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EXHIBIT 10.51
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 17th day of November,
1997, by and between XXXXXX TRAILERS, INC., a Delaware corporation (the
"Company"), and XXXXX XXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Executive by entering into an
employment agreement with Executive as hereinafter provided; and
WHEREAS, Executive desires to commence her employment with the Company
on the terms and conditions provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereby agree as follows:
1. Employment and Term.
(a) Subject to the terms and conditions of this Agreement, the Company
hereby employs Executive, and Executive hereby accepts employment, as President
and Chief Operating Officer of the Company and shall have such
responsibilities, duties and authority that are consistent with such position
as may from time to time be assigned to Executive by the Board. Executive
hereby agrees that during the Term of this Agreement she will devote
substantially all her working time, attention and energies to the diligent
performance of her duties as President and Chief Operating Officer of the
Company, provided that the Executive may also serve on boards of directors or
trustees of other companies and organizations, as long as such service does
not materially interfere with the performance of her duties hereunder and is
with the prior approval of the Chief Executive Officer of the Company.
(b) Unless earlier terminated as provided herein, Executive's employment
under this Agreement shall be for an initial term commencing on November 17,
1997 and ending on December 31, 1999, which initial term shall be deemed to
extend automatically, without further action by either the Company or
Executive, for additional consecutive one-year periods (the "Term");
provided, however, that (i) either party may, by written notice to the other
given at least 90 days prior to the end of the initial term or any subsequent
one-year periods, cause this
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Agreement to cease to extend automatically and, upon such notice, this Agreement
shall terminate upon the expiration of such initial term or additional one-year
period, and (ii) the Term of this Agreement shall not extend beyond the end of
the calendar year in which the Executive attains age 65, unless the parties
otherwise agree in writing. If Executive remains employed by the Company after
the expiration of the Term, she shall be considered an "at will" employee and
her duties and terms and conditions of employment shall be determined by the
Board.
2. Compensation and Benefits. As compensation for her services during the
Term of this Agreement, Executive shall be paid and receive the amounts and
benefits set forth below:
(a) An annual base salary ("Base Salary") of $265,000.00, prorated for
any partial year of employment. Executive's Base Salary shall be subject to
annual review for adjustments at such time as the Company conducts salary
reviews for its executive officers generally. Executive's salary shall be
payable in accordance with the Company's regular payroll practices in effect
from time to time for executive officers of the Company.
(b) Executive shall be entitled to participate in Tier 1 of the
Company's annual Bonus Plan, with a range of bonus from 25% to 75% of Base
Salary (depending upon performance levels) and a target level bonus of 50% of
Base Salary, or at any comparable level of any successor annual bonus plan of
the Company.
(c) As of the date of this Agreement, the Board granted Executive
options for 75,000 shares of the Company's Common Stock, with an option exercise
price of $2.50 per share, in accordance with and under the terms of the
Company's Stock Option Plan.
(d) Executive shall be entitled to participate in, or receive benefits
under, any "employee benefit plan" (as defined in Section 3(3) of ERISA) or
employee benefit arrangement made available by the Company to its executive
officers, including plans providing retirement, 401(k) benefits, deferred
compensation, incentive compensation, health care, life insurance, disability
and similar benefits.
(e) Executive shall be entitled to fringe benefits made available to
Executive Officers by the Company, including a monthly car allowance.
(f) Executive shall be entitled to moving expenses, relocation benefits
and related expenses in the amounts agreed upon by the parties.
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3. Benefits Upon Termination and Change in Control.
(a) If Executive's employment is terminated by the Company during the
Term, Executive shall be entitled to the payments and benefits in subsections
(d) and (e) below, except the Company will not be required to provide said
payments and benefits if Executive's employment is terminated (i) by the
Company for Cause, as defined in subsection (g)(i) below; or (ii) upon
Executive's becoming Disabled, as defined in subsection (g)(iii) below; or
(iii) upon Executive's death; or (iv) by Executive without "Good Reason", as
defined in subsection (c) below.
(b) If Executive's employment is terminated by the Company at the
expiration of the initial term on December 31, 1999, or at the end of any
one-year extension period, as defined above in Section 1(b), by virtue of the
Company giving the written notice required above in Section 1(b)(i), Executive
shall be entitled to the payments and benefits in subsections (d) and (e) below.
(c) If Executive terminates her employment during the Term for Good
Reason, she shall be entitled to the payments and benefits in subsections (d)
and (e) below. For the purposes of this Agreement, "Good Reason" shall mean:
(i) a material breach of this Agreement by the Company which is not corrected
within 30 days of notice of such breach by Executive; or (ii) any significant
demotion of Executive to a different position; or (iii) any significant
reduction in the Executive's responsibilities or job duties.
(d) Executive shall continue to receive Executive's Base Salary as then
in effect (subject to withholding of all applicable taxes) for a period of
twelve (12) months from the termination date in the same manner as it was being
paid as of the termination date. Any bonus amounts that Executive had
previously earned from the Company but which may not yet have been paid as of
the date of termination shall not be affected by her termination. Executive
shall also receive a prorated bonus for any uncompleted fiscal year at the date
of the termination (assuming the target award level has been achieved), based
upon the number of days that she was employed during such fiscal year divided
by 365. The bonus amount(s) determined herein shall be paid in a single lump
sum payment, to be paid not later than 30 days after termination of employment.
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(e) The health and group term life insurance benefits coverage in effect
at Executive's termination date shall be continued at the same level and in the
same manner as if Executive's employment under this Agreement had not
terminated (subject to customary changes in such coverages if Executive
retires, reaches age 65 or similar events), beginning on the date of such
termination and ending on the date twelve (12) months from the date of such
termination. Any additional coverages Executive had at termination, including
dependent coverage and supplemental executive medical coverage, will also be
continued for such period on the same terms, to the extent permitted by the
applicable policies or contracts. Any costs Executive was paying for such
coverages at the time of termination shall be paid by Executive through
deduction from the amounts payable under subsection (d) or, if such withholding
cannot be done, by separate check payable to the Company each month in advance.
(f) Upon the occurrence of a Change in Control of the Company (as defined
in subsection (g)(ii) below), all of Executive's outstanding stock options
shall become fully vested and immediately exercisable. The period during which
such options may be exercised shall be determined in accordance with the
provisions of the option agreement(s).
(g) For purposes of this Agreement, the following definitions shall apply:
(i) "Cause" - For purposes of this Agreement, the term "Cause" shall
mean: (A) Executive's fraud, malfeasance, gross negligence, or willful
misconduct with respect to the business affairs of the Company, (B)
Executive's refusal or repeated failure to follow the established
reasonable and lawful policies of the Company, (C) Executive's failure to
follow the directions and business decisions of the Chief Executive Officer
of the Company, or (D) conviction of a felony or crime involving moral
turpitude. A termination of Executive for Cause based on clauses (B) or (C)
of the preceding sentence shall take effect 30 days after the Executive
receives from the Company written notice of intent to terminate and the
Company's description of the alleged cause, unless Executive shall, during
such 30-day period, remedy the events or circumstances constituting Cause.
(ii) "Change in Control" - A Change in Control shall be deemed to
have occurred (A) upon consummation of a merger, consolidation or other
business combination of the Company with any other "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) or affiliate thereof, other than a merger,
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consolidation or business combination which would result in the outstanding
common stock of the Company immediately prior to such transaction
continuing to represent (either by remaining outstanding or by being
converted into common stock of the surviving entity or a parent or
affiliate thereof) at least fifty percent (50%) of the outstanding common
stock of the Company or such surviving entity or parent or affiliate
thereof outstanding immediately after such merger; or (B) if more than 25%
of the then outstanding shares of Common Stock of the Company are, in a
single transaction or in a series of related transactions, sold or
otherwise transferred to or are acquired by (except as collateral security
for a loan) any other corporation, association or other person, entity or
group, whether or not any such shareholder or any shareholders included in
such group were shareholders of the Company prior to the Change in Control
(excluding any shareholder who on the date hereof owns 25% or more of the
outstanding shares of Common Stock of the Company); or (C) if all or
substantially all of the assets of the Company are sold or otherwise
transferred to or otherwise acquired by any other corporation, association
or other person, entity or group; or (D) if during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board, cease for any reason to constitute at least a
majority thereof, unless the election of each new director was approved in
advance by a vote of at least a majority of the directors then still in
office who were directors at the beginning of the period.
(iii) "Disability" or "Disabled" - Executive's absence from his
duties on a full-time basis for 180 consecutive business days as a result
of incapacity due to physical or mental illness or injury.
4. Confidentiality and Noncompetition. (a) Executive acknowledges that,
prior to and during the Term of this Agreement, the Company has furnished and
will furnish to Executive Confidential Information (as defined in subsection
(f) below) which could be used by Executive on behalf of a competitor of the
Company to the Company's substantial detriment. Moreover, the parties recognize
that Executive during the course of her employment with the Company may develop
important relationships with customers and others having valuable business
relationships with the Company. In view of the foregoing, Executive
acknowledges and agrees that the restrictive covenants contained in this
Section are reasonably necessary to protect the Company's legitimate business
interests and good will.
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(b) Executive agrees that she shall protect the Company's Confidential
Information and shall not disclose to any person, or otherwise use, except in
connection with her duties performed in accordance with this Agreement, any
Confidential Information; provided, however, that Executive may make
disclosures required by a valid order or subpoena issued by a court or
administrative agency of competent jurisdiction, in which event Executive will
promptly notify the Company of such order or subpoena to provide the Company an
opportunity to protect its interests. Executive's obligations under this
Section 4(b) shall survive any expiration or termination of this Agreement,
provided that Executive may after such expiration or termination disclose
Confidential Information with the prior written consent of the Chairman of the
Board.
(c) Upon the termination or expiration of her employment hereunder,
Executive agrees to deliver promptly to the Company all Company files, customer
lists, management reports, memoranda, research, Company forms, financial data
and reports and other documents supplied to or created by her in connection
with her employment hereunder (including all copies of the foregoing) in her
possession or control, and all of the Company's equipment and other materials
in his possession or control. Executive's obligations under this Section 4(c)
shall survive any expiration or termination of this Agreement.
(d) Executive covenants and agrees that in any circumstance in which
Executive's employment ceases, then for a twelve month period she will not,
directly or indirectly, on her own behalf or on behalf of any other person or
entity:
(i) Solicit the patronage or business of any person or entity located
within the geographical area served by the Company's business over which
Executive exerted control ("Protected Customers") and which was a customer
of the Company during the term of Executive's employment, or of any of the
prospective Protected Customers of the Company solicited or called upon by
the Company within two years prior to the termination of Executive's
employment, for the purpose of selling or providing (or attempting to sell
or provide) to any such Protected Customer any product or service
substantially similar to or competitive with any product or service sold
or offered by the Company during the term of Executive's employment by the
Company; or
(ii) Solicit for employment or hire any person who is then employed
by the Company (whether such employment is pursuant to a written contract
with the Company or
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otherwise), or induce or attempt to induce any such person to leave the
employment of the Company for any reason.
If Executive has any doubts as to whether a person or entity is a customer
or prospective customer which she is restricted from soliciting as provided in
covenant (i) above, Executive will submit a written request to the Chairman of
the Board of the Company for clarification and afford the Company at least 10
calendar days (from the receipt of such request) to respond before taking any
action with respect to such person or entity. Executive further acknowledges and
agrees that the covenants contained herein are reasonable and necessary to
protect the legitimate business interests of the Company.
(e) Executive acknowledges that if she breaches or threatens to breach
this Section 4, his actions may cause irreparable harm and damage to the
Company which could not be compensated in damages. Accordingly, if Executive
breaches or threatens to breach this Section 4, the Company shall be entitled
to seek injunctive relief, in addition to any other rights or remedies of the
Company. The existence of any claim or cause of action by Executive against the
Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of Executive's agreement
under this Section 4(e).
(f) For purposes of this Agreement, Confidential Information shall mean
and include all technical, business, and other information relating to the
business of the Company or its subsidiaries or affiliates, including, without
limitation, technical or nontechnical data, formulae, compilations, programs,
devices, methods, techniques, processes, financial data, financial plans,
product plans, and lists of actual or potential customers or suppliers, which
(i) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other Persons, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy or confidentiality. Such information and compilations of
information shall be contractually subject to protection under this Agreement
whether or not such information constitutes a trade secret and is separately
protectable at law or in equity as a trade secret. Confidential Information does
not include confidential business information which does not constitute a trade
secret under applicable law two years after any expiration or termination of
this Agreement.
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5. Contract Non-Assignable. The parties acknowledge that this Agreement
has been entered into due to, among other things, the special skills of
Executive, and agree that this Agreement may not be assigned or transferred by
Executive, in whole or in part, without the prior written consent of the
Company.
6. Successors; Binding Agreement.
(a) In addition to any obligations imposed by law upon any successor to
the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement, in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Company terminated the Executive's employment without Cause,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of termination.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive shall die
while any amount would still be payable to Executive hereunder (other than
amounts which, by their terms, terminate upon the death of Executive) if
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of Executive's estate.
7. Other Agents. Nothing in this Agreement is to be interpreted as
limiting the Company from employing other personnel on such terms and
conditions as may be satisfactory to the Company.
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8. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or seven days after mailing if mailed, first class,
certified mail, postage prepaid:
To the Company: Xxxxxx Trailers, Inc.
One Paces West, Suite 1700
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxx
To the Executive: Xx. Xxxxx Xxxxx
000 Xxxxxxx Xx. XX
Xxxxxxx, XX 00000
Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
9. Provisions Severable. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
10. Waiver. Failure of either party to insist, in one or more instances,
on performance by the other in strict accordance with the terms and conditions
of this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.
11. Arbitration of Disputes. All claims by Executive for compensation and
benefits under this Agreement shall be in writing. Any denial of a claim for
benefits under this Agreement shall be delivered to Executive in writing and
shall set forth the specific reasons for the denial and the specific provisions
of this Agreement relied upon. The Company shall afford a reasonable opportunity
to Executive for a review of a decision denying a claim and shall further
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allow Executive to appeal a decision within sixty (60) days after notification
that Executive's claim has been denied. Except to the extent prohibited by
applicable law, any further dispute or controversy relating to Executive's
claims for compensation and benefits under this Agreement shall be settled
exclusively by arbitration in Atlanta, Georgia, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. Each party shall pay
its own legal fees and other expenses associated with any such dispute. Nothing
in this Section 11 shall interfere with or restrict the Company's right to seek
injunctive relief, or the other rights or remedies, under Section 4(e).
12. Amendments and Modifications: Governing Law. This Agreement may be
amended or modified only by a writing signed by both parties hereto. The
validity and effect of this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
EXECUTIVE:
/s/ XXXXX XXXXX 9/8/98
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XXXXX XXXXX
COMPANY:
XXXXXX TRAILERS, INC.
By: /s/ XXXXXXX XXXXX 9/8/98
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Xxxxxxx Xxxxx, Chief Executive Officer
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