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EXHIBIT 3
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and
among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"),
YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Xxxxx X. Xxxxxxxxxxx,
(the "Executive").
WHEREAS, Yellow and the Company are currently engaged in the
negotiation of an Agreement and Plan of Merger (the "Purchase Agreement")
pursuant to which Yellow would, through an indirect wholly owned subsidiary,
acquire all the shares of common stock of the Company; and
WHEREAS, the Boards of Directors of the Company and Yellow have
approved the employment of the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing, for the considerations provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby accepts such
continued employment, upon the terms and conditions set forth
in this Agreement. On and after the effective date of the
merger of the "Purchaser" (as defined in the Purchase
Agreement) into the Company contemplated by the Purchase
Agreement (the "Merger Date"), Yellow shall cause the
"Surviving Corporation" as defined in the Purchase Agreement
to satisfy the Company's obligations under this Agreement;
provided, however, that Yellow shall have no obligations or
liabilities under this Agreement unless and until the
Effective Date (as defined below) occurs. On and after the
Merger Date, said Surviving Corporation shall be the "Company"
for purposes of this Agreement.
2. Term. This Agreement shall become effective on, and the
term (the "Term") of the Executive's employment under this
Agreement shall commence on, the date on which the Purchaser
purchases shares of the Company's stock pursuant to a tender
offer (the "Effective Date") and shall continue until the date
of termination of the Executive's employment with the Company.
3. Position and Duties. During the Term, the Executive shall
serve as Senior Vice President - CFO of the Company, and shall
have such responsibilities and authority as is commensurate
with such office. The Executive shall devote substantially all
of his working time and efforts to the business and affairs of
the Company.
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4. Compensation. During the Term, the Company shall provide
the Executive with the following compensation and other
benefits:
(a) Base Salary. The Company shall pay the Executive
base salary at the initial rate of $191,200 per
annum, which shall be payable in accordance with the
standard payroll practices of the Company. At no time
during the Term shall the Executive's base salary be
decreased from the rate then in effect except with
the written consent of the Executive.
(b) Bonus. During the Term, the Executive shall
participate in the annual bonus program maintained
for the executive officers of the Company. The
Executive's target bonus for each fiscal year during
the Term shall be no less than 30% of his annual base
salary for that year.
(c) Other Company, Benefits. During the Term, the
Executive shall be entitled to participate in, and to
receive benefits under, the benefit plans and
programs that are at the applicable time available to
executives of the Company generally and on terms and
conditions that are no less favorable than those
applicable to executives of the Company generally.
(d) Stock Options. As of the Effective Date, Yellow
shall grant to the Executive an option to purchase
20,000 shares of common stock of Yellow with the
following principal terms: (i) an exercise price
equal to the closing price of Yellow common stock as
reported by NASDAQ on June 4, 1999, (ii) vesting and
becoming exercisable at the rate of 25% on the first
anniversary of the Effective Date, 25% on the second
anniversary, 25% on the third anniversary, and the
remaining 25% on the fourth anniversary, and (iii)
other terms and conditions substantially similar to
stock options granted to executives generally under
Yellow's 1996 Stock Option Plan. With respect to
calendar years beginning after the Effective Date,
the Executive during the Term shall participate in
Yellow's stock option plans on terms and conditions
substantially similar to those generally applicable
to executives of Yellow and its subsidiaries.
(e) Perquisites. On and after the Effective Date,
Yellow shall cause the Company during the Term to
provide to the Executive the perquisites listed in
Appendix A hereto.
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5. Right to Terminate Employment. The Company reserves the
right to terminate the Executive's employment hereunder at any
time, subject, however, to the termination procedures set
forth in Section 7 of the Amended and Restated Severance
Agreement dated as of June 4, 1999 between the Company and
the Executive (the "Severance Agreement") to the extent such
procedures are then applicable pursuant to the terms of the
Severance Agreement. The Executive reserves the right to
resign from employment with the Company at any time, subject,
however, to any limitations on such right that may then be
applicable pursuant to the terms of the Severance Agreement.
6. Relationship of this Agreement to Severance Agreement.
Nothing in this Agreement shall affect in any way the rights
and obligations of the Company and the Executive under the
Severance Agreement, except that the Executive hereby agrees
to the following modifications of the Severance Agreement,
effective as of the Effective Date:
(i) an act or failure to act constituting "Good Reason" as
described in subsection (i) of Section 15 (M) of the Severance
Agreement shall not be deemed to occur on or after the
Effective Date so long as the Executive has the title,
responsibilities and authority set forth in Section 3 of this
Agreement (notwithstanding changes in the Executive's status,
responsibilities and authority resulting from the Company's
ceasing to be a separate public company), and
(ii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the cessation of the Executive's participation in the
Company's stock option and other stock-based plans so long as
Yellow complies with Section 4 (d) of this Agreement on and
after the Effective Date, and
(iii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15(M) of the
Severance Agreement shall not be deemed to occur by reason of
the limitation of the Executive's target bonus to the level
provided for in Section 4 (b) of this Agreement, and
(iv) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the elimination or modification of any perquisites or fringe
benefits enjoyed by the Executive before the Effective Date
(other than benefits under any Company "employee benefit plan"
as defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended) so long as the Company
provides the perquisites set forth in Appendix A hereto, and
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(v) Yellow's execution of this Agreement shall be deemed to
fully satisfy the Company's obligations pursuant to Section
9.1 of the Severance Agreement.
7. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the party against whom such waiver, modification or
discharge is sought to be enforced (with such signature, in
the case of the Company or Yellow, to be made by a duly
authorized officer thereof). No waiver by any party hereto at
any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any
party which are not expressly set forth in this Agreement. The
validity, interpretation, and construction of this Agreement
shall be governed by the laws of the State of New Jersey.
Payments provided for hereunder shall be paid net of
withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
IN WITNESS WHEREOF, this Agreement has been executed, as of
the date first written, on behalf of the Company by its duly
authorized officer, on behalf of Yellow by its duly authorized
officer, and by the Executive.
JEVIC TRANSPORTATION, INC
/s/ Xxxxx X. Xxxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxxxx
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Secretary
YELLOW CORPORATION
/s/ Xxxxxxx X. Xxxxxx, Xx. By: /s/ X.X. Xxxxxxxxx III
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Secretary
EXECUTIVE
By: /s/ Xxxxx X. Xxxxxxxxxxx
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APPENDIX A
Under Section 4 (e) of the Employment Agreement between the Executive,
Jevic Transportation, Inc. and Yellow Corporation the following perquisites
shall be provided:
(A) Car Allowance. Executive shall be provided a car or car
allowance at least equal to that provided under Jevic
Transportation, Inc.'s policy dated March 5, 1996.
(B) Vacation. Executive will be entitled to annual vacation
at least equal to that currently provided as an employee of
Jevic Transportation under their current policy and practice.
(C) Supplemental Retirement Plan. Continued eligibility to
participate in Jevic Transportation's non-qualified
supplemental retirement arrangements through Fidelity
Investments.
(D) Split Dollar Life Insurance. Continued participation in
the Split Dollar Life Insurance Program currently provided as
an Executive of Jevic.
(E) Financial Planning / Tax Preparation. Executive will be
entitled to an annual reimbursement of expenses in conjunction
with personal financial planning and/or income tax return
preparation not to exceed $1,500.
(F) Executive Physical. Executive will be reimbursed up to
$350 annually for expenses in conjunction with a physical
examination. This benefit shall be in addition to any amounts
otherwise payable under Jevic's Medical Benefit Plan.
