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EXHIBIT 10.1
Xxxxxx X. Xxxxxx
Employment Agreement
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 1st day of July, 1998 by and
between X.X.X. TRANSPORTATION SERVICES, INC., a Delaware corporation
(hereinafter referred to as "X.X.X." or "COMPANY") and XXXXXX X. XXXXXX
(hereinafter referred to as "EMPLOYEE").
RECITALS:
The following is a recital of facts underlying this Agreement and it
replaces, survives and eliminates all prior agreements and is a continuation of
employment.
X.X.X. is a holding company which owns various subsidiary corporations
which operate as motor common carriers and desires to encourage EMPLOYEE to use
his best efforts to further develop such business. Hereinafter, X.X.X. and its
subsidiaries (whether or not now existing) shall be referred to collectively as
"COMPANY".
EMPLOYEE is the President and Chief Executive Officer of X.X.X. and
desires to continue to perform employment services as an employee and fiduciary
of X.X.X.
NOW, THEREFORE, in consideration of the mutual covenants and agreement of
the parties set forth herein, the parties hereto hereby agree as follows:
1. EMPLOYMENT OF EMPLOYEE. X.X.X. hereby continues to employ EMPLOYEE and
EMPLOYEE hereby continues in the same employment of X.X.X. for the business
conducted by COMPANY for a term commencing on July 1, 1998, and ending at the
close of business on June 30, 2001. If EMPLOYEE is terminated due to medical
disability, EMPLOYEE'S compensation shall be continued for twelve (12) months
thereafter from the determination of disability.
2. DUTIES OF EMPLOYEE. EMPLOYEE shall make himself available to serve as
President and Chief Executive Officer of X.X.X. and, at the request of the Board
of Directors, as an officer of its various subsidiaries, with such specific
duties, responsibilities and authority as may from time to time be assigned to
him by the Board of Directors of X.X.X. which may include, but shall not
necessarily be limited to, overall responsibility for operation of the business
of COMPANY in a manner which will maximize COMPANY'S profits. EMPLOYEE shall
devote all of his time, attention, knowledge and skills solely to the business
of COMPANY and EMPLOYEE shall obey and comply with all rules, regulations and
orders issued from time to time by the X.X.X. Board of Directors. COMPANY shall
be entitled to all of the benefits, profits, or other issues arising from or
incident to all work, services, and advise of EMPLOYEE. EMPLOYEE shall thus
devote his full attention to the operation of the COMPANY and shall not be
engaged in any other business or operation that in any way would inhibit
EMPLOYEE from devoting his full attention to the operation of the company,
EMPLOYEE shall be allowed to pursue other business interests unrelated to the
transportation
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industry as long as the EMPLOYEE'S participation in the unrelated business does
not inhibit the EMPLOYEE'S ability to devote his full attention to the operation
of the COMPANY.
3. BASE COMPENSATION AND BONUS. X.X.X. shall pay EMPLOYEE as base
compensation for all services to be rendered by EMPLOYEE compensation of
$337,000 Thousand Dollars for the period July 1, 1998 through June 30, 1999,
$350,000 Thousand Dollars for the period July 1, 1999 through June 30, 2000,
and $375,000 for the period July 1, 2000 through June 30, 2001. Each base
compensation amount is respective and specific to the time period of which the
EMPLOYEE'S service
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Employment Agreement
is rendered. Each amount of base compensation for the expressly mentioned time
periods is payable in equal bi-weekly payments. Any increase of EMPLOYEE'S base
compensation shall be at the sole discretion of the Board of Directors of X.X.X.
Also, X.X.X. shall xxxxx to EMPLOYEE, under terms promulgated by the Board of
Directors, options to buy up to 30,000 Thousand shares of the stock of the
COMPANY. X.X.X. shall also provide EMPLOYEE with the use of a COMPANY car, as
approved by the X.X.X. Board of Directors, with full reimbursements to EMPLOYEE
for business use upon the submission to COMPANY of proper documentation and
shall be entitled to the fringe benefit package available to executive employees
of X.X.X. EMPLOYEE shall be entitled to all bonuses or bonus programs of which
he participated in prior to entering into this agreement. All future and
additional forms and amounts of bonus compensation shall be determined at the
full discretion of X.X.X. Board of Directors.
4. CONFIDENTIALITY. EMPLOYEE shall not at any time or in any manner,
directly or indirectly, divulge, disclose or communicate to any firm, person,
corporation or entity, in any manner whatsoever, any information concerning or
relating to the business of COMPANY, including without limitation, COMPANY'S
customer list, or the methods used by COMPANY in conducting business or any
matter relating to the business of COMPANY, including without limitation, the
prices it obtains or has obtained from the sale of its service, its manner of
operation, its plans, processes or other data, without regard to 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 EMPLOYEE through this
Agreement, his employment with X.X.X. and the operation of the business of
COMPANY is deemed important, material and confidential, and gravely affects the
effective and successful conduct of the business of COMPANY and COMPANY'S good
will and that any breach of the terms of this Paragraph 4 shall be deemed a
material breach of this Agreement. This Paragraph 4 shall continue in full force
and effect for the lesser of the three (3) years after the termination or
earlier cancellation of this Agreement or the longest period of time found to be
enforceable by a court of competent jurisdiction and venue as defined herein. In
recognition of the difficulty of determine damages for violation of this
covenant, COMPANY shall be entitled to injunctive relief for the violation
available to it at law, in equity, or under this Agreement (without the
necessity or equity, or Agreement (without the necessity of posting a bond). All
reasonable costs of any nature whatsoever incurred by company in attempting to
enforce this Paragraph 4, including without limitation, attorneys fees, shall be
paid by EMPLOYEE, provided that company shall prevail in such proceedings or
litigation. If EMPLOYEE shall prevail in such proceedings or litigations, then
COMPANY shall pay all reasonable costs of any nature whatsoever incurred by
EMPLOYEE in defending the proceeding or litigation, including without
limitation, attorneys fees. Any such attorneys fees shall be calculated on a
time and charge basis. If any provision hereunder shall be determined to be
contrary to law, the remainder of this provision shall constitute the agreement
between the parties. This Paragraph shall not be deemed to prevent EMPLOYEE from
making such public disclosures as a person in his position is reputed to do from
time to time.
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5. RESTRICTION ON COMPETITION. As a material part of the consideration of
this Agreement, EMPLOYEE agrees not to compete with COMPANY during his
employment and for one (1) year period following the period of EMPLOYEE'S
employment with COMPANY in the geographic and marketing areas serviced and to be
serviced by COMPANY. EMPLOYEE shall not directly or indirectly, own, manage,
operate, or be connected as an officer, employee, partner, director,
shareholder, adviser or financially or otherwise, anyone else in the conduct of
any business or businesses which compete with any business conducted by the
COMPANY. This covenant is restricted geographically to (i) the United States, or
if found to be unenforceable by a final, unappealable order of a court of
competent jurisdiction and venue as defined herein (hereinafter referred to an
"Unenforceable"), (ii) the states in which COMPANY owns or leases and/or uses
and/or has plans for using a business facility at any time during the term of
EMPLOYEE'S employment of if Unenforceable, (iii) within a one hundred (100) mile
radius of such facilities or if Unenforceable, (iv) the largest geographic area
such court will allow. This covenant also includes all customers of COMPANY
regardless of their geographic location. In recognition of the difficulty of
determining damages for violation of this covenant, COMPANY shall be entitled to
injunctive relief for the violation hereof, in addition to such other relief as
may be available to it at law, in equity, or under this Agreement (without the
necessity of posting a bond). All reasonable costs of any nature whatsoever
incurred by company in attempting to enforce this Paragraph 4, including without
limitation, attorneys fees, shall be paid by EMPLOYEE, provided that COMPANY
shall prevail in such proceedings or litigation. If EMPLOYEE shall prevail in
such proceedings or litigations, then COMPANY shall pay all reasonable costs of
any nature whatsoever incurred by EMPLOYEE in defending the proceedings or
litigation, including without limitation, attorneys fees. Any such attorneys
fees shall be calculated on a time and charges basis. If any provision hereunder
shall be deemed to be contrary to law, the remainder of this provision shall
constitute the agreement between the parties. Anything to the contrary,
notwithstanding, this Paragraph 5 shall survive the termination or earlier
cancellation of this Agreement. EMPLOYEE can own up to five (5%) percent of the
stock of publicly traded transportation companies as a passive investor but
shall take no part in the management or direction of such companies.
Additionally, EMPLOYEE shall be paid $25,000 Thousand Dollars per quarter, for
each quarter following the termination of his service under this Agreement and
ceasing in (1) one year from that date or sooner if EMPLOYEE secures a position
with another firm or institution or is retained as a consultant by the COMPANY.
6. REMEDIES UPON DEFAULT.
6.1 DEFAULT BY EMPLOYEE. EMPLOYEE acknowledges that his loyal, faithful
and effective performance of the employment provided for herein, is of vital
importance to the success of the COMPANY, and that EMPLOYEE'S commitment to
perform for the entire term of this Agreement is an essential inducement to and
condition of COMPANY'S employment of EMPLOYEE, and that premature termination,
abandonment or failure of performance by EMPLOYEE would in all probability
result in substantial damages to the COMPANY, and that EMPLOYEE possesses
peculiar knowledge and expertise important to the success of the
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COMPANY. Accordingly, EMPLOYEE expressly warrants and represents to and
covenants with COMPANY that EMPLOYEE shall not voluntarily terminate his
employment with COMPANY or otherwise abandon the full and faithful performance
of his duties of employment prior to the expiration of the term of this
Agreement. In the event that EMPLOYEE shall breach any covenant set forth in
this Paragraph 6.1, COMPANY shall have the right to pursue and enforce any
remedies available to COMPANY by law, at equity or pursuant to this Agreement,
including without limitation, specific performance as a result of such breach.
COMPANY may commence a lawsuit for enforcement of its rights hereunder seeking
damages without waiving any other rights R may possess.
6.2 DEFAULT BY COMPANY. In the event COMPANY shall terminate the
employment of EMPLOYEE prior to the expiration of the term of this Agreement for
reasons other than good cause, COMPANY'S liability to employee shall be limited
to an amount equal to one-hundred (100%) percent of EMPLOYEE'S compensation as
set forth in paragraph 3 herein for the remainder of the contract term in
complete discharge of any further obligations COMPANY may have to EMPLOYEE by
law, in equity or under this Agreement. If such termination is for good cause,
COMPANY shall pay to EMPLOYEE an amount equal to one months of EMPLOYEE'S annual
compensation and shall not be liable to EMPLOYEE for any further damages or
severance compensation whatsoever. COMPANY shall be deemed to have terminated
EMPLOYEE without good cause if COMPANY conditions EMPLOYEE'S further employment
upon changing his residence from northwest Arkansas.
7. EXCLUSIVE CONSULTING CONTRACT. Upon termination of EMPLOYEE'S
employment with COMPANY for any reason whatsoever, COMPANY 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 reasonable assigned by the Board of Directors of X.X.X. consistent with
the position of an independent consultant, and EMPLOYEE shall be bound by the
restrictions on competition set forth in Paragraphs 4 and 5 hereof. EMPLOYEE
shall be entitled as full compensation for his services under such consulting
contract to an annual salary equal to fifty (50%) percent of his average total
annual compensation hereunder, averaged over the term of his employment with
COMPANY from and after July 1, 1998, payable in equal monthly payments. The
specific terms regarding the actual services to be performed, length of service
and other contractual terms not set forth in this paragraph, shall be mutually
agreeable to the EMPLOYEE and the COMPANY.
8. OPTION TO EXTEND. COMPANY shall have the right to extend this Agreement
for an additional one (1) year beyond termination of this Agreement. The
EMPLOYEE'S annual salary for the one-year option period shall be four hundred
thousand dollars ($400,000) payable in equal bi-weekly payments. COMPANY may
elect to exercise this extension right at any time prior to May 1, 2001.
9. MISCELLANEOUS.
9.1 NON-WAIVER. No covenant or condition of this Agreement may be
waived except by the written consent of the COMPANY. Forbearance or indulgence
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Employment Agreement
by COMPANY in any regard whatsoever shall not constitute a waiver of the
covenants or conditions to be preformed by EMPLOYEE to which the same may apply,
and, until complete performance by EMPLOYEE of said covenant or condition,
COMPANY shall be entitled to invoke any remedy available COMPANY under this
Agreement or by law or in equity, despite said forbearance or indulgence.
9.2 MODIFICATION OF AGREEMENT. This instrument constitutes the entire
agreement between X.X.X. and EMPLOYEE and no modification, extension, waiver,
renewal or termination of the Agreement or any of the provisions hereof may be
binding upon either party unless made in writing and signed by each of the
parties. No modification of this Agreement may be signed by COMPANY except upon
approval by the X.X.X. Board of Directors.
9.3 NOTICES. Service of all notices under this Agreement shall be
sufficient if given personally or mailed by certified mail, return receipt
requested, with postage prepaid, addressed 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. Any notice mailed to such address shall be effective when
deposited in the United States mail.
COMPANY: Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxxx
00000 Xxxxxxxx Xxxx Xxxxxxxx & Xxxxx
Xxxxxx, XX 00000 000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
EMPLOYEE: Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
9.4 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.
9.5 SEVERABILITY. All agreements, terms and covenants contained herein are
severable and in the event any of them, with the exception of those contained in
Paragraph 1, shall be held to be invalid by a court of competent jurisdiction
and venue as defined herein, this Agreement shall be interpreted as if such
invalid agreements, terms or covenants were not contained herein unless within
thirty (30) days of the issuance of a final and unappealable Order of a Court of
competent jurisdiction and venue, COMPANY shall have tendered to EMPLOYEE in the
manner provided for notices hereunder, its election to cancel this Agreement.
9.6 SUCCESSORS. This agreement shall be binding on any successor to the
COMPANY and shall also remain binding on EMPLOYEE in the event the COMPANY is
acquired, merged, consolidated or a change in control occurs.
9.7 TIME OF THE ESSENCE. Time is to be deemed of the essence of this
Agreement and each and all of its provisions.
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9.8 CONSTRUCTION. This Agreement shall be construed according to the laws
of the State of Delaware and exclusive jurisdiction and venue shall be deemed to
lie within the Circuit or Chancery Courts of Washington County, Arkansas.
10. BINDING EFFECTS. This Agreement shall, upon approval of the Board of
Directors of X.X.X. by corporate resolution, be binding upon the parties hereto,
their successors, assigns, heirs, estates or legal representatives and shall
ensure to the benefit of COMPANY and its successors and assigns. Each subsidiary
of X.X.X., of whether presently existing, shall be a third party beneficiary of
this Agreement. This Agreement contains the entire consideration to EMPLOYEE
during the tenure of this contract and supersedes all previous agreements.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement
to be executed and delivered as of the date first above written.
X.X.X. TRANSPORTATION SERVICES, INC., EMPLOYEE
A DELAWARE CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxx 6-23-98 /s/ Xxxxxx X. Xxxxxx 7-1-98
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XXXXXXX X. XXXXXX DATE XXXXXX X. XXXXXX DATE
DIRECTOR AND DULY
AUTHORIZED REPRESENTATIVE
AND
BY: /s/ W. Xxxx Xxxxxx 7-1-98 WITNESSES: /s/ Xxxx Xxxxxxx
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W. XXXX XXXXXX DATE
EXECUTIVE VICE PRESIDENT AND PRINT NAME: Xxxx Xxxxxxx
CHIEF OPERATING OFFICER --------------------
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PRINT NAME:
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