EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of October 27, 2003 (the "Effective Date"), by and between Forward
Air Corporation, a corporation organized under the laws of the State of
Tennessee (the "Company"), and Xxxxx X. Xxxxxxxx (the "Executive").
For and in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT. Subject to the terms and conditions of this
Agreement, Executive shall be employed by the Company as President and
Chief Executive Officer of the Company and shall perform such duties
and functions for the Company and any company controlling, controlled
by or under common control with the Company (such companies hereinafter
collectively called "Affiliates") as shall be specified from time to
time by the Board of Directors of the Company. Executive hereby accepts
such employment and agrees to perform such executive duties as may be
assigned to him.
2. DUTIES. Executive shall devote his full business related
time and best efforts to accomplishing such executive duties at such
locations as may be requested by the Board of Directors of the Company.
While employed by the Company, Executive shall not serve as a
principal, partner, employee, officer or director of, or consultant to,
any other business or entity conducting business for profit without the
prior written approval of the Board of Directors of the Company. In
addition, under no circumstances will Executive have any financial
interest in any competitor of the Company; provided, however, that
Executive may invest in no more than 2% of the outstanding stock or
securities of any competitor whose stock or securities are traded on a
national stock exchange of any country. Notwithstanding the foregoing,
Company is aware that Executive currently serves as a director for
Xxxxxx County Bancshares and Company expressly consents to Executive's
service in that capacity.
3. COMPANY POLICIES. Executive shall be subject to and shall
comply with all codes of conduct, personnel policies and procedures
applicable to senior executives of the Company, including, without
limitation, policies regarding sexual harassment, conflicts of interest
and xxxxxxx xxxxxxx.
4. TERM. The term of this Agreement shall be for a period of
three (3) years following the Effective Date (the "Term").
5. COMPENSATION AND BENEFITS. As compensation for his services
during the Term of this Agreement, Executive shall be paid and receive
the amounts and benefits set forth in subsections (a), (b), (c), and
(d) below:
(a) BASE SALARY. An annual base salary ("Base Salary") of
$300,000. Executive's salary shall be payable in accordance with the Company's
regular payroll practices in effect from time to time for executive officers of
the Company.
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(b) BONUS. Executive shall be eligible for an annual cash
bonus of up to a maximum of 50% of Executive's Base Salary (the "Year-End
Bonus") to be paid to him in each calendar year with the determination of the
Year-End Bonus, if any, to be based on the achievement of certain goals and
Company performance criteria as established by the Board of Directors or a
committee thereof. The Year-End Bonus for each calendar year shall be paid to
Executive on or before February 28th of the immediately succeeding year.
(c) OTHER BENEFITS. Executive shall be entitled to vacation
with pay, health insurance, fringe benefits, and such other employee benefits
generally made available by the Company to its executive officers, in accordance
with the established plans and policies of the Company, as in effect from time
to time.
(d) STOCK OPTIONS. As of the Effective Date of this Agreement,
Executive shall be granted 30,000 options under the Forward Air Corporation 1999
Stock Option and Incentive Plan (the "Stock Option Plan"). The exercise price of
the options will be the fair market value of a share of stock on the Effective
Date, as determined under the Stock Option Plan. Executive may not exercise
these options until after the termination of Executive's employment with the
Company. The terms and conditions of the options will be set forth in the Stock
Option Agreement attached as Exhibit A to this Agreement and, such grant shall
be made in accordance with the Stock Option Plan.
6. TERMINATION.
(a) BY EXECUTIVE. Executive may voluntarily terminate his
employment hereunder at any time, to be effective 60 days after delivery to the
Company of his signed, written resignation. The Company may accept said
resignation and pay Executive in lieu of waiting for passage of the notice
period.
(b) BY COMPANY. Subject to the terms of this Paragraph and
Paragraph 6(c) below, the Company may terminate Executive's employment
hereunder, in its sole discretion, whether with or without just cause (as
defined in Paragraph 6(b)(vi) below and subject to the notice periods described
therein), at any time upon written notice to Executive. If, prior to the end of
the Term of this Agreement, the Company terminates Executive's employment
without just cause (as defined below), the Executive shall be entitled to
receive the compensation and benefits set forth in (i) through (iv) below.
(i) BASE SALARY. The Executive will continue to
receive his Base Salary (subject to withholding of all
applicable taxes and any amounts referred to in paragraph
(iii) below) for a period of one (1) year, such payments to be
made in the same manner paid as of the date of termination.
(ii) BONUS. Any bonus amounts that the Executive had
previously earned from the Company but which may not yet have
been paid as of the termination shall not be affected by
termination of Executive by the Company.
(iii) HEALTH INSURANCE COVERAGE. Any health insurance
benefits
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coverage (including any executive medical plan, if any)
provided to the Executive at his date of termination shall be
continued by the Company at its expense at the same level and
in the same manner as if his employment had not terminated
beginning on the date of such termination and ending on the
date one (1) year from the date of such termination. Any
additional coverages the Executive had at termination,
including dependent coverage, will also be continued for such
period on the same terms. Any costs the Executive was paying
for such coverages at the time of termination shall be paid by
the Executive by separate check payable to the Company each
month in advance. If the terms of any benefit plan referred to
in this paragraph do not permit continued participation by the
Executive, then the Company will arrange for other coverage at
its expense providing substantially similar benefits. The
coverages provided for in this paragraph shall be applied
against and reduce the period for which COBRA will be
provided.
(iv) EFFECT OF RESIGNATION. Executive hereby agrees
and acknowledges that if he voluntarily resigns from his
employment, or is terminated for just cause, prior to the end
of the Term of this Agreement, then he shall be entitled to no
payment or compensation whatsoever (including without
limitation, acceleration of option exercise) from the Company
under this Agreement, other than as may be due him through his
last day of employment.
(v) DEFINITION OF "CAUSE". For purposes of this
Agreement, the phrase "for just cause" shall mean: (A)
Executive's material fraud, malfeasance, self-dealing,
embezzlement or dishonesty with respect to business affairs of
the Company which is directly or materially harmful to the
business or reputation of the Company or any subsidiary of the
Company; (B) Executive's conviction of or failure to contest
prosecution for a felony or a crime involving moral turpitude;
(C) Executive's material breach of this Agreement; (D) failure
of Executive, after reasonable notice, promptly to comply with
any valid and legal directive of the Board of Directors; or
(E) a failure by Executive to perform adequately his
responsibilities under this Agreement as demonstrated by
objective and verifiable evidence showing that the business
operations under Executive's control have been materially
harmed as a result of Executive's gross negligence or willful
misconduct. A termination of Executive for just cause based on
clause (C), (D) or (E) of the preceding sentence shall take
effect 30 days after the Executive receives from the Company
written notice of intent to terminate and Company's
description of the alleged cause, unless Executive shall,
during such 30-day period, remedy the events or circumstances
constituting cause; provided, however, that such termination
shall take effect immediately upon the giving of written
notice of termination of just cause under any clause if the
Company shall have determined in good faith that such events
or circumstances are not remediable (which determination shall
be stated in such notice).
(c) BY DEATH OR DISABILITY. If Executive's employment is
terminated due to Executive's death, the Executive's surviving spouse, or if
none, his estate, shall receive the benefits payable under (i) and (ii) of
Paragraph 6(b) above; provided, however, such payments shall be made in a lump
sum payment within 60 days of the Executive's death. In addition, if the
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Executive's dependents are eligible to and actually elect to continue under
COBRA any coverages provided under Paragraph 6(b)(iii), the Company shall pay
the cost of such COBRA coverage for the period remaining under Paragraph
6(b)(iii). If Executive's employment is terminated due to Executive's disability
(as defined in the Company's long-term disability plan or insurance policy, or
if no such plan or policy exists, as determined in good faith by the Board of
Directors of the Company). Executive shall be entitled to the benefits payable
or to be provided under (i), (ii), (iii), and (iv) of Paragraph 6(b). Executive
or his estate, as the case may be, shall not by operation of this paragraph
forfeit any rights in which he is vested at the time of his death or disability.
(d) SURVIVAL. Upon termination of Executive's employment for
any reason whatsoever (whether voluntary on the part of Executive, for just
cause, or other reasons), the obligations of Executive pursuant to paragraphs 7
and 8 hereof shall survive and remain in effect for the periods described in
Paragraph 7.
7. COMPETITION, CONFIDENTIALITY, AND NONSOLICITATION.
Executive agrees to execute and be bound by the terms and conditions of
the Noncompetition Agreement attached hereto as Exhibit B, which is
hereby made a part of this Agreement.
8. INJUNCTIVE RELIEF. The Executive acknowledges that his
services to be rendered to the Company are of a special and unusual
character which have a unique value to the Company, the loss of which
cannot adequately be compensated by damages in an action at law.
Executive further acknowledges that any breach of the terms of
Paragraph 7, including Exhibit B, would result in material damage to
the Company, although it might be difficult to establish the monetary
value of the damage. Executive therefore agrees that the Company, in
addition to any other rights and remedies available to it, shall be
entitled to obtain an immediate injunction (whether temporary or
permanent) from any court of appropriate jurisdiction in the event of
any such breach thereof by Executive, or threatened breach which the
Company in good faith believes will or is likely to result in
irreparable harm to the Company. The existence of any claim or cause of
action by Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of Executive's agreement under this
Paragraph and Paragraph 7 above.
9. CHANGE OF CONTROL.
(a) DEFINITION. A "Change of Control" shall be deemed to have
taken place if:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, other than the Company, a wholly-owned subsidiary
thereof, or any employee benefit plan of the Company or any of
its subsidiaries becomes the beneficial owner of Company
securities having 50% or more of the combined voting power of
the then outstanding securities of the Company that may be
cast for the election of directors of the Company (other than
as a result of the issuance of securities initiated by the
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Company in the ordinary course of business);
(ii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions, the holders of all
the Company's securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction constitute, following such transaction, less than
a majority of the combined voting power of the
then-outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the
election of the directors of the Company or such other
corporation or entity after such transactions; or
(iii) the Company sells all or substantially all of
the assets of the Company.
(b) EFFECT OF CHANGE OF CONTROL. In the event of a Change of
Control, Executive immediately shall be entitled to a Change of Control Benefit
as follows: (i) an amount equal to Executive's Base Salary over a 12 month
period, payable in installments as normal payroll over the 24 months following
the date of the Change of Control ; (ii) the payment of the maximum amount
Executive may earn as a Year-End Bonus; (iii) any unpaid portion of the Year-End
Bonus for prior calendar years, accrued and unpaid vacation pay, unreimbursed
expenses incurred and any other benefits owed to Executive pursuant to any
written employee benefit plan or policy of the Company; (vi) the vested portion
of Executive's stock options and the acceleration and immediate vesting of any
unvested portion of Executive's stock options; and (v) continued coverage during
the 12 month period following the date of the Change in Control under the
Company's employee medical and life insurance plans. Executive shall have two
(2) years from the date of the Change of Control to exercise all vested stock
options.
Payment of the Change of Control Benefit shall not
otherwise affect the terms and conditions of this Agreement and its Exhibits,
all of which shall remain in full force and effect. Without limiting the
generality of the foregoing, after a Change of Control, Executive shall be
employed as the President and Chief Executive Officer of the Company until this
Agreement is terminated pursuant to the provisions of Section 6 hereof
(including termination by Executive pursuant to Section 6(a) on 60 days notice).
Executive shall be entitled to the compensation and benefits provided for in
Section 5 until this Agreement is terminated to the same extent as if there had
been no Change of Control. Upon termination, Executive and Company shall be
released from any further duties and responsibilities under this Agreement,
except as set forth in this Section 9(b) and in Sections 7, 8 and 10 of this
Agreement and as set forth in Exhibits A and B hereto.
10. MISCELLANEOUS.
(a) NOTICE. Any notice or other communication required or
permitted under this Agreement shall be effective only if it is in writing and
shall be deemed to have been duly given when delivered personally or seven days
after mailing if mailed first class by registered or certified mail, postage
prepaid, addressed as follows:
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If to the Company: Forward Air Corporation
000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Legal Department
If to the Executive: Xxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
or to such other address as either party may designate by notice to the
other.
b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the Executive's employment
by the Company and supersedes and is in full substitution for the Employment
Agreement, dated January 1, 1999, between the Company and Executive and any and
all other prior understandings or agreements with respect to the Executive's
employment.
c) AMENDMENT. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any provision hereof may
be waived only by an instrument in writing signed by the party or parties
against whom or which enforcement of such waiver is sought. The failure of
either party hereto to comply with any provision hereof shall in no way affect
the full right to require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof be taken or
held to be a waiver of any succeeding breach of such provision, or a waiver of
the provision itself, or a waiver of any other provision of this Agreement.
d) BINDING EFFECT. This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be assigned by the Executive or the Company,
except for assignment by the Company to any wholly owned subsidiary.
e) SEVERABILITY AND MODIFICATION. If any provision of this
Agreement or portion thereof is so broad, in scope or duration, so as to be
unenforceable, such provision or portion thereof shall be interpreted to be only
so broad as is enforceable. In addition, to the extent that any provision of
this Agreement as applied to either party or to any circumstances shall be
adjudged by a court of competent jurisdiction to be void or unenforceable, the
same shall in no way affect any other provision of this Agreement or the
validity or enforceability of this Agreement.
f) INTERPRETATION. This Agreement shall be interpreted,
construed and governed by and under the laws of the State of Tennessee. Each
party irrevocably (i) consents to the exclusive jurisdiction and venue of the
courts of Xxxxxx County, State of Tennessee and federal courts in the Eastern
District of Tennessee, in any action arising under or relating to this Agreement
(including Exhibit B hereto), and (ii) waives any jurisdictional
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defenses (including personal jurisdiction and venue) to any such action. If any
provision of this Agreement is deemed or held to be illegal, invalid, or
unenforceable under present or future laws effective during the Term hereof,
this Agreement shall be considered divisible and inoperative as to such
provision to the extent it is deemed to be illegal, invalid or unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any provision of this Agreement is deemed or held to
be illegal, invalid or unenforceable there shall be added hereto automatically a
provision as similar as possible to such illegal, invalid or unenforceable
provision as shall be legal, valid or enforceable. Further, should any provision
contained in this Agreement ever be reformed or rewritten by any judicial body
of competent jurisdiction, such provision as so reformed or rewritten shall be
binding upon the Executive and the Company.
g) FAILURE TO ENFORCE. The failure of either party hereto at
any time, or for any period of time, to enforce any of the provisions of this
Agreement shall not be construed as a waiver of such provision(s) or of the
right of such party hereafter to enforce each and every such provision.
h) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
i) NO CONFLICTING AGREEMENT. The Executive represents and
warrants that he is not party to any agreement, contract or understanding which
would prohibit him from entering into this Agreement or performing fully his
obligations hereunder.
j) COOPERATION IN FUTURE MATTERS. Executive hereby agrees
that, for a period of three (3) years following the date of his termination, he
shall cooperate with the Company's reasonable requests relating to matters that
pertain to Executive's employment by the Company, including, without limitation,
providing information of limited consultation as to such matters, participating
in legal proceedings, investigations or audits on behalf of the Company, or
otherwise making himself reasonably available to the Company for other related
purposes. Any such cooperation shall be performed at times scheduled taking into
consideration Executive's other commitments, and Executive shall be compensated
(except for cooperation in connection with legal proceedings) at a reasonable
hourly or per diem rate to be agreed by the parties to the extent such
cooperation is required on more than an occasional and limited basis. Executive
shall also be reimbursed for all reasonable out of pocket expenses. Executive
shall not be required to perform such cooperation to the extent it conflicts
with any requirements of exclusivity of service for another employer or
otherwise, nor in any manner that in the good faith belief of Executive would
conflict with his rights under or ability to enforce this Agreement.
k) EXPENSES. The Company shall pay all reasonable attorneys'
fees and expenses incurred by Executive in connection with the negotiation and
preparation of this Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx
FORWARD AIR CORPORATION
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Its: V.P. & Controller
---------------------------------
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EXHIBIT A
OCTOBER ___, 2003
INCENTIVE STOCK OPTION AGREEMENT
To the Optionee (the "Optionee") executing the reference and signature page(s)
(the "Signature Page") to this Incentive Stock Option Agreement (this
"Agreement").
Dear Optionee:
This Agreement sets forth the terms under which Forward Air Corporation, a
Tennessee corporation (the "Company"), has awarded you an option to purchase
shares of the $0.01 par value common stock of the Company (the "Common Stock").
This Agreement, along with the Company's 1999 Stock Option and Incentive Plan
(the "Plan"), Plan Prospectus, Xxxxxxx Xxxxxxx Policy and such additional
documents as are approved by the Company, constitute the terms and conditions
governing the grant of options hereunder. Terms not otherwise defined herein
shall have the meanings set forth in the Plan.
This will confirm the agreement between the Company and the Optionee as follows:
1. Grant of Option. Pursuant to the Plan, the Company grants to the
Optionee the right and option (the "Option") to purchase all or any part of the
number of shares of Common Stock set forth on the Signature Page (the "Shares").
The Option granted herein is an incentive stock option and is subject to the
provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Option Price. The option price per Share shall be the "Option Price
per Share" as set forth on the Signature Page (the "Option Price"), representing
one hundred percent (100%) of the Fair Market Value of a share of Common Stock
as determined pursuant to the Plan as of the Grant Date set forth on the
Signature Page.
3. Term of Option. The term of the Option shall commence on the Grant
Date and all rights to purchase Shares hereunder shall cease at 11:59 p.m. on
the Expiration Date set forth on the Signature Page, subject to earlier
termination as provided in the Plan and this Agreement. Except as may otherwise
be provided in the Plan or this Agreement, Options granted hereunder may be
cumulative and exercised as follows:
(a) Subject to the terms and conditions of the Plan and this
Agreement, the Option shall vest on the dates set forth on the Signature Page,
provided that the Optionee remains continually employed by the Company
throughout such period; provided further, that the Option
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shall expire on the Expiration Date and must be exercised, if at all, on or
before the Expiration Date. The Vesting Schedule for the Option is set forth on
the Signature Page.
(b) For the purpose of this Agreement, the Optionee shall be
deemed to be an eligible employee of the Company for so long as the Optionee is
employed by the Company or a parent or subsidiary of the Company. A leave of
absence (regardless of the reason therefor) shall be deemed to constitute the
cessation of eligible employee status as of the commencement date of the leave.
(c) The Option shall become exercisable, to the extent that
Shares have vested, upon the termination of Optionee's employment with the
Company (the "Termination Date").
(d) The Option Price of the Shares as to which the Option
shall be exercised shall be paid in full at the time of exercise (i) in cash or
by certified check or by bank draft; (ii) by the delivery of previously owned
unrestricted shares of Common Stock which shall have an aggregate Fair Market
Value determined in accordance with the Plan equal to the Option Price and have
been held by you for at least six (6) months; or (iii) any combination of the
preceding. Except as provided in Section 5 hereof, the Option may not be
exercised at any time unless the Optionee shall have been continuously, from the
Grant Date to the date of the exercise of the Option, an employee of the Company
or a parent or subsidiary of the Company. Additionally, notwithstanding anything
in this Agreement to the contrary, the Option may be exercised at any given time
only as to those Shares covered by the Option which have "vested" at such time,
as set forth on the Vesting Schedule. The holder of the Option shall not have
any of the rights of a shareholder with respect to Shares covered by the Option
until such time, if ever, as such Shares of Common Stock are actually issued and
delivered to the Optionee.
4. Nontransferability. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Optionee, only by the Optionee. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as provided in Section 6 hereof),
pledged or hypothecated in any way, shall not be assignable by operation of law
and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.
5. Termination of Option. In the event that the Optionee is terminated
for just cause (as defined in the Employment Agreement between the Company and
Optionee, dated October 27, 2003), the Option shall terminate on the Termination
Date. If the Optionee dies while employed by the Company (or within the period
of extended exercisability otherwise provided herein), or if the Optionee's
employment terminates by reason of Disability or Retirement, the Option may be
exercised by the Optionee, by the legal representative of the Optionee's estate,
or by the legatee under the Optionee's will at any time until the expiration of
the stated term of the Option. In the event that the employment of Optionee
terminates (other than by reason of death, Disability, Retirement, or for just
cause), the portion of the Option that is vested on the Termination Date may be
exercised for a period of 90 days from such date or until the expiration
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of the stated term of the Option, whichever period is shorter. The Optionee
shall be considered to be an employee of the Company for all purposes under this
Section 5 if the Compensation Committee determines that the Optionee is
rendering substantial services as a part-time employee to the Company or any
parent or subsidiary of the Company.
6. Other Terminations or Expirations. Notwithstanding any other
provision contained herein, in the event of a "Change of Control," as such term
is defined in Section 9(a) of the Employment Agreement between the Company and
Optionee of even date herewith, the Option shall immediately become fully vested
and exercisable.
7. Adjustments. The number and class of Shares subject to the Option,
and the Option Price per Share (but not the total purchase price), and the
minimum number of Shares as to which the Option may be exercised at any one
time, shall all be proportionately adjusted in the event of any change or
increase or decrease in the number of issued shares of Common Stock, without
receipt of consideration by the Company, which result from a split-up or
consolidation of shares, payment of a share dividend (in excess of two percent
(2%)), a recapitalization, combination of shares or other like capital
adjustment, so that, upon exercise of the Option, the Optionee shall receive the
number and class of shares the Optionee would have received had the Optionee
been the holder of the number of shares of Common Stock, for which the Option is
being exercised, on the date of such change or increase or decrease in the
number of issued shares of Common Stock. Subject to reorganization, merger or
consolidation, the Option shall be proportionately adjusted so as to apply to
the securities to which the holder of the number of Shares of Common Stock
subject to the Option would have been entitled. Adjustments under this Section 7
shall be made by the Compensation Committee whose determination with respect
thereto shall be final and conclusive. No fractional share shall be issued under
the Option or upon any such adjustment.
8. Notice. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, by United States certified or registered mail, prepaid, to
the parties or their assignees, if to the Company, addressed to Forward Air
Corporation, Attention: Xxxxx Xxxxxxxxxx, X.X. Xxx 0000, Xxxxxxxxxxx, Xxxxxxxxx
00000, and if to the Optionee, at the address set forth on the Signature Page
(or such other address as shall be given in writing by either party to the
other).
9. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Option may be exercised by written notice to the Company, at
its principal office in the State of Tennessee, which is set forth in Section 8
hereof. Such notice shall state the election to exercise the Option and the
number of Shares in respect of which it is being exercised and by payment in
full of the Option Price pursuant to Section 3 above, and the Company shall
deliver a certificate or certificates representing the Shares subject to such
exercise as soon as practicable after the notice shall be received. The
certificate or certificates for the Shares as to which the Option shall have
been so exercised shall be registered in the name of the person so exercising
the Option and shall be delivered as provided above to or upon the written order
of the person exercising the Option. In the event the Option shall be exercised
by any person other than the Optionee in accordance with the terms hereof, such
notice shall be accompanied by
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appropriate proof of right of such person to exercise the Option. All Shares
that shall be purchased upon the exercise of the Option as provided herein shall
be fully paid and nonassessable. The holder of the Option shall not be entitled
to the privileges or share ownership as to any shares of Common Stock not
actually issued and delivered to the Optionee.
10. No Agreement to Employ. Nothing in this Agreement shall be
construed to constitute or be evidence of any agreement or understanding,
express or implied, on the part of the Company to employ or retain the Optionee
for any specific period of time.
11. Market Standoff Agreement. The Optionee agrees in connection with
any registration of the Company's securities that, upon the request of the
Company or the underwriters managing any public offering of the Company's
securities, the Optionee will not sell or otherwise dispose of any Shares
without the prior written consent of the Company or such underwriters, as the
case may be, for a period of time (not to exceed 120 days) from the effective
date of such registration as the Company or the underwriters may specify.
12. Stop-Transfer Notices. The Optionee understands and agrees that, in
order to ensure compliance with the restrictions referred to herein, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
13. General. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement, shall pay all
original issue and transfer taxes with respect to the issue and transfer of
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Company in connection therewith, and will from time to time use its best
efforts to comply with all laws and regulations, which, in the opinion of
counsel for the Company, shall be applicable thereto. To the extent that this
Agreement differs from the terms of the Plan, the terms of the Plan shall
control.
If the foregoing correctly sets forth your understanding of the terms
and conditions governing the subject matter of this Agreement, please sign the
enclosed Signature Page to this Agreement in the place indicated and return it
to the corporate office.
Very truly yours,
FORWARD AIR CORPORATION
By:
------------------------
Xxxxxx X. Xxxxxx
Chief Financial Officer and
Senior Vice President
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REFERENCE AND SIGNATURE PAGE TO
FORWARD AIR CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
DATED OCTOBER ___, 2003
XXXXX X. XXXXXXXX
000 XXXXXXX XXXX
XXXXXXXXXXX, XX 00000
Pursuant to the terms and conditions of the Forward Air Corporation 1999 Stock
Option Plan (the "Plan"), you have been granted a Non-Qualified Stock Option to
purchase 29,607 shares of stock (the "Option") as outlined below.
Granted To: XXXXX X. XXXXXXXX
SSN ###-##-####
Date of Grant: October 27, 2003
Options Granted: 29,607
Option Price per Share: $30.3100 Total Cost to Exercise: $897,388.17
Expiration Date: October 27, 2013
Vesting Schedule: 33+% per year for 3 years
9,869 on 10/27/2004
9,869 on 10/27/2005
9,869 on 10/27/2006
By my signature below, I hereby acknowledge receipt of the Option granted on the
date shown above, which has been issued to me under the terms and conditions of
the Plan. I further understand and agree that the Option is governed by the
Plan, the Plan Prospectus, the Agreement, the Company's Xxxxxxx Xxxxxxx Policy,
and that such documents have been furnished by or are available from the Company
upon request. I also agree to conform to all of the terms and conditions of the
Option and the Plan and understand that in order for the grant of the Option to
be effective, I must indicate my acceptance of the Option by signing and
delivering this Reference and Signature Page to the Forward Air Corporation
Xxxxx Xxxxxxxxxx, X.X. Xxx 0000, Xxxxxxxxxxx, XX 00000.
Signature: Date:
--------------------------------- --------------------------
XXXXX X. XXXXXXXX
Note: If there are any discrepancies in the name or address
shown above, please make the appropriate corrections on this form.
REFERENCE AND SIGNATURE PAGE TO
FORWARD AIR CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
DATED OCTOBER ___, 2003
XXXXX X. XXXXXXXX
000 XXXXXXX XXXX
XXXXXXXXXXX, XX 00000
Pursuant to the terms and conditions of the Forward Air Corporation 1999 Stock
Option Plan (the "Plan"), you have been granted an Incentive Stock Option to
purchase 393 shares of stock (the "Option") as outlined below.
Granted To: XXXXX X. XXXXXXXX
SSN ###-##-####
Date of Grant: October 27, 2003
Options Granted: 393
Option Price per Share: $30.3100 Total Cost to Exercise: $11,911.83
Expiration Date: October 27, 2013
Vesting Schedule: 33+% per year for 3 years
131 on 10/27/2004
131 on 10/27/2005
131 on 10/27/2006
By my signature below, I hereby acknowledge receipt of the Option granted on the
date shown above, which has been issued to me under the terms and conditions of
the Plan. I further understand and agree that the Option is governed by the
Plan, the Plan Prospectus, the Agreement, the Company's Xxxxxxx Xxxxxxx Policy,
and that such documents have been furnished by or are available from the Company
upon request. I also agree to conform to all of the terms and conditions of the
Option and the Plan and understand that in order for the grant of the Option to
be effective, I must indicate my acceptance of the Option by signing and
delivering this Reference and Signature Page to the Forward Air Corporation
Xxxxx Xxxxxxxxxx, X.X. Xxx 0000, Xxxxxxxxxxx, XX 00000.
Signature: Date:
--------------------------------- --------------------------
XXXXX X. XXXXXXXX
Note: If there are any discrepancies in the name or address shown
above, please make the appropriate corrections on this form.
EXHIBIT B
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (this "Noncompetition Agreement") is
entered into as of October 27, 2003, between Forward Air Corporation (the
"Company") and Xxxxx X. Xxxxxxxx (the "Executive") contemporaneously with and as
part of the Employment Agreement between the parties to which this
Noncompetition Agreement is attached.
REASONS FOR THIS NONCOMPETITION AGREEMENT: During Executive's
relationship with the Company, Executive has learned, will learn, or has or will
have access to, important proprietary information related to the operations and
business of Forward Air Corporation and its subsidiaries and affiliates
(collectively, the "Company's Business"). Executive acknowledges that the
proprietary customer, operations, financial, and business information that has
been or will be learned or accessible has been and will be developed through the
Company's expenditure of substantial effort, time and money; and together with
relationships developed with customers and employees, could be used to compete
unfairly with the Company. The Company's ability to sell its products on a
competitive basis depends, in part, on its proprietary information and customer
relationships, and the Company would not share this information, provide
training or promote Executive's relationship with customers if the Company
believed that it would be used in competition with the Company, which
non-disclosure would cause Executive's performance and opportunities to suffer.
In consideration of employment or continued employment and other
valuable consideration, the receipt and sufficiency of which are acknowledged,
the Company and Executive agree:
1. DEFINITIONS: For this Noncompetition Agreement, the following terms
shall have the meaning specified below:
(a) PERSON: any individual, corporation, limited liability company,
partnership, joint venture, association, unincorporated organization or other
entity.
(b) TERMINATION DATE: the date of Executive's termination of
employment from the Company, whether such termination is voluntary or
involuntary, whether with or without cause, and whether before or after the
expiration of the Term of the Executive's Employment Agreement.
(c) CUSTOMERS: All customers of the Company who did business with
the Company during the one year period immediately prior to the Executive's
Termination Date.
(d) CONFIDENTIAL INFORMATION: information, without regard to form,
relating to the Company's customers, operation, finances, and business that
derives value, actual or potential, from not being generally known to other
Persons, including, but not limited to,
technical or nontechnical data, formulas, patterns, compilations (including
compilations of customer information), programs (including fulfillment and
marketing programs), devices, methods (including fulfillment methods),
techniques, processes, financial data (including sales forecasts), or lists of
actual or potential customers or suppliers (including identifying information
about those customers), whether or not reduced to writing. Confidential
Information includes information disclosed to the Company by third parties that
the Company is obligated to maintain as confidential. Confidential Information
subject to this Noncompetition Agreement may include information that is not a
trade secret under applicable law, but information not constituting a trade
secret only shall be treated as Confidential Information under this
Noncompetition Agreement for a two year period after the Termination Date.
(e) TERRITORY: the term "Territory" as used in this Noncompetition
Agreement means the continental United States and Canada. Executive acknowledges
that Executive will provide services to Company and will have a substantial
impact on the Company's Business throughout the Territory.
(f) COMPETING BUSINESS: any Person (other than the Company)
providing or offering goods or services identical to or reasonably substitutable
for the Company's Business.
2. CONFIDENTIAL INFORMATION: Executive shall use his best efforts to
protect Confidential Information. During or after association with the Company,
Executive will not use or disclose any of the Company's Confidential Information
except in connection with his duties performed in accordance with his Employment
Agreement or except with the prior written consent of the Chairman of the Board
of the Company; provided, however, Executive may make disclosures required by a
valid order or subpoena issued by a court or administrative agency of competent
jurisdiction, in which event Executive will promptly notify the Company of such
order or subpoena to provide the Company an opportunity to protect its
interests.
3. RETURN OF MATERIALS: On the Termination Date or for any reason or at
any time at the Company's request, Executive will deliver promptly to the
Company all materials, documents, plans, records, notes, or other papers and any
copies in Executive's possession or control relating in any way to the Company's
Business, which at all times shall be the property of the Company.
4. SOLICITATION OF EMPLOYEES: During employment and for a period equal
to the longer of (i) 12 months following his Termination Date or (ii) the period
during which Executive is paid pursuant to the terms of his Employment
Agreement, Executive will not solicit or induce or in any manner attempt to
solicit or induce, any person employed by the Company to leave such employment,
whether or not such employment is pursuant to a written contract with the
Company or at will.
5. SOLICITATION OF CUSTOMERS: During employment and for a period equal
to the longer of (i) 12 months following his Termination Date or (ii) the period
during which Executive is paid pursuant to the terms of his Employment
Agreement, Executive will not
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solicit Customers for the purpose of providing or offering products or services
identical to or reasonably substitutable for the Company's Business.
6. LIMITATIONS ON POST-TERMINATION COMPETITION: During employment and
for a period equal to the longer of (i) 12 months following his Termination Date
or (ii) the period during which Executive is paid pursuant to the terms of his
Employment Agreement, Executive will not, within the Territory, be employed or
engaged by a Competing Business as a employee, director, executive, officer,
manager, consultant or equivalent position.
7. FURTHER LIMITATIONS: Notwithstanding any provision of this
Noncompetition Agreement to the contrary, if Executive's employment is
terminated (whether by the Company or by Executive) under circumstances that
would entitle him to receive benefits under his agreement with the Company
providing compensation and benefits for terminations following a "change in
control" of the Company (as defined in such agreement), then the time periods in
Paragraphs 5 and 6 above shall be reduced to 12 months.
8. DISPARAGEMENT: Executive shall not at any time make false,
misleading or disparaging statements about the Company, including its products,
management, employees, and customers.
9. OWNERSHIP OF CONFIDENTIAL INFORMATION: The Executive hereby agrees
that any and all improvements, inventions, discoveries, formulas, processes,
methods, know-how, confidential data, trade secrets and other proprietary
information (collectively "Work Product") within the scope of any business of
the Company or any affiliate which the Executive may conceive or make or has
conceived or made during his employment with the Company shall be and are the
sole and exclusive property of the Company, and that the Executive shall,
wherever requested to do so by the Company, at its expense, execute and sign any
and all applications, assignments or other instruments and do all other things
which the Company may deem necessary or appropriate (i) in order to apply for,
obtain, maintain, enforce or defend letters patent of the United States or any
foreign country for any Work Product, or (ii) in order to assign, transfer,
convey or otherwise make available to the Company the sole and exclusive right,
title and interest in and to any Work Product.
10. INTERPRETATION; SEVERABILITY: Rights and restrictions in this
Noncompetition Agreement may be exercised and are applicable only to the extent
they do not violate any applicable laws, and are intended to be limited to the
extent necessary so they will not render this Noncompetition Agreement illegal,
invalid, or unenforceable. If any term shall be held illegal, invalid, or
unenforceable by a court of competent jurisdiction, the remaining terms shall
remain in full force and effect. This Noncompetition Agreement does not in any
way limit the Company's rights under the laws of unfair competition, trade
secret, copyright, patent, trademark or any other applicable laws(s), which are
in addition to rights under this Noncompetition Agreement. The existence of a
claim by Executive, whether predicated on this Noncompetition Agreement or
otherwise, shall not constitute a defense to the Company's enforcement of this
Noncompetition Agreement.
Remainder of page intentionally left blank; signature page follows
3
IN WITNESS WHEREOF, the Company and the Executive have executed this
Noncompetition Agreement as of the date first written above.
---------------------------------------
Xxxxx X. Xxxxxxxx
FORWARD AIR CORPORATION
By:
----------------------------------
Its:
---------------------------------
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