Exhibit 10.19
XXXXXXX XXXXXXX
EMPLOYMENT AGREEMENT
AMENDMENT XX. 0
Xxxxxxxxx Xx. 0, dated as of July 26, 2000, to the employment agreement
dated as of January 21, 1994 between Celadon Group, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx Xxxxxxx ("Employee"), as amended by the amendments
dated as of February 12, 1997 and as of August 1, 1997 (the "Employment
Agreement").
The parties wish to amend the Employment Agreement as set forth below.
Accordingly, the parties agree as follows:
1. Section 1 of the Employment Agreement is amended in its entirety to
read as follows:
"The Company agrees to continue to employ Employee, and Employee
agrees to continue to serve, on the terms and conditions of this
Agreement for a period commencing on the date hereof and ending on
January 21, 2004. The period during which Employee is employed
hereunder is hereinafter referred to as the "Employment Period."
The Employment Period shall be automatically renewed for successive
two-year terms unless either party gives written notice to the
other at least 90 days prior to the expiration of the then
Employment Period, of such party's intention to terminate
Employee's employment hereunder at the end of the then current
Employment Period."
2. The following language shall be added at the end of Section 9(c) of
the Employment Agreement:
"A notice by the Company of non-renewal of the Employment Period
pursuant to Section 1 above shall be deemed an involuntary
termination of Employee by the Company without Cause as of the end
of the Employment Period, but the Executive may terminate at any
time after the receipt of such notice and shall be treated as if he
was terminated without Cause as of such date. Notwithstanding
anything herein to the contrary, in the event of the termination by
the Company of Employee's employment hereunder otherwise than
pursuant to Section 9(a) and 9(b) during the period beginning 180
days prior to a Change in Control (as defined in Section 10(b)) and
ending immediately prior to the Change in Control or at any time
during the period beginning on the date of the Change in Control
and ending on the two-year anniversary of the Change in Control,
Employee shall be entitled to receive from the Company the amounts
and benefits described in Section 19(b)(iii) hereof in lieu of the
amounts payable pursuant to the first sentence of this Section
9(c)."
3. The flush language following Section 19(b)(i)(E) of the Employment
Agreement shall be deleted and the first paragraph of Section 10(b)(i) of
the Employment Agreement is amended in its entirety to read as follows:
"(i) Notwithstanding anything herein contained to the contrary, in
the event Employee terminates his employment at any time during the
period
beginning 180 days prior to a Change in Control (as hereinafter
defined in this Section 10(b)) and ending immediately prior to the
Change in Control or at any time during the period beginning on the
date of the Change in Control and ending on the two-year
anniversary of the Change in Control Employee may terminate his
employment hereunder upon 10 days prior written notice to the
Company as a result of the occurrence of any of the following
events:"
4. The following language shall be added at the end of Section
10(b)(i) of the Employment Agreement:
"In addition to the foregoing, Employee may terminate his
employment with the Company for any reason during the 90-day period
immediately following the date which is six months after any Change
in Control and receive the amounts and benefits described in
Section 10(b)(iii) hereof."
5. Section 10(b)(iii) of the Employment Agreement is amended in its
entirety to read as follows:
"Upon termination of this Agreement under the provisions of this
Section 10(b), Employee shall be (A) entitled to his normal salary,
bonuses, awards, perquisites, and benefits through the date of such
termination ("Accrued Obligations") and, in addition thereto, (B)
paid in a lump sum, on the date of such termination three times
Employee's base salary in effect on the date immediately preceding
the Change in Control (or, if impermissibly reduced, prior to such
reduction), (C) paid in a lump sum, on the date of such termination
three times the highest annual bonus paid to Employee for the three
calendar years prior to the calendar year in which the date of the
Change in Control occurs, (D) paid in a lump-sum, on the date of
such termination a pro-rata portion of Employee's bonus for the
fiscal year in which the Change in Control occurs (determined by
multiplying such amount by a fraction, the numerator of which is
the number of days during the fiscal year of termination that
Employee is employed by the Company and the denominator of which
is, 365); (E) entitled to the continuation of medical and dental
benefits for Employee (and eligible dependents) upon the same terms
and conditions in effect prior to the Change in Control for the 36
month period following the date of termination provided, to the
extent Employee incurs tax that he would not have incurred as an
active employee as a result of the aforementioned coverage or the
benefits provided thereunder, Employee shall received from the
Company an additional payment in the amount necessary so that
Employee will have no additional cost for receiving such items or
any additional payment, (F) outplacement services at a level
commensurate with Employee's position, including use of an Employee
office and secretary available through such outplacement services,
for a period of one year commencing on Employee's date of
termination but in no event extending beyond the date on which
Employee commences other full time employment and (G) upon the
occurrence of a Change in Control full and immediate vesting of all
stock options and other equity-based awards held by Employee. In
the event Employee obtains other full time employment that offers
substantially similar or improved medical and dental benefits, such
continuation coverage by the Company
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for such medical or dental benefits under Section 10(b)(iii)(E)
shall immediately cease. The continuation health benefits for the
above-referenced 36 month period shall reduce an count against
Employee's rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended."
6. A new Section 16 is hereby added to the Employment Agreement to
read as follows:
"16 Limitation of Payments.
(a) In the event that Employee shall become entitled to the amounts
and/or benefits provided by Section 10(b)(iii) or any other amounts
(whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions
results in a change of ownership covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person)
as a result of a Change in Control or other change in ownership as
defined in Section 280G of the Code (collectively the "Company
Payments"), and such Company Payments will be subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Code (and any
similar tax that may hereafter be imposed) the Company shall pay to
Employee at the time specified in subsection (d) below an
additional amount (the "Gross-up Payment') such that the net amount
retained by Employee, after deduction of any Excise Tax on the
Company Payments and any federal, state, and local income or
payroll tax upon the Gross-up Payment provided for by this
paragraph (a), but before deduction for any federal, state, and
local income or payroll tax on the Company Payments, shall be equal
to the Company Payments. Notwithstanding the foregoing provisions
of this Section 16 to the contrary, if it shall be determined that
Employee is entitled to a Gross-up Payment, but the Company
Payments do not exceed 110% of the greatest amount (the "Reduced
Amount") that could be paid to Employee such that the receipt of
Company Payments would not give rise to any Excise Tax, then no
Gross-up Payment shall be made to Employee and the Company
Payments, in the aggregate shall be reduced to the Reduced Amount.
(b) For purposes of determining whether any of the Company Payments
and Gross-up Payments (collectively the "Total Payments") will be
subject to the Excise Tax and determining the amounts of such
Excise Tax: (i) the Total Payments shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code, and
all "parachute payments" in excess of the "base amount" (as defined
under Code Section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless sand except to the extent that,
in the opinion of the Company's independent certified public
accountants appointed prior to any change in ownership (as defined
under Code Section 280G(b)(2)) or tax counsel selected by such
accountants (the "Accountants") such Total Payments (in whole or in
part), (A) do not constitute "parachute payments," (B) represent
reasonable compensation for services actually rendered within the
meaning of section
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280G(b)(4) of the Code or (C) are otherwise not subject to the
Excise Tax; and (ii) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants
in accordance with the principles of Section 280G of the Code.
(c) For purposes of determining the amount of the Gross-up Payment,
Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in
which the Gross-up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and
locality of Employee's residence for the calendar year in which the
Company Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year. In the event that the
Excise Tax is subsequently determined by the Accountants to be less
than the amount taken into account hereunder at the time the
Gross-up Payment is made, Employee shall repay to the Company, at
the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the prior Gross-up Payment attributable
to such reduction (plus the portion of the Gross-up Payment
attributable to the Excise Tax and federal, state and local income
tax imposed on the portion of the Gross-up Payment being repaid by
Employee if such repayment results in a reduction in Excise Tax or
a federal, state and local income tax deduction), plus interest on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the
event any portion of the Gross-up Payment to be refunded to the
Company has been paid to any federal, state and local tax
authority, repayment thereof (and related amounts) shall not be
required until actual refund or credit of such portion has been
made to Employee, and interest payable to the Company shall not
exceed the interest received or credited to Employee by such tax
authority for the period it held such portion. Employee and the
Company shall mutually agree upon the course of action to be
pursued (and the method of allocating the expense thereof) if
Employee's claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the
Accountants or the Internal Revenue Service to exceed the amount
taken into account hereunder at the time the Gross-up Payment is
made (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-up Payment),
the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to
such excess) at the time that the amount of such excess is finally
determined
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(d) The Gross-up Payment or portion thereof provided for in
subsection (c) above shall be paid not later than the thirtieth day
following an event occurring which subjects Employee to the Excise
Tax; provided, however, that if the amount of such Gross-up Payment
or portion thereof cannot be finally determined on or before such
day, the Company shall pay to Employee on such day an estimate, as
determined in good faith by the Accountants, of the minimum amount
of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Code Section
1274(b)(2)(B) of the Code), subject to further payments pursuant to
subsection (c) hereof, as soon as the amount thereof can reasonably
be determined, but in no event later than the ninetieth day after
the occurrence of the event subjecting Employee to the Excise Tax.
In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to Employee, payable on the fifth
day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
(e) In the event of any controversy with the Internal Revenue
Service (or other taxing authority) under this Section 16, Employee
shall permit the Company to control issues related to this Section
16 (at its expense), provided that such issues do not potentially
materially adversely affect Employee, but Employee shall control
any other issues. In the event the issues are interrelated,
Employee and the Company shall in good faith cooperate so as not to
jeopardize resolution of either issue, but if the parties cannot
agree, Employee shall make the final determination with regard to
the issues. In the event of any conference with any taxing
authority as to the Excise Tax or associated income taxes, Employee
shall permit the representative of the Company to accompany him,
and Employee and his representative shall cooperate with the
Company and its representative.
(f) The Company shall be responsible for all charges of the
Accountants"
7. A new Section 17 is hereby added to the Employment Agreement to
read as follows:
"17. Legal Fees. To the fullest extent permitted by law, the
Company shall promptly pay upon submission of statements all legal
and other professional fees, costs of litigation, prejudgment
interest, and other expenses incurred in connection with any
dispute concerning payments, benefits or any other entitlements
under Section l0(b); provided, however, the Company shall be
reimbursed by Employee for (i) the fees and expenses advanced in
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the event Employee's claim is, in a material manner, in bad faith
or frivolous and the arbitrator or court, as applicable, determines
that the reimbursement of such fees and expenses is appropriate, or
(ii) to the extent that the arbitrator or court, as appropriate,
determines that such legal and other professional fees are clearly
and demonstrably unreasonable."
8. A new Section 18 is hereby added to the Employment Agreement to
read as follows:
"18. No Mitigation/No Offset/Release
(a) In the event of any termination of employment hereunder,
Employee shall be under no obligation to seek other employment and
there shall be no offset against any amounts due Employee under
this Agreement on account of any remuneration attributable to any
subsequent employment that Employee may obtain, except as
specifically provided in the penultimate sentence of Section
10(b)(iii) hereof. The amounts payable hereunder shall not be
subject to setoff, counterclaim, recoupment, defense or other right
which the Company may have against Employee or others, except as
specifically set forth in this Section 18 hereof or upon obtaining
by the Company of a final unappealable judgment against Employee.
(b) Any amounts payable and benefits or additional rights provided
pursuant to Section 10(b)(iii) beyond Accrued Obligations shall
only be payable if Employee delivers to the Company a release of
all claims that Employee has or may have against the Company and
its affiliates (other than claims to payments, benefits or
entitlements specifically payable or provided hereunder, claims
under COBRA, claims to vested accrued benefits under the Company's
employee benefit plans or any rights of indemnification under the
Company's organizational documents) occurring up to the release
date in such form as reasonably requested by the Company, provided,
however, that such release shall also release Employee of all
claims that the Company and its affiliates have or may have against
Employee. In the event that the Company fails to deliver such
release to Employee within 10 days from the later of (i) Employee's
date of termination or (ii) the date of the Change in Control, such
release shall not be required and shall not prohibit or otherwise
delay payment of any amounts due Employee hereunder.
(c) Upon any termination of employment, upon the request of the
Company, Employee shall deliver to the Company a resignation from
all offices and directorships and fiduciary positions of
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Employee in which Employee is serving with, or at the request of,
the Company or its subsidiaries, affiliates or benefit plans."
9. A new Section 19 is hereby added to the Employment Agreement to
read as follows:
"19. Litigation Support. Subject to Employee's other commitments,
following the Employment Period, Employee shall be reasonably
available to cooperate (but only truthfully) with the Company and
provide information as to matters which Employee was personally
involved, or has information on, during the Employment Period and
which are or become the subject of litigation or other dispute."
10. Agreement Otherwise Unchanged. The Employment Agreement, as so
amended, shall remain in full force and effect.
11. Counterparts. This amendment may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute the same agreement.
CELADON GROUP, INC.
By: /s/ Xxxx Will
-----------------------------------
Name: Xxxx Will
Title: Chief Financial Officer
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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CELADON GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director/Compensation Committee
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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CELADON GROUP, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Director/Compensation Committee
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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