EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is entered into as of September 13, 2004 by
and between UNIVERSAL TRUCKLOAD SERVICES, INC. ("UTSI") and XXX XXXXXXX, and the
parties therefore agree as follows:
Subject to the terms and conditions contained in this Agreement and during
the Term of this Agreement (as defined below), UTSI hereby employs EMPLOYEE in
the position of "President and CEO," with such duties and responsibilities as
are commensurate with such office and may from time-to-time be assigned to
EMPLOYEE by UTSI's Board of Directors.
EMPLOYEE hereby accepts such employment, and while employed, shall devote
his full business time, skills, energy and attention to the business of UTSI,
shall perform his duties in a diligent, loyal, businesslike and efficient
manner, all for the sole purpose of enhancing the business of UTSI, and in a
manner consistent with all UTSI policies, resolutions and directives from time
to time stated or made by the Board of Directors. Moreover, EMPLOYEE shall
perform such services and duties as are consistent with EMPLOYEE's position, are
necessary or appropriate for the operation and management of UTSI, and as are
normally expected of persons appointed to chief executive positions in the
business in which EMPLOYER is engaged. EMPLOYEE shall not directly or indirectly
engage in or be associated with any other business duties or pursuits without
the prior written consent of the Board of Directors.
1. Term of Agreement
This Agreement shall commence on September 13, 2004 (the "Commencement
Date") and shall expire on September 13, 2008 (the "Term") for a Term of four
years, unless sooner terminated pursuant to the provisions of Section 10 or
extended pursuant to Section 3.
2. Compensation for Services
UTSI shall pay to EMPLOYEE compensation at the rate of $300,000 effective
September 13, 2004, with a five percent increase each year thereafter as annual
salary ("Base Salary") payable in equal installments pursuant to UTSI's payroll
system in effect from time to time, less all applicable taxes required to be
withheld by UTSI pursuant to federal, state or local law during the term of this
contract.
3. Option To Extend.
UTSI shall have the option to extend this Agreement for two consecutive
years for an additional one (1) year at a time. The EMPLOYEE's annual salary for
the two one-year option periods shall be at a five percent increase per option
year payable in equal installments pursuant
to UTSI's payroll system in effect from time to time, less all applicable taxes
required to be withheld by UTSI pursuant to federal, state or local law. UTSI
may elect to exercise this extension option any time prior to the end of the
contract years and/or the extended options years.
4. Benefits
EMPLOYEE shall be entitled to fringe benefits provided by UTSI for its
employees in the normal course of business. UTSI agrees to compensate EMPLOYEE
for significant cost increases in benefit costs that are beyond the normal
annual cost that all employees experience.
UTSI agrees to provide Directors and Officers insurance coverage except
under extraordinary market conditions such as those that resulted from the
events of 9/11/01 in which case coverage, if any, shall be as determined by the
Board of Directors.
5. Business Expenses
UTSI shall reimburse EMPLOYEE for all reasonable and necessary business
expenses incurred by him in the performance of his duties hereunder with respect
to travel, entertainment and other business expenses, subject to UTSI's business
expense policies in effect from time to time, including its procedures with
respect to the manner of incurring, reporting and documenting such expenses
6. Proprietary Information
a. EMPLOYEE shall forever hold in the strictest confidence and not
disclose to any person, firm, corporation or other entity any of UTSI's
Proprietary Information (as defined below) or any of UTSI's Records (as defined
below) except as such disclosure may be required in connection with EMPLOYEE's
work for UTSI and as expressly authorized by UTSI's Board of Directors in
writing.
b. For the purposes of this Agreement, the term "Proprietary Information"
shall mean inter company publications, unpublished works, plans, policies,
computer and information systems, software and other information and knowledge
relating or pertaining to the products, services, sales or other business of
UTSI or its successor, affiliates and customers in any way which is of a
confidential or proprietary nature, the prices it obtains or has obtained from
the sale of its services, its manner of operation, its plans, processes or other
data, contracts, information about contracts, contract forms, business
applications, costs, profits, tax information, marketing information,
advertising methods, customers, potential customers, brokers, potential brokers,
employees, matters of a technical nature (including inventions, computer
programs, concepts, developments, contributions, devices, discoveries, software
and documentations, secret processes or machines, including any improvements
thereto and know-how related thereto, and research projects, etc.), and other
information not generally available to the public, without regard to
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whether all of the foregoing matters will be deemed confidential, material or
important. Anything to the contrary notwithstanding, the parties hereto
stipulate that any and all knowledge, data and information gathered by the
EMPLOYEE through this Agreement, his employment with UTSI and the operation of
the business of UTSI is deemed important, material or confidential, and gravely
affects the effective and successful conduct of the business of UTSI and UTSI's
good will; could not without great expense and difficulty be obtained or
duplicated by others who have not been able to acquire such information by
virtue of employment with UTSI; and that any breach of the terms of this
Paragraph 6 shall be deemed a material breach of this Agreement. Proprietary
Information" shall not include any information available from non UTSI sources
or known to employee prior to his employment with UTSI.
c. EMPLOYEE agrees that all creative work, including without limitation,
designs, drawings, specifications, techniques, models, processes and software
prepared or originated by EMPLOYEE during or within the scope of employment
whether or not subject to protection under the federal copyright or other law
constitutes work made for hire all rights to which are owned by UTSI. Moreover,
EMPLOYEE hereby assigns to UTSI all right, title and interest whether by way of
copyright, trade secret, patent or otherwise, and all such work whether or not
subject to protection by copyright or other law.
d. Upon termination of employment with UTSI or at any other time requested
by UTSI, EMPLOYEE shall immediately return to UTSI and not retain any copies of,
any records, data, lists, plans, policies, publications, computer and
information systems, files, diagrams and documentation, data, papers, drawings,
memos, customer records, reports, correspondence, note books, service listing
and any other business record of any kind or nature (including without
limitation records in machine-readable or computer-readable forms) relating to
Proprietary Information ("Records").
7. Covenant Not To Compete
a. As a material part of the consideration for this Agreement, EMPLOYEE
agrees to the following covenants not to compete with UTSI, and with all of its
affiliated companies listed in Exhibit A to this Agreement ("Affiliated
Companies") during his employment and for a one (1) year period following the
termination of EMPLOYEE's employment with UTSI for any reason. EMPLOYEE agrees
not to interfere with customer contracts for a period of one year. This
restriction shall apply to all UTSI Customers and Customers of Affiliated
Companies. EMPLOYEE further agrees not to solicit, retain, employ or accept
business from any UTSI employees, agents or owner operators, or the employees,
agents or owner operators of any Affiliated Companies. Anything contrary
notwithstanding, this Paragraph 7 shall survive after the termination or the
earlier cancellation of this Agreement.
b. Both parties agree that the restrictions in this section are fair and
reasonable in all respects including the length of time that they shall remain
in effect and that UTSI's employment of EMPLOYEE upon the terms and conditions
of this Agreement is fully sufficient consideration for EMPLOYEE's obligations
under this section.
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c. If any provisions of this section are ever held by a Court to be
unreasonable, the parties agree that this section shall be enforced to the
extent it is deemed to be reasonable.
8. No Interference With Employment Relationships
EMPLOYEE agrees that he will not either before or after termination of his
employment with UTSI encourage, solicit or otherwise attempt to persuade any
other employee of UTSI to leave the employment of UTSI. In the event EMPLOYEE
hires an employee of UTSI, UTSI shall be compensated at a fee equal to 30% of
the employee's first year's gross compensation.
9. Equitable Relief And Remedies At Law
EMPLOYEE acknowledges that UTSI would suffer unique and irreparable injury
in the event of a breach of the covenants contained in Sections 6, 7 and 8 of
this Agreement, which breach could not be adequately compensated by the payment
of damages alone. Accordingly in the event of any such breach by EMPLOYEE,
EMPLOYEE agrees that this Agreement may be enforced by a decree of specific
performance or an injunction without the necessity of posting a bond in addition
to any remedies available at law, including damages arising out of or relating
to a breach of those covenants, and that any remedy which UTSI might have at law
would be inadequate by itself.
10. Termination of Agreement
a. Without limitation of any other remedy available to UTSI, whether in
law or in equity, EMPLOYEE's employment relationship shall terminate immediately
without any further liability of UTSI to EMPLOYEE, upon written notice from UTSI
to EMPLOYEE, for just cause: conviction of a felony of moral turpitude or
dishonesty. In the event of EMPLOYEE's termination pursuant to this Section
10(a), UTSI shall have no obligation to pay Base Salary and benefits effective
as of the date the employment relationship is terminated.
b. EMPLOYEE's employment relationship shall terminate immediately upon
death of EMPLOYEE.
c. EMPLOYEE agrees to submit to a medical examination at any time at
UTSI's request and expense. The medical examination will be related to
EMPLOYEE's job and consistent with a business necessity of UTSI. This Agreement
may be terminated by UTSI immediately upon written notice to EMPLOYEE is the
examination reveals that EMPLOYEE is unable to perform the essential functions
of this Agreement even with a reasonable accommodation. The Agreement may also
be terminated if, for a period of three (3) consecutive months, EMPLOYEE is
unable to perform the essential functions of the Agreement even with a
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reasonable accommodation. Upon such termination due to medical disability,
EMPLOYEE's compensation shall be continued for twelve (12) months from the date
of disability.
d. Upon the determination by UTSI's Board of Directors that the best
interests of UTSI would be served, UTSI shall have the further right to
terminate EMPLOYEE's employment relationship immediately or at any time, at its
option upon written notice to EMPLOYEE, without just cause. If EMPLOYEE is
terminated pursuant to this Section 10(d), EMPLOYEE shall be entitled to receive
only Base Salary and benefits for a period of twelve (12) months following such
termination or until the term of this agreement, whichever period is greater.
Maximum twenty-four months.
e. Any compensation payable to EMPLOYEE pursuant to this Section 10
following termination pursuant to subsection (d) of this Section 10 shall be
reduced by the amount of any compensation earned by EMPLOYEE in any employment
or consulting he may undertake during said period that constitutes a violation
of Section 5 respecting noncompetition.
f. Upon three months' prior written notice to UTSI at any time, EMPLOYEE
shall have the right to terminate his employment relationship with UTSI at his
option. Upon receipt of such notice UTSI shall have the option to terminate
EMPLOYEE's employment relationship immediately upon written notice to EMPLOYEE.
In the event of termination pursuant to this Section 10(f), EMPLOYEE shall be
entitled to receive Base Salary and benefits only through the three month period
following EMPLOYEE's notice of termination. The time period on the covenant not
to compete shall commence at the end of the three (3) month period, and EMPLOYEE
shall also be bound by the covenant not to compete during the three (3) month
period he is receiving Base Salary and benefits. EMPLOYEE shall be liable for
all costs and expenses incurred by UTSI for the failure to give three (3)
months' notice.
g. Upon termination of this Agreement by UTSI EMPLOYEE shall, without a
claim for compensation, provide UTSI with written resignations from any and all
offices held by him in or at the request of UTSI, and in the event of his
failure to do so, UTSI is hereby irrevocably authorized to be, or designated as
EMPLOYEE's attorney in fact, to act in his name and in his behalf to execute
such resignations.
h. This Agreement shall terminate upon expiration of the Term unless
otherwise agreed to by the parties in writing prior thereto.
11. Exclusive Consulting Contract
Upon termination of EMPLOYEE's employment with UTSI for any reason
whatsoever, UTSI shall have the right at its option, to retain EMPLOYEE as an
independent consultant under an exclusive consulting contract, for the
performance by EMPLOYEE of such duties as may be reasonably assigned by UTSI
consistent with the position of an independent consultant. The specific terms
regarding the actual services to be performed, length of service, restrictions
on
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competition and other contractual terms not set forth in this paragraph,
shall be mutually agreeable to EMPLOYEE and UTSI.
12. No Restriction on Performance of Services Contemplated by Agreement
EMPLOYEE represents and warrants to UTSI that: (i) he is under no
contractual or other restriction which would give a third party a legal right to
assert that he would not be legally permitted to perform the services
contemplated by this Agreement; and (ii) by entering into this Agreement he has
not breached, and by performing the services contemplated by this Agreement, he
would not breach, any Agreement or duty relating to proprietary information of
another person or entity.
13. Confidentiality of Agreement
EMPLOYEE shall not disclose any of the terms of this Agreement to any
person with the exception of his spouse or attorneys or as required by law,
provided the spouse or attorneys agree to be bound by this Section.
14. Severability
In case any one or more of the provisions hereof shall be held to be
invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. To the extent possible, there shall
be deemed substituted such other provision as will most nearly accomplish the
intent of the parties, to the extent permitted by applicable law.
15. Entire Agreement
This Agreement embodies all the representations, warranties, covenants and
agreements of the parties in relation to the subject matter hereof, and no
representations, warranties, covenants, understandings, or agreements, unless
expressly set forth herein or in an instrument in writing signed by the party to
be bound thereby which makes reference to this Agreement, shall be considered
effective.
16. No Rights in Third Parties
Nothing herein expressed or implied is intended to, or shall be construed
to confer upon, or give to any person, firm or other entity other than the
parties hereto any rights or remedies under this Agreement, except as provided
in Section 17.
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17. Assignment
UTSI may assign its rights and delegate its responsibilities under this
Agreement to any affiliated company or to any corporation which acquires all or
substantially all of the operating assets of UTSI by merger, consolidation,
dissolution, liquidation, combination, sale or transfer of assets or stock or
otherwise. If there is a change of control where upon a new majority
shareholder, other than Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx or affiliates, new
ownership would be equally responsible to honor this contract. EMPLOYEE shall
not be entitled to assign his rights or delegate his responsibilities under this
Agreement to any person.
18. Payment to Estate
No person, firm or entity shall have any right to receive any payments
owing to EMPLOYEE hereunder, except that EMPLOYEE's estate shall be entitled to
receive a final payment of installment of Base Salary for services rendered to
UTSI through date of death and reimbursement for any business expenses
previously incurred by EMPLOYEE for which he would have been entitled to
reimbursement hereunder.
19. Amendment
No modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto.
20. Survival of Covenants
Without limitation of any other provisions of this Agreement, all
representations and warranties set forth in this Agreement and the covenants set
forth in Sections 6, 7, 8 and 13 shall survive the termination of this Agreement
for any reason for the maximum period permitted by law.
21. Governing Law
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of Michigan. The
parties agree that should any litigation arise out of, in connection with, or
relating to this Agreement, such litigation will be commenced in the Circuit
Court for Macomb County Michigan or in the United States District Court for the
Eastern District of Michigan provided such court has subject matter
jurisdiction. The parties specifically agree, however, that either of these
courts has personal jurisdiction and venue.
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22. Notices.
Service of all notices under this Agreement must be given personally to
the party involved at the address set forth below or at such other address as
such party shall provide in writing from time to time.
COMPANY: Xxxxxxx Xxxxxx
00000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
EMPLOYEE: Xxx Xxxxxxx
Universal Truckload Services
00000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
23. Paragraph Headings
The titles to the paragraphs of this Agreement are for convenience of the
parties only and shall not affect in any way the meaning or construction of any
Paragraph of this Agreement.
24. Non-Waiver.
No covenant or condition of this Agreement may be waived except by the
written consent of UTSI Board of Directors. Forbearance or indulgence by UTSI in
any regard whatsoever shall not constitute a waiver of the covenants or
conditions to be performed by EMPLOYEE to which the same may apply, and, until
complete performance by EMPLOYEE of said covenant or condition, UTSI shall be
entitled to invoke any remedy available to UTSI under this Agreement or by law
or in equity, despite said forbearance or indulgence.
25. Construction
Although this Agreement was drafted by UTSI the parties agree that it
accurately reflects the intent and understanding of each party and should not be
construed against UTSI if there is any dispute over the meaning or intent of any
provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
UNIVERSAL TRUCKLOAD SERVICES, INC.
/s/ Xxxxx X. Xxxxx, Xx. By: /s/ Xxxxxxx Xxxxxx
---------------------------------- --------------------------------
[Witness]
Its: Chairman
------------------------------
/s/ Xxxxx X. Xxxxx, Xx. /s/ Xxxxxx X. Xxxxxxx
--------------------------------- -----------------------------------
[Witness] EMPLOYEE
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EXHIBIT A
Central Transport, Inc.
L.I.N.C.
Logistic Services Inc.
CTX Of Michigan LLC
Pro Logistics Inc.
Central Global Express Of MI LLC
Flint Special Services, Inc.
Custom SVCS, Int'l
Mohawk Service Corp.
Central Transport Intl. Inc.
M.C.S.I.
M.C.S.I. Titan
Central-XxXxxxxx International Ltd
C C Canada, Ltd.
Linc Ontario, Ltd
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