EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into effective
as of
October 30, 2007 (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. As a part of his duties, Executive shall
present a succession plan for the Company, specifically addressing every officer
position of the Company, to the Board by December 1 of each year, so that the
succession plan may be reviewed by the Board approximately six (6) months prior
to each annual shareholders meeting 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. Executive may serve on two (2) boards of organizations
without approval of the Board, provided that the organizations are not in
competition with the Company and conduct no business with the
Company.
3. COMPANY
POLICIES. Executive shall be subject to and shall comply
with all codes of conduct, personnel policies and procedures applicable to
employees and/or 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 fixed period from the date of its
execution by both parties until 5:00 p.m. on December 31, 2010.
5. RENEWAL. This
Agreement will be automatically extended for additional one (1) year terms
unless the Executive or the Board of Directors of the Company provides written
notice of non-renewal no less than six (6) months prior to the expiration of
the
then-pending term.
6. COMPENSATION
AND BENEFITS. As compensation for his services during the Term of this
Agreement and based upon the performance of Executive and the Company during
each calendar year, 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 no less
than Four Hundred Thousand Dollars ($400,000.00) until January 31,
2008. Effective February 1, 2008, Executive’s Base Salary shall be
Five Hundred Thousand Dollars ($500,000.00). Executive’s Base Salary
will be consistent with the salaries of the chief executive officers for
companies within a peer group chosen by the Compensation
Committee. Executive’s Base 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.
(b) BONUS. Executive
shall be eligible for an annual cash bonus to be paid to him in the form of
a
Year-End Bonus (“Year-End Bonus”). Executive shall
be eligible to receive a Year-End Bonus equal to fifty percent (50%) of his
Base
Salary upon the Company’s achievement of the performance criteria set forth in a
Business Plan established by the Board of Directors for that year and upon
such
other criteria that the Board of Directors may
establish. Executive shall be eligible to receive a
Year-End Bonus equal to one hundred percent (100%) of his Base Salary upon
the
Company’s achievement of the “Stretch” performance criteria established by the
Board of Directors for that year and upon such other criteria that the Board
of
Directors may establish. The Board of Directors shall have the discretion to
award a Year-End Bonus to Executive upon such other terms as the Board of
Directors may establish which amount shall be consistent with the annual
incentives awarded to chief executive officers of companies within a peer group
chosen by the Compensation Committee. The Year-End Bonus for each
calendar year, if any, shall be paid to Executive on the later of (1)
February 28th of the immediately succeeding year or (2) within thirty days
of
receipt by the Company of a final financial audit of the Company’s performance
for the preceding calendar 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) LONG
TERM INCENTIVE. Executive shall be granted 200,000 stock options under
the Forward Air Corporation 1999 Stock Option and Incentive Plan (the "Stock
Option Plan") on the Effective Date. Such options shall vest equally
over a three (3) year period, shall have a five (5) year life and shall be
made
on such other terms and conditions as set forth in a stock option agreement
at
the time of the grant. Moreover, such grant shall be made in
accordance with the Stock Option Plan and its terms and conditions, as they
may
exist at the time of Executive’s exercise, sale or other disposition of any part
of the grant. Additionally, the Company reserves the right to grant
and/or award additional stock options, restricted stock, restricted stock units
or other long term equity award under the Stock Option Plan or such other Stock
Option/Incentive Plan(s) as may be implemented by the Board of Directors from
time to time, and consistent with the awards to chief executive officers of
companies within a peer group chosen by the Compensation
Committee. The terms and conditions of the options, restricted stock
or other form of long term incentive shall be set forth in an Agreement at
the
time of the grant or award and, such grant or award shall be made in accordance
with the Stock Option Plan and its terms and conditions as they may exist at
the
time of Executive’s exercise, sale or other disposition of any part of the grant
or award.
7. TERMINATION.
(a) BY
COMPANY WITHOUT JUST CAUSE. The Company may terminate
Executive's employment hereunder, in its sole discretion, without just cause
(as
defined in Paragraph 7(b) below), 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,” the Executive shall be entitled to
receive the compensation and benefits set forth in (i) through (iii)
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, or for the remainder of the
then-pending term of this Agreement, whichever is longer with such payments
to
be made in the same manner paid as of the date of termination. Provided however,
that such Base Salary (subject to withholding of all applicable taxes and any
amounts referred to in paragraph (iii) below) shall not be paid to Executive
for
a period longer than two (2) years regardless of whether there are more than
two
(2) years remaining in the Term of this Agreement.
(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) Insurance
Coverage. Any health insurance benefits 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.
(b) BY
COMPANY WITH JUST CAUSE. Executive hereby agrees and
acknowledges that if he is terminated for just cause, as defined below, 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 stock
option exercise) from the Company under this Agreement, other than as may be
due
him through his last day of employment.
Definition
of "Just Cause". For purposes of this Agreement, the phrase
"just cause" shall mean: (A) Executive's fraud, malfeasance, self-dealing,
embezzlement or dishonesty with respect to business affairs of the Company
whether or not the Company is materially harmed; (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, to comply promptly 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 clauses (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
EXECUTIVE WITHOUT CHANGE OF CONTROL OR
MATERIAL CHANGE IN DUTIES. Executive hereby agrees
and acknowledges that if he resigns without a change of control or a material
change in duties, as defined below, 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 stock option exercise) from
the
Company under this Agreement, other than as may be due him through his last
day
of employment.
(d) BY
EXECUTIVE WITH CHANGE OF CONTROL OR
MATERIAL
CHANGE IN DUTIES. Upon occurrence of an event
constituting a “Change of Control” or “Material Change of Duties” as defined
herein, Executive may elect to resign his employment and, agreeing to waive
any
other compensation, elect to receive a Change
of
Control Benefit or
Material
Change in Duties Benefit as follows: (i) an amount equal to
Executive’s Base Salary over a twelve month period, payable in installments as
normal payroll over the twelve months following the date of the Change of
Control or Material Change in Duties; (ii) the payment of a Year-End Bonus
in an
amount equal to the Year-End Bonus awarded to Executive in the prior year,
which
shall be payable in accordance with Paragraph 6(b) hereof; (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; (iv) the vested portion of Executive's stock options and the
acceleration and immediate vesting of any unvested portion of Executive's stock
options under Paragraph 6(d) hereof; and (v) continued coverage during the
twelve month period following the date of the Change in Control or
Material Change in Duties under the Company's employee medical and life
insurance plans. Executive may, in accordance with the Stock Option Plan,
exercise all vested stock options.
(e) IF
EXECUTIVE DECLINES CHANGE OF CONTROL BENEFIT OR MATERIAL CHANGE IN DUTIES
BENEFIT. Without limiting the generality of the foregoing,
after a Change of Control or Material Change in Duties, and if Executive
declines the Change in Control Benefit or Material Change in Duties Benefit,
in
writing, Executive shall be employed as the President and Chief Executive
Officer of the Company until this Agreement expires or is terminated pursuant
to
the provisions of Section 7 hereof (including termination by Executive pursuant
to Section 7(c)).
8. DEFINITIONS.
(a) “CHANGE
OF CONTROL OR
MATERIAL
CHANGE IN DUTIES” shall be deemed to have taken place if
sections (b)(i), (ii) or (iii) or section (c) below occur.
(b) “CHANGE
OF CONTROL” shall be deemed to have occurred when:
(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 Company in
the
ordinary course of business); or
(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.
(c) “MATERIAL
CHANGE IN DUTIES” shall be deemed to have occurred when the
Executive is assigned any duties inconsistent in any material respect with
Executive’s position (including status, offices, titles, and reporting
requirements), authority, duties or responsibilities as in effect on the
Effective Date, or any other action by the Company which results in a materially
demonstrable diminution in such position, authority, duties or
responsibilities.
(d) “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), (ii), (iii), and (iv)
of
Paragraph 7(a) above; provided, however, any payments due thereunder shall
be
made in a lump sum payment within 60 days of the Executive's
death. In addition, if the Executive's dependents are eligible to and
actually elect to continue under COBRA any coverages provided under Paragraph
7(a)(iii), the Company shall pay the cost of such COBRA coverage for the period
remaining under Paragraph 7(a)(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
7(a). 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.
9. NON-COMPETITION,
NON-DISCLOSURE, AND NON-SOLICITATION. Executive agrees to
execute and be bound by the terms and conditions of the Restrictive Covenants
Agreement attached hereto as Exhibit B, which is hereby made a part of this
Agreement. Upon termination of this Agreement, for whatever reason,
Executive remains bound to the Non-Competition, Non-Disclosure and
Non-Solicitation obligations set forth in Attachment B hereto.
10. 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 9, 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 9 above. In
the event that Company institutes suit against Executive to enforce its rights
hereunder and is not successful on the merits, then Company shall indemnify
Executive from and against any and all costs (including attorneys fees and
legal
expenses) and other expenses which Executive expended in defending said
action.
11. 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:
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 including
Exhibit A thereto, dated January 24, 2006, 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 provided, however, that in the event of
Executive’s death, the provisions of Paragraph 9 or Exhibit B shall not be
binding upon Executive’s heirs or executors. Although the
non-competition, non-disclosure and non-solicitation obligations of Executive
set forth in Paragraph 9 and Attachment B hereto may extend to the Company’s
successors and assigns, the remaining rights and obligations of this Agreement
shall not 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) FORUM
SELECTION AND CHOICE OF LAW. 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 and all actions arising under or
relating to this Agreement (including Exhibit B hereto), and (ii) waives any
jurisdictional 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 from employment
for whatever reason, 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 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.
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
Xxxxxx
X. Xxxx
Its: Senior
Vice President and ChiefFinancial Officer
ATTACHMENT
“B”
RESTRICTIVE
COVENANTS AGREEMENT
This
RESTRICTIVE COVENANTS AGREEMENT (this "Agreement" or this “Restrictive Covenants
Agreement”) is entered into as of October 30, 2007, 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 Restrictive Covenants Agreement is attached.
REASONS
FOR THIS 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. Further, the value of
the
Company to any potential buyer will be based in part upon the restrictive
covenants and commitments contained herein.
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 Restricted Covenants 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: “Confidential information” as defined herein shall
exclude company trade secrets and is defined as such other information not
rising to the level of a trade secret, 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 non-technical 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.
(e) TERRITORY: the term
"Territory" as used in this Restrictive Covenants Agreement means the
continental United States and Canada. Executive acknowledges that Executive
will
have direct and indirect supervisory responsibility for the development of
markets and to provide services to Company 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. TRADE
SECRETS AND CONFIDENTIAL INFORMATION: Executive shall not use or
disclose the Company’s trade secrets during or after
employment. Executive shall not use or disclose Confidential
Information for a period of two years following the termination of employment
for any reason, 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. NON-SOLICITATION
OF EMPLOYEES: During employment and for a period of
thirty-six (36) months following his Termination Date, 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. NON-SOLICITATION
OF CUSTOMERS: During employment and for a period of
thirty-six (36) months following his Termination Date, Executive will not
solicit Customers for the purpose of providing or offering products or services
identical to or reasonably substitutable for the Company's
Business.
6. NON-COMPETITION: During
employment and for a period of thirty-six (36) months following his Termination
Date, Executive will not, within the Territory, be employed or engaged by a
Competing Business to provide services similar to those that Executive provided
to the Company. Notwithstanding the foregoing, for a period of twelve (12)
months following his Termination Date, Executive shall be allowed to serve
on a
board or consult with a Competing Business provided that the Board of Directors
of the Company has given their written consent, which shall be given or withheld
in the Board of Directors’ sole discretion. Furthermore, Twelve (12)
months and one (1) day after his Termination Date, Executive shall be allowed
to
serve on a board or consult with a Competing Business without the consent or
approval of the Board of Directors of the Company.
7. FURTHER
LIMITATIONS: Notwithstanding any provision of this
Restrictive Covenants 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 Executive’s Employment 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 Paragraph 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. FORUM SELECTION AND
CHOICE OF LAW: 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 and all actions arising under or relating to this Agreement,
and (ii) waives any jurisdictional 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.
IN
WITNESS WHEREOF, the Company and the Executive have executed this Restrictive
Covenants Agreement as of the date first written
above.
By:
/s/
Xxxxx X.
Xxxxxxxx
Xxxxx
X. Xxxxxxxx
FORWARD
AIR CORPORATION
By: /s/
Xxxxxx X. Xxxx
Xxxxxx
X. Xxxx
Its: Senior
Vice President and ChiefFinancial Officer
