SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to .240.14a-12
CANNON EXPRESS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11(1).
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state
how it was determined): Not Applicable
(4) Proposed maximum aggregate value of transaction: Not Applicable
(5) Total fee paid: Not applicable
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously Paid: Not Applicable
(2) Form, Schedule or Registration Statement No.: Not Applicable
(3) Filing Party: Not Applicable
(4) Date Filed: Not Applicable
CANNON EXPRESS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 20, 2001
The undersigned shareholder(s) of Cannon Express, Inc. hereby appoint Dean G.
Cannon and Rose Marie Cannon, and each or either of them, the true and lawful
agents and attorneys-in-fact for the undersigned, with power of substitution,
to attend the meeting and to vote the stock owned by or registered in the
name of the undersigned, as instructed below, at the Annual Meeting of
Shareholders to be held on Tuesday, November 20, 2001 at 10:00 a.m., local
time, and at any adjournments thereof, for the transaction of the following
business:
1. To elect the following nominees for director of the Company:
Dean G. Cannon Rose Marie Cannon Sam F. Fiser
Glenn E. Kelley Len Bennett
The shareholder may withhold authority to vote for any of these nominees by
lining through or striking out the name of any such nominee.
2. Approval of the 2001 Equity Incentive Plan
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL VOTE
THESE SHARES FOR THE FOREGOING PROPOSALS. The proxies will vote in their
sole discretion upon such other business as may properly come before the
meeting.
Please sign, date and return this proxy as soon as possible.
Dated _______________, 2001
_________________________
Signature
_________________________
Signature
Please sign exactly as name(s) appear at left. If stock is in the name of
two or more persons, each should sign. Persons signing as attorney,
executor, administrator, trustee, guardian or other fiduciary, please give
full title as such. If a corporation, then signature should be by president
or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
CANNON EXPRESS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 2001
TO THE SHAREHOLDERS OF CANNON EXPRESS, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Cannon
Express, Inc., a Delaware corporation, will be held at the corporate office
of Cannon Express, Inc. at 1457 East Robinson Avenue in Springdale, Arkansas
on Tuesday, November 20, 2001 at 10:00 a.m., local time, for the following
purposes:
1. To elect five directors.
2. To consider and act upon a proposal to adopt the 2001 Equity
Incentive Plan.
3. To consider and act upon such other business as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on October 23, 2001 will
be entitled to vote at the Annual Meeting and any adjournments thereof.
The Company's Proxy Statement is submitted herewith. The annual report for
the year ended June 30, 2001 is being mailed to shareholders together with
the mailing of this Notice and Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Dean G. Cannon,
President and Chairman of the Board of Directors
Springdale, Arkansas
October 26, 2001
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED FORM OF PROXY SO
THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER
THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH PROXY DOES
NOT AFFECT YOUR RIGHT TO REVOKE IT LATER OR TO VOTE YOUR SHARES IN PERSON IN
THE EVENT YOU SHOULD ATTEND THE MEETING.
CANNON EXPRESS, INC.
1457 Robinson
Springdale, Arkansas 72765
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 20, 2001 AND ANY ADJOURNMENTS
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy, for use only at the Annual Meeting of Shareholders to be
held at the corporate office of Cannon Express, Inc. (the "Company"), at
1457 East Robinson Avenue in Springdale, Arkansas on Tuesday, November 20,
2001 at 10:00 a.m., local time, and any adjournments or postponements
thereof, is solicited on behalf of the Board of Directors of the Company.
Such solicitation is being made primarily by mail, but may also be made in
person or by telephone or telegraph by officers, directors, and regular
employees of the Company. All expenses incurred in the solicitation will be
borne by the Company.
Any shareholder executing a proxy retains the right to revoke it at any time
prior to exercise at the 2001 Annual Meeting. A proxy may be revoked at any
time before it is used, upon written notice to Rose Marie Cannon, Secretary
of the Company, by execution and delivery of a later proxy, or by attending
the meeting and voting in person. If not revoked, all properly executed
proxies received will be voted at the meeting in accordance with the terms of
the proxy.
This proxy material is first being mailed to shareholders on or about October
31, 2001.
OUTSTANDING STOCK AND VOTING RIGHTS
The outstanding shares of the Company as of October 10, 2001 totaled
3,205,276 shares of common stock, $ .01 par value (the "Common Stock"). At
the meeting, each shareholder will be entitled to one vote, in person or by
proxy, for each share of stock owned of record at the close of business on
October 23, 2001. Votes will be tabulated by inspectors of election
appointed by the Company's Board of Directors. The stock transfer books of
the Company will not be closed.
The enclosed form of proxy provides a method for shareholders to withhold
authority to vote for any one or more of the nominees for the Board of
Directors while still granting authority to the proxy to vote for the
remaining nominees. The names of all nominees are listed on the proxy card.
If you wish to grant the proxy authority to vote for all nominees, check the
box marked "FOR" which appears above the list of nominees. If you wish to
withhold authority to vote for all nominees, check the box marked "ABSTAIN,"
also located above the list of nominees. If you wish your shares to be voted
for some nominees and not for one or more of the others, indicate the name(s)
of the nominee(s) for whom you are withholding authority by drawing a line
through such name(s). If no instructions are indicated, shares of common
stock will be voted for the election of the nominees. Shareholders are not
entitled to cumulative voting with respect to the election of directors.
As noted above, the enclosed form of proxy provides a method for shareholders
to withhold authority to vote for a director and thereby abstain from voting.
If you check the box marked "ABSTAIN", shares will be voted neither for nor
against a director but will be counted for quorum purposes. Additionally,
"broker non-votes" are not relevant to the determination of a quorum or for
determining whether the proposal to elect directors has been approved. While
there may be instances in which a shareholder will wish to abstain, the Board
of Directors encourages all shareholders to vote their shares in their best
judgment and to participate in the voting process to the fullest extent
possible.
Provided a quorum is present, the affirmative vote of a plurality of the
shares of Common Stock represented at the meeting and entitled to vote is
required for election of each nominee to the Board of Directors.
With respect to the proposal to adopt a new equity incentive plan, the
enclosed form of proxy provides a method for you to (1) vote for the
proposal, (2) vote against the proposal, or (3) abstain from voting. By
abstaining, your shares will not be voted either for or against the proposal,
but will be counted for quorum purposes. While there may be instances in
which you will wish to abstain, the Board encourages you to vote your shares
in your best judgment and to participate in the voting process to the fullest
extent possible. Provided a quorum is present, a majority of the votes cast
at the meeting is required to approve the proposal to adopt the new equity
incentive plan. Broker non-votes will be treated in the same manner as
abstentions for quorum and voting purposes (i.e., counted for quorum
purposes, but neither being voted for nor against the proposals and,
therefore, having no effect on the outcome of the votes).
ELECTION OF DIRECTORS; SECURITY OWNERSHIP OF MANAGEMENT
Directors are to be elected to hold office until the next annual meeting of
shareholders or until their successors are duly elected and qualified. The
Board of Directors of the Company has recommended to the Company's
shareholders that the number of Directors which shall be authorized to manage
the affairs of the Company for the ensuing year shall be five, subject to
increase as provided in the Company's by-laws, and that the nominees listed
below be elected as directors at the Annual Meeting.
The following table sets forth, as of October 10, 2001 the name, age, term of
office as director of the Company, and ownership of the Company's Common
Stock with respect to each nominee for election to the Board of Directors,
the named directors, the named executive officers, and of the directors and
executive officers of the Company as a group. The nominees listed below
served as members of the Board of Directors during the last fiscal year,
except for Mr. Bennett.
Year First Common
Elected Shares
Nominees and Officers Age Director Owned Percentage(2)
Dean G. Cannon(1) 60 1986 1,934,486 60%
Rose Marie Cannon(1) 60 1986 1,934,486 60%
Len Bennett 62 N/A * *
Glenn E. Kelley 39 N/A * *
Sam F. Fiser 53 N/A * *
Larry L. Patrick(3) 56 N/A 37,308 1%
Duane Wormington(3) 44 N/A 24,829 1%
Kent Horton(3) 47 N/A * *
All current directors, nominated directors
and executive officers (8 persons) 2,006,623 63%
(1)See "Principal Shareholders"
(2)Percentage based upon 3,205,276 Shares of Common Stock as of October 10,
2001.
(3)Not a nominee for director.
* Denotes ownership of less than 1% of the total outstanding shares of
Common Stock.
Business Experience. The following is a brief summary of the business
experience of each of the nominees for director of the Company for at least
the past five years:
Dean G. Cannon has served as President and a Director of the Company since
its inception in 1981.
Rose Marie Cannon has served as Secretary, Treasurer and a Director of the
Company since its inception in 1981.
Rose Marie Cannon is the wife of Dean G. Cannon. Except for the foregoing,
no family relationships exist among any of the persons named above.
Len Bennett is President and CEO of Petersfield Group LLC, an international
advisory firm specializing in trade, logistics, transportation, and
distribution on a world-wide basis. He has owned and operated all modes of
transportation - air, ocean, rail, truck, warehousing, and logistics. He was
the Founder, President and COO of Celadon Group, the largest full-truckload
carrier in the NAFTA countries. He was Advisor to both the US and Mexican
governments in the writing and negotiating of the Transportation Section of
the NAFTA agreement. He has worked successfully in the US, Mexico, Europe,
South America, and the Far East. He has been published and quoted
extensively, and has lectured in both the government and private sectors.
Mr. Bennett is a Graduate Mechanical and Industrial Engineer, with Doctoral
studies in Psychology.
Glenn E. Kelley is an attorney with the Kelley Law Firm, a professional
limited liability company located in Rogers, Arkansas. He has been licensed
to practice law in the state and federal courts in Arkansas since 1987 with
primary emphasis on commercial transactions, commercial litigation, and
employment matters.
Sam F. Fiser is a partner in S.F. Fiser & Company, a regional accounting firm
headquartered in Springdale, Arkansas. He is a graduate of the University of
Arkansas. Mr. Fiser is a member of the American Institute of Certified
Public Accountants, the Arkansas Society of Certified Public Accountants, and
is a former chairman of the Arkansas Savings and Loan Board.
The Board of Directors has no reason to believe that any nominee will be
unable or unwilling to accept nomination or to serve if elected. However,
should any nominee become unable or unwilling to accept nomination or to
serve if elected, all proxies will be voted for the election of a qualified
substitute nominated by the Board of Directors.
Committees
The Company presently does not have standing nominating committees. The
Board of Directors nominates persons for director. The Board will consider
suggestions by shareholders for names of nominees to the Board of Directors
for the fiscal year ending June 30, 2003 provided that such suggestions are
made in writing and delivered to Rose Marie Cannon, Secretary of the Company,
on or before June 30, 2002.
The Company has an audit committee which is presently composed of Sam F.
Fiser and Glenn E. Kelley. Mr. Uvalde Lindsey served on the Audit Committee
until his resignation and will be replaced by Mr. Bennett, an independent
member of the Board of Directors, upon confirmation of his election to the
Board. The Audit Committee recommends candidates to serve as the Company's
auditors, reviews the reports of the Company's auditors, and has the
authority to investigate the financial and business affairs of the Company.
The Company has a compensation committee which is presently composed of Sam
F. Fiser and Glenn E. Kelley. The compensation committee makes
recommendations to the Board of Directors regarding compensation for the
President and Secretary/Treasurer of the Company.
During the past fiscal year, the Board of Directors met on one occasion, the
Audit Committee met once, and the Compensation Committee met once. In fiscal
2001, each director attended at least 75% or more of the total of meetings of
the Board and committees of the Board during the period in which he or she
served.
PRINCIPAL SHAREHOLDERS
As of October 10, 2001, the only shareholders known to the Company to own,
directly or indirectly, more than 5% of the Company's Common Stock are
reflected in the following table:
Number of Shares Percent of
Beneficially Outstanding
Name and Address Owned Shares(3)
Dean G. Cannon 1,934,486(1) 60%
1457 Robinson
Springdale, Arkansas 72764
Rose Marie Cannon 1,934,486(2) 60%
1457 Robinson
Springdale, Arkansas 72764
Alice L. Walton 283,289 9%
10587 Hwy 281 S.
Fayetteville, Arkansas 72701
(1) Includes 343,150 shares owned of record by Rose Marie Cannon, his wife,
and 1,248,186 shares held jointly by Dean G. and Rose Marie Cannon.
(2) Includes 343,150 shares owned of record by Dean G. Cannon, her husband,
and 1,248,186 shares held jointly by Rose Marie and Dean G. Cannon.
(3) Percentage based upon 3,205,276 shares of the Company's Common Stock
outstanding as of October 10, 2001.
EXECUTIVE COMPENSATION
The following table is set forth with respect to all cash compensation paid
or to be paid by the Company as well as certain other compensation paid to
the Chief Executive Officer and other executive officers whose total
remuneration exceeded $100,000 during fiscal year 2001.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Other Under-
Annual Restricted lying All Other
Name and Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Dean G. Cannon 2001 455,077(1) -0- -0- -0- -0-/-0- -0- -0-
President, 2000 210,016(1) 240,000 -0- -0- -0-/-0- -0- -0-
Chairman of 1999 208,053(1) 240,000 -0- -0- -0-/-0- -0- -0-
the Board
Larry L. Patrick 2001 168,874 -0- -0- -0- -0-/-0- -0- -0-
Vice-President 2000 162,081 -0- -0- -0- -0-/-0- -0- -0-
1999 162,855 -0- -0- -0- -0-/-0- -0- -0-
Duane Wormington 2001 142,570 -0- -0- -0- -0- -0- -0-
Vice-President 2000 139,241 -0- -0- -0- -0- -0- -0-
of Finance 1999 124,158 -0- -0- -0- -0- -0- -0-
Kent Horton 2001 101,603 -0- -0- -0- -0- -0- -0-
Vice-President 2000 87,763 -0- -0- -0- -0- -0- -0-
of Sales 1999 79,135 -0- -0- -0- -0- -0- -0-
(1) Amounts shown include cash and non-cash compensation earned and received
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Value of Unexercised
Number Unexercised Options In-the-Money Options
Shares at June 30, 2001 at June 30, 2001
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Larry L. Patrick -0- -0- 37,243 / -0-(1) $-0-/$-0-(4)
Duane Wormington -0- -0- 24,829 / -0-(2) $-0-/$-0-(4)
Kent Horton -0- -0- 4,000 / 6,000(3) $-0-/$-0-(4)
(1) Represent options to purchase 37,243 Common shares granted under the
Company's Incentive Stock Option Plan.
(2) Represent options to purchase 24,829 Common shares granted under the
Company's Incentive Stock Option Plan.
(3) Represent options to purchase 10,000 Common shares granted under the
Company's Incentive Stock Option Plan.
(4) Market value of the Company's Common Stock at 6/30/01 was $1.70 per share.
Value of unexercised options was calculated based upon the difference
between the foregoing market values and the exercise price of the options.
Compensation of Directors
Each non-officer director was paid a total of $200 for each meeting of the
Board of Directors or its committees which he attended. Directors do not
receive annual fees for attendance at meetings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The members of the
compensation Committee are Sam F. Fiser and Glenn E. Kelley, both non-
employee directors of the Company. All decisions by the Compensation
Committee relating to compensation of the Company's executive officers are
reviewed by the full board, except for decisions regarding awards under the
Company's Incentive Stock Option Plan (the "Plan"), which must be made
solely by the Committee in order for the grants to satisfy Exchange Act Rule
16b-3.
Compensation Policies
The overall compensation policy of the Company is to maximize shareholder
return by combining annual and long-term compensation to executives. The
Committee seeks to provide annual compensation which motivates executives by
recognizing and rewarding individual initiative and achievement. Long-term
compensation to executives is based on stock ownership by management.
Compensation Elements
The following alternatives were available to the Committee as compensation
elements during fiscal 2001: base salary, annual cash bonuses for fiscal
2001, and stock options granted under the Company's Plan. Compensation paid
during fiscal 2001 reflected the Committee's emphasis on determining pay on
an individualized basis.
Base Salary. Executive's base salaries are initially determined with
reference to comparable base salaries of others in the Company's industry.
Subjective measures of performance include a review of each executive's past
and anticipated level of performance. The Committee does not attempt to
relate executive salaries to objective performance-related criteria.
Cash Bonuses. The Compensation Committee determines on an annual basis
whether to award cash bonuses to executives. While no general bonus program
existed during fiscal 2001, the Compensation Committee may elect to award
bonuses to reward individual contributions. Bonuses are awarded by the
Compensation Committee based on subjective criteria, such as a review of the
executive's past and anticipated performance. The Committee does not attempt
to relate bonuses to objective performance-related criteria.
Stock Options. The Company's long-term incentive program is based on the
Company's Plan, which was approved by shareholders in 1986. Upon selection
by the Compensation Committee, the company's key employees are eligible to
participate in the Plan. In determining whether to grant options, the
Committee reviews the options previously granted and exercised under the
Plan, the Company's performance as determined in the market price of its
stock, individual performance and potential contribution to the Company and
the perceived need of providing additional long-term incentive to key
executives. Based on these criteria, no options to acquire shares of the
Company's Common Stock were granted to executive officers during fiscal 2001.
CEO Compensation
The compensation Committee's general approach in setting Mr. Cannon's target
annual compensation is to seek to be competitive with other companies of a
similar size in the Company's industry, to recognize and reward initiative,
overall corporate performance and managerial ability, and to provide long-
term incentive to increase shareholder value. In setting Mr. Cannon's cash
compensation, the Committee reviewed the compensation of chief executive
officers of other companies in the industry. The Committee targeted Mr.
Cannon's cash compensation to fall within the range of such amounts.
COMPENSATION COMMITTEE
Sam F. Fiser
Glenn E. Kelley
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is composed of two
independent directors. It is expected that Mr. Bennett will be appointed to the
Audit committee by the Board of Directors after the election of the Board of
Directors at the Company's Annual Meeting of Shareholders. The Audit Committee
operates under a written charter adopted by the Board of Directors, a copy of
which is attached to this Proxy Statement as Exhibit A. The Board of Directors
and the Audit Committee believe that the Audit Committee's current member
composition satisfies the rules of the National Association of Securities
Dealers, Inc. (the "NASD") that governs audit committee composition, including
the requirement that audit committee members all be "independent directors" as
that term is defined by NASD Rule 4200(a)(14).
The role of the Audit Committee is to assist the Board of Directors in its
oversight of the Company's financial reporting process. Management has the
primary duty for the financial statements and the reporting process,
including the systems of internal controls. The independent auditors are
responsible for auditing the Company's financial statements and expressing an
opinion as to their conformity to accounting principles generally accepted in
the United States.
In the performance of its oversight function, the Audit Committee has
reviewed and discussed with management and the independent auditors the
Company's audited financial statements. The Audit Committee also has
discussed with the independent auditors the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to communication with
audit committees. In addition, the Audit Committee has received from the
independent auditors the written disclosures and letter required by
Independence Standards Board Standard No. 1 relating to independence
discussions with audit committees, has discussed with the independent
auditors their independence from the Company and its management, and has
considered whether the independent auditor's provision of non-audit services
to the Company is compatible with maintaining the auditor's independence.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting. These meetings without management present will
be held at least once each year, but generally more frequently.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the Company's audited financial statements be included in the Company's
2001 Annual Report to Shareholders and Annual Report on Form 10-K for the
year ended June 30, 2001 for filing with the Securities and Exchange
Commission.
AUDIT COMMITTEE
Sam F. Fiser
Glenn E. Kelley
INDEPENDENT AUDITORS
Arthur Andersen LLP, certified public accountants, served as independent
auditors for the Company for the year ended June 30, 2001. The Board of
Directors has selected Arthur Andersen LLP to serve as the independent
auditors of the Company for the current fiscal year. A representative of
Arthur Andersen is expected to be in attendance at the Annual Meeting and
will be afforded the opportunity to make a statement. The representative
will also be available to respond to appropriate questions.
Fees Principal Accounting Firm
During fiscal year 2001, the Company retained its principal auditor, Arthur
Andersen LLP, to provide services in the following categories and amounts.
Audit fees and quarterly reviews $44,750
Financial information systems design
and implementation fees $ -
All other fees $ -
CERTAIN RELATED TRANSACTIONS
The Company leases its offices from Dean G. Cannon and Rose Marie Cannon
pursuant to a written lease entered into and effective as of September 1,
1986. The lease provides for monthly payments of $6,000, cancelable by the
Company on 30 days' notice and is on terms no less favorable to the Company
as could be obtained from an independent third party.
Compensation Committee Interlocks and Insider Participation
There exist no interlocking relationships on the Compensation Committee.
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission reports of ownership and changes in ownership of common stock and
other equity securities of the Company. Officers, directors and greater than
10% shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such reports furnished to the
Company, or written representations from certain reporting persons, the
Company believes that, during the 2001fiscal year, all filing requirements
were complied with as they apply to its officers, directors and greater than
10% beneficial owners.
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return to the
Company's shareholders during the six-year period ended June 30, 2001 as well
as an overall stock market index (AMEX Market Index) and a published industry
index (NASDAQ Transportation Index).
The following information depicts a line graph with the following values:
AB Transport. index Amex
1996 100 100 100
1997 61.9 114.7 107.5
1998 76.2 139.2 134.9
1999 27.4 142.2 151.9
2000 20.2 108.4 121.6
2001 16.2 121.6 163.8
SHAREHOLDER PROPOSALS
Rule 14a-4(c) under the Securities and Exchange Act of 1934 (the "1934
Act") governs the Company's use of discretionary proxy voting authority
with respect to shareholder proposals that are not being included in the
Company's proxy solicitation materials pursuant to Rule 14a-8 of the 1934
Act. Rule 14a-4(c)(1) provides that if a shareholder wishing to make a
proposal fails to notify the company at least 45 days prior to the month and
day of mailing of the prior year's proxy statement (or by an earlier or
later date established by an overriding advance notice provision contained
in the Company's charter or bylaws), then the management proxies named in
the form of proxy distributed in connection with Company's proxy statement
would be allowed to use their discretionary voting authority to address the
matter submitted by the proponent, without discussion of the matter in the
proxy statement. In addition, if a shareholder desires to include a
proposal in the Company's proxy statement for the 2002 Annual Meeting, the
proposal should be directed to Mr. Dean G. Cannon, Chairman of the Company's
Board of Directors, and must be received by the Company on or before June
29, 2002. Any such proposal must comply with the requirements of Rule 14a-8
of the 1934 Act.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made personally, by written communications, telephone or telegraph,
and may be made by directors, officers, and regular employees of the Company
who will not receive any additional compensation, except reimbursement of
actual expenses, in connection with such solicitation.
ADDITIONAL INFORMATION AVAILABLE
Upon written request, the Company will furnish, without charge, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ending June 30,
2001, as filed with the United States Securities and Exchange Commission,
including the financial statements and schedules thereto. The written
request should be sent to Mr. Dean G. Cannon, Chairman of the Company's Board
of Directors, 1457 Robinson, PO Box 364, Springdale, Arkansas 72765.
APPROVAL OF THE 2001 EQUITY INCENTIVE PLAN
Introduction
At the Annual Meeting of Shareholders, the shareholders of the Company will
be asked to approve the 2001 Equity Incentive Plan (the "Plan"), which was
adopted by the Board on October 22, 2001, subject to approval by the
Company's shareholders.
Vote Required
Provided a quorum is present, a majority of the votes cast at the Annual
Meeting is required to approve the Plan.
Summary of the 2001 Equity Incentive Plan
The principal terms and provisions of the Plan are summarized below. The
summary is not a complete description of all of the terms of the Plan. A
copy of the Plan is attached to this proxy statement as "Exhibit B."
Purpose. The Plan is intended to allow employees and certain others to
acquire or increase equity ownership in the Company, thereby strengthening
their commitment to the success of the Company and stimulating their efforts
on behalf of the Company, and to assist the Company in attracting new
employees and retaining existing employees.
Scope of the Plan. Subject to certain adjustments, the total number of
shares of the Company common stock available for grants under the Plan will
be 1,000,000 shares.
Eligibility. All employees of the Company are eligible to be participants.
Administration. The Plan will be administered by a committee (the
"Committee") which will consist of two or more directors of the Company,
all of whom satisfy one of the conditions of Rule 16b-3 in respect of the
exemption of grants to persons subject to potential liability under Section
16(b) of the Securities and Exchange Act of 1934 (the "1934 Act"). Whether
or not a Committee is separately designated by the Board of Directors, any
and all powers and functions of the Committee may at any time and from time
to time be exercised by the Board of Directors. The Committee has the
authority to: (i) select employees to whom awards are granted, (ii) determine
the types of awards and the number of shares covered, (iii) set the terms,
conditions and provisions of such awards and (iv) cancel or suspend awards.
The Committee is authorized to: (i) interpret the Plan, (ii) establish, amend
and rescind any rules and regulations relating to the Plan, and (iii) make
all determinations which may be necessary or advisable for the administration
of the Plan.
Amendment of the Plan. The Board may from time to time, in its discretion,
amend the Plan without the approval of the Company's shareholders, except (i)
as such stockholder approval may be required under the listing requirements
of any securities exchange or national market system on which are listed the
Company's equity securities and (ii) that the Board may not, without the
approval of the Company's shareholders, amend the Plan to (x) increase the
total number of shares reserved for the purposes of the Plan or (y) change
the employees, class of employees or others persons eligible to participate
in the Plan.
Options. The exercise price per share of the Company's common stock
purchasable under any stock option will be determined by the Committee. The
Committee will determine the term of each stock option (subject to a maximum
of 10 years), and the time or times when it may be exercised. The grant and
the terms of Incentive Stock Options ("ISOs" ) will be restricted to the
extent required for qualification as ISOs by the Internal Revenue Code.
Stock Appreciation Rights. When granted, Stock Appreciation Rights ("SARs")
may, but need not be identified with a specific option or specific restricted
shares of the grantee in a number equal to or different from the number of
SARs so granted. The strike price ("Strike Price") of any SAR will equal,
for any SAR that is identified with an option, the price of such option, or
for any other SAR, 100% of the fair market value of a share on the date of
grant of such SAR; except that the Committee may (x) specify a higher Strike
Price in the award Agreement, or (y) provide that the benefit payable upon
exercise of any SAR will not exceed such percentage of the fair market value
of a share on the date granted as the Committee will specify.
Restricted Shares. Except in the case of treasury shares, the Committee will
require the grantee to pay at least $1.00 for each restricted share granted.
The Committee may, but need not, provide that all or any portion of a
grantee's restricted shares, or restricted shares acquired upon exercise of
an option, will be forfeited: (i) upon the grantee's termination of
employment within a specified time period after the grant date; (ii) if the
Company or the grantee does not achieve specified performance goals (if any);
or (iii) upon failure to satisfy such other restrictions as the Committee may
specify.
No Rights as a Stockholder. A grantee will not have any rights as a
stockholder of the Company with respect to the shares (other than restricted
shares) which may be deliverable upon exercise or payment of such award until
such shares have been delivered to him or her.
Adjustments. The Committee will make equitable adjustments in: (i) the
aggregate number of shares which may be distributed under the Plan for awards
in general and for the grant of ISOs; (ii) the number and kind of shares and
SARs covered by an award; and (iii) the option price of all outstanding
options and the Strike Price of all outstanding SARs, to reflect a stock
dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, spin-off, split-off, reorganization,
rights offering, liquidation or similar event, of or by the Company.
Change in Control. In the event of a change in control, as defined in the
Plan ("Change in Control"), in connection with which the holders of common
stock receive shares of common stock of the surviving or successor
corporation that are registered under Section 12 of the 1934 Act: (i) there
will be substituted for each option and SAR outstanding on the date of the
consummation of corporate transaction relating to such Change in Control, a
new option or SAR, as the case may be, reflecting the number and class of
shares into which each outstanding share will be converted pursuant to such
Change in Control and providing each grantee with rights that are
substantially identical to those under this Plan in all material respects;
and (ii) in the event of any such substitution, the purchase price per share
in the case of an option and the Strike Price in the case of an SAR will be
appropriately adjusted by the Committee, such adjustments to be made in the
case of outstanding options and SARs without a change in the aggregate
purchase price or Strike Price.
Termination of the Plan. The Plan will terminate on the ten-year anniversary
of the effective date thereof or at such earlier time as the Board may
determine. No termination will affect any award then outstanding under the
Plan.
OTHER MATTERS
So far as is now known, there is no business other than that described above
to be presented to the shareholders for action at the meeting. Should other
business come before the meeting, votes may be cast pursuant to proxies in
respect to any such business in the best judgment of the persons acting under
the proxies.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN, DATE
AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
Dean G. Cannon, Chairman
October 26, 2001
Exhibit "A"
CHARTER
PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities. The Audit Committee
is responsible for creating and maintaining an open avenue of communication
among the independent accountants, management and the Board of Directors.
The policies and procedures of the Audit Committee must remain flexible in
order to appropriately consider changing conditions and to ensure to the
Board of Directors that the Company's accounting and reporting practices are
in accordance with requirements. Accordingly, the Audit Committee will
review and update this Charter annually or more frequently, as conditions
dictate.
The Audit Committee's primary duties and responsibilities include serving as
an independent and objective committee to:
. Oversee management's responsibility to maintain the reliability and
integrity of the accounting policies and financial reporting and
disclosure practices of the Company;
. Oversee management's responsibility to establish and maintain processes to
assure an adequate system of internal control is functioning within the
Company;
. Oversee management's responsibility to establish and maintain processes to
assure compliance with all applicable laws, regulations and Company
policy.
COMPOSITION
The Audit Committee shall be comprised of the number of directors as
determined by the Board of Directors. Subsequent to June 2001, the Audit
Committee shall be comprised of three or more directors.
Each of the members of the Audit Committee shall be independent directors,
and free from any relationship that, in the opinion of the Board of
Directors, would interfere with the exercise of his or her independent
judgment as a member of the Audit Committee. All members of the Audit
Committee shall have a working familiarity with basic finance and accounting
practices, and at least one member shall have accounting or related
financial management expertise.
The members of the Audit Committee shall be elected by the Board of
Directors and serve until their successors shall be duly elected and
qualified. Unless a Chair is elected by the full Board of Directors, the
members of the Audit Committee may designate a Chair by majority vote of the
full Audit Committee membership.
MEETINGS
The Audit Committee shall hold regular meetings as necessary and special
meetings when called by the Chairman of the Audit Committee or as requested
by the independent accountants.
The Audit Committee shall meet at least annually with management and the
independent accountants in separate sessions to discuss any matters that the
Audit Committee or either of these groups believe should be discussed
privately.
The Audit Committee, or the Chair of the Audit Committee as representative
for the Audit Committee, should meet with the independent accountants and
management quarterly to review the Company's Form 10-Q. This meeting should
take place prior to the earnings release.
The Chairman of the Audit Committee will report to the Board of Directors
following the meetings and is responsible for maintaining minutes and
records of the meetings and activities of the Audit Committee.
RESPONSIBILITIES AND DUTIES
The Audit Committee shall carry out the following responsibilities and
duties.
Review of Reports and Documents
. Review the Company's annual financial statements and any reports or other
financial information submitted to any governmental body, or the public,
including any certification, report, opinion, or review rendered by the
independent accountants.
. Review with management and the independent accountants the 10-Q prior to
the earnings release.
Independent Accountants
. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the
fees and other compensation to be paid to the independent accountants.
. On an annual basis, the Audit Committee should review and discuss with the
accountants all significant relationships the accountants have with the
Company to determine the accountants' independence. The Audit Committee
must receive annually from the independent accountants a written
statement indicating all relationships between the auditor and the
Company in accordance with Independence Standards Board Standard #1.
. Review with the independent auditors and management the scope of the
annual audit and the audit procedures. At the conclusion of the audit,
review the results of the audit including all matters required to be
discussed in accordance with generally accepted auditing standards.
. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
Financial Reporting Processes
. Review the integrity of the Company's financial reporting processes with
the independent accountants.
. Discuss with the independent accountants their judgments about the quality
and appropriateness of the Company's accounting principles as applied in
its financial reporting.
. Consider and approve major changes to the Company's accounting principles
and practices as suggested by the independent accountants.
Compliance
. Review management's monitoring of the Company's compliance with laws,
regulations and Company policies to assure that the Company's financial
statements, reports and other financial information satisfy legal
requirements.
. Perform any other activities consistent with this Charter, the Company's
By-laws and governing law as the Audit Committee or the Board of
Directors deems necessary or appropriate related to the financial affairs
of the Company or the external audit of the Company.
Reporting
. Present a report in the annual proxy statement reflecting the Audit
Committee's findings resulting from its financial reporting oversight
responsibilities.
Exhibit "B"
CANNON EXPRESS, INC.
2001 EQUITY INCENTIVE PLAN
TABLE OF CONTENTS
1.........................................................Purpose
2.....................................................Definitions
3...............................................Scope of the Plan
4..................................................Administration
5.....................................................Eligibility
6............................................Conditions to Grants
7............................................Non-transferability
8.......................................................Exercise
9...........................................Loans and Guarantees
10..............................Notification under Section 83(b)
11.....................................Mandatory Tax Withholding
12....................................Elective Share Withholding
13.....................................Termination of Employment
14............................................Substituted Awards
15........................................Securities Law Matters
16..........................................No Employment Rights
17....................................No Rights as a Stockholder
18............................................Nature of Payments
19....................................Non-uniform Determinations
20...................................................Adjustments
21.........................................Amendment of the Plan
22.......................................Termination of the Plan
23.......................................No Illegal Transactions
24...............................................Controlling Law
25..................................................Severability
CANNON EXPRESS, INC.
2001 EQUITY INCENTIVE PLAN
The 2001 Equity Incentive Plan (the "Plan"), as established by CANNON
EXPRESS, INC., a Delaware corporation ("Cannon Express"), is effective as
of October 22, 2001, subject to the approval of the Stockholders of Cannon
Express within 12 months thereafter.
1. Purpose. The Plan is intended to allow employees and certain
others to acquire or increase equity ownership in Cannon Express, thereby
strengthening their commitment to the success of Cannon Express and
stimulating their efforts on behalf of Cannon Express, and to assist Cannon
Express in attracting new employees and retaining existing employees.
2. Definitions. The terms set forth below have the following meanings (such
meanings to be applicable to both the singular and plural forms):
(a) "Award" means options, including incentive stock options (ISOs),
Restricted Shares or stock appreciation rights (SARs) granted under the
Plan.
(b) "Award Agreement" means the written agreement by which an Award
shall be evidenced.
(c) "Board" means the Board of Directors of Cannon Express.
(d) "Cause" means any one or more of the following, as determined by
the Committee:
(i) a Grantee's commission of a crime that is likely to
result in injury to Cannon Express or a Subsidiary;
(ii) the material violation by the Grantee of written policies
of Cannon Express or a Subsidiary;
(iii) the habitual neglect by the Grantee in the
performance of his or her duties to Cannon Express
or a Subsidiary; or
(iv) the action or inaction in connection with his or her
duties to Cannon Express or a Subsidiary resulting in a material
injury to Cannon Express or a Subsidiary; and
(e) "Change in Control" shall be deemed to have occurred if:
(i) any "person", as defined in Sections 13(d) and 14(d) of
the Exchange Act (other than (i) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company,(ii)
the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, and (iii)
Dean G. Cannon and Rose Marie Cannon and their Immediate Family)
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities unless prior thereto,
the Continuing Directors (as defined below) approves the
transaction that results in the person becoming the beneficial
owner of 50% or more of the combined voting power of the Company's
then outstanding securities. "Continuing Directors" means
directors who were directors of the Company at the beginning of the
24-month period ending on the date the determination is made or
whose election, or nomination for election, by the Company's
stockholders was approved by at least a majority of the directors
who are in office at the time of the election or nomination and who
either (x) were directors at the beginning of the period or (y)
were elected, or nominated for election, by at least a majority of
the directors who were in office at the time of the election or
nomination and were directors at the beginning of the period;
(ii) at any time Continuing Directors no longer constitute a
majority of the directors of the Company;
(iii) the Board fixes a record date for determining
stockholders entitled to vote upon (x) a merger or consolidation of
the Company, statutory share exchange, or other similar transaction
with another corporation, partnership, or other entity or
enterprise in which either the Company is not the surviving or
continuing corporation or Shares are to be converted into or
exchanged for cash, securities other than Shares, or other
property, (y) a sale or disposition of all or substantially all of
the assets of the Company, or (z) the dissolution of the Company;
or
(iv) the Company enters into an agreement with any person,
entity, or enterprise the consummation of which would result in the
occurrence of an event described in subparagraphs (i), (ii), or
(iii) of this paragraph.
Notwithstanding the foregoing, in no event shall a "Change in Control"
be deemed to have occurred with respect to a participant if the participant
is part of a purchasing group that consummates the Change in Control
transaction. A participant shall be deemed "part of a purchasing group"
for purposes of the immediately preceding sentence if the participant is an
equity participant in the purchasing company or group other than as a result
of (y) passive ownership of less than five percent of the voting capital
stock or voting equity interests of the purchasing company; or (z) equity
participation in the purchasing company or group that is otherwise not
significant, as determined prior to the Change in Control by a majority of
the Continuing Directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended or
superceded, and regulations and rulings thereunder. References to a
particular section of the Code include references to successor
provisions.
(g) "Committee" means the committee of the Board appointed pursuant
to Section 4(a).
(h) "Common Stock" means the common stock, $0.01 par value per share,
of Cannon Express.
(i) "Disability" means the inability of the Grantee to reasonably
perform his or her employment responsibilities, in the opinion of a
licensed physician for Cannon Express, due to physical or mental
impairments for a period of sixty (60) consecutive days.
(j) "Effective Date" means October 22, 2001.
(k) "Eligible Employee" means any employee (including any officer) of
Cannon Express or any Subsidiary, including any employee on an approved
leave of absence or layoff, if such leave or layoff does not qualify as
a Disability.
(l) "Fair Market Value" of an equity security as of any date means:
(i) the closing price of a share of such equity security on
the American Exchange (or such other exchange on which such
security is principally traded) on the relevant date or, if there
were no sales on that date, the closing price on the next preceding
date on which there were sales.
(ii) if the Shares of Cannon Express are not listed and traded
on a national securities exchange as of the date in question, the
fair market value shall be the mean between the lowest reported bid
price and highest reported asked price of the Shares on the date in
question in the over-the-counter market, as such prices are
reported in publication of general circulation selected by the
Company and regularly reporting the market price of the Shares in
such market.
(iii) if the Shares of Cannon Express are not listed or
admitted to trading on any stock exchange or traded in the over-
the-counter market as of the date in question, the fair market
value shall be determined in good faith by the Committee.
(m) "Grantee" means an individual who has been granted an Award.
(n) "Immediate Family" means, with respect to a particular Grantee,
such Grantee's spouse, children and grandchildren.
(o) "Mature Shares" means Shares for which the holder thereof has
good title, free and clear of all liens and encumbrances, and which such
holder either (i) has held for at least six months or (ii) has purchased
on the open market.
(p) "Minimum Consideration" means $1.00 per Share.
(q) "1934 Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under, the 1934 Act
include references to successor provisions.
(r) "Option Price" means the per share exercise price of an option.
(s) "Option Term" means the period beginning on the Grant Date of an
option and ending on the expiration date of such option, as specified in
the Award Agreement for such option and as may, in the discretion of the
Committee and consistent with the provisions of the Plan, be extended
from time to time prior to the expiration date of such stock option then
in effect.
(t) "Restricted Shares" means Shares that are subject to forfeiture
if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to such Shares.
(u) "Retirement" means a termination of employment by a Grantee upon
attaining either (i) age 55 with at least 20 years of service as an
employee of Cannon Express or a Subsidiary or (ii) age 60 with at least
15 years of service as an employee of Cannon Express or a Subsidiary.
(v) "Rule 16b-3" means Rule 16b-3 of the SEC under the 1934 Act, as
amended from time to time, together with any successor rule.
(w) "SAR" means stock appreciation right.
(x) "SEC" means the Securities and Exchange Commission.
(y) "Section 16 Person" means a person who is subject to potential
liability under Section 16(b) of the 1934 Act with respect to
transactions involving equity securities of Cannon Express.
(z) "Share" means a share of Common Stock.
(aa) "Subsidiary" means, for purposes of grants of incentive stock
options, a corporation as defined in Section 424(f) of the Code (with
Cannon Express being treated as the employer corporation for purposes of
this definition) and, for all other purposes, a United States or foreign
corporation with respect to which Cannon Express owns, directly or
indirectly, more than 50% or more of the then-outstanding common stock.
(bb) "10% Owner" means a person who owns capital stock (including
stock treated as owned under Section 424(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of capital
stock of Cannon Express or any Subsidiary.
(cc) "Voting Power" means the combined voting power of the then-
outstanding securities of a corporation entitled to vote generally in
the election of directors.
3. Scope of the Plan. Subject to the adjustment as provided in
Section 20, the total number of Shares available for grant under the Plan
shall be 1,000,000 Shares; except that the number of Shares for which Awards
may be granted to any Grantee in any calendar year shall not exceed 50,000.
If any Shares subject to any Award granted hereunder are forfeited or
such Award otherwise terminates without the issuance of such Shares or of
other consideration in lieu of such Shares, the Shares subject to such Award,
to the extent of any such forfeiture or termination, shall again be available
for grant under the Plan. If any outstanding ISOs under the Plan for any
reason expire or are terminated, the Shares allocable to the unexercised
portion of all of such ISOs may again be subject to an incentive stock option
under the Plan. Shares awarded under the Plan may be treasury shares or
newly-issued shares.
4. Administration.
(a) Subject to Section (b), the Plan shall be administered by a
committee (the "Committee") which shall consist of two or more
directors of Cannon Express, all of whom satisfy one of the conditions
of Rule 16b-3 in respect of the exemption of grants to Section 16
Persons from potential liability under Section 16(b) of the 1934 Act. A
majority of the members of the Committee shall constitute a quorum, and
the act of a majority of the members of the Committee shall be the act
of the Committee. Any member of the Committee may be removed at any
time either with or without cause by resolution adopted by the Board of
Directors of Cannon Express, and any vacancy on the Committee may at any
time be filled by a resolution adopted by the Board of Directors.
Whether or not a Committee is separately designated by the Board of
Directors, any and all powers and functions of the Committee may at any
time and from time to time be exercised by the Board of Directors. No
member or former member of the Committee or of the Board of Directors
shall be liable for any action or determination made in good faith with
respect to the Plan or any option granted hereunder. The number of
members of the Committee shall from time to time be increased or
decreased, and shall be subject to such conditions, in each case as the
Board deems appropriate to permit transactions in Shares pursuant to the
Plan to satisfy such conditions of Rule 16b-3 and Section 162(m) of the
Code as then in effect.
(b) Subject to the express provisions of the Plan, the Committee has
full and final authority and sole discretion as follows:
(i) to determine when and to whom Awards should be granted
and the terms and conditions applicable to each Award, including
the benefit payable under any SAR, and whether or not specific
Awards shall be identified with other specific Awards, and if so
whether they shall be exercisable cumulatively with, or
alternatively to, such other specific Awards;
(ii) to determine the amount, if any, that a Grantee shall pay
for Restricted Shares, whether to permit or require the payment of
cash dividends thereon to be deferred and the terms related
thereto, when Restricted Shares (including Restricted Shares
acquired upon the exercise of an option) shall be forfeited and
whether such shares shall be held in escrow;
(iii) to interpret the Plan and to make all determinations
necessary or advisable for the administration of the Plan;
(iv) to make, amend and rescind rules relating to the Plan,
including rules with respect to the exercisability and
nonforfeitability of Awards upon the termination of employment of a
Grantee;
(v) to determine the terms and conditions of all Award
Agreements (which need not be identical) and, with the consent of
the Grantee, to amend any such Award Agreement at any time, among
other things, to permit transfers of such Awards to the extent
permitted by the Plan, except that the consent of the Grantee shall
not be required for any amendment which (A) does not adversely
affect the rights of the Grantee, or (B) is necessary or advisable
(as determined by the Committee) to carry out the purpose of the
Award as a result of any new or change in existing applicable law;
(vi) to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefor;
(vii) to accelerate the exercisability (including
exercisability within a period of less than one year after the
Grant Date) of, and to accelerate or waive any or all of the terms
and conditions applicable to, any Award or any group of Awards for
any reason and at any time, including in connection with a
termination of employment (other than for Cause);
(viii) subject to Section 6(c), to extend the time during
which any Award or group of Awards may be exercised;
(ix) to impose such additional terms and conditions upon the
grant, exercise or retention of Awards as the Committee may, before
or concurrently with the grant thereof, deem appropriate, including
limiting the percentage of Awards which may from time to time be
exercised by a Grantee; and
(x) to take any other action with respect to any matters
relating to the Plan for which it is responsible.
The determination of the Committee on all matters relating to the Plan
or any Award Agreement shall be final. No member of the Committee shall be
liable for any action or determination made in good faith with respect to
the Plan or any Award.
5. Eligibility. The Committee may in its discretion grant Awards to
any Eligible Employee, whether or not he or she has previously received an
Award. In addition, the Committee in its discretion may grant nonqualified
options (but not ISOs), Restricted Stock or SARs to independent contractors
or consultants of Cannon Express or its Subsidiaries who render those types
of services which tend to contribute to the success of Cannon Express or its
Subsidiaries, or which may reasonably be anticipated to contribute to the
future success of Cannon Express or its Subsidiaries.
6. Conditions to Grants.
(a) General Conditions.
(i) The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified in
advance by the Committee.
(ii) Any provision of the Plan to the contrary
notwithstanding, the Option Term shall under no circumstances
extend more than 10 years after the Grant Date, and shall be
subject to earlier termination as herein provided.
(iii) To the extent not set forth in the Plan, the terms
and conditions of each Award shall be set forth in an Award
Agreement.
(b) Grant of Options.
(i) No later than the Grant Date of any option, the Committee
shall determine the Option Price of such option. Only nonqualified
options may be granted with an Option Price that is less than the
Fair Market Value of a Share on the Grant Date. An option shall be
exercisable for unrestricted Shares unless the Award Agreement
provides that it is exercisable for Restricted Shares.
(ii) The Committee may, in its discretion, permit an employee
to elect, before earning compensation, to be granted an Award in
lieu of receiving such compensation; if in the judgment of the
Committee, the value of such Award on the Grant Date equals the
amount of compensation foregone by such employee.
(c) Grant of Incentive Stock Options. At the time of the grant of any
option, the Committee may, in its discretion, designate that such option
shall be made subject to additional restrictions to permit it to qualify
as an "incentive stock option" under the requirements of Section 422
of the Code. Any option designated as an ISO:
(i) shall have an Option Price not less than 100% of the Fair
Market Value of a Share on the Grant Date;
(ii) shall, if granted to a 10% Owner, have an Option Price
not less than 110% of the Fair Market Value of a Share on the Grant
Date;
(iii) shall be for a period of not more than 10 years
(five years in the case of an ISO granted to a 10% Owner) from the
Grant Date, and shall be subject to earlier termination as provided
herein or in the applicable Award Agreement;
(iv) shall meet the limitations of this subparagraph 6(c)(iv).
If the aggregate Fair Market Value of Shares with respect to which
ISOs first become exercisable by a Grantee in any calendar year
exceeds $100,000, taking into account Shares subject to all ISOs
granted by Cannon Express which are held by the Grantee, the excess
will be treated as nonqualified options. To determine whether the
$100,000 limit is exceeded, the Fair Market Value of Shares subject
to options shall be determined as of the Award dates of the
options. In reducing the number of options treated as ISOs to meet
the $100,000 limit, the most recently granted Options will be
reduced first. If a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, Cannon Express may designate
which Shares are to be treated as Shares acquired pursuant to an
ISO.
(v) shall be granted within 10 years from the earlier of the
date the Plan is adopted or the date the Plan is approved by the
stockholders of Cannon Express;
(vi) shall require the Grantee to notify the Committee of any
disposition of any Shares issued pursuant to the exercise of the
ISO under the circumstances as described in Section 421(b) of the
Code (relating to certain disqualifying dispositions) (any such
circumstance, a "Disqualifying Disposition"), within 10 business
days after such Disqualifying Disposition; and
(vii) shall by its terms not be assignable or transferable
other than by will or the laws of descent and distribution and may
be exercised, during the Grantee's lifetime, only by the Grantee,
except that the Grantee may, to the extent provided in the Plan or
in any manner specified by the Committee, designate in writing a
beneficiary to exercise his or her ISO after the Grantee's death;
Notwithstanding any provision herein to the contrary, the Committee may,
without the consent of the Grantee, at any time before the exercise of an
option (whether or not an ISO), take any action necessary to prevent such
option from being treated as an ISO.
(d) Grant of SARs.
(i) When granted, SARs may, but need not be identified with a
specific option or specific Restricted Shares of the Grantee
(including any option or Restricted Shares granted on or before the
Grant Date of the SARs) in a number equal to or different from the
number of SARs so granted. If SARs are identified with Shares
subject to an option or with Restricted Shares, then, unless
otherwise provided in the applicable Award Agreement, the Grantee's
associated SARs shall terminate upon (x) the expiration,
termination, forfeiture or cancellation of such option or
Restricted Shares (y) the exercise of such option or (z) the date
such Restricted Shares become nonforfeitable.
(ii) The strike price ("Strike Price") of any SAR shall
equal, for any SAR that is identified with an option, the Option
Price of such option, or for any other SAR, 100% of the Fair Market
Value of a Share on the Grant Date of such SAR; except that the
Committee may (x) specify a higher Strike Price in the Award
Agreement, or (y) provide that the benefit payable upon exercise of
any SAR shall not exceed such percentage of the Fair Market Value
of a Share on such Grant Date as the Committee shall specify.
(e) Grant of Restricted Shares.
(i) The Committee shall determine the amount, if any, that a
Grantee shall pay for Restricted Shares, subject to the following
sentence. Except with respect to Restricted Shares that are
treasury shares, for which no payment need be required, the
Committee shall require the Grantee to pay at least the Minimum
Consideration for each Restricted Share. Such payment shall be
made in full by the Grantee before the delivery of the shares and
in any event no later than 10 business days after the Grant Date
for such shares. In the discretion of the Committee and to the
extent permitted by law, payment may also be made in accordance
with Section 9.
(ii) The Committee may, but need not, provide that all or any
portion of a Grantee's Restricted Shares, or Restricted Shares
acquired upon exercise of an option, shall be forfeited:
(A) except as otherwise specified in the Plan or the
Award Agreement, upon the Grantee's termination of employment
within a specified time period after the Grant Date; or
(B) if Cannon Express or the Grantee does not achieve
specified performance goals (if any) within a specified time
period after the Grant Date and before the Grantee's
termination of employment; or
(C) upon failure to satisfy such other restrictions as
the Committee may specify in the Award Agreement.
(iii) If restricted Shares are forfeited, then if the
Grantee was required to pay for such shares or acquired such
Restricted Shares upon the exercise of an option, the Grantee shall
be deemed to have resold such Restricted Shares to the Cannon
Express at a price equal to the lesser of (x) the amount paid by
the Grantee for such Restricted Shares, or (y) the Fair Market
Value of a Share on the date of such forfeiture. Cannon Express
shall pay to the Grantee the required amount as soon as is
administratively practical. Such Restricted Shares shall cease to
be outstanding, and shall no longer confer on the Grantee thereof
any rights as a Stockholder of Cannon Express, from and after the
date the event causing the forfeiture, whether or not the Grantee
accepts Cannon Express' tender of payment for such Restricted
Shares.
(iv) The Committee may provide that the certificates for any
Restricted Shares (x) shall be held (together with a stock power
executed in blank by the Grantee) in escrow by the Secretary of
Cannon Express until such Restricted Shares become nonforfeitable
or are forfeited or (y) shall bear an appropriate legend
restricting the transfer of such Restricted Shares. If any
Restricted Shares become nonforfeitable, Cannon Express shall cause
certificates for such shares to be issued without such legend.
7. Non-transferability. An Award granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution and may be exercised, during the Grantee's lifetime, only by the
Grantee or his or her guardian or legal representative, except that, subject
to Section 6(c) (in respect of ISOs), a Grantee may, if permitted by the
Committee, in its discretion, (i) designate in writing a beneficiary to
exercise an Award after his or her death (provided, however, that no such
designation shall be effective unless received by the office of Cannon
Express designated for that purpose prior to the Grantee's death) and (ii)
transfer the Award to a member of his or her Immediate Family.
8. Exercise.
(a) Exercise of Options.
(i) Subject to Section 6 and except as otherwise provided in
the applicable Award Agreement, each option shall become
exercisable at such time or times as may be specified by the
Committee from time to time.
(ii) An option shall be exercised by the delivery to Cannon
Express during the Option Term of (x) written notice of intent to
purchase a specific number of Shares subject to the option and (y)
payment in full of the Option Price of such specific number of
Shares.
(iii) Payment of the Option Price may be made by any one
or more of the following means:
(A) cash, personal check or wire transfer;
(B) Mature Shares, valued at their Fair Market Value on
the date of exercise;
(C) with the approval of the Committee, Restricted
Shares held by the Grantee for at least six months prior to
the exercise of the option, each such share valued at the Fair
Market Value of a Share on the date of exercise;
(D) in accordance with procedures previously approved by
the Secretary of Cannon Express, through the sale of the
Shares acquired on exercise of the Option through a bank or
broker-dealer to whom the Grantee has submitted an irrevocable
notice of exercise and irrevocable instructions to deliver
promptly to Cannon Express the amount of sale or loan proceeds
sufficient to pay for such Shares, together with, if requested
by Cannon Express, the amount of federal, state, local or
foreign withholding taxes payable by Grantee by reason of such
exercise; or
(E) in the discretion of the Committee, payment may also
be made in accordance with Section 9.
The Committee may in its discretion specify that, if any Restricted Shares
("Tendered Restricted Shares") are used to pay the Option Price, (x) all
the Shares acquired on exercise of the option shall be subject to the same
restrictions as the Tendered Restricted Shares, determined as of the date of
exercise of the option, or (y) a number of Shares acquired on exercise of the
option equal to the number of Tendered Restricted Shares shall be subject to
the same restrictions as the Tendered Restricted Shares, determined as of the
date of exercise of the option.
(b) Exercise of SARs.
(i) Subject to Section 6(d), and except as otherwise provided
in the applicable Award Agreement, (x) each SAR not identified with
any other Award shall become exercisable with respect to 25% of the
Shares subject thereto on each of the first four anniversaries of
the Grant Date of such SAR unless the Committee provides otherwise
in the Award Agreement and (y) each SAR which is identified with
any other Award shall become exercisable as and to extend that the
option or Restricted Shares with which such SAR is identified may
be exercised or becomes nonforfeitable, as the case may be.
(ii) SARs shall be exercised by delivery to Cannon Express of
written notice of intent to exercise a specific number of SARs.
Unless otherwise provided in the applicable Award Agreement, the
exercise of SARs which are identified with Shares subject to an
option or Restricted Shares shall result in the cancellation or
forfeiture of such option or Restricted Shares, as the case may be,
to the extent of such exercise.
(iii) The benefit for each SAR exercised shall be equal to
(x) the Fair Market Value of a Share on the date of such exercise,
minus (y) the Strike Price of such SAR. Such benefit shall be
payable in cash, except that the Committee may provide in the Award
Agreement that benefits may be paid wholly or partly in Shares.
9. Loans and Guarantees. The Committee may in its discretion allow a
Grantee to defer payment to Cannon Express of all or any portion of (i) the
Option Price of an option, (ii) the purchase price of Restricted Shares, or
(iii) any taxes associated with the exercise, nonforfeitability of, or
payment of benefits in connection with, an Award, or cause Cannon Express to
guarantee a loan from a third party to the Grantee, in an amount equal to all
or any portion of such Option Price, or any related taxes. Any such payment
deferral or guarantee by Cannon Express shall be on such terms and conditions
as the Committee may determine except that a Grantee shall not be entitled to
defer the payment of such Option Price, purchase price or any related taxes
unless the Grantee (i) enters into a binding, recourse obligation to pay the
deferred amount, which recourse obligation shall include a fixed, market rate
of interest that is non-prepayable and nonrefundable and (ii) other than
treasury shares, pays upon exercise of an option or grant of Restricted
Shares, as applicable, an amount at least equal to the Minimum Consideration
therefor. If the Committee has permitted a payment deferral or caused Cannon
Express to guarantee a loan in accordance with this Section, then the
Committee may require the immediate payment of such deferred amount or the
immediate release of such guarantee upon the Grantee's termination of
employment or if the Grantee sells or otherwise transfers his or her Shares
purchased pursuant to such deferral or guarantee.
10. Notification under Section 83(b). If the Grantee, in connection
with the exercise of any option, or the grant of Restricted Shares, makes the
election permitted under Section 83(b) of the Code to include in such
Grantee's gross income in the year of transfer the amounts specified in
Section 83(b) of the Code, then such Grantee shall notify Cannon Express of
such election within 10 days of filing the notice of the election with the
Internal Revenue Service, in addition to any filing and notification required
pursuant to regulations issued under Section 83(b) of the Code. The
Committee may, in connection with the grant of an Award or at any time
thereafter, prohibit a Grantee from making the election described above.
11. Mandatory Tax Withholding.
(a) Whenever under the Plan, Shares are to be delivered upon exercise
or payment of an Award or upon Restricted Shares becoming
nonforfeitable, or any other event with respect to rights and benefits
hereunder, Cannon Express shall be entitled to require (i) that the
Grantee remit an amount in cash, or in Cannon Express' discretion,
Mature Shares, sufficient to satisfy all federal, state, and local tax
withholding requirements related thereto (_Required Withholding_ ),
(ii) the withholding of such Required Withholding from compensation
otherwise due to the Grantee or from any Shares due to the Grantee under
the Plan or (iii) any combination of the foregoing.
(b) Any Grantee who makes a Disqualifying Disposition or an election
under Section 83(b) of the Code shall remit to Cannon Express an amount
sufficient to satisfy all resulting Required Withholding; except that in
lieu of or in addition to the foregoing, Cannon Express shall have the
right to withhold such Required Withholding from compensation otherwise
due to the Grantee or from any Shares or other payment due to the
Grantee under the Plan.
12. Elective Share Withholding.
(a) Subject to the following subsection, and unless otherwise provided
in the Award Agreement, a Grantee may elect the withholding ("Share
Withholding") by Cannon Express of a portion of the Shares otherwise
deliverable to such Grantee upon the exercise of an Award or upon
Restricted Shares becoming nonforfeitable (each, a "Taxable Event")
having a Fair Market Value equal to the minimum amount necessary to
satisfy Required Withholding liability attributable to the Taxable
Event.
(b) Each Share Withholding election shall be subject to the following
conditions:
(i) any Grantee's election shall be subject to the
Committee's discretion to revoke the Grantee's right to elect Share
Withholding at any time before the Grantee's election if the
Committee has reserved the right to do so in the Award Agreement;
(ii) the Grantee's election must be made before the date (the
"Tax Date") on which the amount to be withheld is determined; and
(iii) the Grantee's election shall be irrevocable.
13. Termination of Employment.
(a) For Cause. If a Grantee's employment is terminated for Cause, (i)
the Grantee's Restricted Shares that are forfeitable shall thereupon be
forfeited, subject to the provisions of Section 6(e)(iii) regarding
repayment of certain amounts to the Grantee; and (ii) any unexercised
option or performance share shall terminate effective immediately upon
such termination of employment.
(b) On Account of Retirement. Except as otherwise provided by the
Committee in the Award Agreement, if a Grantee's employment terminates
on account of Retirement, then:
(i) the Grantee's Restricted Shares that were forfeitable
shall thereupon become nonforfeitable; and
(ii) any unexercised option or SAR, whether or not exercisable
on the date of such termination of employment, may be exercised, in
whole or in part, within the first two (2) years after such
termination of employment (but only during the Option Term) by the
Grantee.
(c) On Account of Death. Except as otherwise provided by the Committee
in the Award Agreement, if a Grantee's employment terminates on account
of death, then:
(i) the Grantee's Restricted Shares that were forfeitable
shall thereupon become nonforfeitable; and
(ii) any unexercised option or SAR, whether or not exercisable
on the date of such termination of employment, may be exercised, in
whole or in part, within the first 12 months after such termination
of employment (but only during the Option Term) by the Grantee or,
after his or her death, by (A) his or her personal representative
or by the person to whom the option or SAR, as applicable, is
transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's designated beneficiary.
(d) On Account of Disability. Except as otherwise provided by the
Committee in the Award Agreement, if a Grantee's employment terminates
on account of Disability, then:
(i) the Grantee's Restricted Shares that were forfeitable
shall thereupon become nonforfeitable; and
(ii) any unexercised option or SAR, whether or not exercisable
on the date of such termination of employment, may be exercised in
whole or in part, within the first 12 months after such termination
of employment (but only during the Option Term) by the Grantee or,
after his or her death, by (A) his or her personal representative
or by the person to whom the option or SAR, as applicable, is
transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's designated beneficiary.
(e) Any Other Reason. Except as otherwise provided by the Committee in
the Award Agreement, if a Grantee's employment terminates for any reason
other than for Cause, Retirement, death, or Disability, then:
(i) the Grantee's Restricted Shares (and any SARs identified
therewith), to the extent forfeitable on the date of the Grantee's
termination of employment, shall be forfeited on such date; and
(ii) any unexercised option or SAR (other than a SAR
identified with a Restricted Share), to the extent exercisable
immediately before the Grantee's termination of employment, may be
exercised in whole or in part, not later than three months after
such termination of employment (but only during the Option Term).
(f) Extension of Term. In the event of a termination of the Grantee's
employment other than for Cause, the term or any Award (whether or not
exercisable immediately before such termination) which would otherwise
expire after the Grantee's termination of employment but before the end
of the period following such termination of employment described in
subparagraphs (b), (c) and (d) of this Section for exercise of Awards
may, in the Committee's discretion, be extended so as to permit any
unexercised portion thereof to be exercised at any time within such
period. The Committee may further extend the period of exercisability
to permit any unexercised portion thereof to be exercised within a
specified period provided by the Committee.
14. Substituted Awards. If the Committee cancels any Award (whether
granted under this Plan or any plan of any entity acquired by Cannon Express
or a Subsidiary), the Committee may, in its discretion, substitute a new
Award therefor upon such terms and conditions consistent with the Plan as the
Committee may determine; except that (a) the Option Price of any new option,
and the Strike Price of any new SAR, shall not be less than 100% (110% in the
case of an incentive stock option granted to a 10% Owner) of the Fair Market
Value of a Share on the date of grant of the new Award; and (b) the Grant
Date of the new Award shall be the date on which such new Award is granted.
15. Securities Law Matters. If the Committee deems necessary to comply
with any applicable securities law, the Committee may require a written
investment intent representation by the Grantee and may require that a
restrictive legend be affixed to certificate for Shares. If, based upon the
advice of counsel to Cannon Express, the Committee determines that the
exercise or nonforfeitability of, or delivery of benefits pursuant to, any
Award would violate any applicable provision of (i) federal or state
securities laws or (ii) the listing requirements of any national securities
exchange or national market system on which are listed any of Cannon Express'
equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but Cannon Express shall use
all reasonable efforts to cause such exercise, nonforfeitability or delivery
to comply with all such provisions at the earliest practicable date.
16. No Employment Rights. Neither the establishment of the Plan, nor
the grant of any Award shall (a) give any Grantee the right to remain
employed by Cannon Express or any Subsidiary or to any benefits not
specifically provided by the Plan or (b) modify the right of Cannon Express
or any Subsidiary to modify, amend, or terminate any employee benefit plan.
17. No Rights as a Stockholder. A Grantee shall not have any rights as
a stockholder of Cannon Express with respect to the Shares (other than
Restricted Shares) which may be deliverable upon exercise or payment of such
Award until such shares have been delivered to him or her. Restricted
Shares, whether held by a Grantee or in escrow by the Secretary of Cannon
Express, shall confer on the Grantee all rights of a stockholder of Cannon
Express, except as otherwise provided in the Plan. At the time of a grant of
Restricted Shares, the Committee may require the payment of cash dividends
thereon to be deferred and, if the Committee so determines, reinvested in
additional Restricted Shares. Stock dividends and deferred cash dividends
issued with respect to Restricted Shares shall be subject to the same
restrictions and other terms as apply to the Restricted Shares with respect
to which such dividends are issued. The Committee may in its discretion
provide for payment of interest on deferred cash dividends.
18. Nature of Payments. Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any
pension, retirement, death or other benefit under (a) any pension,
retirement, profit-sharing, bonus, insurance or other employee benefit plan
of Cannon Express or any Subsidiary or (b) any agreement between (i) Cannon
Express or any Subsidiary and (ii) the Grantee, except as such plan or
agreement shall otherwise expressly provide.
19. Non-uniform Determinations. The Committee's determinations under
the Plan need not be uniform and may be made by the Committee selectively
among persons who receive, or are eligible to receive, Awards, whether or not
such persons are similarly situated. Without limiting the generality of the
foregoing, the Committee shall be entitled, to enter into non-uniform and
selective Award Agreements as to (a) the identity of the Grantees, (b) the
terms and provisions of Awards, and (c) the treatment of terminations of
employment
20. Adjustments.
(a) The Committee shall make equitable adjustment of:
(i) the aggregate numbers and kind of Shares available under
the Plan for Awards in general and for the grant of ISOs;
(ii) the number and kind of Shares and SARs covered by an
Award, and
(iii) the Option Price of all outstanding options and the
Strike Price of all outstanding SARs,
to reflect a stock dividend, stock split, reverse stock split, share
combination, recapitalization, merger, consolidation, spin-off, split-off,
reorganization, rights offering, liquidation or similar event, of or by
Cannon Express.
(b) Notwithstanding any provision in this Plan or any Award Agreement,
in the event of a Change in Control in connection with which the
holders of Common Stock receive shares of common stock of the surviving
or successor corporation that are registered under Section 12 of the
1934 Act:
(i) there shall be substituted for each option and SAR
outstanding on the date of the consummation of corporate
transaction relating to such Change in Control, a new option or
SAR, as the case may be, reflecting the number and class of shares
into which each outstanding Share shall be converted pursuant to
such Change in Control and providing each Grantee with rights that
are substantially identical to those under this Plan in all
material respects; and
(ii) in the event of any such substitution, the purchase price
per share in the case of an option and the Strike Price in the case
of an SAR shall be appropriately adjusted by the Committee, such
adjustments to be made in the case of outstanding options and SARs
without a change in the aggregate purchase price or Strike Price.
21. Amendment of the Plan. The Board may from time to time, in its
discretion, amend the Plan without the approval of Cannon Express'
Stockholders, except (i) as such stockholder approval may be required under
the listing requirements of any securities exchange or national market system
on which are listed Cannon Express' equity securities and (ii) that the Board
may not without the approval of Cannon Express' Stockholders amend the Plan
to (x) increase the total number of shares reserved for the purposes of the
Plan or (y) change the employees, class of employees or others persons
eligible to participate in the Plan.
22. Termination of the Plan. The Plan shall terminate on the ten-year
anniversary of the Effective Date or at such earlier time as the Board may
determine. No termination shall affect any Award then outstanding under the
Plan.
23. No Illegal Transactions. The Plan and all Awards granted pursuant
to it are subject to all applicable laws and regulations. Notwithstanding
any provision of the Plan or any Award, Grantees shall not be entitled to
exercise, or receive benefits under, any Award, and Cannon Express shall not
be obligated to deliver any Shares or deliver benefits to a Grantee, if such
exercise or delivery would constitute a violation by the Grantee or Cannon
Express of any applicable law or regulation.
24. Controlling Law. The law of the State of Delaware, except its law
with respect to choice of law, shall control all matters relating to the
Plan.
25. Severability. If any part of the Plan is declared by any court of
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or
part of a Section so declared to be unlawful or invalid shall, if possible,
be construed in a manner which will given effect to the terms of such Section
to the fullest extent possible while remaining lawful and valid.
CERTIFICATE
I, Rose Marie Cannon, Secretary of CANNON EXPRESS, INC., certify that
the foregoing is a true and correct copy of the CANNON EXPRESS, INC. 2001
Equity Incentive Plan as adopted by the Board of Directors of the corporation
on October 22, 2001.
By: /s/ Rose Marie Cannon
Secretary