EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into by and between XXXX X. XXXXXXX the
"Executive") and METROTRANS CORPORATION (the "Company").
WHEREAS, the Company desires to employ the Executive upon certain terms
and conditions, and the Executive desires to accept such employment upon such
terms and conditions; and
WHEREAS, the Company and the Executive desire to further set forth in a
written agreement the complete terms and conditions pursuant to which the
Executive shall be employed by the Company;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
DEFINITIONS
As used in this Agreement, the following words and/or phrases shall have
the meanings set forth below unless a different meaning plainly is required by
the context:
1.1 Agreement shall mean this Employment Agreement between the Company and
the Executive.
1.2 Board shall mean the Board of Directors of the Company.
1.3 Cause shall mean (i) any act of fraud by the Executive (whether or not
against or involving the Company); (ii) the Executive's competing with the
Company, either directly or indirectly; (iii) the Executive's breach of any
provision of this Agreement; (iv) the Executive's failure to discharge his
duty of loyalty to the Company; (v) the Executive's indictment or conviction
of any felony or misdemeanor (other than minor traffic violations); (vi) any
willful act by the Executive that adversely affects the Company or its
financial condition or business reputation; (vii) the Executive's willful
failure to perform the duties of his position (other than any such failure
resulting from incapacity due to Disability), within fifteen (15) days after
notice from the Board identifying the specific duties which are not being
performed; and (viii) any other action or inaction by the Executive which
constitutes "good cause" under the laws of the State of Georgia.
1.4 Company shall mean Metrotrans Corporation its successors and assigns,
and any other corporation, partnership, sole proprietorship or other type of
business entity into which the Company may be merged, consolidated or
otherwise combined.
1.5 Disability shall mean a physical or mental impairment that prohibits
the Executive from performing the essential duties of his position, is
expected to be of a long and continued duration, and for which he becomes
eligible to receive benefits under the Company's long-term disability plan.
1.6 Effective Date shall mean July 9, 1999.
1.7 Executive shall mean Xxxx X. Xxxxxxx.
1.8 Proprietary Information shall mean information that meets the
definition of "trade secret" under the laws of the State of Georgia (i.e., the
Uniform Trade Secrets Act, O.C.G.A. ?10-1-760, et seq.), as well as any
scientific or technical information, design, process, procedure, formula or
improvement that is secret and of value, information that the Company takes
reasonable efforts to protect from disclosure and from which the Company
derives actual or potential economic value due to its confidential nature,
including, but not limited to, technical or nontechnical data, formulas,
complications, programs, devices, methods, techniques, drawings, processes,
financial data, lists of actual or potential customers, price lists, business
plans, customer and vendor records, training and operations materials and
memoranda, personnel records, financial information relating to the business
of the Company, accounts, customers, vendors, employees and affairs of the
Company, and any information marked "confidential" by the Company.
1.9 Restricted Territory shall mean the geographic area described as
follows: [territory needed]
1.10 Business of the Company shall mean all operations reasonably related
to effecting the manufacture, distribution and sale of buses of all sizes.
1.11 Termination Date shall mean the date specified as the Executive's
official termination of employment date.
1.12 Term shall mean the period during which this Agreement is wholly
effective, which shall be the period commencing on the Effective Date and
ending on the Termination Date.
ARTICLE 2.
DUTIES AND AUTHORITY
2.1 Duties and Authority. The Executive is engaged and agrees to perform
services for and on behalf of the Company as its President and Chief Executive
Officer and shall report directly to the Board. The Executive shall have such
duties and authority as may be assigned to him by the Company's bylaws or by
the Board. The Executive agrees to perform such duties diligently and
efficiently and in accordance with the reasonable directions of the Board.
The Executive shall conduct himself at all times in a business-like and
professional manner as appropriate for his position and shall represent the
Company in all respects in compliance with good business and ethical
practices. In addition, the Executive shall be subject to and abide by the
policies and procedures of the Company applicable to personnel of the Company,
as may be adopted from time to time.
2.2 Best Efforts. During the term of this Agreement, the Executive shall
devote his full attention, energies and best efforts to rendering services on
behalf of the Company and shall not engage in any outside employment without
the express written consent of the Board.
Notwithstanding the foregoing, the Executive may pursue personal
interests as he may have so long as such participation does not interfere with
the Executive's performance of his duties hereunder, and the Executive may
participate in industry, civic and charitable activities so long as such
activities do not materially interfere with the performance of his duties
hereunder. The Executive may also participate in any interest or activity
which is approved in writing by the Board.
2.3 Term. The initial term of this Agreement shall commence on the
effective date hereof and shall continue until the close of business at the
end of two (2) years from the effective date, subject to earlier termination
as provided in this Agreement. At least ninety (90) days prior to the end of
the initial term hereof and each subsequent year thereafter, this Agreement
shall be deemed to be extended automatically for an additional one-year term
on the same terms and conditions unless either the Company or the Executive
gives contrary written notice to the other party no less that ninety (90) days
prior to the date on which this Agreement would otherwise be extended.
ARTICLE 3.
COMPENSATION AND BENEFITS
3.1 Annual Base Salary. The Company shall pay to the Executive as
compensation for his services provided hereunder a base salary of $250,000 per
year ("Base Salary"), unless increased in such amount as may be determined by
the Board. Executive's base salary shall be payable in accordance with the
Company's normal payroll procedures.
3.2 Annual Bonus. At the expiration of one (1) year from the effective
date of this Agreement (the "bonus date"), the Company shall pay to the
Executive a bonus in the amount of $100,000 provided that on the bonus date
the Executive continues to be employed as the President and Chief Executive
Officer of the Company and the Company continues to exist as a going concern.
3.3 Long-Term Cash Incentive Compensation. For the last six months of the
year 2000, the Company agrees to enter into a revised Management Incentive
Compensation Plan with the Executive and other key management employees of the
Company based upon budgets and goals established by the Board during the first
quarter of the year 2000.
3.4 Stock Option. On the effective date of this Agreement, the Executive
shall be entitled to a grant of Incentive Stock Options in the amount of
100,000 shares of Company common stock at its then fair market value. To the
extent that there are insufficient shares in the Company's option plan to
allow for the issuance of Incentive Stock Options, the Company will issue
nonqualified stock options and will provide a cash bonus to the Executive in
the amount of the tax due upon exercise of the nonqualified stock options.
3.5 Employee Benefit Plans and Policies. The Executive shall be entitled
to participate in each employee benefit plan, policy or arrangement which is
sponsored, maintained or contributed to by the Company from time to time and
in which current executive officers of the Company may participate, in
accordance with the terms and provisions of such plans. Contributions by the
Executive to such plans shall be required only to the extent required of other
executive officers of the Company.
3.6 Disability Insurance. The Executive shall be entitled to obtain, at
the Company's expense, a disability insurance policy covering 100% of the
Executive's base salary not inclusive of bonuses provided that the premiums
are reasonable as determined by the Company.
3.7 Automobile Allowance. The Company shall provide the Executive with a
monthly allowance of [$____] for his use in owning or leasing an automobile
for business purposes.
3.8 Vacation. The Executive shall be entitled to such paid vacation time
as is generally provided to the Company's executive officers subject to the
rules in effect regarding such leave.
3.9 Expense Reimbursement. The Company shall reimburse the Executive for
reasonable and necessary travel and other business related expenses, including
entertainment expenses, incurred by him in performance of the business of the
Company in accordance with the Company's standard expense reimbursement
practices and policies in existence from time to time, subject to such dollar
limitations and verification and record keeping requirements as may be
established from time to time by the Company.
3.10 Legal Fees Reimbursement. The Company shall reimburse the Executive
up to $2500 for the legal fees he incurs in connection with his execution of
this Agreement.
3.11 Modification of Compensation and Benefits. By written amendment, the
Executive and the Company may agree to reform provisions contained in this
Article, particularly the provisions pertaining to bonuses and benefits.
ARTICLE 4.
RESTRICTIVE COVENANTS
4.1 Use and Return of Documents and Property. Executive acknowledges that
in the course of his employment with the Company, he will have the opportunity
to inspect and use certain property, both tangible and intangible, of the
Company. All such property shall remain the exclusive property of the
Company, and Executive has and shall have no right or interest in such
property. Executive shall use Company property only during employment and
only in the performance of his job and to further the Company's interests, and
he will not remove Company property from the Company's premises except to the
extent necessary to perform his duties and to the extent approved by the
Company, either expressly or generally under its policies. Promptly upon the
Executive's Termination Date, Executive shall return to the Company all of the
Company's memoranda, notes, records, data, books, sketches, computer programs,
audio-visual materials, correspondence, lists, every piece of information
recorded in any form, and all other tangible property.
4.2 New Developments. Any discovery, invention, process or improvement
made or discovered by the Executive during the term of this Agreement in
connection with or in any way affecting or relating to the Business of the
Company (as then carried on or under active consideration) shall forthwith be
disclosed to the Company and shall belong to and be the absolute property of
the Company. The preceding sentence does not apply to any invention for which
no equipment, supplies, facility, trade secret information of the Company was
used and which was developed entirely on the Executive's own time, unless the
invention relates directly to the business of the Company or to its actual or
demonstrably anticipated research or development, or the invention results
from any work performed by the Executive for the Company.
4.3 Covenant Not to Compete. Executive agrees that, during the term of
his employment under this Agreement and for a period of one (1) year following
the Termination Date, regardless of the reasons for the Executive's
termination of employment, Executive will not, directly or indirectly,
expressly or tacitly, for himself or on behalf of any entity anywhere in the
Restricted Territory, (i) act as an officer, manager, advisor, executive,
controlling shareholder, or consultant to any business in which his duties at
or for such business include oversight of or actual involvement in providing
services which are competitive with the Business of the Company, (ii) recruit
investors on behalf of an entity which engages in activities which are
competitive with the Business of the Company, or (iii) become employed by such
an entity in any capacity which would require Executive to carry out, in whole
or in part, the duties Executive has performed for the Company which are
competitive with the Business of the Company. This covenant shall apply to
any services or products under investigation by the Company on the Termination
Date to the extent that the Executive initiated, promoted, participated in, or
otherwise had knowledge of such investigation. Executive acknowledges that
because of the nature of the Company's business, this restriction will prevent
the Executive from acting in any of the foregoing capacities for any competing
entity wherever located within the Restricted Territory and that this scope is
reasonable in light of the business of the Company.
4.4 Nonsolicitation of Customers, Clients and Suppliers. Executive
agrees that during the term of his employment with the Company, he will not,
directly or indirectly, without the Company's prior written consent, contact
any customer, client or supplier of the Company for business purposes
unrelated to furthering the Business of the Company. Executive further agrees
that for a period of one (1) year following his Termination Date, he will not
directly or indirectly, (i) contact, solicit or divert, or attempt to
contact, solicit, divert or take away, any customer, client or supplier of the
Company for purposes of, or with respect to, providing a customer, client or
supplier to a competing business; or (ii) take any affirmative action with a
customer, client or supplier of the Company for purposes of providing a
customer, client or supplier to a business competing with the Company. The
prohibitions of the preceding sentence shall apply only to customers, clients
and suppliers of the Company with whom the Executive had Material Contact on
the Company's behalf during the twelve months immediately preceding the
Termination Date. For purposes of this Agreement, the Executive had "Material
Contact" with a customer, client or supplier if (a) he had business dealings
with the customer, client or supplier on the Company's behalf; (b) he was
responsible for supervising or coordinating the dealings between the Company
and the customer, client or supplier; or (c) he obtained Proprietary
Information about the customer, client or supplier as a result of his
association with the Company.
4.5 Nonsolicitation of Employees. The Executive agrees that during his
employment with the Company and for one (1) year after his Termination Date,
the Executive will not, directly or indirectly, solicit or attempt to recruit
or hire any employees of the Company who were employed by the Company at any
time during the last year of the Executive's employment with the Company and
who are actively employed by the Company at the time of the solicitation or
attempted solicitation, to provide services similar to those performed by the
employee for the Company on behalf of, or for the purpose of engaging in
employment with, a competitor of the Company.
4.6 Nondisclosure of Trade Secrets and Proprietary Information. Except
to the extent reasonably necessary for Executive to perform his duties for the
Company, the Executive shall not, directly or indirectly, furnish or disclose
to any person, or use in any way, any trade secrets of the Company, for so
long as such trade secrets remain "trade secrets" under applicable state law.
Except to the extent reasonably necessary for Executive to perform his duties
for the Company, Executive shall not, during the term of his employment with
the Company and for a period of one (1) year following the Executive's
Termination Date, directly or indirectly, furnish or disclose to any person,
or use in any way, for personal benefit or the benefit of others, any
Proprietary Information of the Company.
4.7 Reasonableness. Executive has carefully considered the nature and
extent of the restrictions upon his and the rights and remedies conferred on
the Company under this Agreement, and Executive hereby acknowledges and agrees
that:
(a) the restrictions and covenants contained herein, and the rights and
remedies conferred upon the Company, are necessary to protect the goodwill and
other value of the business of the Company;
(b) the restrictions placed upon Executive hereunder are fair and
reasonable in time and territory, will not prevent him from earning a
livelihood, and place no greater restraint upon the Executive than is
reasonably necessary to secure the business and goodwill of the Company;
(c) the Company is relying upon the restrictions and covenants contained
herein in continuing to make available to Executive information concerning the
business of the Company;
(d) Executive's employment hereunder places him in a position of confidence
and trust with the Company and its employees, customers and suppliers; and
(e) the provisions of this section shall be interpreted so as to protect
the Proprietary Information, and to secure for the Company the exclusive
benefits of the work performed on behalf of the Company by the Executive under
this Agreement, and not to unreasonably limit his ability to engage in
employment and consulting activities in noncompetitive areas which do not
endanger the Company's legitimate interests expressed in this Agreement.
4.8 Remedy for Breach. Executive acknowledges and agrees that his breach
of any of the covenants contained in this Article of this Agreement will cause
irreparable injury to the Company and that remedies at law available to the
Company for any actual or threatened breach by the Executive of such covenants
will be inadequate and that the Company shall be entitled to specific
performance of the covenants in this Article or injunctive relief against
activities in violation of this Article by temporary or permanent injunction
or other appropriate judicial remedy, writ or order, without the necessity or
proving actual damages. This provision with respect to injunctive relief
shall not diminish the right of the Company to claim and recover monetary
damages against the Executive for any breach of this Agreement, in addition to
injunctive relief. The Executive acknowledges and agrees that the covenants
contained in this Article shall be construed as agreements independent of any
other provision of this or any other contract between the parties hereto, and
that the existence of any claim or cause of action by the Executive against
the Company, whether predicated upon this or any other contract, shall not
constitute a defense to the enforcement by the Company of said covenants.
ARTICLE 5.
TERMINATION OF EMPLOYMENT
5.1 Termination by Company.
(a) For Cause. During the two (2) year term of this Agreement, the Company
may terminate the Executive for "Cause" as defined in section 1.3 of this
Agreement effective immediately upon written notice to Executive. Upon such a
termination for "Cause," the Executive shall not be entitled to any severance
pay or post-termination benefits, other than as required by law.
(b) Without Cause. During the term of this Agreement, the Company may
terminate the Executive for any reason other than "Cause" upon thirty (30)
days' prior written notice to the Executive. For example, under this
provision, the Company may terminate this Agreement upon the Executive's
failure to meet the financial goals established by the Board, whether or not
the failure is willful. If such a termination occurs during the first year of
this Agreement, the Executive shall be entitled to severance pay in the amount
of three (3) months of his monthly base salary then in effect. If such a
termination occurs during the second year of this Agreement, the Executive
shall be entitled to severance pay in the amount of six (6) months of his
monthly base salary then in effect. If such a termination occurs anytime
after the initial term of this Agreement, and during a period in which this
Agreement has been renewed, the Executive shall be entitled to severance pay
in the amount of twelve (12) months of his monthly base salary then in effect.
The severance pay provided for herein shall be in lieu of any and all other
payments, bonuses or other compensation to which he may have been entitled,
which may be paid in a lump sum payment at the Company's discretion.
5.2 Termination by Executive. The Executive may voluntarily terminate his
employment with the Company and terminate this Agreement by giving the Board a
written notice at least sixty (60) days prior to his proposed date of
termination. Upon such a voluntary termination by the Executive, the
Executive shall not be eligible for any severance payment or benefit other
than those earned prior to his date of termination.
5.3 Automatic Termination. This Agreement shall terminate immediately
upon the death of Executive, or upon written notice from the Company to
Executive if Executive shall at any time become incapacitated by reason of a
Disability.
5.4 Cessation of Payment and Benefits. The base salary and other benefits
provided herein shall be paid to Executive through the effective date of
termination of this Agreement for whatever reason, including the death of
Executive, and not thereafter.
ARTICLE 6.
MISCELLANEOUS PROVISIONS
6.1 Invalidity of Any Provision. It is the intention of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws) of any provision hereof shall not render unenforceable
or impair the remainder of this Agreement which shall be deemed amended to
delete or modify, as necessary, the invalid or unenforceable provisions. The
parties further agree to alter the balance of this Agreement in order to
render the same valid and enforceable. The terms of the restrictive covenant
provisions of this Agreement shall be deemed modified to the extent necessary
to be enforceable and, specifically, without limiting the foregoing, if the
term of the applicable restrictive covenant is too long to be enforceable, it
shall be modified to encompass the longest term which is enforceable and, if
the scope of the geographic area of the applicable restrictive covenant is too
great to be enforceable, it shall be modified to encompass the greatest area
that is enforceable.
6.2 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
6.3 Arbitration. Any claim or dispute arising under this Agreement shall
be subject to arbitration, and prior to commencing any court action, the
parties agree that they shall arbitrate all controversies. The arbitration
shall be conducted in Atlanta, Georgia, in accordance with the Employment
Dispute Rules of the American Arbitration Association and the Federal
Arbitration Act, 9 U.S.C. 1, et. seq. The arbitrator(s) shall be authorized
to award both liquidated and actual damages, in addition to injunctive relief,
but no punitive damages. The arbitrator(s) may also award attorney's fees and
costs, without regard to any restriction on the amount of such award under
Georgia or other applicable law. Such an award shall be binding and
conclusive upon the parties hereto, subject to 9 U.S.C. 10. Each party shall
have the right to have the award made the judgment of a court of competent
jurisdiction.
6.4 Waiver of Breach. The waiver of a breach of any provision of this
Agreement by a party hereto shall not operate or be construed as a wavier of
any subsequent breach by the other party hereto.
6.5 Successors and Assigns. This Agreement shall inure to the benefit of
the Company, and its respective successors and assigns. This Agreement shall
inure to the benefit of and be enforceable by the Executive's estate and/or
legal representatives.
6.6 Assignment of Agreement. This Agreement is not assignable by the
Executive, but shall be freely assignable by the Company to any successor with
the written consent of the Executive. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
6.7 Notices. All notices, demands and other communications hereunder
shall be in writing and shall be delivered in person or deposited in the
United States mail, certified or registered, with return receipt requested, as
follows:
(a) if to Executive: Xx. Xxxx X. Xxxxxxx
[Information Needed]
_____________________
(b) if to Company: Metrotrans Corporation
Attention: Board of Directors
[Information Needed]
________________________
(with a copy to the Chairman of each Board Committee)
6.8 Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof. All understanding and
agreements heretofore made between the parties hereto with respect to the
subject matter of this Agreement are merged into this document which alone
fully and completely expresses their agreement. This Agreement may not be
changed orally but only by an agreement in writing signed by both parties.
6.9 Survival of Provisions. The provisions of Article 4 - Restrictive
Covenants shall survive termination of this Agreement.
6.10 Captions. The captions appearing in this Agreement are inserted only
as a matter of convenience and in no way define, limit, construe or describe
the scope or intent of any provisions of this Agreement or in any way affect
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of this _____________ day of July, 1999.
[signatures on next page]
EXECUTIVE:
/s/ Xxxx X. Xxxxxxx
XXXX X. XXXXXXX
COMPANY:
METROTRANS CORPORATION
By: /s/ Xxxxxxx X. Xxxx III
Xxxxxxx X. Xxxx III
Title: [Information Needed]
[THIS AGREEMENT HAS BEEN EXECUTED IN DUPLICATE.]
ATLANTA:4108194.1
Xxxxxxx Employment Agreement
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