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EXHIBIT 10.3
DISPUTES RELATING TO THIS AGREEMENT ARE REQUIRED TO BE SETTLED
PURSUANT TO CERTAIN DISPUTE RESOLUTION PROCEDURES AS PROVIDED IN
ARTICLE 7 AND APPENDIX A OF THIS AGREEMENT.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective
as of the 12th day of June, 1996, between Xxxxx X. Xxx ("Employee"), and Rush
Administrative Services, Inc., a Delaware corporation (the "Company"), whose
principal executive offices are located in San Antonio, Texas.
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company, on terms hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DUTIES
1.1 Employment. During the term of this Agreement, the Company
agrees to employ Employee, and Employee accepts such employment, on the terms
and conditions set forth in this Agreement.
1.2 Extent of Service. During the term of this Agreement,
Employee shall devote his or her full-time business time, energy and skill to
the affairs of the Company and its affiliated companies, and Employee shall not
be engaged in any other business or consulting activities pursued for gain,
profit or other pecuniary advantage, except for Employee's medical or clinical
practice activities or related educational activities which do not, in the
aggregate, interfere with the performance of Employee's duties hereunder. The
foregoing shall not prevent Employee from making monetary investments in
businesses, provided that such investments do not involve any services on the
part of Employee in the operation or affairs of such businesses.
1.3 Duties. Employee's duties hereunder shall include such duties
as may be prescribed from time to time by Employee's supervisors or the Board
of Directors of the Company (the "Board"). Employee shall also perform,
without additional compensation, such duties for the Company's affiliated
companies.
1.4 Access to and Use of Proprietary Information. Employee
recognizes and the Company agrees that, to assist Employee in the performance
of his or her duties hereunder, Employee will be provided access to and limited
use of proprietary and confidential information of the Company. Employee
further recognizes that, as a part
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of his or her employment with the Company, Employee will benefit from and
Employee's qualifications will be enhanced by additional training, education
and experience which will be provided to Employee by the Company directly
and/or as a result of work projects assigned by the Company in which
proprietary and confidential information of the Company is utilized by
Employee.
ARTICLE 2
TERM OF EMPLOYMENT
The term of this Agreement shall commence on the date hereof and
continue until terminated pursuant to Article 4 hereof.
ARTICLE 3
COMPENSATION
3.1 Monthly Base Salary. As compensation for services rendered
under this Agreement, Employee shall be entitled to receive from the Company a
monthly base salary (before standard deductions) equal to $129,000, subject to
periodic review and adjustment by the Board in its sole discretion. Employee's
monthly base salary shall be payable at regular intervals (at least
semi-monthly) in accordance with the prevailing practice and policy of the
Company.
3.2 Discretionary Performance Bonus. As additional compensation
for services rendered under this Agreement, Employee shall also be eligible to
receive a discretionary performance bonus if, as and when declared by the Board
in its sole discretion.
3.3 Benefits. Employee shall, in addition to the compensation
provided for herein, be entitled to the following additional benefits:
(a) Medical, Health and Disability Benefits. Employee
shall be entitled to receive all medical, health and disability
benefits that may, from time to time, be provided by the Company to
all employees of the Company as a group.
(b) Other Benefits. Employee shall also be entitled to
receive any other benefits that may, from time to time, be provided by
the Company to all employees of Company as a group.
(c) Vacation. Employee shall be entitled to an annual
vacation as determined in accordance with the prevailing practice and
policy of the Company.
(d) Holidays. Employee shall be entitled to holidays in
accordance with the prevailing practice and policy of the Company.
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(e) Reimbursement of Expenses. The Company shall
reimburse Employee for all expenses reasonably incurred by Employee in
conjunction with the rendering of services at the Company's request,
provided that such expenses are incurred in accordance with the
prevailing practice and policy of the Company and are properly
deductible by the Company for federal income tax purposes. As a
condition to such reimbursement, Employee shall submit an itemized
accounting of such expenses in reasonable detail, including receipts
where required under federal income tax laws.
ARTICLE 4
TERMINATION
4.1 Termination With Notice. This Agreement may be terminated by
the Company or Employee, without cause, upon six months' prior written notice
thereof given by one party to the other party. In the event of termination
pursuant to this Section 4.1, the Company shall pay Employee his or her monthly
base salary (subject to standard deductions) earned pro rata to the date of
such termination and the Company shall have no further obligations to Employee
hereunder. Notwithstanding the foregoing, in lieu of continuing the
employment of Employee for a period of six months after notice of termination
is given under this Section 4.1, the Company may, in its sole discretion, elect
to terminate this Agreement immediately and pay Employee a lump-sum equal to
(a) Employee's monthly base salary (subject to standard deductions) earned pro
rata to the date of such notification of termination plus (b) six months of
Employee's then effective base salary (subject to standard deductions),
whereupon the Company shall no further obligations to Employee hereunder.
4.2 Termination For Cause. This Agreement may be terminated by
the Company for "Cause" (hereinafter defined) upon written notice thereof given
by the Company to Employee. In the event of termination pursuant to this
Section 4.2, the Company shall pay Employee his or her monthly base salary
(subject to standard deductions) earned pro rata to the date of such
termination and the Company shall have no further obligations to Employee
hereunder. The term "Cause" shall include, without limitation, the following,
as determined by the Board in its sole judgment: (i) Employee breaches any of
the terms of this Agreement; (ii) Employee is convicted of a felony; (iii)
Employee fails, after at least one warning, to perform duties assigned under
this Agreement (other than a failure due to death or physical or mental
disability); (iv) Employee intentionally engages in conduct which is
demonstrably and materially injurious to the Company; (v) Employee commits
fraud or theft of personal or Company property from Company premises; (vi)
Employee falsifies Company documents or records; (vii) Employee engages in acts
of gross carelessness or willful negligence to endanger life or property on
Company premises; (viii) Employee engages in sexual harassment; (ix) Employee
uses, distributes, possesses or is under the influence of illegal drugs,
alcohol or any other intoxicant on Company premises; (x) Employee possesses or
stores lethal weapons, firearms or illegal knives on Company premises; or (xi)
Employee intentionally violates state, federal or local laws and regulations.
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4.3 Termination Upon Death or Disability. In the event that
Employee dies, this Agreement shall terminate upon Employee's death. Likewise,
if Employee becomes unable to perform the essential functions of his or her
duties hereunder, with or without reasonable accommodation, on account of
illness, disability or other reason whatsoever for a period of more than 180
consecutive or nonconsecutive days in any 12-month period, the Company may,
upon notice to Employee, terminate this Agreement. In the event of termination
pursuant to this Section 4.3, Employee (or his or her legal representatives)
shall be entitled only to his or her monthly base salary earned pro rata for
services actually rendered prior to the date of such termination; provided,
however, Employee shall not be entitled to his or her monthly base salary for
any period with respect to which Employee has received short-term or long-term
disability benefits under employee benefit plans maintained from time to time
by the Company.
4.4 Survival of Provisions. The covenants and provisions of
Articles 5, 6 and 7 hereof shall survive any termination of this Agreement and
continue for the periods indicated, regardless of how such termination may be
brought about.
ARTICLE 5
PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION
5.1 Proprietary Property; Confidential Information. Employee
acknowledges that in and as a result of Employee's employment hereunder,
Employee will be making use of, acquiring and/or adding to confidential
information and proprietary property of a special and unique nature and value
relating to such matters as the Company's trade secrets, systems, procedures,
manuals, confidential reports and lists of customers ("Confidential
Information"). As a material inducement to the Company to enter into this
Agreement and to pay to Employee the compensation and benefits stated herein,
the Employee covenants and agrees that Employee shall not, at any time during
or following the term of Employee's employment, directly or indirectly, divulge
or disclose for any purpose whatsoever any Confidential Information or
proprietary information of the Company. Upon termination of this Agreement,
regardless of how such termination may be brought about, Employee shall deliver
to the Company any and all documents, instruments, notes, papers or other
expressions or embodiments of confidential information which are in Employee's
possession or control.
5.2 Publicity. During the term of this Agreement and for a period
of ten years thereafter, Employee shall not, directly or indirectly, originate
or participate in the origination of any publicity, news release or other
public announcements, written or oral, whether to the public press or
otherwise, relating to this Agreement, to any amendment hereto, to Employee's
employment hereunder or to the Company, without the prior written approval of
the Company.
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ARTICLE 6
RESTRICTIVE COVENANTS
6.1 Non-Competition. In consideration of the benefits of this
Agreement, including Employee's access to and limited use of proprietary and
confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
covenants and agrees that during the term of this Agreement and for a period of
six months following termination of this Agreement, regardless of how such
termination may be brought about, Employee shall not, directly or indirectly,
as proprietor, partner, stockholder, director, officer, employee, consultant,
joint venturer, investor or in any other capacity, engage in, or own, manage,
operate or control, or participate in the ownership, management, operation or
control, of any entity which engages in one of the Company's major geographical
or commercial markets in the business of selling, servicing, renting, leasing,
insuring or financing new or used Class 3 through 8 trucks or any other
business activity in which the Company participates during Employee's
employment with the Company; provided, however, the foregoing shall not, in any
event, prohibit Employee from purchasing and holding as an investment not more
than 1% of any class of publicly traded securities of any entity which conducts
a business in competition with the business of the Company, so long as Employee
does not participate in any way in the management, operation or control of such
entity. It is further recognized and agreed that, even though an activity may
not be restricted under the foregoing provision, Employee shall not during the
term of this Agreement and for a period of one year following termination of
this Agreement, regardless of how such termination may be brought about,
provide any services to any person or entity which may be used against, or in
conflict with the interests of, the Company or its customers or clients.
6.2 Judicial Reformation. Employee acknowledges that, given the
nature of the Company's business, the covenants contained in Section 6.1
establish reasonable limitations as to time, geographic area and scope of
activity to be restrained and do not impose a greater restraint than is
reasonably necessary to protect and preserve the goodwill of the Company's
business and to protect its legitimate business interests. If, however,
Section 6.1 is determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too long a period of time or over
too large a geographic area or by reason of it being too extensive in any other
respect or for any other reason, it will be interpreted to extend only over the
longest period of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court.
6.3 Customer Lists; Non-Solicitation. In consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto,
Employee hereby further covenants and
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agrees that for a period of two years following the termination of this
Agreement, regardless of how such termination may be brought about, Employee
shall not, directly or indirectly, (a) use or make known to any person or
entity the names or addresses of any clients or customers of the Company or any
other information pertaining to them, (b) call on, solicit, take away or
attempt to call on, solicit or take away any clients or customers of the
Company on whom Employee called or with whom he or she became acquainted during
his or her employment with the Company, nor (c) recruit, hire or attempt to
recruit or hire any employees of the Company.
ARTICLE 7
ARBITRATION
Except for the provisions of Articles 5 and 6 of this Agreement
dealing with proprietary property, confidential information and restrictive
covenants, with respect to which the Company expressly reserves the right to
petition a court directly for injunctive and other relief, any claim, dispute
or controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes between the parties to this Agreement or their
respective heirs, executors, administrators, legal representatives, successors
and assigns, as applicable, arising out of or related to Employee's employment
or the terms and conditions of this Agreement, including the implementation,
applicability or interpretation thereof, shall be resolved in accordance with
the dispute resolution procedures set forth in Appendix A attached hereto and
made a part hereof.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by an
overnight delivery service with tracking procedures or by facsimile to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice: If to Employee, at the address set
forth below his or her name on the signature page hereof; and if to the
Company, at 8810 I.H. 00 Xxxx, Xxx Xxxxxxx, Xxxxx 00000, Attention: Chairman of
the Board and Chief Executive Officer.
8.2 Equitable Relief. In the event of a breach or a threatened
breach by Employee of any of the provisions contained in Article 5 or 6 of this
Agreement, Employee acknowledges that the Company will suffer irreparable
injury not fully compensable by money damages and, therefore, will not have an
adequate remedy available at law. Accordingly, the Company shall be entitled
to obtain such injunctive relief or other equitable remedy from any court of
competent jurisdiction as may be necessary or appropriate to prevent or curtail
any such breach, threatened or actual. The foregoing shall be in addition to
and without prejudice to any other rights that the Company may have under this
Agreement, at law or in equity, including, without limitation, the right to xxx
for damages.
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8.3 No Rights in Contracts. Employee acknowledges and agrees that
he or she shall not have any rights in or to any contracts entered into with
clients or customers of the Company in connection with services provided by
Employee hereunder (including those in which Employee may be specifically named
with the Company), unless otherwise agreed to in writing by the Company.
8.4 Assignment. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company. Employee's rights under this Agreement
are not assignable and any attempted assignment thereof shall be null and void.
8.5 Governing Law; Venue. This Agreement shall be subject to and
governed by the laws of the State of Texas. Non-exclusive venue for any action
permitted hereunder shall be proper in San Antonio, Bexar County, Texas, and
Employee hereby consents to such venue.
8.6 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties and supersedes all other agreements
between the parties which may relate to the subject matter contained in this
Agreement. This Agreement may not be amended or modified except by an
agreement in writing which refers to this Agreement and is signed by both
parties.
8.7 Headings. The headings of sections and subsections of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any provision of this Agreement or of the Agreement itself.
8.8 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
8.9 Waiver. The waiver by any party of a breach of any provision
hereof shall not be deemed to constitute the waiver of any prior or subsequent
breach of the same provision or any other provisions hereof. Further, the
failure of any party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement unless such party expressly waives such
provision pursuant to a written instrument which refers to this Agreement and
is signed by such party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
RUSH ADMINISTRATIVE SERVICES, INC.
By:
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W. Xxxxxx Xxxx,
Chief Executive Officer
EMPLOYEE:
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Xxxxx X. Xxx
Address: c/o Rush Enterprises, Inc.
P. O. Xxx 00000
Xxx Xxxxxxx, Xxxxx 00000
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APPENDIX A
DISPUTE RESOLUTION PROCEDURES
Re: Employment Agreement dated June 12, 1996 (including any
amendments, the "Agreement"), between Rush Administrative Services, Inc., a
Delaware corporation (the "Company"), and Xxxxx X. Xxx ("Employee"). Unless
otherwise defined in this Appendix A, terms defined in the Agreement and used
herein shall have the meanings set forth therein.
A. Negotiations. If any claim, dispute or controversy described in
Article 7 of the Agreement (collectively, the "Dispute") arises, either party
may, by written notice to the party, have the Dispute referred to the persons
designated below for attempted resolution by good faith negotiations within 45
days after such written notice is received. Such designated persons are as
follows:
1. Company. The Chairman of the Board and Chief Executive
Officer or his designee; and
2. Employee. Employee or his or her designee.
Any settlement reached by the parties under this paragraph A shall not be
binding until reduced to writing and signed by both parties. When reduced to
writing, such settlement agreement shall supersede all other agreements,
written or oral, to the extent such agreements specifically pertain to the
matters so settled. If the above-designated persons are unable to resolve such
dispute within such 45-day period, either party may invoke the provisions of
paragraph B below.
B. Arbitration. All Disputes shall be settled by negotiation among
the parties as described in paragraph A above or, if such negotiation is
unsuccessful, by binding arbitration in accordance with procedures set forth in
paragraphs C and D below.
C. Notice. Notice of demand for binding arbitration by one party
shall be given in writing to the other party pursuant to the Agreement. In no
event may a notice of demand of any kind be filed more than one (1) year after
the date the Dispute is first asserted in writing to the other party pursuant
to paragraph A above, and if such demand is not timely filed, the Dispute
referenced in the notice given pursuant to paragraph A above shall be deemed
released, waived, barred and unenforceable for all time, and barred as if by
statute of limitations.
D. Binding Arbitration. Upon filing of a notice of demand for
binding arbitration by either party, arbitration shall be commenced and
conducted as follows:
1. Arbitrators. All Disputes and related matters in question
shall be referred to and decided and settled by a panel of three arbitrators,
one selected by the Company, one selected by Employee and the third selected by
the two arbitrators so selected.
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Selection of the arbitrators to be selected the Company and Employee shall be
made within ten (10) business days after the date of giving of a notice of
demand for arbitration, and the two arbitrators so appointed shall appoint the
third within 10 business days following their appointment.
2. Cost of Arbitration. The cost of arbitration proceedings,
including without limitation the arbitrators' compensation and expenses,
hearing room charges, court reporter transcript charges etc., shall be borne by
the parties equally or otherwise as the arbitrators may determine. The
arbitrators may award the prevailing party its reasonable attorneys' fees and
costs incurred in connection with the arbitration. The arbitrators are
specifically instructed to award attorneys' fees for instances of abuse in the
discovery process.
3. Location of Proceedings. The arbitration proceedings shall be
held in San Antonio, Texas, unless the parties agree otherwise.
4. Pre-hearing Discovery. The parties shall have the right to
conduct and enforce pre-hearing discovery in accordance with the then current
Federal Rules of Civil Procedure, subject to these limitations:
(a) Each party may serve no more than one set of
interrogatories limited to 30 questions, including sub-parts;
(b) Each party may depose the other party's expert
witnesses who will be called to testify at the hearing, plus two fact
witnesses without regard to whether they will be called to testify (each
party will be entitled to a total of no more than 24 hours of deposition
time of the other party's witnesses), provided however, that the
arbitrators may provide for additional depositions upon showing of good
cause; and
(c) Document discovery and other discovery shall be under
the control of and enforceable by the arbitrators.
5. Discovery disputes. All discovery disputes shall be decided
by the arbitrators. The arbitrators are empowered;
(a) to issue subpoenas to compel pre-hearing document or
deposition discovery;
(b) to enforce the discovery rights and obligations of the
parties; and
(c) to otherwise to control the scheduling and conduct of
the proceedings.
Notwithstanding any contrary foregoing provisions, the arbitrators shall have
the power and authority to, and to the fullest extent practicable shall,
abbreviate
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arbitration discovery in a manner which is fair to all parties in order to
expedite the conclusion of each alternative dispute resolution proceeding.
6. Pre-hearing Conference. Within fifteen (15) days after
selection of the third arbitrator, or as soon thereafter as is mutually
convenient to the arbitrators, the arbitrators shall hold a pre-hearing
conference to establish schedules for completion of discovery, for exchange of
exhibit and witness lists, for arbitration briefs and for the hearing, and to
decide procedural matters and address all other questions that may be
presented.
7. Hearing Procedures. The hearing shall be conducted to
preserve its privacy and to allow reasonable procedural due process. Rules of
evidence need not be strictly followed, and the hearing shall be streamlined as
follows:
(a) Documents shall be self-authenticating, subject to
valid objection by the opposing party;
(b) Expert reports, witness biographies, depositions and
affidavits may be utilized, subject to the opponent's right of a live
cross-examination of the witness in person;
(c) Charts, graphs and summaries shall be utilized to
present voluminous data, provided (i) that the underlying data is made
available to the opposing party thirty (30) days prior to the hearing,
and (ii) that the preparer of each chart, graph or summary is available
for explanation and live cross-examination in person;
(d) The hearing should be held on consecutive business days
without interruption to the maximum extent practicable; and
(e) The arbitrators shall establish all other procedural
rules for the conduct of the arbitration in accordance with the rules of
arbitration of the Center for Public Resources.
8. Governing Law. This arbitration provision shall be governed
by, and all rights and obligations specifically enforceable under and pursuant
to, the Federal Arbitration Act (9 U.S.C. Section 1, et seq.)
9. Consolidation. No arbitration shall include, by
consolidation, joinder or in any other manner, any additional person not a
party to the Agreement, except by written consent of both parties containing a
specific reference to these provisions.
10. Award. The arbitrators are empowered to render an award of
general compensatory damages and equitable relief (including, without
limitations, injunctive relief), but are not empowered to award exemplary,
special or punitive damages. The award rendered by the arbitrators (a) shall be
final, (b) shall not constitute a basis for collateral estoppel as to any issue
and (c) shall not be subject to vacation or modification.
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00. Confidentiality. The parties hereto will maintain the
substance of any proceedings hereunder in confidence and the arbitrators, prior
to any proceedings hereunder, will sign an agreement whereby the arbitrators
agree to keep the substance of any proceedings hereunder in confidence.
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