EXHIBIT 10.23
EMPLOYMENT AGREEMENT dated as of January
13, 2000 (this "Agreement"), between CONEX
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ACQUISITION CORPORATION, a Delaware corporation
(the "Company"), and XXXXXXX XXXXXX (the
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"Employee").
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The Company is a wholly-owned subsidiary of Pacer International Inc., a
Tennessee corporation ("Pacer"). The Company and the Employee are parties to an
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Asset Purchase Agreement dated as of December 31, 1999 (the "Purchase
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Agreement"), between, among others, the Company, Conex Global Logistics
Services, Inc., a California corporation ("Conex "), MSL Transportation Group,
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Inc., a California corporation ("MSL"), Jupiter Freight, Inc., a California
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corporation ("Jupiter"; and together with Conex and MSL, the "Sellers") and the
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Employee. Pursuant to the terms of the Purchase Agreement, the Company is
acquiring from the Sellers substantially all of the assets of the Sellers and is
assuming certain specified liabilities of the Sellers. The execution and
delivery of this Agreement by the Company and the Employee is a condition to the
closing of the transactions contemplated by the Purchase Agreement.
The Employee has been involved in the business of the Sellers as an
officer, director, employee and shareholder of each Seller; the Employee has
developed close working relationships with key customers and suppliers of each
Seller; and the involvement by the Employee in a business in competition with
the Company would diminish the value of the assets being acquired by the Company
from the Sellers pursuant to the Purchase Agreement. As a material inducement
to the Company to enter into the Purchase Agreement and to consummate the
transactions contemplated thereby, the Employee has agreed to execute and
deliver this Agreement, and as a material inducement to the Employee to enter
into the Purchase Agreement and to consummate the transactions contemplated
thereby, the Company has agreed to execute and deliver this Agreement.
ACCORDINGLY, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee hereby agree as set forth below.
Section 1. Duties.
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On the terms and subject to the conditions contained in this Agreement, the
Employee will be employed as the President of the Freight and Warehousing
Division of the Company, and shall perform such duties and services consistent
with such position as may reasonably be assigned to the Employee from time to
time by the Board of Directors of the Company (the "Board") or the more senior
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officers of the Company. The Employee will have such authority as is reasonably
necessary to perform such duties hereunder.
Section 2. Term.
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Unless sooner terminated in accordance with the applicable provisions of
this Agreement, the Employee's employment hereunder shall be for the period
(including any extensions thereof,
the "Employment Period") commencing on the date hereof (the "Commencement Date")
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and ending on the second anniversary of the date hereof.
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Section 3. Time to be Devoted to Employment.
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During the Employment Period, the Employee will devote substantially all of
the Employee's working energies, efforts, interest, abilities and time to the
business and affairs of the Company and its affiliates. The Employee will not
engage in any other business or activity which, in the reasonable judgment of
the Board, would conflict or interfere with the performance of the Employee's
duties as set forth herein, whether or not such activity is pursued for gain,
profit or other pecuniary advantage.
Section 4. Base Salary; Bonus; Benefits.
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(a) During the Employment Period, the Company shall pay the Employee a
base salary (the "Base Salary") at an annual rate of (i) $150,000 for the period
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ending December 31, 1999, and (ii) $200,000 thereafter. The Base Salary shall be
payable in such installments (but not less often than semi-monthly) as is
generally the policy of the Company with respect to the payment of regular
compensation to the senior executive officers of the Company. The Base Salary
may be increased from time to time in the sole discretion of the Board. During
the Employment Period, the Employee will also be entitled to four weeks vacation
per year and such other benefits as may be made available to other executive
officers of the Company.
(b) The Employee shall be eligible for and, to the extent awarded by the
Company, participate in, any bonus arrangement adopted by the Company, to the
same extent and upon the same conditions (other than the agreed financial
performance targets) as awarded to other employees of the Company at
substantially the same level of employment as the Employee.
(c) During the Employment Period, the Employee shall be entitled to such
benefits as are generally made available from time to time to other employees of
the Company employed at substantially the same level of employment as the
Employee.
Section 5. Reimbursement of Expenses.
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During the Employment Period, the Company shall reimburse the Employee in
accordance with the Company's policy for all reasonable and necessary traveling
expenses and other disbursements incurred by the Employee for or on behalf of
the Company in connection with the performance of the Employee's duties
hereunder upon presentation of appropriate receipts or other documentation
therefor, in accordance with all applicable policies of the Company.
Section 6. Disability or Death.
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If, during the Employment Period, the Employee is incapacitated or disabled
by accident, sickness or otherwise (hereinafter, a "Disability") so as to render
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the Employee mentally or physically incapable of performing the services
required to be performed by the Employee under this Agreement for any period of
ninety (90) consecutive days or for an aggregate of 180 days in any period of
360 consecutive days, the Company may, at any time thereafter, at its option,
terminate the Employee's employment under this Agreement immediately upon giving
the
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Employee written notice to that effect. In the event of the Employee's
death, the Employee's employment will be deemed terminated as of the date of
death.
Section 7. Termination.
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(a) The Company may terminate the Employee's employment hereunder at any
time for "cause" by giving the Employee written notice of such termination, with
reasonable specificity of the grounds therefor. For purposes of this Section 7,
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"cause" shall mean (i) willful misconduct with respect to the business
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and affairs of Pacer, (ii) willful neglect of the Employee's duties or the
failure to follow the lawful directions of the Board of Directors of the Company
or more senior officers of the Company to whom the Employee reports, including,
without limitation, the violation of any material policy of Pacer applicable to
the Employee, (iii) the material breach of any of the provisions of this
Agreement and, if such breach is capable of being cured, the Employee's failure
to cure such breach within thirty (30) days of receipt of written notice thereof
from the Company, (iv) the commission of a felony, (v) the commission of an act
of fraud or financial dishonesty with respect to Pacer or its affiliates or (vi)
the commission of any crime that involves moral turpitude or fraud or that
otherwise has a material adverse effect on the business, assets, liabilities,
operations, affairs or prospects of Pacer or its affiliates. A termination
pursuant to this Section 7(a) shall take effect immediately upon the
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the giving of the notice contemplated hereby.
(b) The Company may terminate the Employee's employment hereunder at any
time without "cause" by giving the Employee written notice of such termination,
which termination shall be effective as of the date of delivery of such notice,
provided that such date shall not be earlier than the date of the notice.
Section 8. Effect of Termination.
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(a) Upon the effective date of a termination of the Employee's employment
under this Agreement for any reason other than a termination without cause
pursuant to Section 7(b), neither the Employee nor the Employee's
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beneficiaries or estate shall have any further rights under this Agreement or
any claims against Pacer or its affiliates arising out of this Agreement, except
the right to receive, within thirty (30) days after the effective date of such
termination:
(i) the unpaid portion of the Base Salary provided for in
Section 4, computed on a pro rata basis to the effective date of such
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termination;
(ii) reimbursement for any expenses for which the Employee shall
not have theretofore been reimbursed, as provided in Section 5; and
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(iii) the unpaid portion of any amounts earned by the Employee
prior to the effective date of such termination pursuant to any benefit
program in which the Employee participated during the Employment Period;
provided, however, the Employee shall not be entitled to receive any
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benefits under any benefit program that have accrued during any period if
the terms of such program require that the beneficiary be employed by the
Company as of the end of such period.
(b) Upon termination of the Employee's employment under this Agreement
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pursuant to Section 7(b), neither the Employee nor the Employee's beneficiaries
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or estate shall have any further rights under this Agreement or any claims
against Pacer or its affiliates arising out of this Agreement, except the right
to receive, within thirty (30) days after the effective date of such
termination, in the case of amounts due pursuant to clause (i) below, and at
such other times as provided in clause (ii) and (iii) below in the case of
amounts due thereunder:
(i) the payments, if any, referred to in Section 8(a) above, to
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the extent not covered by Section 8(b)(ii) or Section 8(b)(iii);
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(ii) the right to continue to receive the Base Salary through the
second anniversary of the Commencement Date, payable during such period in
such manner as the Base Salary is payable pursuant to Section 4, reduced by
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the product of (x) any amounts the Employee (or the Employee's
beneficiaries or estate) receive or are entitled to receive as salary or
other cash compensation from subsequent employment or for services rendered
during such period and (y) 50% (and in order to carry out the intent of
this clause the Employee agrees, for himself and his beneficiaries or
estate, to provide the Company with such information as the Company may
reasonably request regarding the Employee's receipt of salary and other
cash compensation from subsequent employment or for services rendered or to
be rendered during or with respect to such period); and
(iii) the right to receive any bonus payable in accordance with
Section 4 with respect to the fiscal year in which such termination occurs
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(payable at such time as bonuses for such fiscal year are paid to the Company's
senior executives generally).
Notwithstanding anything in this Agreement to the contrary, the Employee's
beneficiaries or estate will be entitled to continue to receive all payments
specified in this Section 8(b) if the Employee dies after the date of a
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termination without "cause."
Section 9. Inventions Assignment.
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During the Employment Period, the Employee shall promptly disclose, and
hereby grants and assigns to the Company for its sole use and benefit, any and
all inventions, improvements, technical information and suggestions reasonably
relating to the business of Pacer or its affiliates (collectively, the
"Inventions") which the Employee may develop or acquire during the Employment
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Period relating to or in connection with the services provided by the Employee
hereunder (whether or not during usual working hours), together with all patent
applications, letters patent, copyrights and reissues thereof that may at any
time be granted for or with respect to the Inventions. In connection therewith,
(a) the Employee shall, at the expense of the Company (including a reasonable
payment for the time involved if the Employee is not then being retained by
Pacer or its affiliates or is not receiving any of the payments set forth in
Section 8 herein), promptly execute and deliver such applications, assignments,
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descriptions and other instruments as may be necessary or proper in the opinion
of the Company to vest title to the Inventions and any patent applications,
patents, copyrights, reissues or other proprietary rights related thereto in the
Company and to enable it to obtain and maintain the entire right and title
thereto throughout the world, and (b) the Employee shall render to the Company,
at its expense (including a reasonable payment for the time involved if the
Employee is not then being retained by Pacer or its affiliates or is not
receiving any of the payments set forth in Section 8 herein), such reasonable
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assistance as the Company may require in the prosecution of applications for
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said patents, copyrights, reissues or other proprietary rights, in the
prosecution or defense of interferences which may be declared involving any said
applications, patents, copyrights or other proprietary rights and in any
litigation in which Pacer of any of its affiliates may be involved relating to
the Inventions.
Section 10. Covenant Not-to-Compete.
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(a) During the Employment Period and for the two (2) year period following
the date of termination of the Employment Period (the "Noncompetition Period"),
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the Employee shall not (i) in any geographic area where Pacer conducts business
during the Noncompetition Period, engage or participate in directly or
indirectly (whether as an officer, director, employee, partner, consultant,
holder of an equity or debt investment, lender or in any other manner or
capacity, including, without limitation, by the rendering of services or advice
to any person), or lend your name (or any part or variant thereof) to, any
Competing Business (as defined in below); (ii) deal, directly or indirectly, in
a competitive manner with any customers doing business with Pacer during the
Noncompetition Period; (iii) solicit or employ any officer, director or agent of
Pacer to become an officer, director, or agent of the Employee, the Employee's
affiliates or anyone else; or (iv) engage in or participate in, directly or
indirectly, any business conducted under any name that shall be the same as or
similar to the name of Pacer or any trade name used by it. Ownership by the
Employee for investment of less than 2% of the outstanding shares of capital
stock or class of debt securities of any corporation with one or more classes of
its capital stock listed on a national securities exchange or actively traded in
the over-the-counter market shall not constitute a breach of the foregoing
covenant. The Employee is entering into the foregoing covenant to assure the
Company of the transfer of the goodwill of the Sellers, and in order to induce
the Company to consummate the purchase contemplated by the Purchase Agreement.
(b) The Employee will not at any time after the date hereof divulge,
furnish to or make accessible to anyone any knowledge or information with
respect to confidential or secret processes, inventions, discoveries,
improvements, formulae, plans, material, devices or ideas or know-how, whether
patentable or not, with respect to any confidential or secret aspects of the
business of Pacer (including, without limitation, customer lists, supplier lists
and pricing arrangements with customers or suppliers); provided, however, that
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nothing herein shall prohibit the Employee from complying with any order or
decree of any court of competent jurisdiction or governmental entity or other
requirements of law, but the Employee will give Pacer reasonably timely notice
of the receipt of any such order or decree or legal requirement, and the
foregoing provision shall not apply to (i) any information which is or becomes
generally available to the public through no breach of this Agreement or (ii) is
or becomes available to the Employee on a non-confidential basis from a source
who is not, to the Employee's knowledge, prohibited from disclosing the same by
any legal or contractual obligation.
(c) As used herein, the term "Competing Business" shall mean any
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transportation or other business that Pacer or any of its affiliates has engaged
in at any time during the Employment Period in any city or county in any state,
province or other political subdivision of the United States, Canada, Mexico,
Japan or China including, without limitation, any business engaged in (i)
intermodal marketing, (ii) flatbed specialized hauling services, (iii) less-
then-truckload common carrier services, (iv) drayage, consolidation,
deconsolidation or distribution services, (v) contract warehousing, freight
handling or logistic services, (vi) comprehensive
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transportation management programs or services to third party customers, (vii)
freight consolidation and deconsolidation, (viii) traffic management and (ix)
railroad signal project management.
Section 11. Assistance in Litigation.
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At the request and expense of the Company (including a reasonable payment
if the Employee is not then being retained by Pacer or its affiliates or is not
receiving any of the payments set forth in Section 8 herein) and upon reasonable
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notice, the Employee shall, at all times during and after the Employment Period,
furnish such information and assistance to the Company as it may reasonably
require in connection with any issue, claim or litigation in which Pacer may be
involved (but only to the extent that providing such information or assistance
does not unreasonably interfere with the Employee's other business activities if
you are no longer employed by Pacer at the time of any such request); provided,
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however, that the Employee will not be contractually obligated by this Section
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11 to furnish any such information or assistance in the event that the Employee
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is an opposing party to Pacer with respect to any pending litigation.
Section 12. Entire Agreement; Amendment and Waiver.
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This Agreement and the other writings referred to herein contain the entire
agreement between the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreement between the Employee and the
Company or any predecessor of the Company or any of their respective
subsidiaries or affiliates. No waiver, amendment or modification of any
provision of this Agreement shall be effective unless such waiver, amendment or
modification is in writing and signed by each party hereto. The waiver by
either party of a breach of any provision of this Agreement by the other party
shall not operate or be construed as a waiver of any subsequent breach by such
other party.
Section 13. Notices.
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All notices or other communications pursuant to this Agreement shall be in
writing and shall be deemed to be sufficient if delivered personally,
telecopied, sent by nationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to the Company, to:
Conex Acquisition Corporation
0000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
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X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
Telephone: 000- 000-0000;
(b) and, if to the Employee, to:
Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Crosby, Heafey, Xxxxx & May
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
Telephone: 000-000-0000.
All such notices and other communications shall be deemed to have been
given and received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of delivery by facsimile, on the date of such
delivery, (c) in the case of delivery by nationally-recognized, overnight
courier, on the business day following dispatch, and (d) in the case of mailing,
on the third business day following such mailing.
Section 14. Headings.
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The section headings in this Agreement are for convenience only and shall
not control or affect the meaning of any provision of this Agreement.
Section 15. Severability.
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In the event that any provision of this Agreement is determined to be
partially or wholly invalid, illegal or unenforceable in any jurisdiction, then
such provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or if
such provision cannot be modified or restricted, then such provision shall, as
to such jurisdiction, be deemed to be excised from this Agreement; provided,
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however, that the binding effect and enforceability of the remaining provisions
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of this Agreement, to the extent the economic benefits conferred upon the
parties by virtue of this Agreement remain substantially unimpaired, shall not
be affected or impaired in any manner, and
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any such invalidity, illegality or unenforceability with respect to such
provisions shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 16. Remedies.
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Each of the parties hereto acknowledges and understands that the provisions
of this Agreement are of a special and unique nature, the loss of which cannot
be adequately compensated for in damages by an action at law, and thus, the
breach or threatened breach of the provisions of this Agreement would cause the
non-breaching party irreparable harm. Each of the parties hereto further
acknowledges that, in the event of a breach of any of the covenants contained in
Section 9 or Section 10 the non-breaching party shall be entitled to immediate
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relief enjoining such violations in any court or before any judicial body having
jurisdiction over such a claim. All remedies hereunder are cumulative, are in
addition to any other remedies provided for by law or in equity and may, to the
extent permitted by law, be exercised concurrently or separately, and the
exercise of any one remedy shall not be deemed to be an election of such remedy
or to preclude the exercise of any other remedy.
Section 17. Representation.
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The Employee hereby represents and warrants to the Company that (a) the
execution, delivery and performance of this Agreement by the Employee does not
breach, violate or cause a default under any agreement, contract or instrument
to which the Employee is a party or any judgment, order or decree to which the
Employee is subject and (b) the Employee is not a party to or bound by any
employment agreement, consulting agreement, non-compete agreement,
confidentiality agreement or similar agreement with any other person or entity.
Section 18. Benefits of Agreement; Assignment.
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The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns,
representatives, heirs and estate, as applicable. Pacer shall be deemed a third
party beneficiary of this Agreement.
Section 19. Survival.
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Anything to the contrary contained in this Agreement notwithstanding, the
provisions of Sections 9, 10, 11, 16, 21, 22 and 23 of this Agreement shall
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survive the termination of the Employment Period.
Section 20. Counterparts and Facsimile Execution.
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This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
(by facsimile or otherwise) to the other party, it being understood that all
parties need not sign the same counterpart. Any counterpart or other signature
hereupon delivered by facsimile shall be deemed for all purposes as constituting
good and valid execution and delivery of this Agreement by such party.
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Section 21. Governing Law.
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This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of California without giving effect to any choice or
conflict of law provision or rule (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
Section 22. Mutual Waiver of Jury Trial.
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BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. THE
PARTIES HERETO AGREE THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR
FEDERAL COURTS LOCATED IN THE CITY OF LOS ANGELES, CALIFORNIA, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THESE COURTS MAY HAVE TO BE HEARD BY A
COURT OUTSIDE OF THE STATE OF CALIFORNIA.
Section 23. Mutual Contribution.
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The parties to this Agreement and their counsel have mutually contributed
to its drafting. Consequently, no provision of this Agreement shall be
construed against any party on the ground that a party drafted the provision or
caused it to be drafted.
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IN WITNESS WHEREOF, each of the undersigned has executed this Employment
Agreement as of the date first above written.
CONEX ACQUISITION CORPORATION
By:
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Name:
Title:
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Xxxxxxx Xxxxxx
