EMPLOYMENT AND NONCOMPETITION AGREEMENT
EMPLOYMENT
AND NONCOMPETITION AGREEMENT
THIS
EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement"), dated June
20, 2007 (the "Effective Date"), is between Xxxxxx Transportation
Services, Inc., a Pennsylvania corporation (the "Company"), and Xxxxxxx
X. Xxxxxxx, an individual (the "Employee").
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Employee
hereby agree as follows:
ARTICLE
I
EMPLOYMENT
AND TERM
Section
1.1. Employment;
Duties. The Company hereby agrees to employ the Employee, and the
Employee hereby accepts employment with the Company, upon the terms set forth
in
this Agreement. The Employee shall serve as the Company's Chief
Executive Officer. During the Term (as defined in Section 1.2
hereof), the Employee shall devote substantially all of his working time,
attention, skill, and reasonable best efforts to the performance of his duties
hereunder in a manner which will faithfully and diligently further the business
and interests of the Company. Employee shall report directly Xxx
Xxxxxx, the Chief Executive Officer of U.S. Xpress Enterprises,
Inc. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices, and policies of the Company and any changes
therein which may be adopted from time to time by the Company and of which
Employee has received notice.
Section
1.2. Term. This
Agreement shall commence on the Effective Date and shall continue until December
31, 2009 (the " Original Term"), unless earlier terminated as provided in
Article III hereof. The duration of this Agreement is referred to
herein as the “Term.”
ARTICLE
II
COMPENSATION
Section
2.1. Salary. Subject
to Section 3.2 hereof, the Company shall pay the Employee a salary at an annual
rate of $345,000, effective April 1, 2007, during year one of the
Term of this Agreement, subject to increase as of April 1, 2008 and at the
discretion of the Board of Directors of the Company (the "Board") in accordance
with Section 6.12(b) of the Stockholders Agreement (as defined
below). Such salary shall be paid at such times and in such
increments as are consistent with the Company's regular payroll procedures
for
other comparable full-time employees of the Company. In addition,
Employee shall participate in the Company’s bonus plan at the executive
level.
Section
2.2. Benefits. Subject
to the terms of applicable benefit plan documents, during the Term of this
Agreement the Company shall provide the Employee with such health and welfare,
retirement savings plan, and other benefits as are generally provided by the
Company to other senior officers of the Company. The Company also
shall adopt a bonus plan for the Employee with such bonus targets and
opportunities as may be established from time to time in accordance with
Section 6.12(b) of the Stockholders' Agreement. The Company may
alter, modify, add to, or delete such benefits as they apply to its employees
(including the Employee) at such times and in such manner as the Company
determines appropriate, without recourse by the Employee.
Section
2.3. Deductions. The
Company may withhold from any salary or benefits payable or otherwise conferred
by this Agreement all federal, state, city, or other taxes as shall be required
pursuant to any federal, state, city, or other laws or regulations.
Section
2.4 Indemnification. Regarding
Employee’s status as an officer, director, employee and/or representative of any
of the Company or its affiliates, the Company shall provide Employee with the
same indemnification and expense advancement rights provided to all officers
and
members of the Board of Directors of the Company pursuant to the terms of the
Stockholders’ Agreement.
Section
2.5 Reimbursement
of Expenses. The Company shall pay or reimburse the Employee for
all reasonable travel and other expenses incurred or paid by him during the
Term
in connection with the performance of duties under this Agreement, in accordance
with the Company's reimbursement policies and upon submission of satisfactory
evidence thereof.
ARTICLE
III
TERMINATION
OF EMPLOYMENT
Section
3.1. Employment
Termination.
(a) Death
or Disability. In the event the Employee dies or becomes disabled
during the Term, his employment hereunder shall automatically
terminate. For the purpose of this Agreement, "disability" or
"disabled" shall mean the good faith determination of a medical doctor selected
by the Company and the Employee that the Employee was or will be unable or
unwilling to perform his duties under this Agreement due to physical or mental
illness or disease or for other causes beyond the Employee's control for
sixty (60) consecutive days, or ninety (90) days in any
twelve (12) month period.
(b) By
the
Company for Cause. The Company may terminate the Employee's
employment hereunder for "Cause" immediately upon written notice to the
Employee, with any determination of "Cause" being made as set forth in
Section 6.12(b) of the Second Amended and Restated Stockholders’ Agreement
dated June 20, 2007, among ATS Acquisition Holding Co., the Investor named
therein, and the Management Stockholders named therein (as amended, the
"Stockholders' Agreement"). The following shall constitute
"Cause" for termination:
(i) The
Employee's falsification of the accounts of the Company, embezzlement of funds
or other assets of the Company, or other similar fraud or dishonesty with
respect to the Company or any of its affiliates that causes or could reasonably
be expected to cause actual harm to the Company or any of its
affiliates;
(ii) Any
material breach of this Agreement (it being expressly understood that any
violation of the covenants or obligations contained in Articles IV and V hereof
shall be deemed a material breach hereof) which, if capable of cure, is not
cured within ten (10) days of receipt of written notice of such breach by
the Employee;
(iii) Conviction
of, or entry of a plea of guilty or nolo contendere to charges of, any crime
involving moral turpitude or dishonesty (it being understood that, for instance,
violation of a motor vehicle code does not constitute such crime);
(iv) Conviction
of, or entry of a plea of guilty or nolo contendere to charges of, any felony
or
other crime which has or may have a materially adverse effect on the Employee's
ability to carry out his duties under this Agreement or on the reputation or
business activities of the Company or its affiliates;
(v) Actions
or failures to act constituting negligence by the Employee in the performance
of
his duties hereunder or failure by the Employee to perform his duties hereunder,
each after the Employee has not cured such actions or failure to act within
thirty (30) days after written request by the Board to do so;
(vi) The
Employee's breach of a fiduciary duty owed to the Company, its shareholders,
or
any of its affiliates involving duty of care, duty of loyalty, corporate
opportunity, or similar doctrines as determined in good faith by the Board;
and
(vii) Any
public disparagement of the Company, its affiliates, or their officers or
directors.
(c) At
the
Election of the Company without Cause. The Company may terminate
the Employee's employment hereunder without Cause at any time upon ten (10)
days' prior written notice to the Employee.
Section
3.2. Effect
of Termination.
(a) Termination
for Death or Disability. If the Employee's employment is
terminated by death or because of disability pursuant to Section 3.1(a)
hereof, the Company shall pay to the estate of the Employee or to the Employee,
as the case may be, the salary accrued under this Agreement through the date
on
which termination due to death or disability occurs.
(b) Termination
for Cause or at the Election of the Employee. In the event that
the Employee's employment is terminated by the Company for Cause pursuant to
Section 3.1(b) hereof or at the election of the Employee pursuant to
Section 3.1(c) of this Agreement, the Company shall pay to the Employee the
salary accrued under this Agreement through the last day of his actual
employment by the Company.
(c) Termination
at the Election of the Company without Cause. In the event that
the Company terminates the Employee without Cause pursuant to
Section 3.1(c) hereof, the Company shall pay to the Employee the salary
payable to him under this Agreement through the remaining Original Term or
then
current Renewal Term of this Agreement.
Section
3.3. Survival. Notwithstanding
termination of this Agreement as provided in this Article III hereof, the
rights and obligations of the Employee and the Company under Articles IV, V,
and
VI, of this Agreement shall survive termination.
ARTICLE
IV
NONCOMPETITION
Section
4.1. Covenant
Not to Compete and Nonsolicitation Covenant. As an inducement for
the Company to enter into this Agreement, the Employee agrees to the following
covenants, whose terms (the "Restrictive Provisions") are set forth
below:
(a) Covenant
Not to Compete. During the Noncompete Term, as defined below,
the Employee shall not, directly or indirectly, own, manage, operate, finance,
control, invest, engage, or participate in the ownership, management, operation,
financing, or control of any business providing freight transportation services
(dedicated or otherwise) by use of dry van trailer equipment or freight
containers, either over-the-road or via intermodal service, directly or through
any brokerage, logistics, leasing, or other indirect arrangement (including
the
engagement of independent contractors) in the United States of America; nor
shall the Employee be employed by, associated with, or in any manner connected
with, lend his name or any similar name to, lend his credit to, render services
of any nature for, or provide advice to such business.
(b) Nonsolicitation
Covenant. During the Noncompete Term as defined below, the
Employee shall not, directly or indirectly, (i) whether for his own account
or for the account of any other person (other than the Company and its
affiliates), solicit business of the same or similar type being carried on
by
the Company or any of its affiliates from any person or entity that is or was
during the Noncompete Term a customer of the Company or any of its affiliates;
(ii) whether for his own account or the account of any other person (other
than the Company and its affiliates), solicit, employ, or otherwise engage
as an
employee, independent contractor, or otherwise any person who is or was during
the Noncompete Term an employee or independent contractor of the Company or
any
of its affiliates or in any manner induce or attempt to induce any employee
or
independent contractor of the Company or any of its affiliates to terminate
his
or her employment or contract with the Company or any such affiliate; or
(iii) publicly disparage the Company or any of its affiliates,
shareholders, directors, officers, employees, or agents.
(d) Limited
Exception. Notwithstanding anything to the contrary above, this
Section 4.1 shall not prohibit the ownership by the Employee of up to (but
not more than) one percent (5%) of the publicly traded securities of any
business specified in Section 4.1(a) or 4.1(b) above (but without otherwise
participating in the activities of such business).
Section
4.2. Duration of Covenant Not to
Compete. The restrictions contained in Section 4.1 shall apply to
Employee from the date hereof to ((a) the first anniversary of the expiration
of
the Term of this Agreement, or (b) the first anniversary of Employee’s
termination pursuant to Section 3.1(b) or 3.1(c) (the “Noncompete
Term”).
Section
4.3. Consideration
for Covenant Not to Compete and Nonsolicitation Covenant. In
addition to the consideration to be received by the Employee during the Term
of
this Agreement and in exchange for the continuous performance of his obligations
under Sections 4.1(a) and 4.1(b), the Employee shall continue to receive
the salary he was receiving as of the date of termination of his employment
until the end of the Noncompete Term. In the event Employee is
terminated pursuant to Section 3.1(c), Employee shall be entitled to receive
the
salary he was receiving as of the date of termination of his employment until
the later of the end of the Term of this Agreement or the end of the Noncompete
Term. The Employee acknowledges that such consideration constitutes
sufficient and adequate consideration for the Employee's agreement to the
Restrictive Provisions. The Employee further acknowledges that, given
the nationwide character of the Company's business, the Restrictive Provisions
and their geographic area and duration are reasonable.
Section
4.4. Enforceability. If
any of the Restrictive Provisions is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time, over too great a range of activities, or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range
of
activities, or geographic area as to which it may be enforceable.
Section
4.4. Specific
Performance. The Restrictive Provisions are necessary for the
protection of the business and goodwill of the Company and are considered by
the
Employee to be reasonable to accomplish such purpose. The Employee
agrees and acknowledges that any breach of the Restrictive Provisions would
cause the Company substantial and irreparable damage and therefore, in the
event
of any such breach, in addition to such other remedies which may be available
in
law, the Company shall have the right to seek specific performance, injunction,
or any other equitable relief, and if the Company prevails in a proceeding
to
remedy a breach under the Restrictive Provisions, the Company shall be entitled
to receive its reasonable attorneys' fees, expert witness frees, and
out-of-pocket costs incurred in connection with such proceeding, in addition
to
any other relief they may be granted.
ARTICLE
V
CONFIDENTIAL
INFORMATION
Section
5.1. Definition
of Confidential Information. For purposes of this Agreement,
"Confidential Information" shall include all information (whether or not
patentable and whether or not copyrightable) owned, possessed, or used by the
Company, including, without limitation, any data, formula, know-how, vendor
information, customer information, driver information, pricing information,
employee information, trade secret, process, design, sketch, photograph, graph,
drawing, sample, invention, idea, research, report, software, software
documentation, hardware design, technology, marketing or business plan,
forecast, unpublished financial statement, budget, and other information,
however documented, of a confidential nature, including any analysis,
compilation, study, summary, and other material prepared by or for the Company
containing or based, in whole or in part, upon any information included in
the
foregoing, that is communicated to, learned of, developed, or otherwise acquired
by the Employee in the course of his employment by the Company.
Section
5.2. Nondisclosure
of Confidential Information. The Employee acknowledges and agrees
that the protection of the Confidential Information is necessary to protect
and
preserve the value of the Company's business. Therefore, the Employee
agrees not to disclose to any unauthorized persons or use for the benefit of
any
third party any Confidential Information, whether or not such information is
embodied in writing or other physical form or is retained in the memory of
Employee, without the Company's prior written consent, unless (i) such
Confidential Information is or becomes generally known to and available for
use
by the public other than as a result of the fault of the Employee, or the fault
of any other Person known by the Employee to be bound by a duty of
confidentiality to the Company, or (ii) the Employee is compelled by law,
rule, regulation, a court of competent jurisdiction or a governmental agency
to
disclose such Confidential Information. The Employee agrees to
deliver to the Company upon termination of this Agreement, and at any other
time
the Company may request, all records, files, memoranda, notes, data, reports
and
other documents (and all copies or reproductions of all of the foregoing)
containing or based upon the Confidential Information.
ARTICLE
VI
MISCELLANEOUS
Section
6.1. Entire
Agreement. This Agreement and the Stockholders Agreement contain
the entire understanding of the parties with respect to the matters contained
herein and supersede all previous commitments, agreements, and understandings
between the parties with respect to such matters. There are no oral
understandings, terms, or conditions, and no party has relied upon any
representation, express or implied, not contained in this
Agreement.
Section
6.2. Amendments. This
Agreement may not be amended in any respect whatsoever, nor may any provision
hereof be waived by any party, except by a further agreement, in writing, fully
executed by each of the parties.
Section
6.3. Successors. This
Agreement shall be binding upon and inure to the benefit of the parties and
to
their respective heirs, personal representatives, successors and assigns,
executors and/or administrators; provided, that (a) the Employee may not
assign his rights hereunder (except by will or the laws of descent) without
the
prior written consent of the Company and (b) the Company may not assign its
rights hereunder without the prior written consent of the Employee which will
not be unreasonably withheld; provided, however, that the Company may assign
this Agreement without the consent of the Employee in connection with any sale
or reorganization of the Company.
Section
6.4. Captions. The
captions of this Agreement are for convenience and reference only and in no
way
define, describe, extend, or limit the scope or intent of this Agreement or
the
intent of any provision contained in this Agreement.
Section
6.5. Notice. Any
notice or communication must be in writing and given by depositing the same
in
the United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, or by delivering
the
same by hand delivery (including by a nationally recognized overnight carrier)
or by fax or by deposit with a reputable overnight courier. Such
notice shall be deemed received on the date on which it is delivered or faxed
(with confirmation received), three (3) business days after deposit in the
United States mail as set forth above, or the next business day after deposit
with a reputable overnight courier. For purposes of notice, the
addresses of the parties shall be:
If
to the
Employee: Xxxx
Xxxxxxx
Xxxxxx
Transportation Services,
Inc.
0000
Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx,
XX
00000
Fax:
|
|
If
to the Company:
|
Xxxxxx
Transportation Services, Inc.
|
|
|
0000
Xxxxxxx Xxxxxx Xxxx
|
|
|
Xxxxxxxxxxxx,
XX 00000
|
Attention:
Fax:
Any
party
may change its address for notice by written notice given to the other party
in
accordance with this Section 7.5.
Section
6.6. Counterparts. This
Agreement may be executed simultaneously in any number of counterparts, via
facsimile or otherwise, each of which counterparts when so executed and
delivered shall be taken to be an original, but such counterparts shall together
constitute but one and the same document.
Section
6.7. Severability. If
any provision of this Agreement is held illegal, invalid or unenforceable,
such
illegality, invalidity, or unenforceability shall not affect any other provision
hereof. Such provision and the remainder of this Agreement shall, in
such circumstances, be modified to the extent necessary to render enforceable
the remaining provisions hereof.
Section
6.8. Applicable
Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Florida, without regard to
principles of comity or conflicts of laws provisions of any
jurisdiction.
Section
6.9. Construction. The
language contained in this Agreement shall be deemed to be approved by both
parties hereto and no rule of strict construction shall be applied against
any
party. Unless otherwise expressly provided, the words "hereof" and
"hereunder" and similar references refer to this Agreement in its entirety
and
not to any specific part hereof.
Section
6.10. Genders. Any
reference to the masculine gender shall be deemed to include feminine and neuter
genders, and vice versa, and any reference to the singular shall include the
plural, and vice versa, unless the context otherwise requires.
Section
6.11. Right
to Offset. The Company may exercise a right of offset at any time
and from time to time against any amounts payable under this Agreement to the
extent the Employee is indebted to the Company or any of its
affiliates.
Section
6.12. Waiver. The
failure of either party to insist upon strict performance of any of the terms
or
conditions of this Agreement shall not constitute a waiver of any of its rights
hereunder.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have caused this Employment and
Noncompetition Agreement to be duly executed as of the date first set forth
above.
| THE COMPANY | |||
|
Date
June 21, 2007
|
By:
|
/s/ XXX X. XXXXXX | |
| Xxx X. Xxxxxx | |||
| Chief Financial Officer | |||
| THE EMPLOYEE | |||
|
|
By:
|
/s/ XXXXXXX X. XXXXXXX | |
| Xxxxxxx X. Xxxxxxx | |||
