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EXHIBIT 10.1
FIRST AMENDMENT
to the
TRANSITION SERVICES AGREEMENT
Between
FORWARD AIR CORPORATION
f/k/a Landair Services, Inc.
and
LANDAIR CORPORATION
This First Amendment to the Transition Services Agreement (this
"Agreement"), dated as of February 4, 2000, is made and entered into by and
between FORWARD AIR CORPORATION ("Forward Air"), a Tennessee corporation and
LANDAIR CORPORATION ("Landair"), a Tennessee corporation.
WHEREAS, Forward Air and Landair entered into that certain Transition
Services Agreement, dated as of September 18, 1998 (the "Original Agreement"),
which provided for, among other things, the continued providing of services by
the parties to the Original Agreement;
WHEREAS, the parties over time have agreed to continue certain services
and to terminate certain services and, in connection with the termination of
future services the parties wish to specifically provide for the terms and
conditions and the allocation of certain costs in connection with the
termination of certain services under the Original Agreement; and
WHEREAS, the parties now desire to amend the Original Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter expressed, and subject to the satisfaction or waiver of
the conditions hereof, the parties hereto agree as follows:
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1. Continuation of Certain Services. The parties understand and agree to
continue the joint services set forth on Attachment A to this Agreement for a
period of 18 months, subject to the termination provisions set forth in the
Original Agreement and as modified by this Agreement.
2. Allocation of Cost for Shared Assets. The parties understand and agree
that the past and future obligations to provide certain services (the
"Services") required under the terms of the Original Agreement has required and
will continue to require either or both parties to acquire equipment and/or make
capital investments in certain assets (the "Joint Services Assets") which are
needed or required to provide services. The parties to the Original Agreement
further understand and agree that in the event of a termination of any Service
that requires the use of Joint Services Assets, the investment in the Joint
Services Assets will need to be settled and resolved as between the parties to
the Original Agreement. In the event of a termination of all or a portion of the
Services under the Original Agreement prior to the full depreciation or
amortization of the Joint Services Assets used to provide such services, the
parties agree that they will settle and resolve all obligations on any Joint
Services Assets that have not been fully amortized or depreciated at the time of
any such termination as follows:
(i) Joint Services Assets not owned by Party Requesting Termination.
In the event the party requesting termination of any Services does not own
the Joint Services Assets used to provide such Services, the party
requesting termination shall pay to the owner of such Joint Services
Assets an amount equal to the pro rata portion of the then remaining book
value of any Joint Services Asset as then set forth on the books of the
owner (such pro rata portion to be determined based on the allocation of
Service costs and expenses as then in effect) and, the party thus
receiving payment shall be entitled to keep the Joint Services Asset; and
(ii) Joint Services Assets owned by Party Requesting Termination. In
the event the party requesting termination of Services owns the Joint
Services Assets
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related to the terminated Services, then the party requesting termination
shall be entitled to payment from the party not requesting termination of
the Services. The payment for the Joint Services Assets utilized in
connection with the terminated Services shall be calculated as follows:
The termination payment shall be in an amount equal to a pro
ration of the book value as set forth in Section 2(i) above times
two thirds.
3. Agreed Basis for Joint Services Assets. The parties agree that the
shared assets which constitute Joint Services Assets, and their respective
approximate book values as of December 31, 1999 are as set forth on Attachment A
to this Agreement. The parties further agree that they will not acquire any
further Joint Services Assets without the written agreement of each other.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
FORWARD AIR CORPORATION
By: /s/ Edward W. Cook
Title: CFO
LANDAIR CORPORATION
By: /s/ C. Tim Roach
Title: President/COO
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ATTACHMENT A
ASSETS TO BE ALLOCATED
DECEMBER 31, 1999
FORWARD AIR
Service NBV Allocation Methodology
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Accounts Payable $ 11,000 * Based upon number of checks processed
Payroll 199,000 Based upon number of employees
Human Resources and
Benefit Plan Administration 7,000 * Based upon number of employees
Settlement 7,000 * Based upon number of owner-operators
Accounting 52,000 50% to Landair and Forward Air
Legal 2,000 * 50% to Landair and Forward Air
General Administration 97,000 50% to Landair and Forward Air
Information Technology 987,000 50% to Landair and Forward Air
Corporate Headquarters
Leasehold Improvements 115,000 50% to Landair and Forward Air
LANDAIR
Safety 57,000
Licensing/Permitting/Fuel Tax 44,000
Insurance/Claims 17,000 *
Recruiting/Retention 7,000 *
Training Center 2,000 *
*Due to the immateriality of the amounts involved, no allocation of assets is
proposed for cost centers under $25,000.