CONSULTING AGREEMENT
EXHIBIT 10.2
This
Consulting Agreement (the “Agreement”) is made and entered into effective as of
December 1, 2005 (the “Effective Date”) by and between Frozen Food Express
Industries, Inc. (“FFE”) and F. Xxxxx XxXxxxx, Xx. (“Consultant”).
RECITALS
WHEREAS,
Consultant’s employment with FFE terminated effective on or about November 29,
2005;
WHEREAS,
Consultant, as the former Chief Financial Officer (“CFO”) of FFE, has
specialized knowledge regarding FFE’s financial management and related matters;
and
WHEREAS,
FFE desires that Consultant complete such tasks and projects as may reasonably
be designated from time to time by FEE, and Consultant agrees to perform
such
consulting services as an independent contractor on the terms and subject
to the
conditions set forth in this Agreement;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants
and
agreements contained herein, as well as other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto
agree as follows:
1. Engagement.
FFE
hereby engages Consultant to render consulting services, as an independent
contractor, to FFE upon the terms and conditions set forth in this Agreement.
2. Terms
of Engagement.
a. Nature
of Services and Engagement.
During
the Consulting Term, as defined under Section 3 below, Consultant shall
perform
services to or for the benefit of FFE by completing such tasks and projects
as
may reasonably be designated from time to time by the Chairman, President
and
Chief Executive Officer and/or the Executive Vice President and Cheif Operating
Officer of FFE. Consultant shall attend meetings and conferences as may
be
directed by FFE from time to time. Consultant shall endeavor to promote
the
interests of FFE and all services rendered by Consultant on behalf of FFE
shall
be performed to the best of his abilities and in furtherance of the welfare
and
objectives of FFE.
b. Independence
of Consultant.
The
parties agree that Consultant is an independent contractor. Nothing in
this
Agreement shall in any way be construed to constitute Consultant as an
agent,
employee, or representative of FFE. Consultant will work independently
and
exercise his own judgment, without official hours or a prescribed minimum
number
of hours worked per week. FFE shall not exercise control over the means
or
methods of Consultant’s work or his day-to-day activities, except that
Consultant shall comply with all applicable local, state, and federal laws,
rules, and regulations and complete all assigned projects in a thorough,
professional, and timely manner.
c. Authority
to Enter Into Agreements.
Consultant shall have no power or authority to act, bind, make commitments,
or
enter into contracts or agreements on behalf of FFE, and Consultant may
not hold
himself out as an employee, officer, director, or agent of FFE.
d. Equipment,
Tools, Materials or Supplies.
Consultant shall supply, at his sole expense, all equipment, tools, materials,
and/or supplies necessary for the provision of services under this Agreement,
except that FFE shall provide Consultant with access to its computer system
as
needed.
3. Consulting
Term and Termination.
a. Consulting
Term.
The
Consulting Term shall be for three (3) years and begin on the Effective
Date of
this Agreement and continue through November 30, 2008.
b. Termination.
This
Agreement may be terminated prior to the expiration of the Consulting Term
by
either party upon thirty (30) days’ prior written notice to the other party but
only for a material breach of this Agreement. In addition, FFE may terminate
this Agreement immediately and without prior written notice if Consultant
refuses or is unable to perform the services to be performed hereunder,
whether
by reason of Consultant’s death or disability or otherwise.
4. Compensation.
As
compensation for the services to be rendered by Consultant to FFE pursuant
to
this Agreement, Consultant shall be paid the compensation and other benefits
described below:
a. Consulting
Fee.
FFE
shall pay to Consultant a one-time fee of $75,000.00 or the pro rata share
of
the bonus payment under the 2005 Executive Bonus And Restricted Stock Plan,
whichever is greater, as described in the Severance Agreement between the
parties, dated November 29, 2005, and incorporated herein by
reference.
b. Reimbursement
of Expenses.
FFE
shall not be liable for any expense paid or incurred by Consultant other
than
those that are pre-approved in writing by FFE and have been documented
and
itemized by Consultant.
c. Benefits.
Consultant shall
not
be entitled to, nor receive any company-sponsored benefits normally provided
to
FFE’s employees, including, but not limited to, training, retirement, vacation,
holidays, leaves of absence, or sick pay. FFE will not provide health,
life,
dental, or disability insurance to Consultant, and will not make unemployment
insurance or disability insurance contributions nor obtain workers’ compensation
insurance on Consultant’s behalf. Consultant
shall carry his own insurance and agrees to assume any risk incidental
to his
entry upon the premises of FFE and travel to and from the location at which
services are to be performed.
d. Taxes.
FFE
shall
not be responsible for withholding federal, state, or local income taxes,
or any
other taxes or social security payments, from any sum paid to Consultant
under
this Agreement. Consultant shall be solely responsible for filing all returns
and paying any income, social security, or other tax levied upon or determined
with respect to the payments made to Consultant pursuant to this Agreement.
Consultant
agrees to indemnify FFE for all such tax liability, including interest
and
penalties, if any.
5. Confidential
Information.
a. Promise
to Provide Confidential Information.
FFE
promises that it will, immediately upon Consultant’s execution of this
Agreement, provide Consultant with Confidential Information, as this term
is
defined in Section 5(b) below, including but not limited to the information
attached hereto as Exhibit A. Consultant acknowledges that FFE has invested
substantial time, money and effort in developing its Confidential Information,
that this Confidential Information is a valuable, special and unique asset
of
FFE, that FFE would sustain great loss if such information were improperly
used
or disclosed, and that the protection and maintenance of FFE’s Confidential
Information constitute legitimate interests to be protected by FEE by the
covenants set forth in Section 6 below.
b. Non-Disclosure.
Consultant acknowledges that, by signing this Agreement, he acknowledges
delivery and receipt of confidential information relating to the business,
financial affairs, services, operations, and/or activities of FFE or its
affiliates, including without limitation accounting information, financial
information, financial analyses, budgets, and forecasts, marketing strategies,
business development plans, research and development, methods of doing
business,
information about employees and employment practices, trade secrets, market
reports, customer information (including but not limited to customer lists,
customer research and investigations, customer sales, and customer financial
information), vendor information (including without limitation vendor lists,
vendor prices, services, and contracts), freight charges, routes, schedules,
rates, tariffs, and prices charged to customers and other similar information
that is proprietary information of FFE or its affiliates (collectively
referred
to as “Confidential Information”). Consultant will not for any reason divulge,
use, furnish, disclose, or make accessible, for his own benefit or the
benefit
of any person or entity with which he may be associated, any Confidential
Information to any person, firm, corporation, association, or other entity
for
any reason or purpose whatsoever without FFE’s prior written consent.
Confidential Information does not include information which has become
publicly
known and made generally available through no wrongful act of Consultant
or
which has been rightfully received by Consultant from a third party authorized
to make such disclosure.
c. Return
of Confidential Information and Records. All
records, files, materials, and Confidential Information obtained by Consultant
are confidential and proprietary and shall remain the exclusive property
of FFE
or its affiliates, as the case may be. Upon the end of the Consulting Term,
Consultant will not take with him, unless authorized in writing by FFE,
data,
formulations, compositions, reports, letters, memoranda, notes, magnetic
or
electronic media, or any writing or documents whatever, or copies thereof,
which
reflect or deal with Confidential Information, and Consultant will promptly
deliver to FFE any of the foregoing which may be in his possession or control.
d. Remedies
for Breach of Confidentiality Covenants.
Consultant acknowledges and agrees that his breach of the confidentiality
provisions of this Agreement could not be adequately compensated with monetary
damages or other legal remedies and would irreparably injure FFE and,
accordingly, that FFE shall be entitled to temporary and permanent injunctive
relief without the necessity of independent proof by it as to the inadequacy
of
legal remedies or the nature or extent of the irreparable harm suffered
by it,
and that specific performance shall be an appropriate remedy. Consultant
waives
any claim or defense that there is an adequate remedy at law for such breach.
Nothing in this Section 5(c) shall be construed to prevent FFE from pursuing
any
and all other legal or equitable remedies available to it for such breach
or
threatened breach, including without limitation the recovery of monetary
damages.
e. Survivability.
The
provisions of this Section 5 will survive the termination of the Agreement
and
shall be binding upon Consultant’s successors and assigns.
6. Non-Competition
and Non-Solicitation Agreement.
a. Non-Competition.
During
the Consulting Term, Consultant shall not, directly or indirectly, engage
or be
engaged in any managerial or executive capacity in any refrigerated trucking
business within the continental United States in which FFE provides refrigerated
trucking services, either as an individual, or as an employee, associate,
partner, member, stockholder, consultant, owner, manager, agent or otherwise
or
by means of any corporate or other device, either on his own behalf or
on behalf
of others.
b. Non-Solicitation.
During
the Consulting Term, Consultant shall not (i) on
his
own behalf or on behalf of any other person or entity, solicit, divert
or
recruit any person who is, during such time frame, an employee of FFE to
leave
such employment or in any other manner attempt, directly or indirectly,
to
influence, induce, or encourage any employee of FFE to leave the employment
of
FFE;
or
(ii) cause or assist anyone to cause any of the customers of FFE with whom
Consultant communicated, dealt with, or became acquainted prior to or during
the
Consulting Term to enter into contractual arrangements with himself or
any other
person, firm, partnership, corporation, or other company in any business
or
activity that is in competition with FFE.
c. Reasonableness
of Restrictions.
Consultant has carefully read and considered the provisions of this Section
6
and, having done so, agrees that the restrictions set forth herein, including,
but not limited to, the time period of restriction, the geographic areas
of
restriction, and the scope of the restriction are fair and reasonable,
are
supported by sufficient and valid consideration, and these restrictions
do not
impose any greater restraint than is necessary to protect the Confidential
Information, goodwill, and other legitimate business interests of FFE.
Consultant acknowledges that these restrictions will not cause him undue
hardship; that there are numerous other employment and business opportunities
available to him that are not affected by these restrictions; and that
Consultant’s ability to earn a livelihood without violating such restrictions is
a material condition to this Agreement.
d. Violation
of Restrictions.
Consultant
acknowledges that compliance with the non-competition and non-solicitation
restrictive covenants contained in this Section 6 is necessary to protect
the
Confidential Information, business, and goodwill of FFE. Consultant also
acknowledges that a breach of such covenants will result in irreparable
and
continuing damages to FFE, for which money damages may be an insufficient
remedy
to FFE. Further, Consultant acknowledges that the ascertainment of the
full
amount of damages in the event of Consultant’s breach of any provision of this
Agreement would be difficult. Consequently, Consultant agrees that, in
the event
of a breach or threatened breach of any of the restrictive covenants contained
in this agreement, that the parties, in addition to all other remedies
they may
have, shall be entitled to both (a) temporary, preliminary and/or permanent
injunctive relief to restrain the breach of or otherwise to specifically
enforce
any of the covenants in order to prevent the continuation of such harm;
and (b)
money damages insofar as they can be determined.
7. Breach
of this Agreement.
If,
during the Consulting Term, Consultant violates any of the terms of this
Agreement, Consultant will return to FFE the full amount of the Consulting
Fee
within ten (10) business days of written notification by FFE that Consultant
has
violated the terms of this Agreement.
8. Indemnification.
Consultant agrees to indemnify and hold harmless FFE, its officers, directors,
and employees from and against all taxes, losses, damages, liabilities,
costs,
and expenses, including attorneys’ fees and costs of court, arising directly or
indirectly from any negligent, reckless, or intentionally wrongful act
of
Consultant or Consultant’s assistants, employees, or agents; a determination by
a court or agency that Consultant is not an independent contractor; and
any
breach by Consultant or his assistants, employees, or agents of any of
the
covenants contained in this Agreement.
9. Severability
and Modification.
It is
the desire and intent of the parties that the provisions of this Agreement
be
enforced to the fullest extent permissible under the laws and public policies
of
the State of Texas. If any provision is adjudicated to be invalid or
unenforceable, the invalid or unenforceable provision shall be deemed amended
in
such manner as to render it enforceable and to effectuate as nearly as
possible
the intentions and agreement of the parties. If any provision of this Agreement
is held illegal, invalid, or unenforceable, in whole or in part, by a court
of
competent jurisdiction, then it is the intent of the parties hereto that
the
balance of this Agreement be enforced to the fullest extent permitted by
applicable law and, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as part of this Agreement
a
provision as similar in its terms to such invalid provision as may be possible
and be legal, valid, and enforceable.
10. Independent
Consideration.
The
covenants contained herein each constitute a separate agreement independently
supported by good and adequate consideration and each such agreement shall
be
severable from the other provisions of this Agreement and shall survive
this
Agreement. The existence of any claim or cause of action of Consultant
against
FFE, whether predicated on this Agreement or otherwise, shall not constitute
a
defense to the enforcement by FFE of the covenants and agreements of Consultant
set forth herein.
11. No
Obligation to Use Services and Cap on Services.
Notwithstanding any other provision of this Agreement, FFE shall have no
obligation to actually utilize Consultant’s services. FFE’s obligations to
Consultant under this Agreement shall be fully performed by the payment
to
Consultant of the Consulting Fee which FFE is obligated to pay Consultant
following the execution of this Agreement, subject to all of FFE’s rights
hereunder. Consultant shall have no obligation to render services beyond
five
(5) hours per month to FFE; if services are requested by FFE that would
require
additional time commitments, the parties shall endeavor to agree upon a
reasonable compensation to Consultant for such additional working
time.
12. Waiver
and Breach.
A
party’s failure at any time to require performance by the other party of any
provision hereof shall not affect the party’s right thereafter to enforce the
same, nor shall the waiver by any party of any breach of any provision
hereof be
construed as a waiver of any succeeding breach of any provision or as a
waiver
of the provision itself.
13. Breach
by FFE.
No act
or omission of FFE hereunder shall constitute a breach of this Agreement
unless
Consultant shall first notify FFE in writing setting forth in reasonable
detail
the alleged breach and FFE shall not cure the alleged breach within thirty
(30)
days after receipt of said notice. If FFE fails to cure a material breach
of its
obligations under this Agreement as herein provided, Consultant may terminate
this Agreement by written notice to FFE delivered to FFE within five (5)
business days after the expiration of the applicable cure period or any
further
cure period to which the parties may agree.
14. Attorneys’
Fees.
In the
event of any suit or judicial proceeding between the parties hereto with
respect
to this Agreement, the prevailing party shall, in addition to such other
relief
as the court may award, be entitled to reasonable attorneys’ fees and
costs.
15. Modification.
No
change or modification of this Agreement shall be valid or binding upon
the
parties hereto, nor shall any waiver of any term or condition in the future
be
so binding, unless such change or modification or waiver is in writing
and
signed by all of the parties hereto.
16. Notices.
All
notices hereunder shall be in writing and shall be delivered by hand or
mailed
within the continental United States by first class, registered, or certified
mail, return receipt requested, postage and registry fees prepaid. Such
notices
shall be deemed to have been duly given upon receipt, if personally delivered,
and, if mailed, upon three (3) days after the date of mailing (two days
in the
case of overnight mail), in each case addressed to the parties at the following
addresses or at such other addresses as shall be specified in writing and
in
accordance with this Section:
If
to
FFE: Xxxxxxx
X. Xxxxxxxxx
Executive
Vice President and Chief Operating Officer
Frozen
Food Express Industries, Inc.
0000
Xxxxxx Xxxxxxx Xxxxx
Xxxxxx,
Xxxxx 00000-0000
If
to
Consultant:
F.
Xxxxx
XxXxxxx, Xx.
0000
Xxxx
Xxxx Xxxxx
Xxxxxx,
Xxxxx 00000
17. Entire
Agreement:
The
matters set forth in this Agreement, along with the Severance Agreement
between
the parties, dated November 29, 2005, constitute the entire agreement between
Consultant and the Company and supersede all prior agreements, negotiations,
and
discussions between the parties hereto and/or their respective counsel
with
respect to the subject matter hereof. No other representations, covenants,
undertakings, or other prior or contemporaneous agreements, oral or written,
regarding the matters set forth in this Agreement shall be deemed to exist
or
bind any of the parties hereto. Each party understands and agrees that
it has
not relied on any statement or representation by the other party or any
of its
representatives in entering into this Agreement.
18. Assignment.
FFE
shall have the right to assign this Agreement and its obligations hereunder
to
any successor in interest. The rights, duties, and benefits to Consultant
hereunder are personal to Consultant and no such right or benefit may be
assigned by Consultant.
19. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Texas.
20. Counterparts.
This
Agreement may be executed in counterparts, each of which will constitute
one
document.
21. Headings.
The
captions, headings, and arrangements used in this Agreement are for convenience
only and do not in any way affect, limit, amplify, or modify the terms
and
provisions hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the date written above.
CONSULTANT:
| /s/ F. Xxxxx XxXxxxx, Xx. |
| F. Xxxxx XxXxxxx, Xx. |
Date
FROZEN
FOOD EXPRESS INDUSTRIES, INC.:
| By: | /s/ Xxxxxx X. Xxxxxx, Xx. |
| Its: | President, Chairman and Chief Executive Officer |
Date
