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Exhibit 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of May 15, 1997, by and between CENTRAL FREIGHT LINES, INC., a Texas corporation
(the "Company"), and XXX XXXX (the "Executive").
WHEREAS, the Company desires to employ the Executive as President and
the Executive is willing to render his services to the Company on the terms,
covenants, and conditions with respect to such employment as hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises, terms, and conditions
hereof, the Company and the Executive agree as follows:
1. Employment. The Company employs the Executive and the Executive accepts
such employment with the Company upon the terms and conditions
hereinafter set forth. The Executive represents and warrants that
neither the execution by him of this Agreement nor the performance by
him of his duties and obligations hereunder will violate any agreement
to which he is a party or by which he is bound.
2. Term. The term of employment hereunder shall be three (3) years and
shall commence on the date and year first above written and end on the
third anniversary of such date (the "Base Term") unless sooner
terminated pursuant to Section 8 of this Agreement.
3. Duties. The Executive is employed as President and shall render his
services at the principal business offices of the Company. As
President of the Company, the Executive has full responsibility and
authority for the day-to-day operation of the business of the Company.
The Executive shall report directly to the Board of Directors of the
Company (the "Board") and the Chairman of the Board (the "Chairman")
and shall have such authority and shall perform such duties as are
customarily performed by one holding the position as described in this
Section 3; subject, however, to such limitations, instructions,
directions, and control as the Board or Chairman may specify from time
to time in its sole discretion.
4. Exclusive Services. The Executive shall devote all necessary working
time, ability, and attention to the business of the Company during the
term of this Agreement and shall not, directly or indirectly, render
any material services of a business, commercial, or professional nature
to any other person, corporation, or organization for compensation
without the prior consent of the Board.
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5. Compensation. As compensation for his services in any capacity rendered
under this Agreement, the Executive shall be entitled to receive the
following:
a. Salary. During the Base Term or Optional Term, as hereinafter defined,
the Company shall pay the Executive a salary at the rate of $227,000
per annum (the "Salary"). The Salary shall be payable in accordance
with the ordinary payroll practices of the Company. Upon termination
of the Executive's employment in accordance with Section 8 or
expiration of the Base Term, the Salary shall be discontinued;
provided, however, the Company shall have the option upon such
termination or expiration to continue to pay the Executive an amount
equal to the Salary for the length of time equal to the Base Term to
bind the Executive to the non-competition provisions of Section 7
hereof and as consideration therefore (the "Optional Term").
b. Bonus. During the Base Term and so long as the Executive's employment
continues under this Agreement, the Board shall conduct, or cause to
be conducted at annual or approximate annual intervals after the end
of each fiscal year, a review of the Executive's performance, giving
attention to all pertinent factors, including without limitation, the
attainment of a 92.5% operating ratio as a minimum qualification for
receipt of such bonus and otherwise the general performance and growth
of the Company (excluding the effects of all transaction and financing
costs associated with the Acquisition Agreement, as hereinafter
defined). Following such review, the Board may award and pay a
performance-based bonus, paid as a lump sum to the Executive, in an
amount of up to fifty-percent (50%) of the Salary.
c. Benefits. The Company shall (i) provide the Executive the use
(business and personal) of an automobile valued at up to $30,000; (ii)
to the extent the Executive or his spouse does not otherwise receive
compensation therefor, pay any expenses incurred by the Executive in
the initial move, if any, by the Executive and his immediate family to
the greater metropolitan area in which the Company's principal place
of business is located; and (iii) permit the Executive to participate
in any and all employee benefit plans, including but not limited to
health and medical insurance, group term life insurance, disability
insurance, and retirement plan contributions, as may be in effect for
other senior executives of the Company.
6. Business Expenses. The Company shall reimburse the Executive for all
business expenses incurred in the performance of his duties under this
Agreement in a manner consistent with the Company-wide policies for
reimbursing business expenses generally as such policies existed on the day
immediately prior to the date first written above.
7. Non-Competition. For a period from the date and year first above written
until the latest of (a) the expiration of the Base Term or (b) the last day
of the payroll period after which the Company gives notice to the Executive
of its desire to discontinue payment of the Salary during the Optional
Term, neither Executive nor any entity of which Executive
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directly or indirectly owns more than 5% shall (a) own, operate, manage, be
employed or retained as a consultant by, or in any other manner assist any
truckload or less-than-truckload carrier, broker, agent, consolidator,
third-party logistics provider, or other company engaged in the business of
transporting or arranging for the transportation of general commodity
freight that conducts operations in the United States; (b) divert or
solicit any person who is or was a customer of Company or any affiliated
entity during such period; (c) induce or influence any employee, agent,
owner-operator, or other representative of Company, or any affiliated
entity to leave any of such corporations in order to engage in a
competitive business; or (d) use or allow anyone to use the name of the
Company or any affiliated or successor entity, or any derivation of the
foregoing. The parties deem the restrictions contained in this Section
reasonable and necessary to secure for Company the benefits of employing
the Executive and obtaining for Company's stockholders the benefits of the
Asset Purchase Agreement among the Company and the Southwestern Division of
Viking Freight, Inc., a subsidiary of Caliber System, Inc., a Delaware
corporation (the "Acquisition Agreement"). However, if a court of competent
jurisdiction determines that such restrictions are unreasonable, the
restrictions shall be reduced by the court to a reasonable level and
enforced in accordance therewith pursuant to Section 10.b. hereof. Although
subject to the terms of this Agreement (and in particular Section 10.b.
hereof), the covenants set forth in this Section 7 shall be deemed and
construed as a separate agreement independent of any other provisions of
the Acquisition Agreement, this Agreement, and any other agreement between
the Company and the Executive. The existence of any claim or cause of
action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of this covenant. It is expressly agreed, in addition to the
obligation to reimburse the Company for any amount received by the
Executive after any breach of this Section 7, that the remedy at law for
the breach of any such covenant is inadequate and injunctive relief shall
be available to prevent the breach or any threatened breach thereof.
8. Termination. This Executive's employment hereunder may be terminated as
follows:
a. By the Executive. The Executive may terminate his employment at any
time by giving sixty (60) days' prior written notice of termination to
the Board. The Executive shall receive any compensation accrued on the
date of termination and shall not be entitled to any compensation
beyond the actual date of termination.
b. By the Company with Cause. The Board may, in its reasonable discretion
and judgment and upon written notice effective immediately, terminate
Executive's employment under this Agreement at any time for "Cause."
Cause shall mean:
i. If the Executive is convicted of a felony under any applicable
criminal code or statute or of any misdemeanor involving fraud or
dishonesty against the Company or any affiliated or successor
entity;
ii. If the Executive breaches Section 7 of this Agreement;
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iii. If the Executive breaches any fiduciary duties as a director of
the Company;
iv. If the Executive wilfully fails to comply with the terms and
conditions of this Agreement and fails to cure any such material
breach or failure within ten (10) days after written notice
thereof given by the Company to the Executive; or
v. If the Executive wilfully and continually neglects to
substantially perform his duties hereunder, and fails to cure
such performance within ten (10) days after demand for
substantial performance is delivered in writing by the Board or
Chairman that specifically identifies the manner in which the
Board or Chairman believes the Executive has not substantially
performed his duties.
The Executive shall receive any Salary accrued on the date of such
termination and shall not be entitled to any compensation, including
rights to any bonus or other benefits set forth herein.
c. Physical or Mental Illness Incapacity. Executive's employment under
this Agreement shall be terminable by the Company, as a result of the
Executive's incapacity due to physical or mental illness, on the
earlier of either: (i) the date when the Executive is eligible for
coverage under the Company's long-term disability insurance plan; or
(ii) the date when the Executive shall have been absent from his
duties hereunder on a full-time basis for a period of six consecutive
months (unless within ten (10) days after written notice to return is
given, which may occur at or after the end of such six month period,
Executive shall have returned to the performance of his duties
hereunder on a full-time basis). During any period that the Executive
fails to perform his duties due to incapacity, the Executive shall
continue to receive from the Company his Salary and any declared or
announced bonus until termination of the Base Term. The rights and
benefits of the Executive under employee benefit and fringe benefit
plans, and other programs of the Company shall be determined in
accordance with the terms and provisions of such plans and programs.
d. Death. Executive's employment under this Agreement shall terminate as
a result of the death of the Executive. The designated beneficiary or
beneficiaries shall be entitled to receive any Salary installments and
any accrued reimbursable expenses or declared or announced bonus. The
rights under the benefit plans and programs of the Company shall be
determined in accordance with the terms and provisions of such plans
and programs.
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9. Notices. Any notices to be given hereunder by either party to the other may
be effected either by personal delivery in writing or by mail, registered
or certified, postage prepaid, with return receipt requested. Mailed
notices shall be addressed as follows:
If to the Company: Xxxx Xxxxxxxxx
0000 Xxxx Xxxx Xxxxx
Xxxx, XX 00000
With required copy to: Xxxx X. Xxxxxxx, Xx.
Xxxxxxx Law Firm, P.C.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to the Executive: Xxx Xxxx
0000 Xxxx Xxxx Xxxxx
Xxxx, XX 00000
Either party may change its address for notice by giving notice in
accordance with the terms of this Section 9.
10. General Provisions.
a. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
b. Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully
severable and this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised
a part hereof; and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable
provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and still be legal, valid
or enforceable.
c. Attorney Fees. If any action at law or in equity is brought to enforce
or interpret the provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees from the other
party. These fees shall be in addition to any other relief that may be
awarded.
d. Entire Agreement. This Agreement sets forth the entire understanding
of the parties and supersedes all prior agreements or understandings,
whether written or oral, with respect to the subject matter hereof. No
terms, conditions, warranties,
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other than those contained herein, and no amendments or modifications
hereto shall be binding unless made in writing and signed by the
parties hereto.
e. Binding Effect. This Agreement shall extend to and be binding upon and
inure to the benefit of the parties hereto, their respective heirs,
representatives, successors, and assigns. This Agreement may not be
assigned by the Executive.
f. Waiver. The waiver by either party hereto of a breach of any term or
provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of
the breach of any other term or provision of this Agreement.
g. Titles. Titles of the sections herein are used solely for convenience
and shall not be used for interpretation or construing any word,
clause, paragraph, or provision of this Agreement.
h. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, but which together shall
constitute one and the same instrument.
i. Contingency. This terms and conditions of this Agreement are expressly
contingent upon the closing of the Acquisition Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
EXECUTIVE CENTRAL FREIGHT LINES, INC.
/s/Xxx Xxxx By: /s/Xxxx Xxxxxxxxx
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Xxx Xxxx Xxxx Xxxxxxxxx, Senior Vice President of
Finance, Secretary, and Treasurer
