EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of August 5th ,
2004, by and between Trailer Bridge, Inc. (the "Company"), and Xxxx X. XxXxxx,
Xx.(the "Executive").
WHEREAS, the Company desires to continue to employ Executive in
accordance with the terms and conditions stated in this Agreement; and
WHEREAS, Executive desires to continue that employment pursuant to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and undertakings stated herein, the parties agree as follows:
I. Employment
1.1 Employment As Executive. The Company hereby agrees to employ
Executive as Chairman & Chief Executive Officer ( hereafter "CEO") for a two
year term commencing the effective date of this Agreement. Executive accepts
such employment pursuant to the terms of this Agreement. Executive shall have
general and active management of the business and affairs of the Company,
subject to the control of the Board. Executive shall from time to time make such
reports of the affairs of the Company as the Board may require and shall perform
such other duties as the Board may from time to time determine. The Stockholders
have passed a resolution appointing Executive to the Company's Board.
1.2 Term. After the initial two year term, this Agreement will
automatically be renewed for additional one year terms if Executive or the
Company fail to give the other party written notice of intent not to renew six
(6) months or more prior to the Agreement's termination date.
1.3 Exclusive Services. Executive agrees to devote his full time,
attention, and energy to performing his duties and responsibilities to the
Company under this Agreement during the period that this Agreement is in effect.
Notwithstanding the foregoing, the Executive may (i) serve on the boards of
directors or equivalent bodies of nonprofit organizations and business entities,
(ii) undertake outside speaking and writing engagements, and (iii) continue to
engage in private investment activities, in each case provided that none of the
foregoing activities materially interferes with the performance of the
Executive's duties hereunder or creates a potential business conflict or the
appearance thereof. The Company hereby acknowledges that the Executive shall be
entitled to continue serving as a member of the board of directors of Firstmark
Corporation provided that such service does not, in the future, materially
interfere with the performance of the Executive's duties hereunder or create a
potential business conflict or the appearance thereof. The Executive shall be
entitled to retain any compensation received on account of services rendered in
accordance with this Section.
II. Compensation, Equity Ownership, Benefits, and Perquisites
2.1 Salary. During the term of this Agreement, the Company shall
continue to pay Executive a salary at the annual rate of $298,320, the level of
Executive's salary since August, 2002. The salary shall be payable in accordance
with the Company's standard payroll policy. Executive's salary shall be
increased only by formal action of the Company's Compensation Committee and
Board of Directors. The salary shall be reviewed by the Compensation Committee
on an annual basis.
2.2 Vacations. Executive shall be entitled to four (4) weeks of paid
vacation.
2.3 Bonuses. Bonuses shall be determined by the Compensation Committee.
The target bonus which shall serve as a guidepost for the committee will be 100%
of salary. Executive's cash bonuses shall be payable within 30 days following
the issuance of the year end audit by the Company's outside auditing firm. The
Committee may also consider bonuses in the form of restricted stock or options.
All bonuses including cash, restricted stock and stock options shall be subject
to the approval of the Board of Directors
2.4 Employee Benefits. Executive shall be entitled to the benefits and
perquisites which the Company generally provides to its other executive
employees under the applicable Company plans and policies. Executive's
participation in such benefit plans shall be on the same basis as applies to
other executive employees of the Company and subject to the terms of applicable
law, plan documents, and insurance policies.
2.5 Employment Taxes and Withholding. Executive recognizes that the
compensation, benefits, and other amounts provided by the Company under this
Agreement may be subject to federal, state, or local income taxes. All such
taxes shall be the responsibility of the Executive. To the extent that federal,
state, or local law requires withholding of taxes on compensation, benefits, or
other amounts provided under this Agreement, the Company shall withhold the
necessary amounts from the amounts payable to Executive under this Agreement.
2.6 Expenses. Executive shall be entitled to receive reimbursement from
the Company (in accordance with the policies and procedures then in effect for
the Company's employees) for all reasonable travel and other expenses incurred
by him in connection with his services under this Agreement.
III. Termination of Executive's Employment
3.1 Termination of Employment. Executive's employment under this
Agreement may be terminated by the Company at any time for any reason; provided
however, that if Executive's employment is terminated by the Company without
Cause after the effective date of this Agreement, he may be entitled to receive
severance pay. If Executive is terminated without Cause after the effective date
of this Agreement, Executive shall be entitled to receive twelve month's
severance pay at the time of his termination. For purposes of this Agreement,
"Cause" shall mean (i) any indictment or information being filed against
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Executive involving fraud, embezzlement, theft, dishonesty or other criminal
conduct, (ii) any breach of fiduciary duty by Executive, or (iii) any breach by
Executive not remedied within ten (10) days after written notice thereof from
the Company's Board of Directors. Executive's employment under this Agreement
may be terminated by Executive at any time for any reason. The termination shall
be effective as of the date specified by the party initiating the termination in
a written notice delivered to the other party, which date shall not be earlier
than the date such notice is delivered to the other party. Except as expressly
provided to the contrary in this Agreement or applicable law, Executive's rights
to compensation and benefits shall cease on the date his employment under this
Agreement terminates. Resignation by Executive following a material breach of
this Agreement by the Company will be treated as a termination without Cause.
3.2 Executive's Disability. In the event that Executive becomes unable
to perform the essential duties of his position as CEO for more than thirty (30)
days, due to a mental or physical disability, the Company shall pay Executive
his monthly base salary for up to a nine (9) month period. At the conclusion of
the nine (9) month disability leave of absence, if Executive is unable to return
to work, Executive's employment under this Agreement shall terminate. If
Executive returns to work prior to the conclusion of the nine (9) month
disability leave and subsequently, due to the same mental or physical
disability, becomes again unable to perform for more than thirty (30) days, he
shall be entitled to receive his monthly base salary for the remainder of his
original nine (9) month leave period. If Executive is unable to return to work
following the conclusion of such subsequent disability leave of absence,
Executive's employment under this Agreement shall terminate.
3.3 Termination for Death. The Executive's employment shall terminate
upon the Executive's death. In that event, the Company shall pay Executive's
estate the equivalent of nine month's severance pay and shall continue
Executive's family health care benefits for such nine-month period as well.
IV. Non-Competition, Confidentiality and Trade Secrets
4.1 Agreement Not to Compete. Executive agrees that, on or before the
date that is nine months after the date Executive's employment under this
Agreement terminates under Section 3.1, he will not, unless he receives the
prior written approval of the Company or unless the Company is in default
hereunder or Executive's employment has been terminated by the Company without
Cause, directly or indirectly engage in any of the following actions:
(a) Own an interest in (except as provided below), manage,
operate, join, control, lend money or render financial or other assistance to,
or participate in or be connected with, as an officer, employee, partner,
stockholder, consultant or otherwise, any entity whose products or services
compete directly with the Company in North America. However, nothing in this
subsection (a) shall preclude Executive from holding less than one percent of
the outstanding capital stock of any corporation required to file periodic
reports with the Securities and Exchange Commission under Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, the securities of which are
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listed on any securities exchange, quoted on the National Association of
Securities Dealers Automated Quotation System, or traded in the over-the-counter
market.
(b) Intentionally solicit, endeavor to entice away from the
Company, or otherwise interfere with the relationship of the Company, any person
who is employed by or otherwise engaged to perform services for the Company,
(including, but not limited to, any independent sales representatives or
organizations), or any persons or entity who is, or was within the then most
recent 12-month period, a customer or client of the Company, whether for
Executive's own account or for the account of any other individual, partnership,
firm, corporation or other business organization.
If the scope of the restrictions in this Section 4 are determined by a court of
competent jurisdiction to be too broad to permit enforcement of such
restrictions to their full extent, then such restrictions shall be construed or
rewritten so as to be enforceable to the maximum extent permitted by law, and
Executive hereby consents, to the extent he may lawfully do so, to the judicial
modification of the scope of such restrictions in any proceeding brought to
enforce them.
4.2 Confidential Information. Executive acknowledges that, as CEO, he
will be exposed to the Company's Trade Secrets and Confidential Information. He
therefore agrees to be subject to the following provisions:
(a) At no time will Executive, directly or indirectly to the
detriment of the Company or its commercial interest, disclose to any third
party (including any person, firm, or corporation) any Trade Secrets and
Confidential Information of the Company other than an employee or affiliate of
the Company, an insurance company that provides insurance coverage to the
Company, a consultant engaged by the Company or an applicant for employment by
the Company, in each case only on a need-to-know basis in the course of the
Company's business.
(b) Upon termination of his employment as CEO, Executive
agrees that all documents, records, notebooks, computer storage cards, tapes or
discs or similar repositories of information, including copies thereof,
available to him as a result of his employment as CEO under this Agreement will
be left with the Company (unless he is engaged by the Company in another
capacity or as the parties may otherwise agree).
(c) As used herein "Trade Secrets and Confidential Information" of
the Company includes any plan, method, or know-how, in connection with all
phases of the Company's business, including, without limitation, systems,
procedures, software, manuals, confidential reports, customer lists, lists of
temporary employees, financial information (including the revenues, costs or
profits associated with any of the Company's activities), business plans,
prospects or opportunities and bidding practices and information disclosed to
Executive by the Company or any employee or representative of the Company,
whether or not acting in such capacity, as a consequence of his or her past,
present, or future relationship with the Company.
(d) The foregoing obligations of confidentiality shall not
apply to any knowledge or information that (i) is now or subsequently becomes
generally publicly known, (ii) is independently made available to Executive in
good faith by a third party who has not violated a confidential relationship
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with the Company, (iii) is required to be disclosed by legal process, other
than as a direct or indirect result of the breach of this Agreement by
Executive or (iv) is already known to Executive other than solely as a result
of his duties as an independent contractor for the Company.
4.3 Remedies. Executive acknowledges that the Company's remedy at law
for any breach or threatened breach by Executive of Section 4.1 or Section 4.2
will be inadequate. Therefore, the Company shall be entitled to injunctive and
other equitable relief restraining Executive from violating those requirements,
in addition to any other remedies that may be available to the Company under
this Agreement or applicable law.
5. Assignment of Inventions and Original Works
5.1 Inventions and Original Works Assigned to the Company. Executive
hereby agrees to make prompt written disclosure to the Company, to hold in trust
for the sole right and benefit of the Company, and hereby assigns to the Company
all of Executive's right, title and interest in and to any patents, ideas,
inventions, original works of authorship, developments, improvements or trade
secrets which Executive may solely or jointly conceive or reduce to practice, or
cause to be conceived or reduced to practice, during the period of this
Agreement if such idea, invention, original works of authorship, developments,
improvements, or trade secrets are in any way directly or indirectly, related to
the Company's business as now conducted or as may be conducted in the future.
5.2 Works Made for Hire. Executive acknowledges that all original works
of authorship which are made by Executive (solely or jointly with others) within
the scope of this Agreement and which are protected by copyright are "works made
for hire," as that term is defined in the United States Copyright Act (17
U.S.C., Section 101).
5.3 Obtaining Letters Patent, Copyright Registrations and Other
Protections.
(a) Executive agrees to assist the Company in every proper way
to obtain and enforce United States and foreign proprietary rights relating to
any and all inventions, original works of authorship, developments, improvements
or trade secrets of the Company in any and all countries. To that end, Executive
shall execute, verify and deliver (A) such documents and perform such other acts
(including appearing as a witness) as the Company may reasonably request for use
in applying for, obtaining, perfecting, evidencing, sustaining and enforcing
such proprietary rights and the assignment thereof and (B) assignments of such
proprietary rights to the Company or its designee.
(b) Executive's obligation to assist the Company with respect
to proprietary rights in any and all countries shall continue beyond the
termination of Executive's employment, but the Company shall compensate
Executive at a reasonable rate after the termination of this Agreement for the
time actually spent by Executive at the Company's request on such assistance.
(c) In the event the Company is unable for any reason, after
reasonable effort, to secure Executive's signature on any document needed in
connection with the actions specified in the preceding paragraph, Executive
hereby irrevocably designates and appoints the Company and its duly authorized
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officers and agents as Executive's agent and attorney-in-fact, to act for and on
Executive's behalf to execute, verify and file any such documents and to do all
other lawfully permitted acts to further the purposes of the preceding paragraph
with the same legal force and effect as if executed by Executive. Such
appointment is coupled with an interest. Executive hereby waives and quitclaims
to the Company any and all claims of any nature whatsoever which Executive now
or may hereafter have for infringement of any proprietary rights assigned to the
Company.
VI. No Violation of Other Agreements
6.1 Non-contravention. Executive represents and agrees that neither (a)
Executive's entering into this Agreement nor (b) Executive's carrying out the
provisions of this Agreement will violate any other agreement (oral or written)
to which Executive is a party or by which Executive is bound.
VII. Miscellaneous
7.1 Amendment. This Agreement may be amended only in a writing that is
signed by both parties.
7.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to the employment of the Executive by the Company.
There are no other agreements, conditions, or representations, oral or written,
expressed or implied, with regard thereto. This Agreement supersedes all prior
agreements, promises, and representations relating to the employment of
Executive by the Company.
7.3 Assignment. The Company may in its sole discretion assign this
Agreement to any entity which succeeds to the business of the Company through
merger, consolidation, a sale of all or substantially all of the assets of the
Company, or any similar transaction. Executive acknowledges that the services to
be rendered by him are unique and personal. Accordingly, Executive may not
assign any of his rights or obligations under this Agreement, provided that the
rights and obligations set forth herein with respect to the Shares shall apply
to any transferee of the Shares.
7.4 Successors. Subject to Section 7.3, the provisions of this
Agreement shall be binding upon the parties hereto, upon any successor to or
assign of the Company, and upon Executive's heirs and the personal
representative of Executive or Executive's estate.
7.5 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested. Any notice by mail shall be addressed
as follows:
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If to the Company, to:
Xxxxxxx X. Xxxxxxx, Xx.
Executive Vice President & General Counsel
Trailer Bridge, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
If to Executive, to:
Xxxx X. XxXxxx, Xx.
00 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
or to such other addresses as either party may be designate in writing to the
other party from time to time.
7.6 Return of Records and Property. Upon termination of his employment
with the Company, Executive shall promptly deliver to the Company any and all
Company records and any and all Company property in his possession or under his
control, including without limitation manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, printouts, computer disks,
computer tapes, source codes, data, tables or calculations and all copies
thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company and all
copies thereof, and keys, access cards, access codes, passwords, credit cards,
personal computers, telephones and other electronic equipment belonging to the
Company.
7.7 Separate Representation. Executive hereby acknowledges that he has
sought and received independent advice from counsel of Executive's own selection
in connection with this Agreement and has not relied to any extent on any
representative or counsel of the Company in deciding to enter into this
Agreement.
7.8 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement or of any subsequent breach
by such party of a provision of this Agreement. No waiver by the Company shall
be valid unless in writing and signed by a person authorized to do so by the
Board of Directors of the Company.
7.9 Severability. If any one or more of the provisions (or portions
thereof) of this Agreement shall for any reason be held by a final determination
of a court of competent jurisdiction to be invalid, illegal, or unenforceable in
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any respect, such invalidity, illegality, or unenforceability shall not affect
any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal, or unenforceable provision shall be deemed replaced by a
provision that is valid, legal, and enforceable and that comes closest to
expressing intention of the parties.
7.10 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of law principles.
7.11 Headings. The headings of articles and sections herein are
included solely for convenience and reference and shall not control the meaning
of interpretation of any of the provisions of this Agreement.
7.12 Counterparts. This Agreement may be executed by either of the
parties in counterparts, each of which shall be deemed to be an original, but
all such counterparts shall constitute a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.
Trailer Bridge, Inc.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Its: Chairman, Compensation Committee
By: /s/ Xxxx X. XxXxxx
-------------------------------------
Xxxx X. XxXxxx, Xx.
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