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Exhibit 10.16
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of January 1, 1999 (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 Operating
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 my
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.
3. TERM. The term of this Agreement shall be for a three (3) year term
commencing on the date hereof, and beginning on the second anniversary of the
Effective Date shall be deemed automatically (without further action by either
the Company or the Executive) to extend each day for an additional day such that
the remaining term of this Agreement shall continue to be one (1) year;
provided, however, that the Company may, by notice to the Executive, cause this
Agreement to cease to extend automatically and, upon such notice, the "Term" of
this Agreement shall be equal to a term which is the greater of (i) the balance
of the original term of this Agreement as of the date of such notice or (ii) one
year.
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4. 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 $200,000
for the year beginning January 1, 1999, increased to $225,000 for the year
beginning January 1, 2000 and $250,000 for the year beginning January 1, 2001.
For periods subsequent to December 31, 2001, if any, Executive's Base Salary
shall be subject to annual review, at such time as the Board of Directors of the
Company conducts salary reviews for its executive officers generally.
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.
(b) BONUS. In addition to the Base Salary, the Executive shall be
entitled to participate in any of the Company's present and future stock or cash
based plans that are generally available to its executive officers, as such
plans may exist or be changed from time to time at the discretion of the
Company.
(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 100,000 options under Forward Air Corporation 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. 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.
5. TERMINATION.
(a) BY EXECUTIVE. Executive may voluntarily terminate his employment
hereunder at any time, to be effective 30 days after delivery to the Company of
his signed, written resignation; 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 5(c) below, the Company may terminate Executive's employment
hereunder, in its sole discretion, whether with or without just cause (as
defined in Paragraph 5(b)(vii) 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
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Agreement, the Company terminates Executive's employment without just cause (as
defined below), the Executive shall be entitled to receive, as damages payable
as a result of, and arising from, a breach of this Agreement, the compensation
and benefits set forth in (i) through (iv) below. Executive shall not be
required to mitigate damages by reducing the amounts he is entitled to receive
hereunder by earnings from subsequent employment. The time periods in (i)
through (iii) below shall be equal to the time period remaining from the date of
Executive's termination to the end of the Term of this Agreement.
(i) Base Salary. The Executive will continue to receive his
current salary (subject to withholding of all applicable taxes and any
amounts referred to in paragraph (iii) below) for a period equal to the
remainder of the term of this Agreement, such payments to be made in
the same manner as it was being paid as of the date of termination. For
purposes hereof, the Executive's "current salary" shall be the highest
rate in effect during the twelve-month period prior to the Executive's
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
date of termination shall not be affected by termination of Executive
by the Company. Executive shall also receive a prorated bonus for any
uncompleted fiscal year at the date of termination based on the number
of days he worked in such year divided by 365 days, such bonus to be
paid at the time other participants are paid under such bonus program
or plan.
(iii) Health 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 twelve (12) months 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.
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(iv) Stock Options. As of Executive's date of termination, all
outstanding stock options granted to Executive under the Stock Option
and Incentive Plan and any other Company stock option plan shall become
100% vested and immediately exercisable. To the extent necessary, the
provisions of this paragraph (iv) shall constitute an amendment of the
Executive's stock option agreements under the Stock Option Plans.
(v) Effect of Death. In the event of the Executive's death after
his termination of employment by the Company under this Paragraph 5(b),
the benefits payable under (i) and (ii) of this Paragraph 5(b) shall
continue for a period of twelve (12) months, or, if shorter, until the
end of the Term of this Agreement; provided, however, such payments
will be paid in a lump sum payment within 60 days following the
Executive's death, to the Executive's surviving spouse, or, if none, to
the Executive's estate. In addition, in the event of Executive's death,
any dependent coverage in effect under (iii) of this Paragraph 5(b)
shall continue at the Company's expense, for a period of 12 months, or,
if shorter, until the end of the Term of this Agreement.
(vi) 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.
(vii) For purposes of this Agreement, the phrase "for just cause"
shall mean: (A) Executive's material fraud, malfeasance, gross
negligence, or willful misconduct 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; or (C) Executive's
material breach of this Agreement. A termination of Executive for just
cause based on clause (A) or (C) of the preceding sentence shall take
effect 30 days after the Executive receives from 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).
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(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 5(b)
above; provided, however, such payments shall be for a period of 12 months and
such payments 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 5(b)(iii), the Company shall pay the cost of such COBRA coverage for a
period of 12 months following the date of Executive's death. 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, as determined in good faith by the Company), Executive shall be entitled
to the benefits payable or to be provided under (i), (ii), (iii), and (iv) of
Paragraph 5(b); provided, however, the benefits under (i), (ii), or (iii) of
Paragraph 5(b) shall be payable or to be provided for a period of 24 months.
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) 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 6 and 7 hereof
shall survive and remain in effect for the periods described in Paragraph 6.
6. 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. The
Company and Executive understand and agree that the time periods under the Non
Competition Agreement shall be equal to a period equal to the longer of (i)
twelve months or (ii) the remaining term of this Agreement.
7. 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 6, 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
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defense to the enforcement by the Company of Executive's agreement under this
Paragraph and Paragraph 6 above.
8. 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 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
or to such other address as any party may designate by notice to the others.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the Executive's employment
by the Company, and superseded and is in full substitution for any and all 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.
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(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 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.
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IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement as of the date first written above.
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
FORWARD AIR CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Its Chief Executive Officer
---------------------------------
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EXHIBIT A
January 1, 1999
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 Fellow Employee:
This Agreement sets forth the terms under which Forward Air
Corporation, a Tennessee corporation (the "Company"), has awarded you options to
purchase shares of the $0.01 par value common stock of the Company (the "Common
Stock"). This Agreement, along with the Company's 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.
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
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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 become exercisable 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 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.
Accordingly, the Option shall be fully exercisable in accordance with this
Section 3, provided the Optionee continues to be an employee of the Company or a
parent or subsidiary thereof throughout such period to such extent that the
Shares are vested.
(c) 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; (iii)
with the prior written consent and approval of the Company, by the execution and
delivery of the Optionee's promissory note in the principal amount of the Option
Price, with such term, interest rate and other terms and provisions, including,
without limitation, requiring the Shares acquired upon exercise to be pledged to
the Company to secure payment of the note, as the Compensation Committee of
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Board of Directors of the Company (the "Compensation Committee") may specify;
(iv) by cancellation of indebtedness of the Company to the Optionee; (v) by
waiver of compensation due or accrued to the Optionee for services rendered;
(vi) provided that a public market for the Common Stock exists, through a "same
day sale" commitment from the Optionee and a broker-dealer that is a member of
the National Association of Securities Dealers (a "NASD" Dealer) whereby the
Optionee irrevocably elects to exercise his Option and to sell a portion of the
Shares so purchased to pay for the Option Price and whereby the NASD Dealer
irrevocably commits to forward the Option Price directly to the Company in
exchange for receipt of such Shares; (vii) provided that a public market for the
Common Stock exists, through a "margin" commitment from the Optionee and a NASD
Dealer whereby the Optionee irrevocably elects to exercise the Option and pledge
the Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Option Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Option Price directly to the Company, or (viii) 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. 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.
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5. Termination of Option. Except as provided in the Plan, this Option
shall terminate on the date the Optionee ceases to be an employee of the Company
or a parent or subsidiary of the Company (the "Termination Date"). 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. In addition to any other event
causing an expiration or termination of the Option, the Option shall expire and
all rights to purchase Shares shall cease (to the extent not theretofore
terminated or expired as herein provided) upon the effective date of the
dissolution or liquidation of the Company or upon a merger, consolidation,
acquisition of property or shares, separation or reorganization of the Company
with one or more entities, corporate or otherwise, as a result of which the
Company is not the surviving entity, or if the Company is the surviving entity
and the ownership of the outstanding Common Stock following the transaction
changes by 80% or more as a result of such transaction, or of a sale of
substantially all of the property or shares of the Company to another entity,
corporate or otherwise (collectively, a "Transaction"); provided, however, that
the Company may, in its discretion, and immediately prior to any such
Transaction, cause a new option to be substituted for the Option or cause the
Option to be assumed by an employer entity or a parent or subsidiary of such
entity; and, subject to the terms of the Plan, the terms and conditions of any
such new option shall apply to all Shares issued in addition to or in
substitution, replacement or modification of the Shares covered by any Option
canceled or replaced.
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
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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 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
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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
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this Agreement in the place indicated and return it to the corporate office.
Very truly yours,
FORWARD AIR CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Chairman and
Chief Executive Officer
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EXHIBIT B
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (this "Noncompetition Agreement") is
entered into as of January 1, 1999 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.
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(c) CUSTOMERS: - all Persons (i) that Executive solicited or
contacted on behalf of the Company; (ii) whose dealings with the Company were
coordinated or supervised, in whole or in part, by Executive; or (iii) about
whom Executive possessed Confidential Information, in each case 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. 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 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.
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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 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 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
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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.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Noncompetition Agreement as of the date first written above.
/s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx
FORWARD AIR CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Its: Chief Executive Officer
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