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EXHIBIT 10.9
EMPLOYEE AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into
effective as of October 1, 1997, by and between EAGLE USA AIR FREIGHT, INC., a
Texas corporation with its principal office at 0000 X. Xxx Xxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxx X.
Xxxxxxx, an individual residing in Xxxxxxxxxx County, Texas ("Employee");
W I T N E S S E T H:
WHEREAS, Employee has resigned from service as an officer of
the Company and from any executive functions with the Company effective as of
the date of this Agreement; and
WHEREAS, Employee and the Company agree to provide herein a
waiver and release of claims in consideration for this Agreement; and
WHEREAS, the Company desires to secure the further services of
Employee in the capacity as an employee and advisor to the Company; and
WHEREAS, in consideration of such arrangements, which
arrangements represent the mutual and respective desires of both Employee and
the Company, the parties hereto are willing to enter into this Agreement upon
the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the parties hereto agree as follows:
1. Resignation by Employee: Effective as of October 1,
1997 (the "Effective Date"), Employee hereby resigns as Chief Marketing Officer
of the Company. Employee further resigns from any other executive position or
office relating to the affairs of the Company except membership on the
Company's Board of Directors.
2. Continued Employment Relationship: During the
Employment Term (as defined below), Employee shall perform such services as the
President of the Company shall request. In performing such services, Employee
shall not be an officer of the Company. Notwithstanding anything to the
contrary contained herein, any such services requested of Employee shall:
(i) be requested by written notice to Employee at
least three days prior to the time the Company desires Employee to
perform such services; shall be during regular business hours of the
Company or such times for entertainment as are in accordance with
Employee's past practice with the Company or such other times as
mutually agreed; shall be utilized in increments of no less than five
hours; and shall not be required to be performed on any date that
Employee has specified by written notice to the Company at least ten
days in advance ("Unavailability Dates") but not to exceed ten
Unavailability Dates per calendar month, or any two (2) consecutive
periods for vacation of not less than ten (10) days, such periods
aggregating not more than twenty- one Unavailability Dates during a
calendar year
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which he designates as vacation, it being understood that Employee
will be engaging in other personal and business activities and travel
related thereto;
(ii) relate to entertaining customers of the
Company, interviewing prospective employees of the Company, attending
and participating in group meetings of Company sales staff and, to the
extent mutually agreed, other services or activities, including those
of a type performed by Employee prior to the Effective Date;
(iii) not involve travel by Employee outside Xxxxxx
and Xxxxxxxxxx Counties, Texas unless Employee specifically consents
thereto which consent will not be unreasonably withheld; and
(iv) not require Employee to perform such services
for more than thirty (30) hours in any calendar month.
Employee agrees to utilize commercially reasonable best efforts in performing
such services. Except as specifically prohibited hereby, Employee may engage
in other personal and business activities.
3. Term:
(a) Employment and Termination. The Company hereby
engages Employee for a two year period beginning on the Effective Date and
ending on September 30, 1999 (the "Employment Term"). Notwithstanding the
foregoing, Employee's employment under this agreement shall terminate earlier
upon:
(i) Employee's disability which prevents Employee
from performing services, with reasonable accommodation, for any
consecutive ninety-day period, or Employee's death; or
(ii) Written notice by the Company to Employee of
termination for "Cause." For purposes of this Agreement "Cause" shall
mean (A) Employee's repeated and intentional failure or refusal to
perform to the reasonable satisfaction of the Company any duty or
task, or more than one duty or task, delegated to him in accordance
with this Agreement or Employee's repeated and intentional failure or
refusal to observe and keep any and all covenants or obligations on
his part to be performed or kept under the terms of this Agreement or
other policies and guidelines from time to time established by the
Company that are generally applicable to all employees, which repeated
and intentional failure or refusal is not cured within ten days after
written notice thereof from the Company, or (B) Employee's conviction
of a felony crime involving theft from the Company, embezzlement or
other illegal conduct which in the judgment of the Company could
damage the business or reputation of the Company; or
(iii) Written notice by Employee to the Company
that Employee is terminating the Agreement and resigning from
employment hereunder because of the Company's material failure or
refusal to observe and keep any material covenant or obligation on the
Company's part to be performed or kept under the terms of this
Agreement,
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which material failure or refusal is not cured within ten (10) days
after written notice thereof from Employee to the Company.
(b) Company Obligation on Termination of Employment.
In the event of Employee's termination of employment prior to the expiration of
the Employment Term, then:
(i) In the event such termination of employment
is due to death or disability under Section 3(a)(i) or resignation due
to a material breach by the Company under Section 3(a)(iii), then the
Company shall be obligated to pay to Employee or his estate Employee's
compensation under Section 4(a) for a period commencing on (a) the
date of Employee's death, (b) the last day of the ninety (90) day
disability period provided in Section 3(a)(i), above, or (c) the
effective date of Employee's resignation pursuant to Section
3(a)(iii), above, and ending on the expiration of the Employment Term.
At any time during the Employment Term, and to the extent possible,
the Company shall maintain in full force and effect for Employee
during such period specified in the immediately preceding sentence,
all group insurance that Employee was entitled to participate in
immediately prior to the time of such termination. Under no
circumstances shall Employee be required to mitigate the amount of any
payment of compensation under Section 4(a) due under this Section
3(b)(i).
(ii) In the event such termination occurs due to
voluntary termination by Employee or due to termination by the Company
for Cause under Section 3(a)(ii), the Company shall have no obligation
to provide any of the compensation under Section 4 attributable to
period after the date of termination of employment.
4. Compensation:
a. Base Salary. Commencing at the Effective
Date, the Company shall pay Employee during the term of Employee's
employment under this Agreement a base salary equal to $300,000 per
annum. The base salary, less any applicable withholding taxes, shall
be paid to Employee in accordance with the Company's normal payroll
practices in effect with respect to other employees of the Company.
b. Reimbursement for Expenses. The Company will
reimburse Employee for all reasonable out-of-pocket expenses incurred
by him in connection with his performance of services under this
Agreement; provided, however, that any out-of-pocket expense in excess
of $1,000 must have been approved in advance by the Company. The
Company will pay $550 per month for base dues at Lochnivar country
club, but the Company shall not reimburse Employee for other country
club or golf club dues or expenses (except expenses to be reimbursed
pursuant to the immediately preceding sentence).
c. Insurance. The Company shall provide
Employee with dental and medical insurance coverages at such cost and
to the same extent made available by the Company to its employees
generally.
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d. Incentive Plan. Employee shall not be
eligible to participate in the Company's Five-Year Incentive Plan and
no additional amounts shall be owed to Employee with respect thereto
for any period after the Effective Time.
e. Company Vehicle. As soon as practicable
following the Effective Date, the Company shall transfer to Employee
title to the Company vehicle furnished to Employee by the Company
immediately prior to the Effective Date, and Employee shall after the
Effective Date be responsible for all expenses associated with the
vehicle.
f. 401(k) Plan. Employee shall be entitled to
participate in the Company's 401(k) Plan.
5. Disclosure of Proprietary Information: Employee
recognizes and agrees that he has and will continue to have access to a
substantial amount of proprietary, confidential and trade secret information
and materials (collectively "Proprietary Information") relating to the
Company's customers, pricing structures and policies, credit terms, and to the
business of the Company. The Proprietary Information has been and will
continue to be disclosed or made available to him exclusively in connection
with the performance of services for the Company and the performance of his
duties as a director of the Company. Employee shall not publish, disseminate,
distribute, disclose, sell, assign, transfer, copy, remove from the Company's
premises, commercially exploit, or otherwise make use of any Proprietary
Information to or for the use or benefit of Employee or any other person, firm,
corporation or entity, except as specifically authorized in writing by the
Board of Directors of the Company or as required for the due and proper
performance of his duties and obligations under this Agreement. In addition,
Employee shall employ all necessary safeguards and precautions in order to
insure that unauthorized access to the Proprietary Information is not afforded
to any person, firm, corporation or entity. Employee agrees that he shall
continue to maintain the confidentiality of the Proprietary Information at all
times except: (i) if the information becomes readily ascertainable by the
public (other than by reason of a breach of this Section 5), and, when viewed
as a whole does not qualify for legal protection, or (ii) if disclosure is
required pursuant to order of a court of competent jurisdiction.
6. Noncompetition and Related Matters: Conditioned upon
the Employee not having terminated employment under Section 3(a)(iii), Employee
agrees that during the Employment Term and for a period of 2 years following
the expiration of the Employment Term (the "Non-compete Period"), he shall not,
directly or indirectly, as an owner, operator, employee, representative,
shareholder, officer, director, partner, venturer, equityholder, consultant,
advisor or in any other capacity, within a one hundred (100) mile radius of any
location where the Company (directly or through agents or others) is operating,
or at any time during the Employment Term is planning to operate, (i) engage in
any business activity in direct competition with the business in which the
Company is currently engaged, (ii) solicit such business from any of the
customers or accounts of the Company, or (iii) become the employee of, or
otherwise render services to or on behalf of, any enterprise which competes
directly with the current business of the Company. Notwithstanding the
foregoing, Employee may purchase or otherwise acquire up to (but not more than)
5 percent of any class of securities of any enterprise (but without otherwise
participating in the activities of such enterprise), whether or not such
enterprise is in competition with the Company, if
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such securities are listed on any national or regional securities exchange or
have been registered under Section 12(g) of the Securities Exchange Act of
1934.
7. No Solicitation: Employee agrees that he shall not,
directly or indirectly, during the Non- compete Period, (i) take any action to
solicit or divert any business or customers away from the Company, (ii) induce
customers, suppliers, agents or other persons under contract or otherwise
associated or doing business with the Company to terminate, reduce or diminish
any such association or business with or from the Company and/or (iii) induce
any person in the employment of the Company or any exclusive consultant to the
Company to (A) terminate such employment or consulting arrangement or (B)
accept employment or enter into any consulting arrangement with anyone other
than the Company.
8. Nondisparagement: As a material inducement to the
Company to enter into this Agreement, Employee agrees that during the
Non-compete Period he will not (i) publicly criticize or disparage the Company
or any affiliate, or privately criticize or disparage the Company or any
affiliate in a manner intended or reasonably calculated to result in public
embarrassment to, or injury to the reputation of, the Company or any affiliate
in any community in which the Company or any affiliate is engaged in business;
or (ii) intentionally commit damage to the property of the Company or any
affiliate or otherwise engage in any illegal conduct which is injurious to the
business or reputation of the Company or any affiliate. As used in this
Agreement, the term "affiliate" means the Company; any direct or indirect
subsidiary of the Company; any other entity in which the Company, or any of its
direct or indirect subsidiaries owns more than 50% of the outstanding equity
interests; any officer, director or employee of the Company or of any of the
foregoing entities, but only to the extent that the proscribed activity of
Employee described above in this Section 8 deals with or concerns any such
officer, director or employee in their role as such officer, director or
employee, or relates to their business activities or skills; and any former
officer, director or employee of the Company or of any of the foregoing
entities, but only to the extent that the proscribed activity of Employee
described above in this Section 8 deals with or concerns any such officer,
director or employee in their role as such officer, director or employee, or
relates to their business activities or skills.
9. Injunctive Relief: Employee recognizes and agrees
that any violation of any of the provisions contained in Sections 5, 6, 7 or 8
hereof will cause such damage or injury to the Company as would be irreparable
and continuing, that the exact amount of such damage might be difficult to
ascertain and that, for such reason, among others, the Company shall be
entitled, as a matter of course, to a temporary restraining order and a
temporary and permanent injunction restraining any further violation of any
such provision. Such right to injunctive relief shall be in addition to, and
not in limitation of, any other rights and remedies the Company may have
against Employee, including without limitation the right to recover damages for
any breach or threatened breach, including without limitation the recovery of
damages from Employee. Employee specifically agrees that such limitations as
to the period of time, geographic area and type and scope of restriction on his
activities specified in this Agreement are reasonable and necessary for the
protection of the goodwill or other business interests of the Company and its
affiliates. If any provision of this Agreement is found by a court of
competent jurisdiction to be unreasonably broad, oppressive or unenforceable,
such court (i) shall narrow the scope of this Agreement in order to ensure that
the application thereof is not unreasonably broad, oppressive or unenforceable,
and (ii) to the fullest extent permitted by law, shall enforce this Agreement
as though reformed.
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10. Releases:
a. Except with respect to Employee's right to
the benefits set forth in this Agreement, the sufficiency of which is
hereby acknowledged, Employee hereby releases, acquits and forever
discharges (i) the Company from any and all "Claims" (as hereinafter
defined) against the Company including any and all Claims on account
of, related to, or arising out of the facts and circumstances
surrounding Employee's employment or termination of employment as an
officer of the Company or its affiliates which Employee ever had, now
has or may have from the date of his commencement of employment with
the Company to the date of his resignation as an officer of the
Company, and (ii) the officers, Directors and employees of the Company
and its affiliates from any and all Claims known to Employee at the
date hereof, including any and all Claims on account of, related to,
or arising out of the facts and circumstances surrounding Employee's
employment or termination of employment as an officer of the Company
or its affiliates which Employee ever had, now has or may have from
the date of his commencement of employment with the Company to the
date of his resignation as an officer of the Company. "Claims" shall
mean any damages, losses, causes of action, expenses, claims, demands
and liability of whatever kind and character, including, but not
limited to, any claims, such as those of any federal, state, or local
law dealing with discrimination in employment. The Company agrees
that this release shall not affect any right or Claim that Employee
has pursuant to any director's and officer's liability insurance
policy maintained by the Company to be indemnified and insured, from
and after the date of this Agreement, for any Claims arising against
Employee as a result of his service as an officer and a director of
the Company.
b. Except with respect to the Company's rights
set forth in this Agreement, the sufficiency of which are hereby
acknowledged, the Company and its affiliates hereby release, acquit,
and forever discharge Employee, his personal legal representatives and
heirs, from any and all Claims against Employee known to the Company
or its affiliates at the date hereof, including any and all Claims on
account of, related to, or arising out of the facts and circumstances
surrounding Employee's employment or termination of employment as an
officer of the Company or its affiliates, which the Company or its
affiliates ever had, now has or may have from the date of Employee's
commencement of employment with the Company to the date hereof; and
the Company hereby agrees to indemnify, defend and hold Employee
harmless with respect to any claim, demand or action related to the
Claims released in this Section 10.b.
c. Notwithstanding anything to the contrary
contained herein, this Section 10 shall not in any way affect any
existing right or claim of Employee to exercise and acquire capital
stock of the Company pursuant to any stock option, warrant or other
contractual right.
11. Effect of Prior Agreements: This Agreement contains
the entire understanding between the parties hereto relating to the subject
matter hereof and supersedes any other prior agreement between the Company and
Employee, it being specifically agreed that the Chief Marketing Officer
Employment Agreement dated October 10, 1996 between the Company and Employee is
hereby terminated and all parties are released from any obligation thereunder.
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12. General Provisions:
a. Nonassignability. Except as otherwise
provided herein, neither this Agreement nor any right or interest
hereunder shall be subject, in any manner, to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge,
whether voluntary or involuntary, by operation of law or otherwise,
and any attempt at such shall be void; and further provided, that any
such benefit to Employee hereunder shall not in any way be subject to
the debts, contracts, liabilities, engagements or torts of Employee,
nor shall it be subject to attachment or legal process for or against
Employee.
b. Applicable Law; Jurisdiction. The parties
intend and agree that the terms and provisions of this Agreement and
the performance of the parties hereunder shall be governed only by the
laws of the State of Texas. The parties agree to submit exclusively
to the jurisdiction of the courts located in Xxxxxx County, Texas with
respect to any matter arising under this Agreement or its enforcement
and that such jurisdiction shall be exclusive over the jurisdiction of
any courts located outside of Xxxxxx County, Texas.
c. Source of Payment. All payment provided in
this Agreement shall be paid in cash from the general funds of the
Company, and no special or separate funds shall be established and no
other segregation of assets shall be made to assure payments.
Employee shall have no right, title, or interest whatever in or to any
investments which the Company may make to aid the Company in meeting
its obligations hereunder. Nothing contained in this Agreement, and
no action taken pursuant to this provision, shall create or be
construed to create a trust of any kind, or a fiduciary relationship,
between the Company and Employee or any other person. To the extent
that any person acquires a right to receive payments from the Company
hereunder, such right shall be no greater than the right of an
unsecured creditor of the Company.
13. Modification and Waiver:
a. Amendment of Agreement. This Agreement may
not be modified or amended except by an instrument in writing signed
by the parties hereto.
b. Waiver. No term or condition of this
Agreement shall be deemed to have been waived, nor shall there be an
estoppel against the enforcement
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of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel.
14. Notices: All written notices or communications
hereunder shall be addressed as follows:
To the Company:
Eagle USA Air Freight, Inc.
0000 X. Xxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxx, President
To Employee:
Xxxxxx X. Xxxxxxx
3 Lace Wing
Xxx Xxxxxxxxx, Xxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Zimmerman, Axelrad, Xxxxx, Xxxxx & Xxxx, P.C.
0000 Xxxx Xxx Xxxx.
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
All such notices shall be conclusively deemed to be received and shall be
effective, (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission or (iii) if sent by registered or certified mail, on the fifth day
after the day on which such notice is mailed.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its officer thereunto duly authorized, and Employee has signed
this Agreement, all as of the day first above written.
EAGLE USA AIR FREIGHT, INC.
By:/s/ Xxxxxxx X. Xxxxxx
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/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx ("Employee")
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