expressed as a percentage of his or her Base Salary, as determined by the Committee in accordance with Section 3.3.

2.20    “Termination of Employment” means a cessation of the employee-employer relationship between an Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate.
SECTION 3
SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS
3.1    Selection of Participants. The Committee, in its sole discretion, shall select the Employees who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, and on a Performance Period by Performance Period basis. Accordingly, an Employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period.
3.2    Determination of Performance Goals. The Committee, in its sole discretion, shall establish the Performance Goals for each Participant for each Performance Period. Such Performance Goals shall be set forth in writing.
3.3    Determination of Target Awards. 
(a)    The Committee, in its sole discretion, shall establish a Target Award for each Participant. Each Participant’s Target Award shall be determined by the Committee in its sole discretion, and each Target Award shall be set forth in writing. The Committee, in its discretion, may adjust any Performance Goal (or actual performance versus the Performance Goal) for the effects of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment of a business or related to a change in accounting principle, asset write-downs, litigation, claims, judgments or settlements, the effect of changes in tax law or other such laws or provisions affecting reported results, accruals for reorganization and restructuring programs, provided that any such adjustment is intended not to jeopardize the qualification of an Actual Award as performance-based compensation under Section 162(m) of the Code.
(b)    If a Performance Goal is based on, or calculated with respect to, the Company’s common stock (such as increases in earnings per share, book value per share or other similar measures), then, if any corporate transaction occurs involving the Company (including, without limitation, any subdivision or combination or exchange of the outstanding shares of common stock, stock dividend, stock split, spin-off, split-off, recapitalization, capital reorganization, liquidation, reclassification of shares of common stock, merger, consolidation, extraordinary cash distribution, redemption, stock issuance, or sale, lease or transfer of substantially all of the assets of the Company), the Compensation Committee shall make or provide for such adjustments in such Performance Goal as the Compensation Committee may in good faith determine to be equitably required to prevent dilution or enlargement of any increase or decrease in the rights of Participants.
3.4    Determination of Payout Formula or Formulae. On or prior to the Determination Date, the Committee, in its sole discretion, shall establish a Payout Formula or Formulae for purposes of determining the Actual Award (if any) payable to each Participant. Each Payout Formula shall (a) be in writing, (b) be based on a comparison of actual performance to the Performance Goals, (c) provide for the payment of a Participant’s Target Award if the Performance Goals for the Performance Period are achieved, and (d) provide for an Actual Award greater than or less than the Participant’s Target Award, depending upon the extent to which actual 

performance exceeds or falls below the Performance Goals. Notwithstanding the preceding, in no event shall a Participant’s Actual Award for any Fiscal Year exceed the Maximum Award.
3.5    Date for Determinations. The Committee shall make all determinations under Sections 3.1 through 3.4 on or before the Determination Date.
3.6    Determination of Actual Awards. After the end of each Performance Period, the Committee shall certify in writing the extent to which the Performance Goals applicable to each Participant for the Performance Period were achieved or exceeded. The Actual Award for each Participant shall be determined by applying the Payout Formula to the level of actual performance that has been certified by the Committee. Notwithstanding any contrary provision of the Plan, the Committee, in its sole discretion, may (a) eliminate or reduce the Actual Award payable to any Participant below that which otherwise would be payable under the Payout Formula, and (b) determine what Actual Award, if any, will be paid in the event of a Termination of Employment as the result of a Participant’s death or Disability or upon a Change of Control or in the event of a Termination of Employment following a Change of Control prior to the end of the Performance Period, and (c) determine what Actual Award, if any, will be paid in the event of a Termination of Employment other than as the result of a Participant’s death or Disability prior to a Change of Control and prior to the end of the Performance Period to the extent an Actual Award would have otherwise been achieved had the Participant remained employed through the end of the Performance Period.
SECTION 4
PAYMENT OF AWARDS
4.1    Right to Receive Payment. Each Actual Award that may become payable under the Plan shall be paid solely from the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any right to payment of an Actual Award other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.
4.2    Timing of Payment. Payment of each Actual Award shall be made as soon as practical following the determination and certification of the Actual Award as set forth in Section 3.6, but in no event later than the fifteenth day of the third month of the Fiscal Year following the date the Participant’s Actual Award has been earned and is no longer subject to a substantial risk of forfeiture; provided that the Committee may permit Participants to elect to defer payment of their Actual Awards in a manner satisfying the requirements of Section 409A of the Code.
4.3    Form of Payment. Each Actual Award shall be paid in cash (or its equivalent) in a single lump sum unless otherwise deferred in accordance with Section 4.2.
4.4    Compensation Recovery Policy. The Committee, in its sole discretion, may require Participant to forfeit, return or reimburse to the Company all or a portion of any Actual Award received in accordance with any then-effective Company compensation clawback or recovery policy, as may be established or amended from time to time. Any such policy generally shall be intended to apply substantially equally to all officers of the Company, except as the Committee (or the Board or a committee of the Board, as determined by the Board), in its discretion, determines is reasonably necessary or appropriate to comply with applicable laws.
SECTION 5
ADMINISTRATION

5.1    Committee is the Administrator. The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) members of the Board. The members of the Committee shall be appointed from time to time by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as an “outside director” under Section 162(m) of the Code. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.
5.2    Committee Authority. It shall be the duty of the Committee to administer the Plan in accordance with the Plan's provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees shall be granted awards, (b) prescribe the terms and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules.
5.3    Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law.
5.4    Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company to the extent that the delegation would not jeopardize the qualification of an Actual Award as performance-based compensation under Section 162(m) of the Code.
SECTION 6
GENERAL PROVISIONS
6.1    Tax Withholding. The Company shall withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant employment tax obligations).
6.2    Section 409A of the Code. It is intended that all bonuses payable under this Plan will be exempt from the requirements of Section 409A of the Code pursuant to the “short-term deferral” exemption or, in the alternative, will comply with the requirements of Section 409A of the Code so that none of the payments and benefits to be provided under this Plan will be subject to the additional tax imposed under Section 409A of the Code, and any ambiguities or ambiguous terms herein shall be interpreted to so comply or be exempt. Each payment and benefit payable under this Plan is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. The Company may, in good faith and without the consent of any Participant, make any amendments to this Plan and take such reasonable actions which it deems necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to actual payment to the Participant. However, unless explicitly determined otherwise in writing by the Committee, in no event will the Company or any Affiliate pay or reimburse any Participant for any taxes or other costs that may be imposed on the Participant as a result of Section 409A of the Code or any other section of the Code or other tax rule or regulation.
6.3    No Effect on Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company or an Affiliate, as applicable, to terminate any Participant’s employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company 

and any one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Employment. Employment with the Company and its Affiliates is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time and without regard to when during and after a Performance Period such exercise occurs, to terminate any individual’s employment with or without cause, and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.
6.4    Participation. No Employee shall have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award.
6.5    Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any award, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
6.6    Successors. All obligations of the Company and any Affiliate under the Plan, with respect to awards granted hereunder, shall be binding on any successor to the Company and/or such Affiliate, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company or such Affiliate.
6.7    Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant's death shall be paid to the Participant’s estate.
6.8    Nontransferability of Awards. No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.6. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the Participant.
SECTION 7
AMENDMENT, SUSPENSION, TERMINATION
7.1    Amendment and Termination. The Board or Compensation Committee of the Board may amend, alter, suspend or terminate the Plan.
7.2    Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary or desirable to comply with applicable laws.

7.3    Consent of Participants Generally Required. Subject to Section 7.4, no amendment, alteration, suspension or termination of the Plan or an award under it will materially impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Compensation Committee, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Compensation Committee’s ability to exercise the powers granted to it regarding awards established under the Plan prior to such termination.
7.4    Exceptions to Consent Requirement.
(a)    A Participant’s rights will not be deemed to have been impaired by any amendment, alteration, suspension or termination if the Compensation Committee, in its sole discretion, determines that the amendment, alteration, suspension or termination does not materially impair the Participant’s rights, and 
(b)    Subject to any limitations of applicable laws, the Compensation Committee may amend the terms of any awards under the Plan without the affected Participant’s consent even if it does materially impair the Participant’s right if such amendment is done:
(i)    in a manner permitted under the Plan;
(ii)    to avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to actual payment to the Participant; 
(iii)    to comply with other applicable laws; or
(iv)    as necessary based on rulings or guidance issued to ensure compliance with the requirements of Section 162(m) of the Code.
SECTION 8
LEGAL CONSTRUCTION
8.1    Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
8.2    Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
8.3    Requirements of Law. The granting of awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
8.4    Governing Law. The Plan and all awards shall be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions.
8.5    Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan.usak20160830_10q.htm

Exhibit 10.1

 

 

EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT

 

This Executive Severance and Change in Control Agreement (this “Agreement”), dated as of August 3, 2016, is made by and between USA Truck, Inc., a Delaware corporation (as hereinafter defined, the “Company”), and Joseph Kaiser, Vice President, Chief Accounting Officer, and Principal Financial Officer of the Company (as hereinafter defined, the “Executive”).

 

WHEREAS, the Company and the Executive have entered into that Employment Letter Agreement by and between the Company and the Executive dated June 12, 2014 (the "Employment Letter Agreement");

 

WHEREAS, the Company and the Executive have entered into that Noncompete and Confidentiality Agreement by and between the Company and the Executive dated July 14, 2014, attached hereto as Exhibit A (the "Noncompete and Confidentiality Agreement"), which the Executive agreed to in connection with of his employment with the Company and which the Executive is agreeing to now for the additional severance benefits provided herein;

 

WHEREAS, in recognition that the services of the Executive are integral to the success of the operations of the Company, the Executive should remain focused on execution of his responsibilities without fear of unwarranted termination of his employment or the possibility of a Change in Control (as hereinafter defined) of the Company, and that either of such circumstances, and the uncertainty it may cause, may result in the departure or distraction of key management employees of the Company to the detriment of the Company and its stockholders; 

 

WHEREAS, the Executive is a key management employee of the Company, and the Board of Directors of the Company (the “Board”) through its Executive Compensation Committee (the “Committee”) has determined that the Company should encourage the continued employment of the Executive by the Company and the continued dedication of the Executive to his assigned duties without distraction as a result of the circumstances set forth above; and

 

WHEREAS, the Company and the Executive desire to set forth the circumstances under which the Executive may receive payments under this Agreement.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

 

1.            Defined Terms.

 

For purposes of this Agreement, the following terms shall have the meanings indicated below:

 

(A)     “Annual Base Salary” shall mean the annual base salary of the Executive, specifically excluding any additional compensation approved by the Committee on August 3, 2016, for Executive's role as Principal Financial Officer.

 

(A)     “Board” shall mean the Board of Directors of the Company, as constituted from time to time.

 

 

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(B)     “Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful violation of Company policy or willful failure by the Executive to substantially perform the Executive’s duties with the Company, other than any failure resulting from the Executive’s incapacity due to physical or mental illness, that continues for at least 30 days after the Board delivers to the Executive a written demand for performance that identifies in reasonable detail the manner in which the Board believes that the Executive willfully has failed substantially to perform the Executive’s duties; (ii) the willful violation of any law, rule or regulation applicable to the Company’s business operations; (iii) the willful engaging by the Executive in misconduct that is demonstrably and materially injurious to the Company, from a monetary or reputational standpoint; (iv) a material violation by the Executive of the corporate governance guidelines, code of ethics, insider trading policy, or other governance policy of the Company; (v) a material violation by the Executive of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule, or regulation; (vi) a material breach by the Executive of any of the covenants contained in Sections 14, 15, and 16 of this Agreement; or (vii) the repeated use of alcohol by the Executive that materially interferes with the Executive's duties, the use of illegal drugs by the Executive, or a violation by the Executive of the drug and/or alcohol policies of the Company. For purposes of this definition following a Change in Control, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company.

 

(C)     A “Change in Control” shall mean the occurrence of any of the following occurring after the date of this Agreement:

 

(i)     Any “Person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding the Company and any employee benefit plan sponsored or maintained by the Company (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities (other than indirectly as a result of the Company’s redemption of its own securities); or 

 

(ii)     The consummation of any merger or other business combination of the Company, a sale of more than 50% of the Company’s assets, the liquidation or dissolution of the Company or any combination of one or more of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own more than 50% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to the Company’s assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

 

 

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(iii)     Within any twenty-four (24)-month period, the individuals who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a Person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a Person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).

 

(D)     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(E)     “Company” shall mean USA Truck, Inc. and any successor to its business or assets, by operation of law or otherwise.

 

(F)     “Constructive Termination” shall mean the occurrence of any of the following, without the Executive’s express written consent, at any time within twelve (12) months following a Change in Control:

 

(i)     material diminution in the overall scope of the Executive’s duties, authorities and responsibilities from those held by the Executive immediately prior to the time of a Change in Control; provided, that the expiration of the Executive's position as Principal Financial Officer, if any, shall not be considered a material diminution in the overall scope of the Executive's duties, authorities, and responsibilities;

 

(ii)     geographic relocation of the Executive’s assigned principal business location to a location greater than forty (40) miles from the place of the Executive’s principal business location immediately prior to the time of a Change in Control; or

 

(iii)     diminution by ten percent (10%) or more of the Executive’s Annual Base Salary or target bonus in effect immediately prior to the time of a Change in Control.

 

(G)     “Date of Termination” shall have the meaning stated in Paragraph (B) of Section 5 hereof.

 

(H)     “Disability” shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment.

 

(I)     “Executive” shall mean the individual named in the first paragraph of this Agreement.

 

(J)     “Incumbent Directors” shall mean directors who were directors of the Company as of the date hereof or who are appointed, elected or nominated to the Board in accordance with the following sentence. It is understood that any individual becoming a member of the Board subsequent to the date hereof whose appointment was approved by a vote of at least a two-thirds majority of the Continuing Directors remaining in office at the time of appointment or whose election or nomination for election by the Company’s stockholders was approved by a vote of at least a two-thirds majority of the Continuing Directors remaining in office at the time of election or nomination shall be considered, for purposes of this Agreement, as though such individual were a Continuing Director on the date hereof. 

 

 

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(K)     “Notice of Termination” shall have the meaning stated in Paragraph (A) of Section 5 hereof.

 

(L)     “Payment Trigger” shall mean any of the following that occurs during the term of this Agreement:

 

(i)     termination of the Executive’s employment by the Company without Cause, at any time other than within twelve (12) months following a Change in Control, and other than as a result of the Executive’s Disability; or 

 

(ii)     Constructive Termination of the Executive while the Executive remains employed by the Company or its successor, or termination of the Executive’s employment by the Company without Cause within twelve (12) months following a Change in Control occurring during the term of this Agreement.

 

For the avoidance of doubt, a termination of the Executive by the Company for Disability shall not be deemed a termination of the Executive without Cause. 

 

(M)     “Person” shall have the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as modified and used in Sections 13(d) and 14(d) thereof; except that, a Person shall not include (i) the Company, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (iii) an underwriter temporarily holding securities pursuant to an offering of such securities.

 

2.             Term of Agreement.

 

This Agreement shall be effective as of the date set forth in the first paragraph of this Agreement and shall continue in effect until the earliest of (i) a Date of Termination in accordance with Section 5 or the death of the Executive, or (ii) if a Payment Trigger occurs during the term of this Agreement under subparagraphs (i) or (ii) of Paragraph (L) of Section 1, the performance by the Company of all its obligations and the satisfaction by the Company of all its liabilities under this Agreement.

 

3.             General Provisions.

 

(A)     The Company hereby represents and warrants to the Executive that the execution and delivery of this Agreement and the performance by the Company of the actions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement is a legal, valid and legally binding obligation of the Company enforceable in accordance with its terms.

 

 

4

 

 

(B)     No amount or benefit shall be payable under this Agreement unless there shall have occurred a Payment Trigger during the term of this Agreement.

 

(C)     This Agreement, the Employment Letter Agreement, and the Noncompete and Confidentiality Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. Notwithstanding the immediately preceding sentence or any other provision of this Agreement, any purported termination of the Executive’s employment that is not effected in accordance with a Notice of Termination satisfying Paragraph (A) of Section 5 shall not be effective for purposes of this Agreement. The Executive’s continued employment for any period of time after a Payment Trigger, up to the maximum time specified in Paragraph (B) of Section 5, shall not constitute a waiver of the Executive’s rights with respect to any payment obligations of the Company under this Agreement. The waiver by the Executive of any particular event meeting the definition of or constituting a Constructive Termination shall not operate as a waiver by the Executive of any benefits or rights under this Agreement should any subsequent event or circumstance occur that constitutes a Constructive Termination under this Agreement.

 

4.             Payments Due Upon a Payment Trigger.

 

(A)     The Company shall pay to the Executive the payments described in this Section 4 upon the occurrence of a Payment Trigger during the term of this Agreement.

 

(B)     (i)     Upon the occurrence of a Payment Trigger during the term of this Agreement arising by reason of the circumstances described in subparagraph (i) of Paragraph (L) of Section 1:

 

(a)     the Company shall pay the Executive monthly payments, in cash, equal to one-twelfth (1/12) of the Executive’s Annual Base Salary in effect immediately prior to the Payment Trigger, on or as near as practicable to the same date in each month as monthly installments (each of which shall be considered a separate "payment" for purposes of Code Section 409A, as defined in Section 23) of the Annual Base Salary were made to the Executive prior to the occurrence of the Payment Trigger, for a period of twelve (12) months following the occurrence of the Payment Trigger;

 

(b)     the Company shall pay to the Executive a lump sum amount, in cash, equal to the target amount of any short term cash incentive compensation that would have been awarded to and earned by the Executive under any incentive compensation plan for the fiscal year of the Payment Trigger, assuming all performance and other vesting criteria were satisfied for such year; and

 

(c)     the Company shall pay the Executive any other amounts (other than any unearned, pro-rated, or other payment of short term cash incentive compensation) that may be due the Executive under any employee welfare, benefit, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan. 

 

 

5

 

 

(ii)     Upon the occurrence of a Payment Trigger during the term of this Agreement arising by reason of the circumstances described in subparagraph (ii) of Paragraph (L) of Section 1: 

 

(a)     the Company shall pay the Executive a lump sum payment, in cash, equal to the sum of one hundred fifty percent (150%) of the Executive’s Annual Base Salary in effect immediately prior to the Payment Trigger provided that if the Change in Control does not constitute a change in control event as defined in Code Section 409A then the portion of the lump sum payment, if any, that is considered deferred compensation subject to Code Section 409A shall be paid in installments as described in Section 4(B)(i)(a); 

 

(b)     the Company shall pay the Executive the amount, if any, set forth on the signature page of this Agreement and identified as relocation services benefit, to defray the Executive's costs of relocation services;

 

(c)     the Company shall pay to the Executive a lump sum amount, in cash, equal to one hundred fifty percent (150%) of the target amount of any short term incentive cash compensation that would have been paid to the Executive for the fiscal year of the Payment Trigger, assuming all performance and other vesting criteria were satisfied for such year; 

 

(d)     the Company shall reimburse, on an after-tax basis, any premiums paid by the Executive pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), during a period of eighteen (18) months following the Date of Termination; and

 

(e)     the Company shall pay the Executive any other amounts (other than any unearned, pro-rated, or other payment of short term cash incentive compensation) that may be due the Executive under any employee welfare, benefit, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan.

 

(C)     Notwithstanding any provision of any incentive compensation plan, and in addition to any payments under Paragraph (B) hereof, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount of any incentive compensation that has been awarded to and earned by the Executive under any incentive compensation plan for a completed fiscal year preceding the occurrence of a Payment Trigger but that has not yet been paid to the Executive.

 

(D)     The payments provided for in subparagraph (ii)(a) of Paragraph (B) and, if applicable, Paragraph (C) of this Section 4 shall be made within two (2) business days following the Date of Termination, or such later required date as may be prescribed, allowing for applicable waiting periods, under the terms of the General Release (hereafter defined), unless the amounts of such payments cannot be finally determined on or before that date, in which case, the Company shall pay to the Executive on that date an estimate, as reasonably determined in good faith by the Company, of the minimum amount of the payments to which the Executive is clearly entitled and shall pay the remainder of the payments within five (5) business days following the final determination of such amounts due to the Executive under this Agreement. 

 

 

6

 

 

(E)     As a condition to the receipt of the severance and other payment benefits described in this Agreement, the Executive shall execute and comply with the terms of a general release of all claims (the “General Release”) against the Company, its affiliates and representatives, in the form attached hereto as Exhibit B, as updated by the Company for any change in laws. The General Release must be signed, and the period provided therein for revocation must have expired, not later than sixty days from the Date of Termination. No severance benefits or other payment benefits shall be paid until the General Release is signed and the revocation period has expired, and any amounts that would otherwise have been paid prior to such date shall be paid as soon as practicable after such date, without interest. Notwithstanding the foregoing, if the sixty day period after the Date of Termination ends in the calendar year following the year that includes the Date of Termination, no such amount that is subject to Code Section 409A shall be paid sooner than the first day of the year following the year that includes the Date of Termination, regardless of when the General Release is signed. 

 

5.             Termination Procedures.

 

(A)     During the term of this Agreement, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that indicates the specific termination provision in this Agreement relied upon, and, if applicable, the notice shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Further, a Notice of Termination for Cause shall include a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board that was called and held for the purpose of considering the termination finding that, in the informed, reasonable, good faith judgment of the Board, the Executive was guilty of conduct set forth in the definition of Cause in Paragraph (B) of Section 1, and specifying the particulars thereof in reasonable detail. A Notice of Termination by the Employee in the case of a Constructive Termination shall specify in reasonable detail the event or circumstance constituting the Constructive Termination under Paragraph (F) of Section 1 of this Agreement. Such notice of Constructive Termination must be provided by the Executive to the Company within sixty (60) days of the initial existence of the condition giving rise to the Constructive Termination.

 

(B)     “Date of Termination” with respect to any purported termination of the Executive’s employment during the term of this Agreement (other than by reason of death) shall mean:

 

(i)     if the Executive’s employment is terminated by the Company for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during that thirty (30) day period);

 

 

7

 

 

(ii)     if the Executive’s employment is terminated by the Company for any other reason except in the case of a termination for Cause, up to thirty (30) days, at the Company's discretion, after Notice of Termination is given;

 

(iii)     if the Executive’s employment is terminated by the Company for Cause, the date specified in the Notice of Termination; and

 

(iv)     in the case of termination by the Executive (including a Constructive Termination following a Change in Control), thirty (30) days after the date such Notice of Termination is given; provided, in the case of a Constructive Termination, the Notice of Termination contemplated by Paragraph (A) of this Section 5 shall be deemed cancelled, void and of no further force and effect, and no payment obligation of the Company shall arise therefrom, if the Company rescinds or otherwise eliminates or reverses the action or event that would otherwise constitute grounds for Constructive Termination, and so notifies the Executive in writing within thirty (30) days of its receipt of the notice of Constructive Termination. The rescission, elimination or reversal of any such action or event constituting a Constructive Termination shall not operate to release or discharge the Company from any other liability or obligation under this Agreement, including any liability or obligation arising from any subsequent action or event that constitutes a Constructive Termination.

 

6.             No Mitigation; No Setoff.

 

The Executive shall not be required to mitigate the amount of any benefits the Company becomes obligated to provide to the Executive in connection with this Agreement by seeking other employment or otherwise. The benefits to be provided to the Executive in connection with this Agreement may not be reduced, setoff or subject to recovery by the Company by any benefits the Executive may receive from other employment, from retirement benefits or otherwise. Further, the amount of any payment or benefit provided for in this Agreement shall not be setoff against any amount claimed to be owed by the Executive to the Company, or otherwise, except for a violation of Section 14, 15, or 16.

 

7.             Disputes.

 

(A)     If a dispute or controversy arises out of or in connection with this Agreement, the parties shall first attempt in good faith to settle the dispute or controversy by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or litigation. Thereafter, any remaining unresolved dispute or controversy arising out of or in connection with this Agreement may be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in a city located within Crawford or Sebastian County, Arkansas. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Executive shall, however, be entitled to seek specific performance of the Company’s obligations hereunder during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

 

8

 

 

(B)     Any legal action concerning this Agreement, other than a mediation or an arbitration described in Paragraph (A) of this Section 7, whether instituted by the Company or the Executive, shall be brought and resolved only in a state or federal court of competent jurisdiction located in Crawford County, Arkansas or the Fort Smith Division of the Western District of Arkansas. The parties hereby irrevocably consent and submit to and shall take any action necessary to subject themselves to the personal jurisdiction of any such court and hereby irrevocably agree that all claims in respect of the action shall be instituted, heard, and determined in such court. The parties agree that such court is a convenient forum, and hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of the action. Any final judgment in the action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(C)     The Company shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding (including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Executive pursuant to a final, unappealable judgment. The Executive shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding (including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Company pursuant to a final, unappealable judgment. The non-prevailing party, as set forth above, shall pay prejudgment interest on any money judgment obtained by the prevailing party as a result of such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the Code.

 

8.            Successors; Binding Agreement.

 

(A)     In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not such a transaction constitutes a Change in Control) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the effectiveness of any succession shall be a breach of this Agreement for which the Executive shall have any and all of the remedies available to him under this Agreement. The provisions of this Section 8 shall continue to apply to each subsequent employer of the Executive bound by this Agreement in the event of any merger, consolidation, or transfer of all or substantially all of the business or assets of that subsequent employer, whether or not that transaction constitutes a Change in Control.

 

(B)     This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive shall die while any amount would be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, the amount, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives, or administrators of the Executive’s estate.

 

 

9

 

 

9.             Effect on Prior Agreements.

 

This Agreement contains the complete, final, and exclusive embodiment of the agreement and understanding among the parties hereto regarding severance, change in control, or similar payments to the Executive and supersedes in all respects any prior or other agreement or understanding, written or oral, among the parties with respect to the subject matter of this Agreement, including, but not limited to, Change in Control Severance Agreements, the Employment Letter Agreement, including, without limitation, the sections titled "Separation of Employment Apart from a Change in Control" and "Separation of Employment After a Change in Control" therein, the Noncompete and Confidentiality Agreement, employment agreements or company policies, or other agreements or arrangements with respect to severance, change in control, or similar payments.

 

10.          Exclusive Remedy.

 

In the event of a Payment Trigger, the provisions of Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which the Executive or the Company may otherwise be entitled (including any contrary provisions in any written or oral employment agreement or arrangement the Executive may have with the Company), whether at law, tort or contract, in equity, or under this Agreement. The Executive shall not be entitled to any severance or Change in Control benefits or rights upon a Payment Trigger other than those benefits expressly set forth in Section 4.

 

11.          Notices.

 

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

 

	
To the Company:   
	
USA Truck, Inc.

	
 
	
3201 Industrial Park Road

	
 
	
Van Buren, Arkansas 72956

	
 
	
Attention: Chairman of the Board 

	
 
	
 

	
To the Executive:    
	
Joseph Kaiser

	
 
	
 

	
 
	
 

        

12.          Miscellaneous.

 

No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by the Executive and an officer of the Company specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. All references to sections of the Code shall be deemed also to refer to any successor provisions to such sections.

 

 

10

 

 

13.          Governing Law.

 

The validity, interpretation, construction, and performance of this Agreement shall be governed by the internal, substantive laws of the State of Delaware, without giving effect to the law or principles of conflict of laws of any jurisdiction. 

 

14.          Obligation Not to Solicit and Compete. 

 

The Executive previously entered into the Noncompete and Confidentiality Agreement in which the Executive agreed to certain restrictive covenants in Sections 2 and 3 thereof (the "Restrictive Covenants"). The purpose of this Section 14 is to modify and supersede the duration of the Restrictive Covenants, as set forth in Section 2 of Noncompete and Confidentiality Agreement, and to utilize the scope and other terms of the Restrictive Covenants as if they were fully set forth herein. The Executive hereby agrees that during his employment with the Company and for a period of twelve (12) months thereafter or, in the event of a Change in Control, eighteen (18) months thereafter (the applicable period being referred to herein as the "Restricted Period"), the Executive will comply with the Restrictive Covenants, as if the Restrictive Covenants were fully set forth herein; provided when there is no Payment Trigger, the Company must make monthly payments, in cash, equal to one-twelfth (1/12) of the Executive’s Annual Base Salary in effect immediately prior to termination, on or as near as practicable to the same date in each month as monthly installments of the Annual Base Salary were made to the Executive prior to termination, for such portion of the Restricted Period as the Company determines (the "Non-Compete Payments"), which benefits will commence when the General Release is signed and the revocation period has expired. The Company will give the Executive notice within ten (10) days following the Executive's termination if it elects to not make the Non-Compete Payments and, once Non-Compete Payments commence, the Company will give the Executive thirty (30) days' written notice before discontinuing the Non-Compete Payments. The provisions of Section 3 of the Noncompete and Confidentiality Agreement will automatically apply to the Executive regardless of whether there is a Payment Trigger and the scope and other terms, except for the duration, of Section 2 of the Noncompete and Confidentiality Agreement will automatically apply to the Executive if there is a Payment Trigger; the Executive acknowledging that he has received sufficient consideration for such covenants and further he agreed to such covenants at commencement of employment with the Company. 

 

15.          Confidentiality.

 

The Executive acknowledges that the requirements for confidentiality as set forth in the Noncompete and Confidentiality Agreement, including, without limitations, Sections 4 and 5 thereof, and the requirements for confidentiality as set forth in the Company handbook continue to apply to the Executive for the term provided therein.

 

16.           Non-disparagement.

 

The Executive agrees that he will not make to any person or entity any false, disparaging, or derogatory comments about the Company or its affiliates, or their business affairs, directors, officers, employees, drivers, independent contractors, customers, or vendors.

 

 

11

 

17.          Remedies 

 

Upon breach of any of the covenants contained in Section 14, 15, or 16 of this Agreement, (a) the Company can and may take any and all actions available at law and in equity, including obtaining a restraining order or injunctive relief, (b) all compensation and benefits described in this Agreement will immediately cease, (c) the Executive will remain obligated to comply with the covenants in this Agreement, and (d) the periods set forth above in Sections 14 and 15 will be tolled during any period in which the Executive is in violation of such Section(s) so that the Company is provided with the full benefit of the Restricted Period.

 

18.          Withholding.

 

All payments provided for hereunder will be subject to required withholding of federal, state and local income, excise, and employment-related taxes. If any such excise taxes would otherwise be imposed, the Company shall determine in good faith whether the Executive will either receive all of the benefits to which he is entitled under this Agreement, subject to the excise tax, or have his benefits under this Agreement reduced to a level at which the excise tax will not apply, depending upon which approach will provide the Executive with the greater net after-tax benefit.

 

19.          Severability.

 

If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If there is a conflict between a portion or provision of this Agreement and the Noncompete and Confidentiality Agreement or the Employment Letter Agreement, such portion or provision of this Agreement shall control

 

20.          Counterparts.

 

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

21.          Payment; Assignment.

 

Benefits payable under this Agreement will be paid only from the general assets of the Company. No person has any right to or interest in any specific assets of the Company by reason of this Agreement, the Employment Letter Agreement, or the Noncompete and Confidentiality Agreement. To the extent benefits under this Agreement are not paid when due to any individual, he or she is a general unsecured creditor of the Company with respect to any amounts due. Benefits payable pursuant to this Agreement and the right to receive future benefits may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subject to any charge.

 

 

12

 

 

22.          Further Assurances. 

 

The parties to this Agreement agree to perform, or cause to be performed, such further acts and deeds and to execute and deliver or cause to be executed and delivered, such additional or supplemental documents or instruments as may be reasonably required by the other party to carry into effect the intent and purpose of this Agreement.

 

23.          Code Section 409A.

 

It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Code Section 409A (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject the Executive to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted, and if necessary modified or reformed (including any modification or reformation regarding the timing and amount of any payment) to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that the Company determines may be considered nonqualified deferred compensation under Code Section 409A upon or following a termination of employment unless such termination is also a "separation from service" within the meaning of Code Section 409A, and, for purposes of any such provision of this Agreement, references to a "termination," "termination of employment" or like term, and the timing thereof, shall mean such a separation from service. Notwithstanding any other provision of this Agreement, in the event the Executive is a “specified employee” as defined in Code Section 409A on the date the Executive incurs a separation from service, as so defined, to the extent required by Code Section 409A, payments and benefits hereunder to which Code Section 409A would apply may not commence to the Executive until the earlier of the first day of the seventh month following the month that includes the Executive’s separation from service (as defined in Code Section 409A) or the date of the Executive’s death and any delayed payments and benefits shall be paid and provided in the aggregate, without interest, no later than ten (10) days following such date. For purposes of Code Section 409A, the Executive's right to receive the payments and benefits hereunder shall be treated as a right to receive a series of separate and distinct payments and benefits. Whenever a payment or benefit hereunder specifies a payment or benefit period with reference to a number of days, the actual date of payment or benefit within the specified period shall be within the sole discretion of the Company. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Code Section 409A, but do not satisfy an exemption from, or the conditions of, Code Section 409A. Any terms of this Agreement that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply therewith. If for any reason any provision of this Agreement does not accurately reflect its intended establishment of an exemption from or compliance with Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from or compliance with Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company. 

 

 

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

 

 

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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date set forth above.

 

 

 

	
USA TRUCK, INC.

	  
	
By:
	  
	
Name:
	  
	
Title:
	  
	  	  
	  	  
	  
	
Joseph Kaiser

	  
	  
	
Signature

	  
	
$30,000

	
Amount of Relocation services Benefit

 

  

 

 

  

Exhibit A

 

Noncompete and Confidentiality Agreement

 

THIS NONCOMPETE AGREEMENT (the "Agreement") is entered into, to be effective as of the 14th day of July 2014, between USA Truck, Inc., ("the Company"), a Delaware corporation and Joseph Kaiser ("Employee").

 

RECITALS:

 

In consideration of the mutual promises, undertakings and agreements herein contained and for other good and valuable consideration including, but not limited to, the Company's agreement to employ Employee or to continue Employee in his/her employment, as the case maybe, subject to all other terms and conditions of Employee's at will employment, and Employee's acceptance or continuance of employment, the Company and Employee agree as follows:

 

	 	
1.
	
Employment. The parties hereto acknowledge and agree that the Employee's employment by the Company is an "at will" employment and nothing in this Agreement shall in any way limit the Company's ability to terminate Employee with or without cause.

 

	 	
2.
	
Non-Compete Agreement. If employee is a new employee, then as a condition of his/her employment, or if the employee is an existing employee, then as a condition of his/her continued employment, Employee agrees and promises that during the term of his/her employment by the Company and for a period of one (1) year after the voluntary or involuntary termination of his/her employment with the Company, Employee will not:

 

	 	
a. 
	
accept employment from any business which performs services for customers whose accounts Employee serviced or about which Employee learned specific account information during Employee's employment with the Company;

 

	 	
b. 
	
accept employment that would utilize information about accounts Employee serviced or about which Employee learned specific account information during his/her employment with the Company;

 

	 	
c. 
	
use confidential, proprietary or account specific information acquired during his/her employment with the Company to compete in any manner, either directly or indirectly, with the Company;

 

	 	
d. 
	
solicit, induce, or attempt to induce any past or current customer of the Company with whom the Company did any business or for which it performed services at any time during Employee's employment with the Company to either (1) cease doing business in whole or in part with or through the Company, or (2) to do business with any other person, firm, partnership, corporation, or other entity which performs services materially similar to or competitive with those provided by the Company;●or

 

	 	
e. 
	
serve in any position or capacity in which Employee may inevitably disclose, utilize or consider confidential information Employee acquired during his/her employment with the Company. 

 

The "confidential" and "proprietary" information of the Company as used in this paragraph 2 is information falling within the description of "proprietary and confidential information" in paragraph 4 of this Agreement. 

 

The term "services" as used in this paragraph 2 means any services provided to customers by the Company, including but not limited to freight brokerage and freight hauling services.

 

	 	
3. 
	
Non-Solicitation of Employees. For a period of one (1) year after termination of Employee's employment with the Company, Employee shall not, directly or indirectly, induce or influence or attempt to induce or influence any person who is engaged as an employee, agent, independent contractor or otherwise by the Company to terminate his or her employment or engagement with the Company.

  

 

 

 

 

	 	
4. 
	
Proprietary and Confidential Information. The parties hereto acknowledge and agree that proprietary and confidential information means information or material which is not generally available to or used by others outside the Company or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain. Information and material which is considered proprietary and confidential by the Company includes, but is not limited to, the following:

 

	 	
a. 
	
customer lists and information, specific price and rate information or models, the content of any Company contract or documents, profits earned by the Company on its customer contracts; Company's methods of doing business including its processes, operations or marketing programs, Company's strategic planning or its vendor information, trade secrets, litigation and claims information, personal information regarding employees, including social security information, health information, credit and/or credit card information, financial, salary and/or wage information, information concerning the business, finances, operations, assets, liabilities, transactions or affairs of the Company, its customers and/or employees, information and other information that may be entrusted to the Employee or that may arise or come into his or her knowledge during the course of employment, or otherwise information regarding pricing customer identification or customer list,

 

	 	
b. 
	
all files, records, documents, drawings, specifications, electronic data, equipment and similar items relating to the business of the Company, its customers and employees, whether prepared by the Employee or otherwise coming into his or her possession, and

 

	 	
c. 
	
any of the information of the type described above which the Company obtained from another source and which the Company treats as proprietary or designates as confidential, whether or not owned or developed by the Company.

 

	 	
5. 
	
Use of Confidential or Proprietary Information. Employee acknowledges and agrees that he or she, during the term of his/her employment with the Company and as a consequence of the trust and confidence reposed in Employee by the Company, Employee will receive proprietary and confidential information and/or trade secrets of the Company, as previously defined in this Agreement. In partial consideration for the mutual promises contained herein, Employee agrees not to directly or indirectly divulge, publish, communicate, use to the detriment of the Company, use for the benefit of any person, firm, corporation, or business or misuse in any way any such proprietary and confidential information and/or trade secrets either during or subsequent to employment with the Company, whether or not conceived, originated, discovered or developed in whole or in part by Employee. Upon his or her termination, Employee shall immediately deliver to the Company all confidential information, documents, papers, data, disks, media, equipment and other property belonging to the Company, its customers or employees, including property that may have been created or prepared by Employee or which may have come into Employee's possession in the course of employment, and Employee shall not retain any copies thereof without the express written permission of the Company.

 

	 	
6. 
	
Reasonableness of Restriction. Employee has carefully read and considered the provisions contained herein, and having done so agrees that the restrictions set forth are fair and reasonable and are required for the protection of the interest of the Company. Employee acknowledges that the Company is engaged in the transportation business throughout the United States, Mexico and Canada and that the depth and breadth of the restrictions set forth herein are reasonable and necessary to protect the Company from unfair competition and the disclosure of confidential or proprietary information. Employee further agrees to waive his right to challenge the validity of the restriction set forth herein. Further, if such waiver is determined to be invalid and Employee nevertheless challenges the validity of the restrictions set forth herein, Employee agrees to pay the Company's attorney's fees and costs incurred in the defense of the validity of the restrictions.

  

 

 

 

 

	 	
7. 
	
Availability of Injunctive Relief. The parties acknowledge that compliance with the covenants in Sections 2, 4, and 5 is necessary to protect the business goodwill and proprietary interests of the Company. The parties further agree that the remedy at law for breach of any of the provisions of such covenants is inadequate and that the Company shall be entitled, in addition to other such remedies as it may have, to injunctive relief for any breach or threatened breach of Sections 2, 4, and 5 without proof of any actual damages that may have been or may be caused to the Company by such breach or threatened breach.

 

	 	
8. 
	
Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein. No supplement, modification, waiver or termination of this Agreement shall be binding unless executed writing by the party to be bound thereby. No Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver or continuing waiver of any other provision hereof.

 

	 	
9. 
	
Partial Invalidity. In the event one or more of the provisions contained in this Agreement, or any portion of any such provisions, shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, or any portion of any such provision, but the Agreement shall be construed as if such invalid, illegal or unenforceable provision, or portion thereof, had never been contained herein.

 

	 	
10. 
	
Place of Contracting and Governing Law. This Agreement is accepted by the Company and entered into in Crawford County, Arkansas, and this Agreement and all rights, obligations and liabilities arising hereunder shall be construed and enforced in accordance with the laws of the State of Arkansas. Employee consents to personal jurisdiction in the Circuit Court of Crawford County, Arkansas, for all claims and causes of action arising under this Agreement or for the enforcement of this Agreement.

 

	 	
11. 
	
Titles and Headings. Titles and headings to provisions of this Agreement are for the purpose of reference only and shall in no way limit, define or otherwise affect the interpretation or construction of such provisions.

 

	 	
12. 
	
Binding Agreement. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding on the successors and assigns of the Company.

 

IN WITNESS WHEREOF, the parties have hereto executed this Agreement as to the day and year first written above.

 

	
EMPLOYEE:

	  
	
 
	
(signature)

	
 
	
(printed name)

	
 
	
(social security number)

	
 
	
(address)

	  	  
	
USA TRUCK, INC.

	  
	
 

	
By: Burton Weis, Vice President of Human Resources

  

 

 

  

Exhibit B

 

General Release

 

FOR AND IN CONSIDERATION OF the compensation pursuant to a Payment Trigger or the Company's election under Section 14 when there is no Payment Trigger to be provided me in connection with the termination of my engagement with USA Truck, Inc. (“Company”), as that term is defined in that certain Executive Severance and Change in Control Agreement between Company and me, dated as of August 3, 2016 (the “Agreement”), which are conditioned on my signing this General Release and to which I am not otherwise entitled, I, on my own behalf and on behalf of my heirs, executors, administrators, beneficiaries, representatives, and assigns, and all others connected with or claiming through me, hereby release and forever discharge Company, each of its affiliates, and all of their respective past, present, and future officers, directors, trustees, shareholders, employees, agents, general and limited partners, members, managers, joint venturers, representatives, successors, and assigns, and all others connected with any of them, both individually and in their official capacities, from any and all causes of action, rights, or claims of any type or description, known or unknown, which I have had in the past, now have, or might now have, through the date of my signing of this General Release, in any way resulting from, arising out of, or connected with my engagement with Company or the termination of that engagement or pursuant to any federal, state or local law, regulation, or other requirement, including if deemed to be an employee of Company (including without limitation Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the fair employment practices laws of the state or states in which I have been employed by Company, each as amended from time to time). 

 

In signing this General Release, I acknowledge my understanding that I may not sign it prior to the termination of my engagement with Company, but that I may consider the terms of this General Release for up to thirty (30) days (or such longer period as Company may specify) from the date my engagement with Company terminates. I also acknowledge that I have been advised by Company to seek the advice of an attorney prior to signing this General Release; that I have had a full and sufficient time to consider this General Release and to consult with an attorney, if I wished to do so, or to consult with any other person of my choosing before signing; and that I am signing this General Release voluntarily and with a full understanding of its terms. I understand that I have seven (7) days following my execution of this General Release to revoke this General Release and that this General Release will not be effective until the eighth day after I execute and do not revoke this General Release. 

 

I hereby acknowledge and reaffirm my continuing obligations to the Company under the Agreement, in particular as the Agreement relates to certain restrictive covenants, which was signed in connection with my employment. 

 

I further acknowledge that, in signing this General Release, I have not relied on any promises or representations, expressed or implied, that are not set forth expressly in the Agreement. 

 

[Signature page follows]

 

 

 

 

Intending to be legally bound, I have signed this General Release as of the date written below.

 

	
Signature:
	
 

	
Date signed:

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