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                                                                 Exhibit 10.32

                                  SEPRACOR INC.

                            2000 STOCK INCENTIVE PLAN

1.       PURPOSE

         The purpose of this 2000 Stock Incentive Plan (the "Plan") of Sepracor
Inc., a Delaware corporation (the "Company"), is to advance the interests of the
Company's stockholders by enhancing the Company's ability to attract, retain and
motivate persons who make (or are expected to make) important contributions to
the Company by providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Company's stockholders. Except where the context
otherwise requires, the term "Company" shall include any of the Company's
present or future subsidiary corporations as defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the "Code") and any other business venture (including, without
limitation, joint venture or limited liability company) in which the Company has
a significant interest, as determined by the Board of Directors of the Company
(the "Board").

2.       ELIGIBILITY

         All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant".

3.       ADMINISTRATION, DELEGATION

         (a) ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered
by the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

         (b) APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board
referred to in Section 3(b) to the extent that the Board's powers or authority
under the Plan have been delegated to such Committee.

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4.       STOCK AVAILABLE FOR AWARDS

         (a) NUMBER OF SHARES. Subject to adjustment under Section 8, Awards may
be made under the Plan for up to 2,500,000 shares of common stock, $.10 par
value per share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

         (b) PER-PARTICIPANT LIMIT. Subject to adjustment under Section 8, for
Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which Awards may be granted to any Participant
under the Plan shall be 500,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code ("Section 162(m)").

5.       STOCK OPTIONS

         (a) GENERAL. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

         (b) INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

         (c) EXERCISE PRICE. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement,
provided, however, that the exercise price shall not be less than 100% of the
fair market value of the Common Stock, as determined by the Board, at the time
the Option is granted.

         (d) DURATION OF OPTIONS. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement, provided however, that no Option will be granted
for a term in excess of ten years.

         (e) EXERCISE OF OPTION. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including

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electronic notice) approved by the Board together with payment in full as
specified in Section 5(f) for the number of shares for which the Option is
exercised.

         (f) PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

              (1) in cash or by check, payable to the order of the Company;

              (2) except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price;

              (3) when the Common Stock is registered under the Exchange Act, by
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), provided (i) such method of payment is then
permitted under applicable law and (ii) such Common Stock was owned by the
Participant at least six months prior to such delivery;

              (4) to the extent permitted by the Board, in its sole discretion
by (i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or

              (5) by any combination of the above permitted forms of payment.

         (g) SUBSTITUTE OPTIONS. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5.

6.       RESTRICTED STOCK

         (a) GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").

         (b) TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be

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registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in
blank, with the Company (or its designee). At the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if the
Participant has died, to the beneficiary designated, in a manner determined by
the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "Designated
Beneficiary"). In the absence of an effective designation by a Participant,
Designated Beneficiary shall mean the Participant's estate.

7.       OTHER STOCK-BASED AWARDS

         The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.

8.       ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS

         (a) CHANGES IN CAPITALIZATION. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.

         (b) LIQUIDATION OR DISSOLUTION. In the event of a proposed liquidation
or dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.

         (c) ACQUISITION AND CHANGE IN CONTROL EVENTS

              (1) DEFINITIONS

                   (a) An "Acquisition Event" shall mean:

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                        (i)  any merger or consolidation of the Company with or
                             into another entity as a result of which the Common
                             Stock is converted into or exchanged for the right
                             to receive cash, securities or other property; or

                        (ii) any exchange of shares of the Company for cash,
                             securities or other property pursuant to a
                             statutory share exchange transaction.

                   (b) A "Change in Control Event" shall mean:

                        (i)  the acquisition by an individual, entity or group
                             (within the meaning of Section 13(d)(3) or 14(d)(2)
                             of the Securities Exchange Act of 1934, as amended
                             (the "Exchange Act")) (a "Person") of beneficial
                             ownership of any capital stock of the Company if,
                             after such acquisition, such Person beneficially
                             owns (within the meaning of Rule 13d-3 promulgated
                             under the Exchange Act) 30% or more of either (x)
                             the then-outstanding shares of common stock of the
                             Company (the "Outstanding Company Common Stock") or
                             (y) the combined voting power of the
                             then-outstanding securities of the Company entitled
                             to vote generally in the election of directors (the
                             "Outstanding Company Voting Securities"); PROVIDED,
                             HOWEVER, that for purposes of this subsection (i),
                             the following acquisitions shall not constitute a
                             Change in Control Event: (A) any acquisition
                             directly from the Company (excluding an acquisition
                             pursuant to the exercise, conversion or exchange
                             of any security exercisable for, convertible into
                             or exchangeable for common stock or voting
                             securities of the Company, unless the Person
                             exercising, converting or exchanging such security
                             acquired such security directly from the Company
                             or an underwriter or agent of the Company),(B) any
                             acquisition by any employee benefit plan (or
                             related trust) sponsored or maintained by the
                             Company or any corporation controlled by the
                             Company, or (C) any acquisition by any corporation
                             pursuant to a Business Combination (as defined
                             below) which complies with clauses (x) and (y) of
                             subsection (iii) of this definition; or

                        (ii) such time as the Continuing Directors (as defined
                             below) do not constitute a majority of the Board
                             (or, if applicable, the Board of Directors of a
                             successor corporation to the Company), where the
                             term "Continuing Director" means at

                                      -5-
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                             any date a member of the Board (x) who was a member
                             of the Board on the date of the initial adoption of
                             this Plan by the Board or (y) who was nominated or
                             elected subsequent to such date by at least a
                             majority of the directors who were Continuing
                             Directors at the time of such nomination or
                             election or whose election to the Board was
                             recommended or endorsed by at least a majority of
                             the directors who were Continuing Directors at the
                             time of such nomination or election; PROVIDED,
                             HOWEVER, that there shall be excluded from this
                             clause (y) any individual whose initial assumption
                             of office occurred as a result of an actual or
                             threatened election contest with respect to the
                             election or removal of directors or other actual or
                             threatened solicitation of proxies or consents, by
                             or on behalf of a person other than the Board; or

                       (iii) the consummation of a merger, consolidation,
                             reorganization, recapitalization or statutory share
                             exchange involving the Company or a sale or other
                             disposition of all or substantially all of the
                             assets of the Company (a "Business Combination"),
                             unless, immediately following such Business
                             Combination, each of the following two conditions
                             is satisfied: (x) all or substantially all of the
                             individuals and entities who were the beneficial
                             owners of the Outstanding Company Common Stock and
                             Outstanding Company Voting Securities immediately
                             prior to such Business Combination beneficially
                             own, directly or indirectly, more than 50% of the
                             then-outstanding shares of common stock and the
                             combined voting power of the then-outstanding
                             securities entitled to vote generally in the
                             election of directors, respectively, of the
                             resulting or acquiring corporation in such Business
                             Combination (which shall include, without
                             limitation, a corporation which as a result of such
                             transaction owns the Company or substantially all
                             of the Company's assets either directly or through
                             one or more subsidiaries) (such resulting or
                             acquiring corporation is referred to herein as the
                             "Acquiring Corporation") in substantially the same
                             proportions as their ownership of the Outstanding
                             Company Common Stock and Outstanding Company Voting
                             Securities, respectively, immediately prior to such
                             Business Combination and (y) no Person (excluding
                             the Acquiring Corporation or any employee benefit
                             plan (or related trust) maintained or sponsored by
                             the Company or by the Acquiring Corporation)
                             beneficially owns, directly

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                             or indirectly, 30% or more of the then-outstanding
                             shares of common stock of the Acquiring
                             Corporation, or of the combined voting power of the
                             then-outstanding securities of such corporation
                             entitled to vote generally in the election of
                             directors (except to the extent that such ownership
                             existed prior to the Business Combination).

              (2) EFFECT ON OPTIONS

                   (a)  ACQUISITION EVENT. Upon the occurrence of an Acquisition
                        Event (regardless of whether such event also constitutes
                        a Change in Control Event), or the execution by the
                        Company of any agreement with respect to an Acquisition
                        Event (regardless of whether such event will result in a
                        Change in Control Event), the Board shall provide that
                        all outstanding Options shall be assumed, or equivalent
                        options shall be substituted, by the acquiring or
                        succeeding corporation (or an affiliate thereof);
                        PROVIDED THAT if such Acquisition Event also constitutes
                        a Change in Control Event, except to the extent
                        specifically provided to the contrary in the instrument
                        evidencing any Option or any other agreement between a
                        Participant and the Company, such assumed or substituted
                        options shall be immediately exercisable in full upon
                        the occurrence of such Acquisition Event. For purposes
                        hereof, an Option shall be considered to be assumed if,
                        following consummation of the Acquisition Event, the
                        Option confers the right to purchase, for each share of
                        Common Stock subject to the Option immediately prior to
                        the consummation of the Acquisition Event, the
                        consideration (whether cash, securities or other
                        property) received as a result of the Acquisition Event
                        by holders of Common Stock for each share of Common
                        Stock held immediately prior to the consummation of the
                        Acquisition Event (and if holders were offered a choice
                        of consideration, the type of consideration chosen by
                        the holders of a majority of the outstanding shares of
                        Common Stock); provided, however, that if the
                        consideration received as a result of the Acquisition
                        Event is not solely common stock of the acquiring or
                        succeeding corporation (or an affiliate thereof), the
                        Company may, with the consent of the acquiring or
                        succeeding corporation, provide for the consideration to
                        be received upon the exercise of Options to consist
                        solely of common stock of the acquiring or succeeding
                        corporation (or an affiliate thereof) equivalent in fair
                        market value to the per share consideration received by
                        holders of outstanding shares of Common Stock as a
                        result of the Acquisition Event.

                                      -7-

<PAGE>

                             Notwithstanding the foregoing, if the acquiring or
                        succeeding corporation (or an affiliate thereof) does
                        not agree to assume, or substitute for, such Options,
                        then the Board shall, upon written notice to the
                        Participants, provide that all then unexercised Options
                        will become exercisable in full as of a specified time
                        prior to the Acquisition Event and will terminate
                        immediately prior to the consummation of such
                        Acquisition Event, except to the extent exercised by the
                        Participants before the consummation of such Acquisition
                        Event; provided, however, in the event of an Acquisition
                        Event under the terms of which holders of Common Stock
                        will receive upon consummation thereof a cash payment
                        for each share of Common Stock surrendered pursuant to
                        such Acquisition Event (the "Acquisition Price"), then
                        the Board may instead provide that all outstanding
                        Options shall terminate upon consummation of such
                        Acquisition Event and that each Participant shall
                        receive, in exchange therefor, a cash payment equal to
                        the amount (if any) by which (A) the Acquisition Price
                        multiplied by the number of shares of Common Stock
                        subject to such outstanding Options (whether or not then
                        exercisable), exceeds (B) the aggregate exercise price
                        of such Options.

                   (b)  CHANGE IN CONTROL EVENT THAT IS NOT AN ACQUISITION
                        EVENT. Upon the occurrence of a Change in Control Event
                        that does not also constitute an Acquisition Event,
                        except to the extent specifically provided to the
                        contrary in the instrument evidencing any Option or any
                        other agreement between a Participant and the Company,
                        all Options then-outstanding shall automatically become
                        immediately exercisable in full.

              (3) EFFECT ON RESTRICTED STOCK AWARDS

                   (a)  ACQUISITION EVENT THAT IS NOT A CHANGE IN CONTROL EVENT.
                        Upon the occurrence of an Acquisition Event that is not
                        a Change in Control Event, the repurchase and other
                        rights of the Company under each outstanding Restricted
                        Stock Award shall inure to the benefit of the Company's
                        successor and shall apply to the cash, securities or
                        other property which the Common Stock was converted into
                        or exchanged for pursuant to such Acquisition Event in
                        the same manner and to the same extent as they applied
                        to the Common Stock subject to such Restricted Stock
                        Award.

                   (b)  CHANGE IN CONTROL EVENT. Upon the occurrence of a Change
                        in Control Event (regardless of whether such event also
                        constitutes an Acquisition Event), except to the extent
                        specifically provided to the contrary in the instrument
                        evidencing any Restricted Stock

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                        Award or any other agreement between a Participant and
                        the Company, all restrictions and conditions on all
                        Restricted Stock Awards then-outstanding shall
                        automatically be deemed terminated or satisfied.

              (4) EFFECT ON OTHER AWARDS

                   (a)  ACQUISITION EVENT THAT IS NOT A CHANGE IN CONTROL EVENT.
                        The Board shall specify the effect of an Acquisition
                        Event that is not a Change in Control Event on any other
                        Award granted under the Plan at the time of the grant of
                        such Award.

                   (b)  CHANGE IN CONTROL EVENT. Upon the occurrence of a Change
                        in Control Event (regardless of whether such event also
                        constitutes an Acquisition Event), except to the extent
                        specifically provided to the contrary in the instrument
                        evidencing any other Award or any other agreement
                        between a Participant and the Company, all other Awards
                        shall become exercisable, realizable or vested in full,
                        or shall be free of all conditions or restrictions, as
                        applicable to each such Award.

              (5)  LIMITATIONS. Notwithstanding the foregoing provisions of this
                   Section 8(c), if the Change in Control Event is intended to
                   be accounted for as a "pooling of interests" for financial
                   accounting purposes, and if the acceleration to be effected
                   by the foregoing provisions of this Section 8(c) would
                   preclude accounting for the Change in Control Event as a
                   "pooling of interests" for financial accounting purposes,
                   then no such acceleration shall occur upon the Change in
                   Control Event.

9.       GENERAL PROVISIONS APPLICABLE TO AWARDS

         (a) TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

         (b) DOCUMENTATION. Each Award shall be evidenced by a written
instrument in such form as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.

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         (c) BOARD DISCRETION. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

         (d) TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

         (e) WITHHOLDING. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may, to the extent then permitted under applicable law, satisfy
such tax obligations in whole or in part by delivery of shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.

         (f) AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

         (g) CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

         (h) ACCELERATION. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of restrictions in full or in part or that any other
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

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<PAGE>

10.      MISCELLANEOUS

         (a) NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

         (b) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

         (c) EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant that is intended to comply with Section 162(m) shall become
exercisable, vested or realizable, as applicable to such Award, unless and until
the Plan has been approved by the Company's stockholders to the extent
stockholder approval is required by Section 162(m) in the manner required under
Section 162(m) (including the vote required under Section 162(m)). No Awards
shall be granted under the Plan after the completion of ten years from the
earlier of (i) the date on which the Plan was adopted by the Board or (ii) the
date the Plan was approved by the Company's stockholders, but Awards previously
granted may extend beyond that date.

         (d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company's stockholders as required by
Section 162(m) (including the vote required under Section 162(m)).

         (e) GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                      -11-Prepared by MERRILL CORPORATION www.edgaradvantage.com

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EXECUTION COPY  

 
 

FIFTH AMENDMENT TO CREDIT AGREEMENT    
  

    This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and entered into as of December 6, 2000, is
by and between MARTEN TRANSPORT, LTD., a Delaware corporation (the "Borrower"), the banks which are signatories hereto (individually, a "Bank" and, collectively, the "Banks"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as agent for the Banks (in such capacity, the "Agent"). 

RECITALS  

    A.  The
Borrower and U.S. Bank National Association, in its capacity as a Bank and the Agent, entered into a Credit Agreement dated as of October 30, 1998, as amended
by that certain First Amendment to Credit Agreement dated as of January 3, 2000, that certain Second Amendment to Credit Agreement dated as of January 19, 2000, that certain Third Amendment to Credit
Agreement dated as of April 5, 2000; and that certain Fourth Amendment to Credit Agreement dated as of May 31, 2000 (as amended, the "Credit Agreement"). 

    B.  The
Borrower has requested, among other things, that the Banks extend the Revolving Commitment Ending Date to January 31, 2004; and 

    C.  The
Borrower desires to amend certain other provisions of the Credit Agreement, and the Banks and Agent have agreed to make such amendments, subject to the terms
and conditions set forth in this Amendment. 

 
 

AGREEMENT    
  

    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto hereby covenant and agree to be bound as follows: 

    Section 1.  Capitalized Terms.  Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement, unless the context shall otherwise require. 

    Section 2.  Amendments.  The Credit Agreement is hereby amended as follows: 

    2.1  Definitions.  The definition of "Applicable Margin"
is amended in its entirety to read as follows: 

    "Applicable Margin": With respect to Eurodollar Rate Advances, the rate per annum corresponding with the Cash Flow Leverage Ratio as of
the last day of the preceding fiscal quarter: 

	Cash Flow Leverage Ratio
 
	 	Applicable Margin
	 
	>3.00	 	1.750	%
	>2.25 and <=3.00	 	1.500	%
	>1.75 and <=2.25	 	1.125	%
	>1.00 and <=1.75	 	1.000	%
	<=1.00	 	0.875	%

 

    2.2  Letter of Credit Fees.  Section 2.16 of the Credit
Agreement is amended by deleting the letter of credit fee table as it appears therein and inserting in lieu thereof the following table: 

	Cash Flow Leverage Ratio
 
	 	Rate Per Annum
	 
	>3.00	 	1.750	%
	>2.25 and <=3.00	 	1.500	%
	>1.75 and <=2.25	 	1.125	%
	>1.00 and <=1.75	 	1.000	%
	<=1.00	 	0.875	%

    2.3  Revolving Commitment Ending Date.  Section 2.19 of
the Credit Agreement is amended to read in its entirety as follows: 

    Section
2.19 Revolving Commitment Ending Date. The "Revolving Commitment Ending Date" is January 31, 2004. 

    Section 3.  Effectiveness of Amendments.  The amendments
contained in this Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following: 

    3.1 This Amendment duly executed by the Borrower. 

    3.2 A copy of the resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary (i) certifying that there has
been no amendment to the Certificate of Incorporation or Bylaws of the Borrower since true and accurate copies of the same were delivered to the Lender with a certificate of the Secretary of the
Borrower dated October 30, 1998, and (ii) identifying each officer of the Borrower authorized to execute this Amendment and any other instrument or agreement executed by the Borrower in connection
with this Amendment (collectively, the "Amendment Documents"), and certifying as to specimens of such officer's signature and such officer's incumbency in such offices as such officer holds. 

    3.3 A certificate of an officer of the Borrower certifying that, as of the date hereof, no Lien granted by or
Indebtedness owing by the Borrower exceeds that permitted under the related financial covenants in the Senior Unsecured Loan Documents. 

    3.4 Certified copies of all documents evidencing any necessary corporate action, consent or governmental or regulatory
approval (if any) with respect to this Amendment. 

    3.5 A copy of the Third Fee Letter, dated as of the date hereof, duly executed by the Borrower. 

    3.6 The Borrower shall have satisfied such other conditions as specified by the Agent and the Banks, including payment
of all unpaid legal fees and expenses incurred by the Agent through the date of this Amendment in connection with the Credit Agreement and the Amendment Documents. 

    Section 4.  Representations, Warranties, Authority, No Adverse
Claim.  

    4.1  Reassertion of Representations and Warranties, No
Default.  The Borrower hereby represents that on and as of the date hereof and after giving effect to this Amendment (a) all of the representations and
warranties contained in the Credit Agreement are true, correct and complete in all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of
the Credit Agreement, and (b) there will exist no Default or 

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Event of Default under the Credit Agreement as amended by this Amendment on such date which has not been waived by the Agent and the Banks. 

    4.2  Authority, No Conflict, No Consent Required.  The
Borrower represents and warrants that the Borrower has the power and legal right and authority to enter into the Amendment Documents and has duly authorized as appropriate the execution and delivery
of the Amendment Documents and other agreements and documents executed and delivered by the Borrower in connection herewith or therewith by proper corporate, and none of the Amendment Documents nor
the agreements contained herein or therein contravenes or constitutes a default under any agreement, instrument or indenture to which the Borrower is a party or a signatory or a provision of the
Borrower's Certificate of Incorporation, Bylaws or any other agreement or requirement of law in which the consequences of such default or violation could have a material adverse effect on the
business, operations, properties, assets
or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole, or result in the imposition of any Lien on any of its property under any agreement binding on or applicable
to the Borrower or any of its property except, if any, in favor of the Agent on behalf of the Banks. The Borrower represents and warrants that no consent, approval or authorization of or registration
or declaration with any Person, including but not limited to any governmental authority, is required in connection with the execution and delivery by the Borrower of the Amendment Documents or other
agreements and documents executed and delivered by the Borrower in connection therewith or the performance of obligations of the Borrower therein described, except for those which the Borrower has
obtained or provided and as to which the Borrower has delivered certified copies of documents evidencing each such action to the Agent. 

    4.3  No Adverse Claim.  The Borrower warrants,
acknowledges and agrees that no events have taken place and no circumstances exist at the date hereof which would give the Borrower a basis to assert a defense, offset or counterclaim to any claim of
the Agent or the Banks with respect to the Obligations or the Borrower's obligations under the Credit Agreement as amended by this Amendment. 

    Section 5.  Affirmation of Credit Agreement, Further
References.  The Agent, the Banks, and the Borrower each acknowledge and affirm that the Credit Agreement, as hereby amended, is hereby ratified and confirmed in
all respects and all terms, conditions and provisions of the Credit Agreement, except as amended by this Amendment, shall remain unmodified and in full force and effect. All references in any document
or instrument to the Credit Agreement are hereby amended and shall refer to the Credit Agreement as amended by this Amendment. All of the terms, conditions, provisions, agreements, requirements,
promises, obligations, duties, covenants and representations of the Borrower under such documents and any and all other documents and agreements entered into with respect to the obligations under the
Credit Agreement are incorporated herein by reference and are hereby ratified and affirmed in all respects by the Borrower. 

    Section 6.  Merger and Integration, Superseding
Effect.  This Amendment, from and after the date hereof, embodies the entire agreement and understanding between the parties hereto and supersedes and has merged
into this Amendment all prior oral and written agreements on the same subjects by and between the parties hereto with the effect that this Amendment, shall control with respect to the specific
subjects hereof and thereof. 

    Section 7.  Severability.  Whenever possible, each
provision of this Amendment and the other Amendment Documents and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted in
such manner as to be effective, valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment, the other Amendment Documents or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under 

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the applicable law, such provision shall be ineffective in such jurisdiction only to the extent of such prohibition, invalidity or unenforceability, without invalidating or rendering unenforceable the
remainder of such provision or the remaining provisions of this Amendment, the other Amendment Documents or any other statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto in such jurisdiction, or affecting the effectiveness, validity or enforceability of such provision in any other jurisdiction. 

    Section 8.  Successors.  The Amendment Documents shall be
binding upon the Borrower, the Banks, and the Agent and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Banks, and the Agent and the successors and assigns
of the Banks and the Agent. 

    Section 9.  Legal Expenses.  As provided in Section 9.2
of the Credit Agreement, the Borrower agrees to reimburse the Agent, upon execution of this Amendment, for all reasonable out-of-pocket expenses (including attorney' fees and legal expenses of Dorsey
& Whitney LLP, counsel for the Agent) incurred in connection with the Credit Agreement, including in connection with the negotiation, preparation and execution of the Amendment Documents and all other
documents negotiated, prepared and executed in connection with the Amendment Documents, and in enforcing the obligations of the Borrower under the Amendment Documents, and to pay and save the Agent
and the Banks harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of the Amendment Documents, which obligations of the Borrower
shall survive any termination of the Credit Agreement. 

    Section 10.  Headings.  The headings of various sections
of this Amendment have been inserted for reference only and shall not be deemed to be a part of this Amendment. 

    Section 11.  Counterparts.  The Amendment Documents may
be executed in several counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that all such counterparts shall be regarded as one and
the same document, and either party to the Amendment Documents may execute any such agreement by executing a counterpart of such agreement. 

    Section 12.  Governing Law.  THE
AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.

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    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written. 

	 	 	MARTEN TRANSPORT, LTD.
	

 	
 	
By:	

/s/ FRANKLIN J. FOSTER   
	 	 	 	

	 	 	Title:	Vice President
	 	 	 	

	 	 	Address:	129 Marten Street

Mondovi, Wisconsin 54755
	
Revolving Commitment

Amount:	
 	
U.S. BANK NATIONAL ASSOCIATION

In its individual corporate capacity and as Agent
	

$45,000,000	
 	

By:	

/s/ MICHAEL J. REYMANN   
	 	 	 	

	 	 	Title:	Vice President
	 	 	 	

	 	 	Address:	601 Second Avenue South,

MPFP0602

Minneapolis, MN 55402-4302

ATTN: Michael J. Reymann
	
Revolving Commitment

Amount:	
 	
THE NORTHERN TRUST COMPANY
	

$15,000,000	
 	

By:	

/s/ JEFFREY B. CLARK   
	 	 	 	

	 	 	Title:	Vice President
	 	 	 	

	 	 	Address:	50 South LaSalle Street

Chicago, IL 60675

ATTN: Jeffrey B. Clark

[Signature Page to Fifth Amendment to Credit Agreement] 

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FIFTH AMENDMENT TO CREDIT AGREEMENT

AGREEMENT

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