EXHIBIT 10.4
YELLOW CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
PURSUANT TO 1992 STOCK OPTION PLAN
WITH NON-COMPETE COVENANT
This Restricted Stock Award Agreement (the "Agreement"), made this 4th day
of March, 2002, by and between Yellow Corporation, formerly Yellow Freight
System, Inc. of Delaware, (the "Company") and Xxxxxxx X. Xxxxxxx (the "Grantee")
evidences the grant, by Company, of a Restricted Stock Award (the "Award") to
the Grantee on March 4, 2002 ("Date of Grant") and the Grantee's acceptance of
the Award in accordance with the provisions of the Company's 1992 Stock Option
Plan (the "Plan"). Company and Grantee agree as follows:
1. Shares Awarded and Restriction on Shares. The Grantee shall be awarded
26,000 shares of Company common stock ("Restricted Shares") subject to
the restrictions on the rights of ownership set forth in this
Agreement and further subject to the terms and conditions of the Plan
and the applicable rules (the "Rules") of the Compensation Committee
(the "Committee"), the provisions of which are hereby incorporated in
this Agreement by reference.
2. Sale or Transfer Restrictions. Except as set forth in Paragraph 6
below, Grantee shall have no right to sell or transfer the Restricted
Shares until the restrictions on sale or transfer lapse. The
restrictions on sale or transfer on all shares shall lapse on the
third anniversary of the date of this award. However, should the
Company adopt a future stock option plan, after stockholder approval,
providing for Restricted Stock Units, Grantee may convert one
Restricted Share awarded under this Agreement for one Restricted Stock
Unit, pursuant to such rules as the future plan and the Committee may
prescribe, and so long as Grantee chooses to convert to Restricted
Stock Units prior to the date the restrictions lapse on the Restricted
Shares. The Committee may provide that a Grantee, after attaining age
60, shall have the option to have the value of the Restricted Stock
Units transferred to a diversified investment such as a mutual fund.
3. Employment Requirement. Except as provided in Paragraphs 6 and 7, in
the event the Grantee's employment with Company (including all
Subsidiaries, as defined in the Plan) terminates prior to the date
specified in Paragraph 2 above, the Restricted Shares shall be
forfeited and returned to Company. For this purpose authorized leaves
of absence from Company or a Subsidiary (as defined in the Plan) or
the transfer of the Grantee between Company and a Subsidiary or
between such Subsidiaries shall not constitute a termination of
employment. For purposes of this Agreement, an authorized leave of
absence shall be an absence while the Grantee is on military leave,
sick leave, family leave, or other bona fide leave of absence so long
as the Grantee's right to employment or re-employment with Company or
a Subsidiary is provided for by statute, written contract or Company
policy.
4. Deposit of Stock Certificates. Concurrently with signing this
Agreement (i) Company shall direct its transfer agent to issue one
stock certificate for the Restricted Shares, representing 26,000
shares of common stock of the Company, $1.00 par value, registered in
the name of the Grantee, and (ii) Grantee shall execute and deliver to
Company to be held by Company, with the stock certificate for the
Restricted Shares, a stock power for the Restricted Shares.
After the prohibited sale and transfer restrictions lapse under
Paragraph 2 above with respect to the Restricted Shares and provided
the Restricted Shares have not been forfeited under Paragraph 3 above,
Company shall deliver to the Grantee, or such person or persons as the
Grantee may direct in writing, the stock certificate, and the stock
power representing the Restricted Shares as to which the prohibited
sale or transfer restrictions have lapsed less any shares withheld,
pursuant to Grantee's election and the Committee's approval, to
satisfy applicable income tax withholding requirements. The shares
represented by such stock certificate after delivery shall cease to be
Restricted shares.
5. Voting and Other Rights of Restricted Shares. Subject to the
provisions of this Agreement restricting sale or transfer and
providing for forfeiture of Restricted Shares, Grantee shall have all
the rights of a shareholder with respect to the Restricted Shares,
including dividend and voting rights. However, any dividends payable
to Grantee shall be subject to any taxes due with respect to such
dividends, including FICA tax (if applicable) and local state and
federal income tax.
6. Acceleration of Lapse of Restrictions. Notwithstanding the foregoing
provisions of this Agreement, the Grantee or the Grantee's legal
representative or guardian shall be immediately entitled to receive
the certificates for all Restricted shares and the prohibited sale and
transfer restrictions of Paragraph 2 above shall immediately lapse on
the earliest of the following occurrences:
(a) The Grantee's date of death;
(b) The permanent and total disability of the Grantee. For purposes
of this Agreement, total disability shall mean the inability to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which can be expected to last for
a continuous period of not less than twelve months. The existence
of such permanent and total disability shall be evidenced by such
medical certification as the Secretary of the Company may require
and determined by the Company's Compensation Committee.
(c) In the event of a "Change of Control" of the Company, with
"Change of Control" having the same definition as set forth in
the Company's standard Executive Severance Agreement, which
definition is hereby incorporated by reference.
7. Continued Lapse of Restrictions in Retirement. Notwithstanding the
provisions of Paragraph 3, should the Grantee's termination result
from the Grantee's retirement after attaining age 55 with at least 11
years of service under the terms of a retirement plan of the Company
or a Subsidiary (as defined in the Plan), prior to the lapsing of the
restrictions on sale or transfer as defined in Paragraph 2, the
Grantee or the Grantee's legal representative shall be entitled to
receive on the date the restrictions lapse the certificates for the
Restricted Shares less applicable withholding, provided Grantee has
otherwise complied with this Agreement, including, but not limited to
the non-compete provisions of Paragraph 9.
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8. Tax Withholding Requirements. Grantee's Restricted Shares are subject
to certain tax withholding requirements, which may include but are not
limited to the withholding of tax on dividends paid on Restricted
Shares and the withholding of tax on the amount includable in income
of Grantee coincident with the lapse of the sale and transfer
restrictions on the Restricted Shares. Grantee understands that the
certificate for Restricted Shares will not be delivered to him
following the lapse of restrictions unless and until he has paid to
the Company any tax due or has authorized the Company, pursuant to the
Rules of the committee, and provided the Committee does not
disapprove, to retain a sufficient number of the Restricted Shares
upon which the restrictions have lapsed to pay such tax. The Committee
shall have the right in its discretion to satisfy withholding tax
liability by retaining Restricted Shares.
9. Covenant Not to Compete. In consideration of this grant of a
Restricted Stock Award, Grantee agrees that should Grantee voluntarily
resign or quit the employ of the Company or its parent, subsidiary or
affiliated companies, Grantee shall not, for a period of two years
(the "Restriction Period") measured from the effective date of such
resignation or quitting, seek or accept employment with any person,
firm or entity in the U.S. that is significantly engaged in the
business of providing services in the areas of interstate trucking,
third party logistics or domestic/international freight forwarding.
It is specifically agreed that the employment prohibition set forth in
this Agreement includes employment in any capacity, directly or
indirectly, with any entity described above, including but not limited
to investment in any such entity (other than owning less than 2% of
the stock of a publicly traded company) or employment as an officer,
director, employee, consultant, or independent contractor.
It is specifically understood that the Covenant Not to Compete of this
paragraph shall not apply if the Grantee resigns or quits the employ
of the Company, or its parent, subsidiary or affiliated company
following a reduction in the Grantee's title or responsibilities from
Grantee's title or responsibilities existing as of the date of this
Agreement or following a reduction in Grantee's base salary or
benefits from the level of such base salary and benefits existing as
of the date of this Agreement, other than a reduction in such base
salary or benefits occurring as a result of across the board
reductions applying to all officers of the Company, or the involved
parent, subsidiary or affiliated company.
10. Confidential Information. Confidential and proprietary information and
knowledge in Grantee's possession about the business, customers,
finances, business practices, marketing and sales strategies and
personnel of the Company, its parents, subsidiaries and affiliates
("Company Information") shall remain confidential for the Restriction
Period and Grantee shall not disclose or communicate such Company
Information during that time to any individual or entity not a party
to this Agreement, including family members, and Grantee will not make
use of Company Information on Grantee's own behalf or on behalf of a
family member or aid or encourage any family member to do so,
including, but not limited to, soliciting or recommending that anyone
else solicit any then-current Company employee for hire. Grantee
specifically agrees any disclosure
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of any Company Information during the Restriction Period by a family
member, or by an individual or entity who has obtained such
information from Grantee or a family member, shall be regarded as a
breach of this Agreement by Grantee.
11. Remedies for Breach. In the event that Grantee breaches or threatens
to breach the non-compete or confidentiality provisions of this
Agreement, Grantee acknowledges that the Company shall be entitled, in
addition to any other remedies which may be available to it, to
institute and maintain proceedings at law or in equity to recover
damages, to obtain specific performance or a temporary or permanent
injunction against Grantee's employment by the competitive entities
described above, or for breach of the promise not to disclose Company
Information, and that the Company shall be entitled to recover from
Grantee all costs, including attorney's fees, incurred in prosecuting
the above remedies.
12. Severability. In the event that any of the restrictions described
above shall be held contrary to law or invalid or unenforceable in any
respect in any jurisdiction, the remaining provisions shall not be
affected, but shall remain in full force and effect. Any such invalid
or enforceable provisions shall be deemed, without further action on
the part of any persons, modified, amended and limited to the extent
necessary to render the same valid and enforceable in such
jurisdiction.
13. Binding Nature of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Company, its parent, subsidiaries,
successors and assigns, including, without limitation, any
corporation, person or entity which may acquire all or substantially
all of the Company's assets and business or to which the Company is
consolidated or merged. Grantee's rights and benefits hereunder are
personal to Grantee and no such rights or benefits shall be subject to
voluntary or involuntary assignment or transfer, except as
specifically provided in this Agreement.
14. Confidentiality of Agreement. This Agreement shall be kept in strict
confidence by Grantee and shall be revealed only to Grantee's spouse
and attorney or other professional adviser. The Company shall keep
this Agreement in strict confidence except to the extent that
disclosure is required by government law or regulation.
15. Choice of Law. This Agreement, its interpretation, performance and
enforcement and the rights and remedies of Grantee and the Company,
shall be governed and construed by the laws of the state of Kansas
applicable to contracts to be performed wholly within Kansas, without
regard to principles of conflicts of laws.
16. Complete Agreement. This Agreement contains the entire agreement
between Grantee and the Company and supersedes all prior agreements
and understandings, both written and oral, between Grantee and the
Company with respect to the subject matter hereof.
17. No Employment Contract. Grantee and the Company agree that this
Agreement is not intended or understood to create any contract of
employment for a definite term or an expectation of continued
employment.
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18. Amendment. This Agreement may not be modified or amended except in
writing signed by both Grantee and an officer of the Company.
IN WITNESS WHEREOF, Company, by its duly authorized officer or
representative, and the Grantee have signed this Agreement as of the day and
year first above written.
YELLOW CORPORATION
By:
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Title:
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GRANTEE SIGNATURE
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