Exhibit 10.37
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made between
Velocity Express, Inc. (together with its parents, subsidiaries and affiliates,
collectively referred to throughout this Agreement as "the Company") and Xxxx
Xxxxxxx ("Employee").
In exchange for the Company's agreement to hire Employee
effective November 28, 2001, and to provide access to the Company's Trade
Secrets and Confidential Information, and the compensation and severance package
set forth below, Employee's agrees as follows:
1. Compensation and Benefits The Company agrees to place Employee in the
position of Senior Vice President, Sales and Marketing, reporting
directly to the Chief Executive Officer, and to pay Employee a gross
salary rate, which if annualized, equals $180,000, payable on equal
installments on a biweekly basis. Employee's principal place of
operations shall be located in Teterboro, New Jersey, subject to
necessary business relocations within the close proximity of this office
and subject to the provisions set forth in Paragraph 2. Employee shall
be eligible to participate in the Management Incentive Plan, which
provides potential incentive pay equal to 35% of Employee's annual
salary rate, with an additional bonus potential based on the Company's
profitability. Employee shall be eligible for all Company benefits,
including health, disability, and dental insurance, 40IK, life
insurance, and paid time off (which shall include three weeks' paid
vacation). Employee also shall be eligible for 35,000 US&T stock
options, with an additional 15,000 US&T stock options as a sign on bonus
upon inception of employment. These option grants and the strike price
for these options shall be subject to Board approval. Employee's
eligibility, date of enrollment and costs for participation in such
benefits shall be governed by the Company's policies. During the period
before Employee's first enrollment opportunity, the Company agrees to
reimburse Employee for the costs of continuing health and dental
insurance with Employee's previous employer under COBRA. Employee shall
be eligible to obtain vehicle business use reimbursement under the
Company's Runnzheimer program, subject to Employee meeting the program's
requirements.
2. Severance
As additional consideration for Employee's covenants herein, including
the restrictive covenants set forth in Paragraphs 3 - 8, in the event
that Employee's employment is terminated by the Company without Cause or
by the Employee for Good Reason, as defined below, and upon such
termination, Employee executes a Release in the standard separation and
release form used by the Company with general reductions in force, the
Company will pay Employee an amount equal to 52 weeks' wages, minus
applicable withholdings, payable in equal installments on a biweekly
basis in accordance with the Company's normal payroll practices (the
"Severance Fund"). The amount of the Severance Fund shall be based
solely on Employee's base salary rate at the tune of termination, and
shall not include any additional amounts based on other benefits or
earnings. If Employee resigns without Good
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Reason or his employment is terminated for Cause as defined below,
Employee will not be entitled to payment of any severance amount. For
purposes of this Paragraph 1, the term "Cause" shall mean: (a)
Employee's death; (b) Employee's becoming "Totally Disabled" (Employee
shall be "Totally Disabled" as of the date he becomes entitled to
receive disability benefits under the Company's long term disability
plan); (c) Employee's conviction or admission of a felony or of any
criminal act involving theft, dishonesty or physical violence; (d)
Employee's commission of fraud or embezzlement; (e) Employee's gross
misconduct or gross negligence in connection with the business of the
Company; or (f) breach of any of the covenants set forth in this
Agreement. Employee will be considered to have been terminated for
"Cause" if, at any tune prior to a payment date for any portion of the
Severance Fund, the Company reasonably determines in good faith that
Employee engaged in an act constituting "Cause" while employed with the
Company, regardless of whether Employee's employment was voluntarily or
involuntarily terminated, and regardless of whether Employee's
termination initially was considered to have been without Cause." For
Purposes of this Agreement, "Good Reason" shall mean: (a) any reduction
of Employee's base salary rate without Employee's written consent; or
(b) any required relocation (to which Employee objects in writing prior
to relocation) of a distance greater than 50 miles from the place of
Employee's residence as of the date of the execution of this Agreement.
"Good Reason" does not include "Cause" as defined above, reassignments
or temporary or new or specific tasks involving the same or greater
level of base salary rate, authority and responsibility as the position
held by Employee at the time this Agreement was signed. Nothing
contained in this Paragraph 1 shall be deemed to limit the Company's or
Employee's rights to terminate the employment relationship at-will
subject to this severance provision and Employee's restrictive
covenants.
3. Confidential Information
(a) Employee and the Company agree that during the course of employment
by the Company, Employee has and will come into contact with and have
access to various technical and nontechnical Trade Secrets and
Confidential Information, which are the property of the Company. This
information relates both to the Company and any persons, firms,
corporations or other entities that are or become customers, or are
prospective customers, of the Company. Such Trade Secrets and
Confidential Information include, but are not limited to, information
with respect to costs, commissions, fees, profits, margins, sales,
markets, products, mailing lists, strategies and plans for future
business, new business development, and other development; methods,
procedures, devices, data processing programs, computer models, research
projects, routes, contractors, drivers and other means used by the
Company in the conduct of its business; the identity of the Company's
customers, their names and addresses, the names of representatives of
such the Company's customers responsible for entering into contracts
with the Company, the rates charged to and the amounts paid by such
customers to the Company, specific customer needs and requirements, and
leads and referrals to prospective customers; and the identities of the
employees and independent contractors of the Company, salaries, wages,
rates, bonuses, benefits, qualifications and abilities. Such information
excludes that information already known to Employee prior to employment
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with the Company, that information generally known or available to the
general public, or that which becomes part of the public domain without
Employee's involvement.
(b) Employee specifically acknowledges and agrees that the Company is
engaged in a highly competitive business and that its competitive
position depends upon its ability to maintain the confidentiality of the
Trade Secrets and Confidential Information, which were developed,
compiled and acquired by the Company over a considerable period of time
and at great effort and expense. Employee further acknowledges and
agrees that any disclosure, divulging, revelation or use of any of the
aforesaid Trade Secrets and Confidential Information by Employee, other
than in connection with the Company's business or as specifically
authorized by the Company, will be highly detrimental to the Company,
and that serious loss of business and pecuniary damage may result
therefrom.
(c) Accordingly, Employee specifically covenants and agrees to hold all
such Trade Secrets and Confidential Information and any data or
documents containing or reflecting the same in the strictest confidence,
and that both during employment and at any time after Employee's
employment with the Company, Employee will not, without the prior
written consent of the President of the Company, disclose, divulge or
reveal to any person whomsoever, or use for any purpose other than for
the exclusive benefit of the Company, any Trade Secrets or Confidential
Information whatsoever, whether contained in Employee's memory or
embodied in writing or other physical form.
(d) Employee further covenants and agrees to deliver to the Company,
immediately upon cessation of employment or at any time the Company so
requests, (i) any and all documents, files, notes, memoranda, manuals,
blanks, forms, databases and/or other computer programs reflecting any
Trade Secrets or Confidential Information whatsoever, or otherwise
relating to the Company's business; (ii) lists of the Company's
customers or leads or referrals thereto; and (iii) any computer
equipment, home office equipment, automobile or other business equipment
which is owned, leased, or rented by or in the name of the Company which
Employee may then possess or have under his control.
4. Non-Solicitation of Customers
(a) Employee acknowledges and agrees that solely by reason of employment
by the Company, Employee has and will continue to come into contact with
some, most or all of the Company's customers, and learn or have access
to Trade Secrets and Confidential Information regarding the Company's
customers as set forth in paragraph 3 of this Agreement. Employee
further acknowledges and agrees that loss of the Company's customers
and/or its employees may cause the Company great and irreparable harm.
(b) Consequently, Employee covenants and agrees that in the event of
termination of employment by the Company, whether such termination is
voluntary or involuntary, Employee will not, for the 52 weeks following
termination, directly or indirectly, solicit or seek to do messenger,
courier, transportation, logistics or delivery services of the type
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conducted by the Company with any Company customer and/or its officers,
directors, or its employees with which or whom Employee had any contact
during his employment by the Company, without the express written
consent of the President of the Company. This restriction does not
restrict Employee from providing services to a customer of the Company
in a geographic area or for a service type not serviced by the Company
at any time within the six months preceding Employee's termination.
5. Non-Competition
(a) Employee acknowledges and agrees that the Company is engaged in a
highly competitive business and that by virtue of Employee's position
and responsibilities with the Company and Employee's access to the
Confidential Information, engaging in any business that is directly or
indirectly competitive with the Company will cause it great and
irreparable harm.
Consequently, Employee covenants and agrees that so long as Employee is
employed by the Company and for a period of 52 weeks after such
employment is terminated, whether voluntarily or involuntarily, by
wrongful discharge or otherwise, Employee will not, without the express
written consent of the President of the Company, directly or indirectly
enter into or engage in messenger, courier, transportation, logistics or
delivery services of the type conducted by the Company (whether as an
individual for his own account, partner, joint venturer, agent,
consultant, employee, officer, director or shareholder of any
corporation, or otherwise), in any area over which Employee held
responsibility within the last three years of employment or about which
Employee had access to the Company's Confidential Information at any
time during Employee's employment. In the event Employee resigns for
reasons other than Good Reason, the restrictions in this Paragraph 5
shall not apply, but all other reasons set forth in Paragraphs 3,4,6,7,
and remain in full force and effect
6. Non-Solicitation of Employees
Employee agrees that he will not, during the term of employment with the
Company and for an additional period of 6 months thereafter (the
"Restricted Period"), either voluntarily or involuntarily, for any
reason whatsoever, directly or indirectly, individually or on behalf of
others, aid or endeavor to solicit or induce any other employee,
employees, consultant and/or consultants of the Company to leave their
employment or service of the Company in order to accept employment of
any land with any other person, firm, partnership, or corporation with
which Employee is or may become associated. In the event Employee
receives 52 weeks' severance due to a Change in Control termination,
Employee covenants and agrees that the Restricted Period shall be for
the 12 months following termination.
7. Conflict of Interest
During his term of employment with the Company, Employee may not use his
position, influence, and knowledge of confidential information or
Company assets for personal gain.
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Any material direct or indirect financial interest, including joint
ventures in or with a supplier, vendor, customer or prospective customer
of the Company without disclosure and written approval from the
President of the Company, is strictly prohibited and constitutes cause
for dismissal.
8. Secret Information Belonging To Others
Employee represents that Employee's employment with the Company does not
and will not breach any agreements with or duties to a former employer
or any other third party to keep secret confidential information
belonging to others or to assign inventions to them. Employee will not
disclose to the Company or use in its behalf any confidential
information belonging to others. Employee agrees that in the event any
former Employer takes any action against Employee or the Company,
whether for an injunction or damages, Employee shall be solely
responsible for defending any such claims and that the Company will not
indemnify or hold Employee harmless for any liability or damage awards.
To the extent Employee is enjoined from performing on behalf of the
Company, the Company shall not pay Employee for the duration of any such
injunction.
9. Enforcement
Employee acknowledges and agrees that compliance with the covenants set
forth in this Agreement is necessary to protect the business and
goodwill of the Company and that any breach of paragraphs 3 through 8 or
any subparagraph thereof will result in irreparable and continuing harm
to the Company, for which money damages may not provide adequate relief.
Accordingly, in the event of any breach of paragraphs 3 through 8 by
Employee, the Company and Employee agree that the Company shall be
entitled to the following particular forms of relief as a result of such
breach, in addition to any remedies otherwise available to it at law or
equity: (a) injunctions, both preliminary and permanent, enjoining or
restraining such breach, and Employee hereby consents to the issuance
thereof forthwith and without bond by any court of competent
jurisdiction; (b) forfeiture of any Severance Fund amounts paid or to be
paid to Employee; (c) any other damage amounts that were caused by such
breach; and (d) recovery of all reasonable sums and costs, including
attorneys' fees, incurred by the Company to enforce the provisions of
paragraphs 3 through 8. The Company acknowledges and agrees that
compliance with the covenants set forth in this Agreement is necessary
to protect the economic well being of Employee and that any wrongful
failure to pay any owed severance pay under the terms of Paragraph 2
will result in irreparable harm during the period during which such
failure continues. Accordingly, if the Company is in default on any
installation of the Severance Fund following written notice by Employee
of such default and a 20 day opportunity to cure, if Employee must then
enforce compliance with Paragraph 2 by way of injunctive or other legal
action, if Employee prevails, Employee will be entitled to receive any
outstanding amount of the Severance Fund in a lump sum, and to recover
Employee's attorneys' fees incurred in enforcing Employee's entitlement
to severance, and to be released from any restrictive covenants
remaining in force at the time of such determination, with the exception
that Employee shall not be released from
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his duty to maintain and refrain from using or disclosing the
confidentiality of the Company's Trade Secrets and Confidential
Information. Employee shall not be entitled to a lump sum payment of
severance, attorneys' fees or a release from any restrictive covenants
if Employee is found to be in breach of his obligations under this
Agreement, and the Company waives no rights to seek enforcement of its
rights herein.
10. Employment At Will
This Agreement is not an employment agreement for any specific term.
Employee acknowledges and agrees that employment with the Company is not
for any specific period of time and he has the right to resign from such
employment at any time he desires, subject to the restrictive covenants
set forth herein and that likewise, the Company has the right to
terminate the employment relationship at any time it desires to do so,
with or without cause and with or without notice, subject only to the
severance provisions set forth in Paragraph 2 and the restrictive
covenants set forth in Paragraphs 3 through 8.
11. Modification
No modification of this Agreement shall be valid unless made in writing,
wherein specific reference is made to this Agreement, and signed by both
parties hereto.
12. Binding Effect
This Agreement shall be binding upon Employee, Employee's heirs,
executors, assigns, and administrators and the Company and its
successors and assigns, including any subsequent purchasing or merging
entity.
13. Confidentiality of Agreement; Non-Disparagement
In further consideration of the covenants, agreements, payments and
other acts or things agreed to be done herein, Employee hereby agrees
not to disclose, divulge or discuss, nor cause anyone in privity with
him to disclose, divulge or discuss, either directly or indirectly, the
terms of this Agreement unless such disclosure is required by law. The
parties further agree that they shall not engage in any pattern of
conduct that involves the making or publishing of written or oral
statements or remarks (including, without limitation, the repetition or
distribution of derogatory rumors, allegations, negative reports or
comments) which are disparaging, deleterious or damaging to the
integrity, reputation or goodwill of the other party. However, nothing
shall prevent either party from making factual statements regarding the
other party in any litigation or governmental investigation.
14. Entire Agreement
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter of the Agreement, superseding all prior or
contemporaneous agreements and understandings (whether oral or written)
between the parties with respect to the subject matter of the Agreement,
including any Employment Agreement entered by the parties.
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15. Construction
The headings of the paragraphs of this Agreement are inserted for
convenience only, and do not constitute part of and shall not be used to
interpret this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not
strictly for or against the Company or Employee.
16. Severability
If any term or provision of this Agreement or any portion thereof is
declared illegal or unenforceable by any court of competent
jurisdiction, such provision or portion thereof shall be deemed modified
so as to render it enforceable, and to the extent such provision or
portion thereof cannot be rendered enforceable, this Agreement shall be
considered divisible as to such provision which shall become null and
void, leaving the remainder of this Agreement in full force and effect.
17. Non-Waiver
The failure of either the Company or Employee, whether purposeful or
otherwise, to exercise in any instance any right, power, or privilege
under this Agreement or under law shall not constitute a waiver of any
other right, power, or privilege, nor of the same right, power, or
privilege in any other instance. Any waiver by the Company or by
Employee must be in writing and signed by either Employee, if Employee
is seeking to waive any of his rights under this Agreement, or by an
officer of the Company (other than Employee) or some other person duly
authorized by the Company.
AGREED TO BY:
Dated: ____________________________ By: Employee
/s/ Xxxxxx X. Xxxxxxx
------------------------------
VELOCITY EXPRESS, INC.
Dated: ____________________________ By: ______________________________
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