Document:

Exhibit 109 - Bruha Transition Agreement

		

			 

		

		
			Exhibit 10.9
		

		
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			Transition Agreement
		

		
			THIS TRANSITION AGREEMENT (this “Agreement”), dated as of June 10, 2021, is entered into by and between Frontier Communications Parent, Inc., a Delaware corporation (the “Company”), and Sheldon Bruha (the “Executive”).
		

		
			WHEREAS, the Executive currently serves as Chief Financial Officer of the Company pursuant to that certain Offer Letter, dated as of June 7, 2019 (the “Offer Letter”), by and between the Company and the Executive; and
		

		
			WHEREAS, the Company and the Executive now desire to enter into a mutually satisfactory arrangement concerning, among other things, the Executive’s transition,  the Executive’s separation from service with the Company,  and other matters related thereto.
		

		
			NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
		

		
			1.Resignation as CFO; Transition Period.
		

		
			(a)Resignation & Transition Period.
		

		
			(i)Effective as of June 13, 2021, and without any further action by the Executive, the Executive shall resign his position as Executive Vice President and Chief Financial Officer of the Company.
		

		
			(ii)The period between June 14, 2021 and the Separation Date (as defined below) will be a “Transition Period,” during which the following terms will apply:
		

		
			(1)the Executive shall continue as an employee of the Company and shall provide advisory services with respect to the transition of the role of Chief Financial Officer generally, and as to specific matters with respect to which he has knowledge, in each case, as reasonably requested by the Board or the Chief Executive Officer of the Company; and
		

		
			(2)For so long as the Executive remains employed by the Company during the Transition Period, the Executive will continue to receive his base salary of $550,000 (on an annualized basis) and will participate in the same benefit plans (other than compensation benefit plans) that the Executive participated in immediately prior to the Transition Period.
		

		
			(iii)The Executive’s employment with the Company will cease as of July 30, 2021 (the “Separation Date”), unless terminated earlier as provided below.  
		

		
			(b)Acknowledgment.  From and after the date hereof, the Executive hereby waives any right to resign from the Company and its affiliates for Good Reason (as defined in the Severance Agreement between the Executive and the Company dated August 5, 2019 (as attached hereto as Exhibit B,  the “Severance Letter”)) or a similar term of like meaning for purposes of any compensation or employee benefit plan, agreement, policy, or arrangement (including, without limitation, the Severance Letter) of the 
		
		
 

 

		Company and its affiliates.  The  Executive also hereby acknowledges that neither the Company’s emergence from chapter 11 bankruptcy nor the consummation of the transactions contemplated by the Fifth Amended Joint Plan of Reorganization of Frontier Communications Corporation and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 984] shall be deemed to constitute a “change in control” or similar term for any purpose, including under the Offer Letter, the Severance Letter, or under any of the Company’s compensation and benefit programs.

		
		
			2.Termination of Employment.
		

		
			(a)Separation Date. The Executive’s employment with the Company shall, by virtue of executing this Agreement and without any further action by the Company or the Executive, terminate on the Separation Date.
		

		
			(b)Death. The Executive’s employment shall terminate automatically upon the Executive’s death prior to the Separation Date.
		

		
			(c)By the Company. The Company may terminate the Executive’s employment at any time with Cause (as defined in the Severance Letter).
		

		
			(d)By the Executive. The Executive may terminate the Executive’s employment at any time without Good Reason.
		

		
			(e)Resignation from All Positions. The Separation Date shall be deemed to be the date of separation from service, and the date that employment ends, for purposes of this Agreement and any applicable plans or programs in which Executive is entitled to continue to participate during the Transition Period pursuant to this Agreement.  
		

		
			3.Payments upon Termination of Employment.  
		

		
			(a)Any Termination. Upon any termination of the Executive’s employment, the Executive shall be entitled to the following accrued benefits: (i) base salary through the date of termination, and (ii) any accrued but unpaid vacation (collectively, the “Accrued Benefits”).  Upon any termination of the Executive’s employment, he shall only be entitled to the Accrued Benefits and no other compensation or benefits from the Company, except as specifically set forth in this Agreement under Section 3(b).  
		

		
			(b)Termination on the Separation Date or due to Death. In addition, if the Executive’s employment with the Company terminates on the Separation Date in accordance with Section 2(a) or due to the Executive’s death in accordance with Section 2(b), then, subject to the Executive’s execution and non-revocation of a general release of claims in the form attached as Exhibit A (the “Release”) in accordance with Section 4 of this Agreement,  the Company shall pay or provide the Executive with the following (collectively, the “Severance Package”):
		

		
			(i)An amount in cash equal to $1,100,000, payable in monthly installments over the 24-month period commencing on the Separation Date;  provided,  however, that the first such payment shall not be made until the Company’s first regularly scheduled payroll date following the Payment Vesting Date (as defined in Section 4), and such first payment shall include any amounts that would otherwise have been payable between the Separation Date and the date of such first payment; and provided,  further, that, if the Consideration Period (as defined in Section 4)  commences in one calendar year and ends in a subsequent calendar year, then the first such payment shall not be made until the second calendar year;
		

		 

		

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			(ii)An amount in cash equal to $137,500, equal to one quarter of the Executive’s target annual bonus under the Company’s 2021 Annual Incentive Plan, in full satisfaction of the Executive’s award opportunity under the Company’s 2021 Annual Incentive Plan,  payable in a lump sum on the Company’s first regularly scheduled payroll date following the Payment Vesting Date;  provided, that, if the Consideration Period (as defined in Section 4) commences in one calendar year and ends in a subsequent calendar year, then such payment shall not be made until the second calendar year; and
		

		
			(iii)Subject to the Executive’s (A) timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and (B) continued copayment of premiums at the same level and cost to the Executive as if the Executive were an employee of the Company (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), continued participation in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) that covers the Executive (and the Executive’s eligible dependents) for a period of 3 months, commencing on September 30, 2021, or such earlier date as COBRA subsidy coverage under the American Rescue Plan Act of 2021 is terminated,  at the Company’s expense; provided that the Executive is eligible and remains eligible for COBRA coverage; provided,  further, that the Company may modify the continuation coverage contemplated herein to the extent reasonably necessary to avoid the imposition of any excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and/or the Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable); and provided,  further, that, if the Executive obtains other employment that offers substantially comparable group health benefits, such continuation of coverage by the Company hereunder shall immediately cease.
		

		
			The Executive acknowledges that other than the amounts set forth in this Section 3, he is not entitled to receive any additional compensation or benefits from the Company in connection with his separation from service with the Company (including, without limitation, any payments under the Offer Letter, the Severance Letter or any incentive compensation arrangement of the Company).  
		

		
			4.Release.  
		

		
			(a)The obligations as set out in this Agreement and the Release represent a complete waiver and release of all rights and claims that the Executive has against the Released Parties (as defined in the Release). Accordingly, the Executive understands his obligation to review this Agreement and the Release carefully before signing.  The Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for Executive’s obligations under the Release.
		

		
			(b)The Executive understands that he can take up to 45 days from his receipt of this Agreement and the Release (the “Consideration Period”) to consider its meaning and effect and to determine whether or not he wishes to enter into it by signing this Agreement and signing the Release in the first space provided below.  In addition, in order to receive the Severance Package, the Executive will be required to reaffirm his signature of the Release on the Separation Date in the second space provided below.  Before signing this Agreement or signing the Release in either space, the Executive is advised to consult with an attorney. 
		

		
			(c) If the Executive chooses to sign this Agreement and Release in the first space before the end of the Consideration Period, he is doing so voluntarily.  The Executive may revoke his 
		
		
 

		

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		signature on the Release within seven (7) days after signing the Release in the first space (the “First Revocation Period”).  Further, the Executive may revoke his signature within seven (7) days after signing the Release in the second space (the “Second Revocation Period”).  Any revocation of the Release must be made in writing.  The Executive understands that if he fails to sign this Agreement, or if he fails to sign the Release in both of the spaces as required, or he signs the Release but exercises his right to revoke his signature in any space on the Release, his right to receive the Severance Package will not vest and will not become due and owing to him.  The day following the day the Second Revocation Period expires without revocation will be the “Payment Vesting Date.”  

		
		
			5.Restrictive Covenants; Cooperation. The Executive acknowledges and agrees that the restrictive covenants  set forth in the Severance Letter under the heading “Non-Competition/Non-Solicitation/Non-Disparagement” shall survive the execution of this Agreement and the Executive’s termination of employment, and shall remain in full force and effect following the Separation Date in accordance with the terms thereof.    The Executive acknowledges and agrees that the remedies at law for a breach or threatened breach of any of the provisions of the Severance Letter that appear under the heading “Non-Competition/Non-Solicitation/Non-Disparagement” would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach.  In recognition of this fact, the Executive Agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.  
		

		
			In addition, in consideration of the Company providing the Severance Package, and as a condition to the Executive’s receipt thereof, Executive agrees to reasonably cooperate with the Company and its financial and legal advisors when and as the Company requests in connection with any claims, investigations, or other proceedings involving the Company with respect to matters occurring while Executive was employed by the Company; provided,  however, that the Executive shall have no such obligation with respect to claims, investigations, or other proceedings commenced after the second anniversary of the Separation Date. Executive shall receive no additional compensation for rendering such services pursuant to this Section 5.
		

		
			6.Section 409A. It is intended that this Agreement shall comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations relating thereto, or an exemption to Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception or “separation pay” exception shall be paid under such exception. For purposes of Section 409A of the Code, each payment under this Agreement shall be treated as a separate payment for purposes of the exclusion for certain short-term deferral amounts. In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement. Notwithstanding anything to the contrary in this Agreement, all reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that: (a) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement); (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (c) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, the Executive will be solely responsible for the satisfaction of all taxes and penalties that may be imposed on him in connection with any payments made pursuant to this Agreement, and neither the Company nor any of its affiliates or successors shall have any obligation to indemnify or otherwise hold the Executive harmless from any or all such taxes or penalties.
		

		 

		

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			7.Miscellaneous.
		

		
			(a)Successors and Assigns. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive. This Agreement and any rights and benefits hereunder shall inure to the benefit of and be enforceable by the Executive’s legal representatives, heirs, or legatees. This Agreement and any rights and benefits hereunder shall inure to the benefit of and be binding upon the Company and its successors and assigns.
		

		
			(b)Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement such federal, state, local, or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
		

		
			(c)Governing Law. The provisions of this Agreement shall be construed in accordance with the internal laws of the State of Connecticut, without regard to the conflict of law provisions of any state.
		

		
			(d)Dispute Resolution.  The section of the Severance Letter titled “Arbitration” shall apply to this Agreement, mutatis mutandis, as though fully set forth herein.
		

		
			(e)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and this Agreement shall be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified).
		

		
			(f)Amendment; Entire Agreement. No provision of this Agreement may be amended, modified, waived, or discharged unless such amendment, modification, waiver, or discharge is agreed to in writing and such writing is signed by the Company and the Executive. From and after the date hereof, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof (including, without limitation, the Offer Letter and the Severance Letter);  provided, that the provisions of the Severance Letter that survive the Executive’s termination of employment shall remain in full force and effect following the Separation Date.
		

		
			(g)Survival.  The provisions of the Severance Letter that survive the Executive’s termination of employment shall remain in full force and effect following the Separation Date.
		

		
			(h)Waiver of Breach. No waiver by any party hereto of a breach of any provision of this Agreement by any other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, shall operate or be construed as a waiver of any subsequent breach by such other party of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time. The failure of any party hereto to take any action by reason of such breach shall not deprive such party of the right to take action at any time while such breach continues.
		

		
			(i)Notices.   All notices, demands, requests or other communications, which may be or are required to be given or made by any party to any other party pursuant to this Agreement, shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by e-mail addressed as follows: 
		

		 

		

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			If to the Company:
		

		
			Frontier Communications Parent, Inc.
401 Merritt 7
Norwalk, Connecticut 06851
Attention: Chief Legal Officer
		

		
			If to the Executive:
		

		
			Address and personal email address last shown on the Company’s books and records
		

		
			Each party may designate by notice in writing a new address or email address to which any notice, demand, request or communication may thereafter be so given, served or sent.  Each notice, demand, request or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of e-mail transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
		

		
			(j)Headings. The headings of this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
		

		
			(k)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.
		

		
			8.Protected Disclosures.
		

		
			(a)Nothing in this Agreement or in any other document, agreement or policy relating to the Executive’s employment by the Company prohibits or restricts the Executive or the Company from disclosing relevant and necessary information or documents in any action, investigation or proceeding relating to the Executive’s employment by the Company, or initiating communications directly with, cooperating with, providing relevant information to, testifying before, or otherwise assisting in an investigation or proceeding by any governmental or regulatory body; provided that, if and to the extent permitted by law, upon receipt of any subpoena, court order or other legal process compelling the disclosure of any such information or documents, the Executive shall give prompt written notice to the Company to permit the Company to protect its interests in confidentiality to the fullest extent possible.
		

		
			(b)The Executive cannot be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (1) is made: (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  As a result, the Company and the Executive shall have the right to disclose trade secrets in confidence to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law.  
		

		
			(c)Both the Company and the Executive also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.  
		

		
			(d)Nothing in this Agreement is intended to conflict with that right or to create liability for 
		

		 

		

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		disclosures of trade secrets that are expressly allowed by the foregoing.
		

		
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			[Signature Page Follows]
		

		
			 
		

		

		

		 

		

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		IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.
		

		
			FRONTIER COMMUNICATIONS PARENT, INC.
		

		
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						By:

					
					
						/s/ Mark D. Nielsen

				
	
					
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						Name: Mark D. Nielsen

					
						Title: EVP, Chief Legal and Regulatory Officer

				
	
					
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						/s/ Sheldon Bruha

				
	
					
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						Sheldon Bruha

				
	
					
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			EXHIBIT A
GENERAL RELEASE
		

		
			I, Sheldon Bruha, in consideration of the payments and benefits set forth in Section 3 of the Transition Agreement between myself and Frontier Communications Parent Inc. (together with its subsidiaries and affiliates, the “Company Group”), dated as of June [__], 2021 (the “Agreement”), do hereby release and forever discharge the Company and its subsidiaries and affiliates and all of their respective present, former and future managers, directors, officers, stakeholders, employees, predecessors, successors and assigns (collectively, the “Released Parties”) to the extent provided below (this “General Release”).  The Released Parties are intended to be third-party beneficiaries of this General Release and the Agreement, and this General Release and the Agreement may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder.  Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement.
		

		
			1.My employment with the Company will terminate as of the Separation Date, and I hereby resign from any position as an officer, member of the board of managers or directors (as applicable) or fiduciary of the Company or any other member of the Company Group (or reaffirm any such resignation that may have already occurred).  I understand that any payments or benefits paid or granted to me under Section 3 of the Agreement represent consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled.  I understand and agree that I will not receive the payments and benefits specified in Section 3 of the Agreement unless I execute this General Release in both spaces and do not revoke this General Release in either space within the time period permitted hereafter.  I understand and agree that such payments and benefits are subject to those provisions of the Severance Letter which (as noted below) expressly survive my termination of employment and the execution of this General Release.  Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company Group.
		

		
			2.Except as provided in paragraph 5 below, I knowingly and voluntarily (for myself and my heirs, executors, administrators and assigns) release and forever discharge the Company and each of the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter‐claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date on which I execute this General Release in either space) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties, which I, my spouse, or any of my heirs, executors, administrators or assigns may have, which arise out of, relate to, or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act; or their state or local counterparts (including but not limited to the Connecticut Human Rights & Opportunities Law, Conn. Gen. Stat. § 46a-60 et seq.; Connecticut Wage and Hour Laws, the Connecticut Wage Payment Law, Conn. Gen. Stat. §§ 31-71a et seq.; and the Connecticut Family and Medical Leave Act, Conn. Gen. Stat. §§ 31-51kk et seq.); or under any other federal, state or local civil or human rights law, or under any other local, state or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company Group; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for 
		

		 

		

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		costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”). 
		

		
			3.I represent that I have made no assignment or transfer of any right, claim, demand, cause of action or other matter covered by paragraph 2 above.
		

		
			4.I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967).
		

		
			5.I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay, front pay and any form of injunctive relief.  Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under applicable law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.  Additionally, I am not waiving (a) any right to the Accrued Benefits or any portion of the Severance Package to which I am entitled under the Agreement, or (b) any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the Company’s organizational documents.
		

		
			6.In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied.  I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied.  I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement.  I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law.  I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release.
		

		
			7.I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.
		

		
			8.I agree that I will forfeit the Severance Package, and that the Company has the right to immediately stop making payments in respect of any portion of the Severance Package and shall have the right to seek repayment of payments already made in respect thereof, if I challenge the validity of this General Release or if I breach any promise or obligation of mine under this General Release or the Agreement.  I also agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees, and return all payments received by me pursuant to the Agreement on or after the termination of my employment.
		

		
			9.I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate 
		

		 

		

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		family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone.  
		

		
			10.Any nondisclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD) or any other self‐regulatory organization or governmental entity or otherwise limit the scope of any protections that may apply to me under any applicable whistleblower laws.
		

		
			11.I hereby acknowledge that the provisions of the Severance Letter included under the heading “Non-Competition/Non-Solicitation/Non-Disparagement shall survive my execution of this General Release and the termination of my employment with the Company.
		

		
			12.I represent that I am not aware of any claim by me other than the claims that are released by this General Release.  I acknowledge that I may hereafter discover claims or facts in addition to or different than those that I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and that, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it, and that this General Release serves as a waiver of any and all such claims.
		

		
			13.Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date on which I execute this General Release in the applicable space.
		

		
			14.Whenever possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
		

		
			BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: 
		

		
			(i)I HAVE READ IT CAREFULLY;
		

		
			(ii)I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING, BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;
		

		
			(iii)I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
		

		
			(iv)I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
		

		 

		

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			(v)I HAVE HAD AT LEAST 45 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED 45‐DAY PERIOD;
		

		
			(vi)I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE IN EITHER SPACE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE SECOND REVOCATION PERIOD HAS EXPIRED;
		

		
			(vii)I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND
		

		
			(viii)I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.
		

		
			FIRST SPACE
		

		
			SIGNED: ________________________DATED: ___________________
		

		
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			SECOND SPACE (DO NOT SIGN UNTIL SEPARATION DATE)
		

		
			SIGNED: ________________________DATED: ___________________
		

		
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			Exhibit B
		

		
			Severance Letter 
		

		 

		

			-6-ex_269584.htm

Exhibit 10.1

FORM OF

INDEMNIFICATION AGREEMENT 

 

This Indemnification Agreement (this "Agreement") is entered into, effective as of __________, by and between Covenant Logistics Group, Inc., a Nevada corporation (the "Company"), and [Name of Board Member or Executive Officer], a duly elected and incumbent director and officer of the Company ("Indemnitee").

 

WHEREAS, it is essential for the Company to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors and officers of corporations;

 

WHEREAS, the Company's Third Amended and Restated Articles of Incorporation and Fifth Amended and Restated Bylaws permit the Company to provide its directors and officers the maximum indemnification permitted to be given by the Company under Nevada law, and to enter into agreements to provide such indemnification;

 

WHEREAS, from time-to-time the Company has entered into indemnification agreements with certain of its directors and officers (the “Prior Agreements”); and

 

WHEREAS, in recognition of Indemnitee's need for (i) substantial protection against personal liability based on Indemnitee's reliance on the Company's Third Amended and Restated Articles of Incorporation and Fifth Amended and Restated Bylaws; (ii) specific contractual assurance that the protection promised by the Third Amended and Restated Articles of Incorporation and Fifth Amended and Restated Bylaws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the Third Amended and Restated Articles of Incorporation and Fifth Amended and Restated Bylaws or any change in the composition of the Board of Directors or acquisition transaction relating to the Company); and (iii) an inducement to provide effective services to the Company as a director and/or officer, the Board of Directors of the Company has found it in the Company’s best interests (y) to supersede and replace any applicable Prior Agreement with this Agreement, and (z) to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows:

 

1.         Definitions. As used in Agreement:

 

(a)         Board: the board of directors of the Company.

 

(b)         Affiliate: any corporation or other person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

 

(c)         Change in Control: means a change in control of the Company of a nature that would be required to be reported in response to Item 5.01 of a Current Report on Form 8-K, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided that, without limitation, a Change in Control shall be deemed to have occurred if:

 

(i)          Any "person" within the meaning of Section 3(a)(9) of the Exchange Act, and as modified and used in Section 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the Exchange Act (but excluding the Company, any employee benefit plan sponsored or maintained by the Company (including any trustee of such plan (acting as trustee) or other fiduciary holding securities under an employee benefit plan of the Company), and any underwriter temporarily holding securities pursuant to an offering of such securities) ("Person"), other than a Permitted Holder becomes the "beneficial owner," as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of twenty percent (20%) or more of the combined voting power of the outstanding securities of the Company ordinarily having the right to vote in the election of directors; provided, however, that the following will not constitute a Change in Control: any acquisition by any corporation if, immediately following such acquisition, more than eighty percent (80%) of the outstanding securities of the acquiring corporation (or the parent thereof) ordinarily having the right to vote in the election of directors is beneficially owned by all or substantially all of those persons who, immediately prior to such acquisition, were the beneficial owners of the outstanding securities of the Company ordinarily having the right to vote in the election of directors;

 

(ii)          Individuals who constitute the Board of the Company as of the date hereof (the "Incumbent Board") have ceased for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least three-fourths (3/4) of the directors comprising the Incumbent Board, either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination (other than an election or nomination of an individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of the Company, including, without limitation, in connection with a "tender offer," as such term is used in Section 14(d) of the Exchange Act), shall be, for purposes of the Agreement, considered as though such person were a member of the Incumbent Board;

 

(iii)          Upon the consummation by the Company of a reorganization, merger, or consolidation, other than one with respect to which all or substantially all of those persons who were the beneficial owners, immediately prior to such reorganization, merger, or consolidation, of outstanding securities of the Company ordinarily having the right to vote in the election of directors own, immediately after such transaction, more than eighty percent (80%) of the outstanding securities of the resulting corporation ordinarily having the right to vote in the election of directors;

 

(iv)          Upon the approval by the Company’s stockholders of a complete liquidation and dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company other than to a subsidiary or to an entity controlled by a Permitted Holder; or

 

(v)         Upon the consummation of a transaction subject to Rule 13e-3 of the Exchange Act in which the Permitted Holders identified in romanette (iii) of the definition of Permitted Holder hereunder are the beneficial owners of more than fifty percent (50%) of the outstanding securities of the resulting corporation ordinarily having the right to vote in the election of directors.

 

(d)         Expenses: any expense, damages, liability, or loss, including attorneys' fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon, any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, and all other costs and obligations, paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding and all fees and disbursements of attorneys, experts, or other professionals relating to any Indemnifiable Event.

 

(e)         Indemnifiable Event: any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company, or while a director or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent of the Company, as described above. For the avoidance of doubt, for purposes of this Agreement, a director’s or officer’s service on behalf of, or with respect to, any direct or indirect wholly or partially owned subsidiary of the Company (including, without limitation, Transport Enterprise Leasing, LLC) shall be deemed at the request of the Company. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification under this Agreement (i) in any action in which there is a final adjudication that Indemnitee's acts or omissions involved intentional misconduct, fraud, or a knowing violation of law, a breach of Indemnitee's duty of good faith or loyalty, or were not in the best interest of the Company; (ii) on account of any Proceeding in which there is a final adjudication against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or similar provisions of any federal, state, or local laws; (iii) in any derivative action in which Indemnitee has been finally adjudged to be liable to the Company unless and only to the extent that the court in which the proceeding was brought shall determine that, despite the adjudication of liability, the Indemnitee is entitled to indemnity for such expenses as the court shall deem proper; and (iv) prior to a Change in Control, in connection with any claim initiated by Indemnitee against the Company or any officer or director thereof unless permitted under Section 2(b).

 

(f)         Independent Counsel: the person or body appointed in connection with Section 4.

 

(g)         "Permitted Holder" means: (i) the Company or a subsidiary, (ii) any employee benefit plan sponsored by the Company or a subsidiary, or (iii) David or Jacqueline Parker or their siblings, children, or grandchildren ("Family Members") or a trust, corporation, partnership, limited partnership, limited liability company, or other such entity, so long as at least eighty percent (80%) of the beneficial interests of the entity are held by Mr. or Mrs. Parker and/or one or more Family Members, where such person(s) or entity acquired their Company stock from Mr. or Mrs. Parker.

 

(h)         Proceeding: any threatened, pending, or completed action, suit, or proceeding (including an action by or in the right of the Company), or any inquiry, hearing, or investigation, claim, demand, method of alternative dispute resolution, notice, complaint, or other proceeding, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other.

 

(i)         Reviewing Party: the person or body appointed in accordance with Section 4.

 

(j)         Voting Securities: any securities of the Company that vote generally in the election of directors.

 

2.         Agreement to Indemnify.

 

(a)         General Agreement. During the Term (as defined in Section 3) of this Agreement, in the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto).

 

(b)         Initiation of Proceeding. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification or advance pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights under Section 5; or (iii) the Proceeding is instituted after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) and Independent Counsel has approved its initiation.

 

(c)         Expense Advances. If so requested by Indemnitee, the Company shall advance (within ten business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"); provided, that (i) such an Expense Advance shall be made only upon delivery to the Company of an undertaking by or on behalf of the Indemnitee to repay the amount thereof if it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company; (ii) if and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; and (iii) such an Expense Advance shall only be made if permitted under applicable law. If Indemnitee has commenced or commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 5, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding, and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed). Indemnitee's obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.

 

(d)         Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

 

(e)         Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

3.         Term. The indemnification herein given shall be deemed to have commenced upon the commencement of Indemnitee's service as a director or officer of the Company, even if such election occurred prior to the date of this Agreement, and shall continue for the period of membership on the Company's Board or as an officer of the Company and thereafter for any Indemnifiable Event arising from actions or events occurring during service as a director or officer even though he or she may have ceased to be a director or officer and shall inure to the benefit of the estate, heirs, and personal representatives of Indemnitee. If this Agreement is cancelled, modified, or amended, in whole or in part, any claims arising from actions or events occurring during the term of this Agreement shall be covered under the same terms and conditions as described herein.

 

4.         Reviewing Party. Prior to any Change in Control, the Reviewing Party shall be any appropriate person or body consisting of a member or members of the Board or any other person or body appointed by the Board who is not a party to the particular Proceeding with respect to which Indemnitee is seeking indemnification. After a Change in Control, the Independent Counsel referred to below shall become the Reviewing Party. With respect to all matters arising after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Company's Third Amended and Restated Articles of Incorporation or Fifth Amended and Restated Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five years. The Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto.

 

5.         Indemnification Process and Appeal.

 

(a)         Indemnification Payment. Indemnitee shall be entitled to indemnification and advance of Expenses, and shall receive payment thereof, from the Company in accordance with this Agreement as soon as practicable after Indemnitee has made written demand on the Company for such indemnification or advance, unless the Reviewing Party has given a written opinion to the Company that Indemnitee is not entitled to indemnification or advance under applicable law.

 

(b)         Suit to Enforce Rights. Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification or advance within thirty days after making a demand in accordance with Section 5(a), Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court having subject matter jurisdiction, which seeks an initial determination by the court or challenges any determination by the Reviewing Party or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party not challenged by the Indemnitee shall be binding on the Company and Indemnitee. The remedy provided for in this Section 5(b) shall be in addition to any other remedies available to Indemnitee at law or in equity.

 

(c)         Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under applicable law for the Company to indemnify, or provide an advance to, Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified or receive an advance hereunder, the Indemnitee shall be presumed to be entitled to indemnification or an advance hereunder and the burden of proving such a defense or determination shall be on the Company. Neither the failure of the Reviewing Party or the Company (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant or an advance relating thereto is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Company (including its Board, independent legal counsel, or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

 

6.         Indemnification for Expenses Incurred in Enforcing Rights. The Company shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by Indemnitee for (i)  indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or under applicable law or the Company's Third Amended and Restated Articles of Incorporation or Fifth Amended and Restated Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events; and/or (ii) recovery under directors' and officers' liability insurance policies maintained by the Company, but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification or insurance recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with Section 2(c).

 

7.         Notification and Defense of Proceeding.

 

(a)         Notice. Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 7(c).

 

(b)         Defense. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ legal counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee's expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company; (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding; (iii) after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the employment of counsel by Indemnitee has been approved by the Independent Counsel; or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or in the event (ii), (iii) or (iv) above exists.

 

(c)         Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company's written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company's liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

 

8.         Service. It is contemplated that Indemnitee will continue to serve as a director and officer of the Company. However, nothing herein contained shall obligate Indemnitee to such continued service; it being acknowledged by the Company that Indemnitee retains the right to resign as a director or officer of the Company for any reason whatsoever. Neither shall this Agreement be construed as obligating either the Company or the stockholders to continue to elect Indemnitee to the Company's Board, or as an officer of the corporation.

 

9.         Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company's Third Amended and Restated Articles of Incorporation, Fifth Amended and Restated Bylaws, applicable law, or otherwise; provided, however, this Agreement shall supersede any Prior Agreement between the Company and the Indemnitee, subject to Section 16 hereof. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company's Third Amended and Restated Articles of Incorporation, Fifth Amended and Restated Bylaws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.

 

10.         Liability Insurance. To the extent the Company maintains or has maintained an insurance policy or policies providing general and/or directors' and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer.

 

11.         Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any Affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs, executors, or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, or such longer period as may be required by state law under the circumstances. Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely filing and notice of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.

 

12.         Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

13.         Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights (unless such action would make Indemnitee liable under applicable documents).

 

14.         No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received payment (under any insurance policy, article, bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder.

 

15.         Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though he or she may have ceased to serve in such capacity at the time of any Proceeding.

 

16.         Severability; Reinstatement of Prior Agreements. If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, (i) the remaining provisions of this Agreement shall remain enforceable to the fullest extent permitted by law, and (ii) any Prior Agreement with Indemnitee shall be re-instated ab initio, and without further act by the Company or the Indemnitee, and Indemnitee shall be entitled to seek indemnification thereunder. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, which is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void, or unenforceable.

 

17.         Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws.

 

18.         Notices. All notices, demands, and other communications required or permitted hereunder may be effected by personal delivery in writing, by facsimile, or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed communicated as of the date of personal delivery, facsimile, or mailing. Mailed notices shall be addressed as set forth below, but each party may change its address by written notice in accordance with this Section 18.

 

Covenant Logistics Group, Inc.

Attention: President

400 Birmingham Highway

Chattanooga, Tennessee 37419

Fax Number: 423-821-5442

 

19.         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.

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.

 

INDEMNITEE:                                                      COVENANT LOGISTICS GROUP, INC.

a Nevada corporation

 

 

____________________________________                  By: ___________________________________

[Name of Board Member or Executive Officer]

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