Document:

exhibit10_1.htm

 

FORWARD AIR CORPORATION

 

 

NOTICE OF GRANT OF PERFORMANCE SHARES

 

The Participant has been granted an award of an opportunity to receive a number of Performance Shares (the “Award”) pursuant to the Forward Air Corporation Amended and Restated Stock Option and Incentive Plan (the “Plan”) and the Performance Share Agreement attached hereto (the “Agreement”), as follows:

	
Participant:

	  	
Employee ID:

	  
	
Grant Date:

	
February 11, 2011

	
Grant No.:

	  
	
Target Number of Performance Shares:

	
 

[_______________], subject to adjustment as provided by the Agreement.

	
Maximum Number of Performance Shares:

	
[_______________], subject to adjustment as provided by the Agreement.

	
Performance Metric:

	
Percentile Ranking of Common Stock Price Appreciation within Peer Group

	
Performance Period:

	
Three-year period beginning on the Grant Date and ending on the third anniversary of the Grant Date (February 11, 2011 – February 11, 2014)

	
Performance Share Vesting Date:

	
The 30th day after the last day of the Performance Period, except as otherwise provided by the Agreement.

	
Vested Performance Shares:

	
Provided that the Participant’s Service has not terminated prior to the Performance Share Vesting Date, except as provided by the Agreement, on the Performance Share Vesting Date the number of Vested Performance Shares (not to exceed the Maximum Number of Performance Shares) shall be determined by multiplying the Target Number of Performance Shares by the Appreciation Multiplier (as defined by the Agreement).

	
Settlement Date:

	
The Performance Share Vesting Date, except as otherwise provided by the Agreement.

	
Recoupment Policy:

	
The Award shall be subject to the terms and conditions of such policy on the recoupment of incentive compensation as shall be adopted by the Company to implement the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

By their signatures below, the Company and the Participant agree that the Award is governed by this Notice and by the provisions of the Plan and the Agreement, both of which are made a part of this document.  The Participant acknowledges receipt of a copy of the Plan, the Agreement and the prospectus for the Plan, represents that the Participant has read and is familiar with the provisions of the Plan and the Agreement, and hereby accepts the Award subject to all of their terms and conditions.

 

	
FORWARD AIR CORPORATION

	  	  	
PARTICIPANT

	  
	  	  	  	  	  	  	  	  	  
	
By:

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	
Signature

	  	  
	  	  	  	  	  	  	  	  	  
	
Its:

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	
Date

	  	  

	
ATTACHMENT:

	
Performance Share Agreement

 

  

  

  

FORWARD AIR CORPORATION

PERFORMANCE SHARE AGREEMENT

Forward Air Corporation, a Tennessee corporation (the “Company”), has granted to the Participant named in the Notice of Grant of Performance Shares (the “Grant Notice”) to which this Performance Share Agreement (the “Agreement”) is attached an Award consisting of Performance Shares subject to the terms and conditions set forth in the Grant Notice and this Agreement.  The Award has been granted pursuant to the Forward Air Corporation Amended and Restated Stock Option and Incentive Plan (the “Plan”), as amended to the Grant Date, the provisions of which are incorporated herein by reference.

 

1. Definitions and Construction.

 

1.1 Definitions.  Unless otherwise defined herein, including within the Glossary at the end of this Agreement, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

 

1.2 Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  The Company intends that the Award made under this Agreement constitute qualified performance-based compensation within the meaning of Section 162(m) of the Code and the regulations thereunder, and the provisions of this Agreement shall be construed and administered in a manner consistent with this intent. The Company intends that the Award made under this Agreement comply with, or otherwise be exempt from, Section 409A (including any amendments or replacements of such section), and the provisions of this Agreement shall be construed and administered in a manner consistent with this intent.

 

2. Administration.

 

All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall be determined by the Committee.  All determinations by the Committee shall be final, binding and conclusive upon all persons having an interest in the Award.

 

3. The Award.

 

3.1 Grant of Performance Shares.  On the Grant Date, the Participant has acquired, subject to the provisions of this Agreement, an opportunity to receive a number of Performance Shares, which shall not exceed the Maximum Number of Performance Shares set forth in the Grant Notice, subject to adjustment as provided in Section 9.  The number of Performance Shares, if any, ultimately earned by the Participant, shall be that number of Performance Shares which become Vested Performance Shares.

 

3.2 No Monetary Payment Required.  The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Performance Shares or the Common Shares issued upon settlement of the Performance Shares, the consideration for which shall be past services actually rendered and/or future services to be rendered to the Company (or any Affiliate) or for its benefit.  Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered to the Company (or any Affiliate) or for its benefit having a value not less than the par value of the Common Shares issued upon settlement of the Vested Performance Shares.

 

  

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4. Certification by the Committee.

 

4.1 Percentile Ranking of Peer Group Common Stock Price Appreciation.  As soon as practicable following completion of the Performance Period, and in any event on or before the Performance Share Vesting Date, the Committee shall certify in writing the Appreciation Percentile Ranking of the Company for the Performance Period and the resulting number of Performance Shares, if any, which shall become Vested Performance Shares on the Performance Share Vesting Date, subject to the Participant’s continued Service until the Performance Share Vesting Date, except as otherwise provided by Section 5.  The number of Performance Shares which shall become Vested Performance Shares on the Performance Share Vesting Date, subject to the Participant’s continued Service until the Performance Share Vesting Date, shall be determined by multiplying the Target Number of Performance Shares specified on the Grant Notice by the Appreciation Multiplier specified below, based on the Company’s Common Stock Price Appreciation for the Performance Period relative to the Common Stock Price Appreciation of the Peer Companies, rounding up to the nearest whole share:

 

	
Appreciation Percentile Ranking

	
Appreciation Multiplier

	
90th percentile or higher

	
                          200%

	
70th to 89th percentile

	
                          150%

	
50th to 69th percentile

	
                          100%

	
30th to 49th percentile

	
                            50%

	
Below 30th percentile

	
                              0%

The Company shall promptly notify the Participant of the determination by the Committee.

 

4.2 Adjustment to Performance Period.  Notwithstanding anything on the Grant Notice or in this Agreement to the contrary, if for any reason the Company (including any successor corporation) ceases to have its Common Stock listed for public trade on any national securities exchange or market before the last day of the Performance Period specified on the Grant Notice, the Performance Period shall end as of the last date that the Company’s Common Stock is listed for public trade on a national securities exchange or market.  Any temporary halt in trading, including without limitation any period during which trade is suspended while the Company comes into compliance with the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, shall be disregarded for this purpose.

 

5. Vesting of Performance Shares.

 

5.1 In General.  Except as provided by this Section 5 and Section 8, the Performance Shares shall vest and become Vested Performance Shares as provided in the Grant Notice and Section 4.1, as certified by the Committee.

 

5.2 Termination of Service Other Than By Reason of Retirement, Death, Disability or Coincident with a Change in Control of the Company.  In the event the Participant’s Service terminates for any reason prior to the Performance Share Vesting Date, other than by reason of Retirement, death, Disability or coincident with a Change in Control of the Company, the Participant shall immediately forfeit, without requiring any act of the Participant or the Company to effectuate such forfeiture, all rights to and interests in the Performance Shares subject to the Award and the Award shall be cancelled as of the last day of the Participant’s Service.  The Participant shall not be entitled to any payment for such forfeited Performance Shares.

 

  

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5.3 Termination of Service by Reason of Death or Disability.  In the event the Participant’s Service terminates by reason of death or Disability prior to the Performance Share Vesting Date, a number of Performance Shares shall become Vested Performance Shares on the last day of the Participant’s Service as follows.  The number of Performance Shares which shall become Vested Performance Shares shall be the product, rounded up to the nearest whole share, of (a) the Target Number of Performance Shares specified on the Grant Notice, multiplied by (b) an Appreciation Multiplier of 100%, multiplied by (c) a percentage equal to the ratio of the number of whole and partial months (rounded up to the nearest integer) of the Participant’s Service during the Performance Period to the number of full months contained in the Performance Period.  Notwithstanding the foregoing, in the event the Participant’s Service terminates by reason of death or Disability after the end of the Performance Period but prior to the Performance Share Vesting Date, the Appreciation Multiplier to be used in the equation set forth in the immediately preceding sentence shall be the Appreciation Multiplier applicable for the Performance Period as determined under Section 4.1.  The Participant shall forfeit, without requiring any act of the Participant, his personal representative or the Company to effectuate such forfeiture, all rights to and interests in any Performance Shares subject to the Award that do not become Vested Performance Shares under this Section 5.3 and the Award shall be cancelled with respect to such unvested Performance Shares on the last day of the Participant’s Service.  Neither the Participant nor any person claiming through the Participant shall be entitled to any payment for such forfeited Performance Shares.

 

5.4 Termination of Service by Reason of Retirement.  In the event the Participant’s Service terminates by reason of Retirement prior to the Performance Share Vesting Date, then on the Performance Share Vesting Date the number of Performance Shares that shall become Vested Performance Shares, rounded up to the nearest whole share, shall be determined by multiplying (a) that number of Performance Shares that would have become Vested Performance Shares under Section 4.1 had no such termination occurred by (b) a percentage equal to the ratio of the number of whole and partial months (rounded up to the nearest integer) of the Participant’s Service during the Performance Period to the number of full months contained in the Performance Period.

 

5.5 Forfeiture of Unvested Performance Shares.  Except as otherwise provided by this Section 5 or Section 8, on the Performance Share Vesting Date, the Participant shall forfeit, without requiring any act of the Participant or the Company to effectuate such forfeiture, all rights to and interests in any Performance Shares subject to the Award that have not become Vested Performance Shares and the Award shall be cancelled with respect to such unvested Performance Shares.  The Participant shall not be entitled to any payment for such forfeited Performance Shares.

 

6. Settlement of the Award.

 

6.1 Issuance of Common Shares.  Subject to the provisions of Section 6.3, Section 7.2 and Section 8.1 below, the Company shall issue to the Participant on the Settlement Date with respect to each Vested Performance Share one (1) Common Share.  Common Shares issued in settlement of Performance Shares shall be subject to any restrictions as may be required pursuant to Section 6.3, Section 7 or the Insider Trading Policy.

 

6.2 Beneficial Ownership of Common Shares. Upon issuance of Common Shares in settlement of the Award, the Company will determine the form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) and may deliver such shares on the Participant’s behalf electronically to the Company’s designated stock plan administrator or such other broker-dealer as the Company may choose at its sole discretion, within reason.  Except as otherwise provided by this Section 6.2, the Common Shares as to which the Award is settled shall be registered in the name of the Participant, or, if applicable, in the names of the heirs or estate of the Participant.

 

6.3 Restrictions on Grant of the Award and Issuance of Common Shares.  The grant of the Award and issuance of Common Shares upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities.  No Common Shares may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Common Shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained.  As a condition to the settlement of the Award, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

  

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6.4 Fractional Shares.  The Company shall not be required to issue fractional Common Shares upon the settlement of the Award.  Any fractional share resulting from the determination of the number of Vested Performance Shares shall be rounded up to the nearest whole number.

 

7. Tax Matters.

 

7.1 In General.  At the time the Grant Notice is executed, or at any time thereafter as requested by the Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company, if any, which arise in connection with the Award or the issuance of Common Shares in settlement thereof.  The Company shall have no obligation to process the settlement of the Award or to deliver Common Shares until the tax withholding obligations as described in this Section have been satisfied by the Participant.

 

7.2 Withholding in Common Shares.  Subject to applicable law, the Company may, in its sole discretion, permit the Participant to satisfy any tax withholding obligations that arise in connection with the Award by directing that the Company reduce the number of shares of Common Shares otherwise issuable to the Participant in settlement of the Award by a number of whole Common Shares having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, up to but not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

 

8. CHANGE IN CONTROL.

 

8.1 Acceleration of Vesting Upon a Change in Control.  In the event of the consummation of a Change in Control before the last day of the Performance Period, vesting of the outstanding Award shall be accelerated so that 100% of the Target Number of Performance Shares shall become Vested Performance Shares effective as of the date of the Change in Control, provided that the Participant’s Service has not terminated prior to the Change in Control.  In the event of the consummation of a Change in Control after the last day of the Performance Period but before the Performance Share Vesting Date, vesting of the outstanding Award shall be accelerated so that the greater of (a) 100% of the Target Number of Performance Shares or (b) the number of Performance Shares that would have become vested as of the Performance Share Vesting Date, based on the Appreciation Multiplier attained for the Performance Period, shall become Vested Performance Shares effective as of the date of the Change in Control, provided that the Participant’s Service has not terminated prior to the Change in Control.  Notwithstanding the foregoing, if the Participant’s Service terminates due to Retirement and a Change in Control is consummated before the Participant’s Award is settled, vesting of the Participant’s outstanding Award shall be accelerated so that a number of Performance Shares shall become Vested Performance Shares effective as of the date of the Change in Control determined, rounded up to the nearest whole share, by multiplying (a) that number of Performance Shares that would have become Vested Performance Shares under this Section 8.1 had no such Retirement occurred by (b) a percentage equal to the ratio of the number of whole and partial months (rounded up to the nearest integer) of the Participant’s Service during the Performance Period to the number of full months contained in the Performance Period as reflected on the Grant Notice. In settlement of the Award, the Company shall issue to the Participant, on the date of the Change in Control, one (1) Common Share for each Vested Performance Share determined in accordance with this Section 8.1.  The vesting of Performance Shares and settlement of the Award that was permissible solely by reason of this Section 8.1 shall be conditioned upon the consummation of the Change in Control.  Notwithstanding the foregoing, the Committee may, in its discretion, determine that upon a Change in Control, each Award outstanding immediately prior to the Change in Control shall be canceled in exchange for payment with respect to the greater of (a) 100% of the Target Number of Performance Shares or (b) the number of Performance Shares that would otherwise become Vested Performance Shares by reason of this Section 8.1, in (a) cash, (b) stock of the Company or the acquiring entity or any parent company of the acquiring entity, or (c) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per share of Common Stock in the Change in Control for each such Performance Share (subject to any required tax withholding).  Such payment shall be made on or as soon as practicable following the Change in Control.  All of the foregoing provisions of this Section 8.1 may be revised or eliminated, in whole or in part, in the discretion of the Committee and without the consent of the Participant, to the extent that the Committee determines such action to be appropriate or desirable after obtaining in connection with a Change in Control transaction a shareholder advisory vote required by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any successor provision, on golden parachute compensation arrangements, provided that this Agreement is a subject of that advisory vote.

 

  

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8.2 Federal Excise Tax Under Section 4999 of the Code.

 

(a) Excess Parachute Payment.  In the event that any acceleration of vesting of the Performance Shares and any other payment or benefit received or to be received by the Participant would subject the Participant to any excise tax pursuant to Section 4999 of the Code due to the characterization of such acceleration of vesting, payment or benefit as an “excess parachute payment” under Section 280G of the Code, the Participant may elect, in his or her sole discretion before the consummation of the Change in Control transaction, to reduce the amount of any acceleration of vesting called for by this Agreement in order to avoid such characterization.

 

(b) Determination by Independent Accountants.  To aid the Participant in making any election called for under Section 8.2(a), no later than ten (10) days before the anticipated date of the occurrence of any event that might reasonably be anticipated to result in an “excess parachute payment” to the Participant as described in Section 8.2(a) (an “Event”), the Company shall request a determination in writing by independent public accountants selected by the Company (the “Accountants”).  Unless the Company and the Participant otherwise agree in writing, the Accountants shall determine and report to the Company and the Participant within three (3) days before the date of the Event the amount of such acceleration of vesting, payments and benefits which would produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code and make reasonable assumptions and projections needed to make their required determination.  The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determination.  The Company shall bear all fees and expenses the Accountants may reasonably charge in connection with their services contemplated by this Section 8.2(b).

 

9. Adjustments for Changes in Capital Structure.

 

Subject to any required action by the stockholders of the Company, in the event of any change in the Common Shares effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Common Shares (excepting normal cash dividends) that has a material effect on the Fair Market Value of the Common Shares, appropriate adjustments shall be made by the Committee in the number of Performance Shares and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number.  Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.  The Committee shall have discretion to make appropriate adjustments, as determined by the Committee, to the Common Stock Price Appreciation calculation for the Company or any Peer Company in the event that the common securities of the Company or such Peer Company are affected by a stock split, reverse stock split, stock dividend, or similar change in capitalization.

 

  

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10. Rights as a Stockholder or Employee.

 

The Participant shall have no rights as a stockholder with respect to any Common Shares which may be issued in settlement of this Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 9.  Except as otherwise provided in a separate, written employment agreement between the Company or any Affiliate and the Participant, the Participant’s employment is “at will” and is for no specified term.  Nothing in the Grant Notice or this Agreement shall confer upon the Participant any right to continue in Service with the Company or any Affiliate or interfere in any way with any right of the Company or any Affiliate to terminate the Participant’s Service with the Company or any Affiliate at any time.

 

11. Compliance with Section 409A.

 

11.1 General Rule of Interpretation.  This Agreement and the Performance Shares granted hereunder are intended to fit within the “short-term deferral” exemption from Section 409A as set forth in Treas. Reg. § 1.409A-1(b)(4).  In administering this Agreement, the Committee shall interpret this Agreement in a manner consistent with such exemption.

 

11.2 Required Delay in Payment to Specified Employee.  Notwithstanding the foregoing, if it is determined that the Performance Shares fail to satisfy the requirements of the short-term deferral rule and otherwise result in Section 409A Deferred Compensation, and if the Participant is a “specified employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of the Participant’s separation from service (within the meaning of Treas. Reg. § 1.409A-1(h)), then the issuance of any shares that would otherwise be made in connection with a "separation from service” (as determined for purposes of Section 409A) upon the date of the separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six (6) months and one day after the date of the separation from service, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of additional taxation on the Participant in respect of the shares under Section 409A.

 

11.3 Other Delays in Payment.  Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits under this Agreement in any manner which would not be in compliance with Code Section 409A.  Notwithstanding the foregoing:

 

(a) If any payment is due to the Participant upon a Change in Control but such Change in Control does not constitute a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company as defined in Section 409A(a)(2)(A)(v), then such payment which constitutes Section 409A Deferred Compensation shall be deferred until another permissible payment event contained in Section 409A occurs (e.g., death, Disability, separation from service from the Company and its affiliated companies as defined for purposes of Section 409A).

 

(b) If any payment is due to the Participant upon the Participant’s termination of Service but such termination of Service does not constitute a “separation from service” as defined in Section 409A(a)(2)(A)(i), then such payment which constitutes Section 409A Deferred Compensation shall be deferred until another permissible payment event contained in Section 409A occurs.

 

(c) If any payment is due to the Participant upon the Participant’s becoming Disabled but such disability does not meet the requirements of a disability under Section 409A(a)(2)(C), then such payment which constitutes Section 409A Deferred Compensation shall be deferred until another permissible payment event contained in Section 409A occurs.

 

  

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11.4 Amendments to Comply with Section 409A; Indemnification.  Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with Section 409A without prior notice to or consent of the Participant.  The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

 

11.5 Advice of Independent Tax Advisor.  The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award.  The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

 

12. Miscellaneous Provisions.

 

12.1 Termination or Amendment.  The Committee may terminate or amend the Plan or this Agreement at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment may materially adversely affect the Participant’s rights under this Agreement, as determined in good faith in the discretion of the Committee, without the consent of the Participant unless such termination or amendment is necessary to comply with applicable law or government regulation, including, but not limited to, Section 409A.  No amendment or addition to this Agreement shall be effective unless in writing.

 

12.2 Nontransferability of the Award.  Prior the issuance of Common Shares, neither this Award nor any Performance Shares subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, garnishment by creditors of the Participant or the Participant’s beneficiary, or in any other manner made subject to a hedging transaction or puts and calls, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

 

12.3 Unfunded Obligation.  The Participant shall have the status of a general unsecured creditor of the Company.  Any amounts payable to the Participant pursuant to the Award shall be an unfunded and unsecured obligation for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974.  The Company shall not be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations.  The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or the Company and the Participant, or otherwise create any vested or beneficial interest in the Participant or the Participant’s creditors in any assets of the Company.  The Participant shall have no claim against the Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Award.

 

  

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12.4 Further Instruments.  The Company and the Participant agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

 

12.5 Binding Effect.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

 

12.6 Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by the Company or any Affiliate, or upon deposit in the U.S. Post Office, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed as applicable to the last known address of the Participant or the address of the principal executive office of the Company, in care of its General Counsel, or at such other address as such party may designate in writing from time to time to the other party.

 

(a) Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, the Plan prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  In addition, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

 

(b) Consent to Electronic Delivery.  The Participant acknowledges that the Participant has read Section 12.6(a) of this Agreement and consents to the electronic delivery of the Plan documents and Grant Notice, as described in Section 12.6(a).  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 12.6(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 12.6(a).

 

12.7 Integrated Agreement.  The Grant Notice, this Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the Company with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties between the Participant and the Company with respect to such subject matter other than those as set forth or provided for herein or therein.  To the extent contemplated herein or therein, the provisions of the Grant Notice and the Agreement shall survive any settlement of the Award and shall remain in full force and effect.

 

12.8 Applicable Law.  The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Committee relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Tennessee, without regard to its provisions concerning the applicability of laws of other jurisdictions.  Any suit with respect hereto will be brought in the federal or state courts in the districts which include Greeneville, Tennessee, and you hereby agree and submit to the personal jurisdiction and venue thereof.

 

  

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12.9 Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

{Glossary begins on next page}

 

  

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GLOSSARY

(a)           “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with Forward Air Corporation (including but not limited to joint ventures, limited liability companies and partnerships).  For this purpose, “control” means ownership of 50% or more of the total combined voting power of all classes of stock or interests of the entity.

(b)           “Appreciation Multiplier” means a number determined as follows:

	
Appreciation Percentile Ranking

	
Appreciation Multiplier

	
90th percentile or higher

	
200%

	
70th to 89th percentile

	
150%

	
50th to 69th percentile

	
100%

	
30th to 49th percentile

	
50%

	
Below 30th percentile

	
  0%

(c)           “Appreciation Percentile Ranking” means the Company’s percentile ranking relative to the Peer Companies, based on Common Stock Price Appreciation, calculated as follows: 1 – [(Company Rank – 1)/(Total Number of Peer Companies + the Company – 1)], rounding to the nearest whole percentile.  For example, if the Company is ranked third out of a group of 13 consisting of the 12 Peer Companies plus the Company, the Percentile Ranking is calculated as 1 – [(3 – 1)/(12 + 1 – 1)] or 1 – (2/12) or 1 – 0.1667 or the 83rd percentile.  The Company’s rank is determined by ordering the Peer Companies and the Company from highest to lowest based on Common Stock Price Appreciation for the Performance Period and counting down from the entity with the highest Common Stock Price Appreciation (ranked first) to the Company’s position on the list.  If two entities are ranked equally, the ranking of the next entity shall account for the tie, so that if one entity is ranked first and two entities are tied for second, the next entity is ranked fourth.

(d)           “Average Price” means the average official closing price per share over the 30 consecutive trading days ending with and including the applicable day (if the applicable day is not a trading day, the next preceding trading day), adjusted to reflect the effect of any dividends actually paid during the 30 consecutive trading day period.

(e)           “Cause” means a felony conviction of the Participant or the failure of the Participant to contest prosecution for a felony, or the Participant’s gross negligence, willful misconduct or dishonesty, any of which is directly or materially harmful to the business or reputation of the Company, as determined by the Committee in its sole discretion.

(f)           “Change in Control” shall have the meaning ascribed thereto in the Plan.

(g)           “Committee” means the Board of Directors of Forward Air Corporation or such committee or committees appointed by the Board to administer the Plan.

(h)           “Common Shares” means shares of Common Stock issued in settlement of the Award.

(i)           “Common Stock Price Appreciation” means an issuer’s total appreciation realized in its common stock value over the Performance Period, inclusive of dividends and other distributions paid during the Performance Period, expressed as a percentage and determined by dividing (A) the sum of (I) the Average Price of the issuer’s shares at the end of the Performance Period minus the Average Price of the issuer’s shares at the beginning of the Performance Period plus (II) all dividends and other distributions paid on the issuer’s common shares during the Performance Period, by (B) the Average Price of the issuer’s shares at the beginning of the Performance Period, rounded to one decimal place (e.g., 3.3%).  In calculating Common Stock Price Appreciation, all dividends are assumed to have been reinvested in shares on the ex-dividend date.

  

10

  

(j)           “Company” means Forward Air Corporation and its Affiliates, except where the context otherwise requires.  For purposes of determining whether a Change in Control has occurred, Company shall mean only Forward Air Corporation.

(k)           “Disability” means a disability as determined under procedures established by the Committee for purposes of the Plan, so long as such disability is within the meaning specified under Treas. Reg. § 1.409A-3(a)(4).

(l)           “Insider Trading Policy” means the written policy of the Company pertaining to the sale, transfer or other disposition of the Company’s equity securities by members of the Board, officers or other employees who may possess material, non-public information regarding the Company, as in effect at the time of a disposition of any Common Shares.

(m)           “Peer Company” means each of C.H. Robinson Worldwide, Inc.; Con-way, Inc.; Expeditors International of Washington, Inc.; FedEx Corporation; Hub Group, Inc.; J.B. Hunt Transport Services, Inc.; Knight Transportation, Inc.; Landstar System, Inc.; Old Dominion Freight Line, Inc.; United Parcel Service, Inc.; UTi Worldwide, Inc.; and Werner Enterprises, Inc., and each Peer Company’s successor; so long as each Peer Company has a class of common securities listed for public trade on a national securities exchange or market from the beginning through the end of the Performance Period.  The Peer Companies shall be changed as follows:

(A)  In the event that, at any time during the Performance Period, a Peer Company is no longer included in the same Standard & Poor’s Global Industry Classification Standard (“GICS”) Sub-Industry as the Company, such company shall no longer be a Peer Company.

(B)  In the event of a merger, acquisition or business combination transaction of a Peer Company with or by another Peer Company, the surviving entity shall remain a Peer Company, without adjustment to its financial or market structure, provided that the surviving entity is still in the same GICS Sub-Industry as the Company.

(C)  In the event of a merger of a Peer Company with or by an entity that is not a Peer Company, or the acquisition or business combination transaction of a Peer Company with an entity that is not a Peer Company, in each case, where the Peer Company is the surviving entity, the surviving entity shall remain a Peer Company, without adjustment to its financial or market structure, provided that the surviving entity is still in the same GICS Sub-Industry as the Company.

(D)  In the event of a merger or acquisition or business combination transaction of a Peer Company with or by an entity that is not a Peer Company, other form of “going private” transaction relating to any Peer Company or the liquidation of any Peer Company, where such Peer Company is not the surviving entity or is otherwise no longer publicly traded, the company shall no longer be a Peer Company.

(E)  In the event of a bankruptcy of a Peer Company, such company shall remain a Peer Company, without adjustment to its financial or market condition.

(n)           “Performance Period” means the three-year period over which Common Stock Price Appreciation is measured.  In the event that the last day of a Performance Period falls on a weekend or any other day on which the Nasdaq Stock Market is not open, the Performance Period shall end on the next following Nasdaq Stock Market business day.

  

11

  

(o)           “Performance Share” means a right to receive on the Settlement Date one (1) Common Share, subject to further restrictions as provided by this Agreement.

(p)           “Retirement” means the Participant’s termination of Service with the Company and its Affiliates on or after attainment of age 65.

(q)           “Section 409A” means Section 409A of the Code and any applicable regulations or administrative guidelines promulgated thereunder.

(r)           “Section 409A Deferred Compensation” means compensation payable pursuant to the Award granted to a Participant subject to United States income taxation that constitutes nonqualified deferred compensation for purposes of Section 409A.

(s)           “Service” means the Participant’s employment with the Company and its Affiliates.  The Participant’s Service will be considered to have ceased with the Company and its Affiliates if, immediately after a sale, merger or other corporate transaction, the trade, business or entity with which the Participant are employed or otherwise have a service relationship is not Forward Air Corporation or an Affiliate of Forward Air Corporation.

(t)           “Settlement Date” means the date so specified on the Grant Notice; provided, however, that in the event of termination of the Participant’s Service by reason of death or Disability, the term “Settlement Date” shall mean the sixtieth (60th) day after the day on which the Participant’s Service terminates.

{End of Agreement}

 

  

12nfx10q-03312011ex101.htm

Exhibit 10.1

 

NEWFIELD EXPLORATION COMPANY

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

	  _______________________	
Awardee

	
Date of Award:

	
February 11, 2011

	
Vesting Dates:

	  
	  	
First Vesting Date:

	
February 11, 2012

	  	
Second Vesting Date:

	
February 11, 2013

	  	
Third Vesting Date:

	
February 11, 2014

	
Number of Restricted Stock Units:

	
_______________

 

AWARD OF RESTRICTED STOCK UNITS

 

The Compensation & Management Development Committee (the “Committee”) of the Board of Directors of Newfield Exploration Company, a Delaware corporation (the “Company”), pursuant to the Newfield Exploration Company 2009 Omnibus Stock Plan (the “Plan”), hereby awards to you, the above-named awardee, effective as of the Date of Award set forth above (the “Date of Award”), that number of restricted stock units set forth above (the “Restricted Stock Units”), on the following terms and conditions:

 

The Restricted Stock Units shall be subject to the prohibitions and restrictions set forth herein with respect to the sale or other disposition of such Restricted Stock Units and the obligation to forfeit and surrender such Restricted Stock Units to the Company (the “Forfeiture Restrictions”).  The Forfeiture Restrictions shall lapse as to the Restricted Stock Units that are awarded hereby in accordance with the following schedule provided that your employment with the Company and its direct and indirect wholly owned subsidiaries has not terminated prior to the applicable lapse date:

 

	
  

	
(a)

	
on the First Vesting Date, the Forfeiture Restrictions shall lapse as to one-third of the Restricted Stock Units subject to this Agreement; and

 

	
  

	
(b)

	
on each succeeding Vesting Date, the Forfeiture Restrictions shall lapse as to an additional one-third of the Restricted Stock Units subject to this Agreement, so that on the Third Vesting Date the Forfeiture Restrictions shall lapse as to all of the Restricted Stock Units subject to this Agreement.

 

If a Change of Control of the Company occurs, you die, become Disabled or your employment terminates by reason of a Qualified Retirement, in each case, before the Third Vesting Date, your rights to the Restricted Stock Units under this Agreement will be determined as provided in the attached Terms and Conditions (the “Terms and Conditions”).

 

Upon the lapse of the Forfeiture Restrictions applicable to the Restricted Stock Units, the Company shall issue to you one share of the Company’s Common Stock, $.01 par value per share (the “Common Stock”), in exchange for each such Restricted Stock Unit and thereafter you shall have no further rights with respect to such Restricted Stock Unit and such shares of the Common Stock shall be transferable by you (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable federal or state securities law).

 

 

  

  

  

 

 

If during the period in which you hold the Restricted Stock Units the Company pays a dividend in shares of the Common Stock with respect to the outstanding shares of the Common Stock, then the Company will increase the Restricted Stock Units that have not then been exchanged by the Company for shares of the Common Stock by an amount equal to the product of (a) the Restricted Stock Units that have not been forfeited to the Company or exchanged by the Company for shares of the Common Stock and (b) the number of shares of the Common Stock paid by the Company per share of the Common Stock (collectively, the “Stock Dividend Restricted Stock Units”).  Each Stock Dividend Restricted Stock Unit will be subject to same Forfeiture Restrictions and other restrictions, limitations and conditions applicable to the Restricted Stock Unit for which such Stock Dividend Restricted Stock Unit was awarded and will be exchanged for shares of the Common Stock at the same time and on the same basis as such Restricted Stock Unit.

 

Notwithstanding any provisions of the Plan, shares of Common Stock shall be transferred at the time(s) specified in this Agreement and the Terms and Conditions.

 

The Restricted Stock Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of (other than by will or the applicable laws of descent and distribution).  Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company shall not be bound thereby.  Any shares of Common Stock issued to you in exchange for the Restricted Stock Units may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws.  You also agree that (a) the Company may refuse to cause the transfer of any such shares of the Common Stock to be registered on the stock register of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable federal or state securities law and (b) the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of such shares of the Common Stock.

 

The shares of Common Stock that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration Statement on Form S-8.

 

Capitalized terms that are not defined herein shall have the meaning ascribed to such terms in the Plan or the Terms and Conditions.

 

In accepting the award of the Restricted Stock Units you accept and agree to be bound by all the terms and conditions of the Plan, this Agreement and the Terms and Conditions.

 

 

NEWFIELD EXPLORATION COMPANY

 

 

  

  

  

NEWFIELD EXPLORATION COMPANY

 

TERMS AND CONDITIONS

 

	
1.  

	
TERMINATION OF EMPLOYMENT/CHANGE OF CONTROL.  The following provisions will apply in the event your employment with the Company and all direct and indirect wholly owned subsidiaries (collectively, the “Company Group”) terminates, or a Change of Control of the Company occurs prior to the Third Vesting Date under the Restricted Stock Unit Award Agreement awarded to you (the “Agreement”):

 

1.1 Termination Generally.  If your employment with the Company Group terminates before the Third Vesting Date for any reason other than one of the reasons described in Sections 1.2 through 1.5 below, the Forfeiture Restrictions then applicable to the Restricted Stock Units shall not lapse and the number of Restricted Stock Units then subject to the Forfeiture Restrictions shall be forfeited to the Company on the date your employment terminates.

 

1.2 Change of Control.  The impact of a Change of Control of the Company on the Restricted Stock Units shall be determined under the provisions of this Section 1.2 rather than under any provisions of the Plan dealing with vesting or the lapse of forfeiture restrictions. If a Change of Control of the Company occurs before the Third Vesting Date and you do not terminate employment with the Company Group before the date the Change of Control of the Company occurs, then all remaining Forfeiture Restrictions shall lapse on the date the Change of Control of the Company occurs if the Change of Control of the Company qualifies as a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, within the meaning of the Internal Revenue Code of 1986, as amended and the final Department of Treasury Regulations issued thereunder (“Section 409A”).

 

1.3 Disability.  Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if before the Third Vesting Date you incur a Separation From Service due to your having incurred a Disability, then all remaining Forfeiture Restrictions shall immediately lapse on the date you incur a Separation From Service due to your Disability if you are not a Specified Employee or on the date that is six months following your Separation From Service if you are a Specified Employee; provided, however, that if you die before the expiration of such six-month delay period (if applicable) then all remaining Forfeiture Restrictions shall immediately lapse on the date of your death.  For purposes of this Section 1.3, you will be treated as having a “Disability” if you (a) are unable 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 can be expected to last for a continuous period of not less than 12 months, or (b) are, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company Group.  For purposes of these Terms and Conditions, “Separation From Service” has the meaning ascribed to that term in Section 409A and “Specified Employee” means a person who is, as of the date of the person’s Separation From Service, a “specified employee” within the meaning of Section 409A, taking into account any elections made and procedures established in resolutions adopted by the Compensation & Management Development Committee of the Board.

 

 

  

1

  

 

 

1.4 Death.  Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you die before the Third Vesting Date and before you have otherwise terminated employment with the Company Group, all remaining Forfeiture Restrictions shall immediately lapse on the date of the termination of your employment due to death.

 

1.5 Qualified Retirement. Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you incur a Separation From Service as a result of your Qualified Retirement before the Third Vesting Date, then the number of Restricted Stock Units issued to you under the Agreement shall automatically be reduced (without further action by you and/or the Company) on the date you incur a Separation From Service to that number of Restricted Stock Units determined under the following formula (the “Retirement Adjusted Restricted Stock Units”):

 

(1) multiplied by (2) divided by (3)

 

where (1) is the number of the Restricted Stock Units with respect to which Forfeiture Restrictions would have otherwise lapsed on the next Vesting Date following your Separation From Service due to Qualified Retirement, (2) is the number of days, if any, that have elapsed (excluding the date of your Separation From Service) since the most recent Vesting Date before the date you incur a Separation From Service due to Qualified Retirement, and (3) is 365.

 

The excess of the Restricted Stock Units that were originally awarded to you under the Agreement over the Retirement Adjusted Restricted Stock Units shall be immediately forfeited on the date you incur a Separation From Service due to Qualified Retirement.  The Forfeiture Restrictions with respect to the Retirement Adjusted Restricted Stock Units shall immediately lapse on the date you incur a Separation From Service due to your Qualified Retirement if you are not a Specified Employee or on the date that is six months following your Separation From Service if you are a Specified Employee; provided, however, that if you die before the expiration of such six-month delay period (if applicable) then all remaining Forfeiture Restrictions shall immediately lapse on the date of your death.

 

For purposes of this Section 1.5 “Qualified Retirement” means you (i) either are (A) at least age 60 and sign a non-compete agreement (the form of which is attached hereto as Exhibit A) that is effective until your reaching age 62 or (B) are at least age 62, (ii) have at least 10 years of Qualified Service and (iii) provide the Requisite Notice.  “Qualified Service” means (i) your continuous employment with (A) the Company or (B) a subsidiary of the Company during the time that such subsidiary is, directly or indirectly, a wholly owned subsidiary of the Company plus (b) any additional service credit granted to you (or a group of employees of which you are a member) by the Board.  “Requisite Notice” means (a) if you are an officer of the Company, at least six months prior written notice to the Board or (b) otherwise, at least three months prior written notice to the chief executive officer of the Company.

 

 

  

2

  

 

 

	
2.  

	
PROHIBITED ACTIVITY.  Notwithstanding any other provision of these Terms and Conditions or the Agreement, if you engage in a “Prohibited Activity,” as described below, while employed by one or more members of the Company Group or within two years after the date your employment with the Company Group terminates, then your right to receive the shares of the Common Stock, to the extent still outstanding at that time, shall be completely forfeited.  A "Prohibited Activity" shall be deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you divulge any non-public, confidential or proprietary information of the Company Group, but excluding information that (a) becomes generally available to the public other than as a result of your public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after your employment termination date from a source other than a member of the Company Group prior to the public use or disclosure by you, provided that such source is not bound by a confidentiality agreement or otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation.

 

	
3.  

	
TAX WITHHOLDING.  To the extent that the receipt of the Restricted Stock Units or the lapse of any forfeiture restrictions results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company has a withholding obligation, you shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money as the Company may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is authorized to withhold from any shares of Common Stock issued under the Agreement or from any cash or stock remuneration or other payment then or thereafter payable to you any tax required to be withheld by reason of such taxable income, wages or compensation including (without limitation) shares of the Common Stock sufficient to satisfy the withholding obligation. No shares of Common Stock shall be withheld from the shares issued under the Agreement in excess of the Company’s minimum statutory withholding obligations (determined using the minimum statutory withholding rates required by the relevant tax authorities, including your share of payroll taxes that are applicable to such supplemental taxable income.)

 

	
4.  

	
NONTRANSFERABILITY. The Agreement is not transferable by you otherwise than by will or by the laws of descent and distribution.

 

	
5.  

	
CAPITAL ADJUSTMENTS AND REORGANIZATIONS.  The existence of the Restricted Stock Units shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.

 

 

  

3

  

 

 

	
6.  

	
RESTRICTED STOCK UNITS DO NOT AWARD ANY RIGHTS OF A STOCKHOLDER.  You shall not have the voting rights or any of the other rights, powers or privileges of a holder of the Common Stock with respect to the Restricted Stock Units that are awarded hereby.  Only after a share of the Common Stock is issued in exchange for a Restricted Stock Unit will you have all of the rights of a stockholder with respect to such share of Common Stock issued in exchange for a Restricted Stock Unit.

 

	
7.  

	
EMPLOYMENT RELATIONSHIP.  For purposes of the Agreement, you shall be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group.  The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination shall be final and binding on all persons.

 

	
8.  

	
NOT AN EMPLOYMENT AGREEMENT.  The Agreement is not an employment agreement, and no provision of the Agreement shall be construed or interpreted to create an employment relationship between you and any member of the Company Group or guarantee the right to remain employed by any member of the Company Group for any specified term.

 

	
9.  

	
SECURITIES ACT LEGEND.  If you are an officer or affiliate of the Company under the Securities Act of 1933, you consent to the placing on any certificate for the shares of the Common Stock issued under the Agreement an appropriate legend restricting resale or other transfer of such shares except in accordance with such Act and all applicable rules thereunder.

 

	
10.  

	
LIMIT OF LIABILITY.  Under no circumstances will any member of the Company Group be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.

 

	
11.  

	
FUNDING.  You shall have no right, title, or interest whatsoever in or to any assets of the Company or any investments which the Company may make to aid it in meeting its obligations under this Agreement.  Your right to receive payments under this Agreement shall be no greater than the right to an unsecured general creditor of the Company.

 

	
12.  

	
MISCELLANEOUS.  The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any.  In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control.  The term “you” and “your” refer to the Awardee named in the Agreement.  Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan or the Agreement.

 

  

4

  

EXHIBIT A

 

NON-COMPETE AGREEMENT

 

THIS NON-COMPETE AGREEMENT (this “Agreement”) is dated as of [date of Qualified Retirement] and is by and between Newfield Exploration Company, a Delaware corporation (the “Company”) and ________________, a retiring employee of the Company (“Retiring Employee”).

 

R E C I T A L S:

 

WHEREAS, Retiring Employee has been granted the awards set forth on Annex A hereto (the “Awards”) by the Company;

 

WHEREAS, pursuant to the terms of the agreements governing the Awards (the “Award Agreements”), Retiring Employee is entitled to certain benefits (the “Retirement Benefits”) if Retiring Employee’s termination of employment with the Company is by reason of a “Qualified Retirement” (as defined in each of the Award Agreements); and

 

WHEREAS, it is a condition to Retiring Employee being entitled to the Retirement Benefits that Retiring Employee enter into a Non-Compete Agreement substantially in the form of this Agreement;

 

NOW, THEREFORE, in consideration of the premises, the Retirement Benefits to be provided to Retiring Employee and the other covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.           Definitions; Rules of Construction.

 

(a)           Definitions.  The following capitalized terms shall have the meaning given to it below:

 

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person and, if such specified Person is a natural person, the immediate family members of such specified Person.  “Control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, as general partner or manager, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

 

“Competing Business” means any business involved in the acquisition or development of, or exploration for, crude oil or natural gas or any rights in or with respect crude oil or natural gas within the Covered Area; provided, however, that “Competing Business” shall not include any business that provides services solely to assist other Persons in the acquisition or development of, or exploration for, crude oil or natural gas or any rights in or with respect to crude oil or natural gas but does not itself acquire or develop, or explore for, crude oil or natural gas or any rights in or with respect to crude oil or natural gas within the Covered Area.

 

 

  

A-1

  

 

 

“Covered Area” means (a) the United States of America and (b) any foreign jurisdiction (i) in which the Company is operating or (ii) with respect to which the Company is actively considering for operations, in the case of clause (b) only, as of the date hereof.

 

“Person” means any individual, partnership, corporation, limited liability company, trust, incorporated or unincorporated organization or association or other legal entity of any kind.

 

“Term” means the period commencing on the date hereof and ending on the date on which Retiring Employee attains the age of 62.

 

(b)           Rules of Construction.  For purposes of this Agreement (i) unless the context otherwise requires, (A) “or” is not exclusive; (B) words applicable to one gender shall be construed to apply to each gender; (C) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement and (D) the term “Section” refers to the specified Section of this Agreement, (ii) the Section and other headings and titles contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement, (iii) a reference to any Person includes such Person’s successors and assigns.

 

2.           Non-Competition and Non-Solicitation. During the Term, Retiring Employee covenants and agrees with the Company that Retiring Employee shall not, directly or indirectly, individually, through an Affiliate or otherwise (including as an officer, director, employee or consultant) own an interest or engage in, participate with or provide any financial or other support, assistance or advice to any Competing Business; provided, however, that Retiring Employee may (i) when taken together with the ownership, directly or indirectly, of all of his Affiliates, own, solely as an investment, up to 5% of any class of securities of any Person if such securities are listed on any national securities exchange or traded on the Nasdaq Stock Market so long as Retiring Employee is not a director, officer, employee of, or analogously employed or engaged by, such Person or any of such Person’s Affiliates or (ii) own securities issued by the Company. In addition, Retiring Employee agrees that during the Term he shall not, directly or indirectly: (1) interfere with the relationship of the Company or any Affiliate of the Company, or endeavor to entice away from the Company or any Affiliate of the Company, any individual or entity who was or is a material customer or material supplier of, or who has maintained a material business relationship with, the Company or its Affiliates, (2) establish (or take preliminary steps to establish) a business with, or cause or attempt to cause others to establish (or take preliminary steps to establish) a business with, any employee or agent of the Company or any of its Affiliates, if such business competes with or will compete with the Company or any of its Affiliates, or (3) employ, engage as a consultant or adviser, or solicit employment, engagement as a consultant or adviser, of any employee or agent of the Company or any of its Affiliates, or cause or attempt to cause any individual or entity to do any of the foregoing.  Retiring Employee agrees that the restrictions contained in this Section 2 are necessary to protect confidential information the Company has provided to Retiring Employee.

 

 

  

A-2

  

 

 

3.           Specific Performance; Injunctive Relief. Retiring Employee specifically acknowledges and agrees that the Company, in providing the Retirement Benefits, has relied on the agreements and covenants of Retiring Employee contained in this Agreement and that the terms of this Agreement are reasonable and necessary for the protection of the Company.  Retiring Employee specifically acknowledges and agrees that any breach or threatened breach by Retiring Employee of his or her agreements and covenants contained herein would cause the Company irreparable harm not compensable solely in damages.  Retiring Employee further acknowledges and agrees that it is essential to the effective enforcement of this Agreement that Company be entitled to the remedies of specific performance, injunctive relief and similar remedies and Retiring Employee agrees to the granting of any such remedies upon a breach or threatened breach by Retiring Employee of any of the terms hereof.  The Company also shall be entitled to pursue any other remedies (at law or in equity) available to it for any breach or threatened breach of this Agreement, including the recovery of money damages.

 

4.           Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.  The parties agree to cooperate in any revision of this Agreement that may be necessary to meet the requirements of law.

 

5.           Amendment; Modification; Waiver.  No amendment or modification of the terms or provisions of this Agreement shall be binding unless the same shall be in writing and duly executed by the Company and Retiring Employee, except that any of the terms or provisions of this Agreement may be waived in writing at any time by the party that is entitled to the benefits of such waived terms or provisions.  No single waiver of any of the provisions of this Agreement shall be deemed to or shall constitute, absent an express statement otherwise, a continuous waiver of such provision or a waiver of any other provision hereof (whether or not similar).

 

6.           Failure or Indulgence Not Waiver; Remedies Cumulative.  No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any covenant or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies existing under this Agreement are cumulative with, and not exclusive of, any rights or remedies otherwise available.

 

7.           No Effect on Retiring Employee’s Obligations.  This Agreement shall in no way affect any other duties or obligations Retiring Employee owes to the Company by contract, law or otherwise.

 

8.           Legal Fees.  If either party hereto institutes any legal proceedings against the other for breach of any provision hereof, the losing party shall be liable for the costs and expenses of the prevailing party, including without limitation its reasonable attorneys’ fees.

 

9.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

 

  

A-3

  

 

 

10.           Governing Law; Consent to Jurisdiction.  This Agreement shall be construed in accordance with and governed by the laws of the State of Texas applicable to agreements made and to be performed wholly within that jurisdiction.

 

 

[Signature page follows.]

 

 

  

A-4

  

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an authorized officer and Retiring Employee has executed this Agreement, in each case, as of the day and year first above written.

 

NEWFIELD EXPLORATION COMPANY

By:  ______________________________                                                                

Name:

Title:

RETIRING EMPLOYEE

                                                                                                ___________________________________

[Retiring Employee]

A-5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]