SEPARATION AGREEMENT, GENERAL RELEASE, CONSULTING AGREEMENT, AND NON- COMPETITION, NON-DISCLOSURE AND NON-SOLICITATIONAGREEMENT
Exhibit
10.21
SEPARATION
AGREEMENT, GENERAL RELEASE, CONSULTING AGREEMENT,
AND
NON-COMPETITION, NON-DISCLOSURE AND
NON-SOLICITATIONAGREEMENT
THIS
SEPARATION AGREEMENT, GENERAL RELEASE, CONSULTING AGREEMENT, AND
NON-COMPETITION, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT ("Agreement")
is
made and entered into between Celadon Trucking Services, Inc., located at One
Celadon Drive, 0000 X. 00xx Xxxxxx,
Xxxxxxxxxxxx, XX 00000 (the "Company" or "Celadon") and Xxxxxx X. Xxxxxx at
00000 Xxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000 (hereinafter "Xxxxxx") (Celadon and
Xxxxxx are referred to herein collectively as the "Parties").
WHEREAS,
Xxxxxx was employed by Celadon in 2001 as its Vice President of Customer Service
and over the years he has risen to the position of President of the Company;
and,
WHEREAS,
Xxxxxx’x employment with the Celadon is being terminated due to his desire to
retire from the Company,
WHEREAS,
Xxxxxx and Celadon have reached a mutual agreement on the termination of
Xxxxxx’x employment;
NOW,
THEREFORE, in consideration of the mutual promises contained in this Agreement,
it is agreed as follows:
1. Termination
of Employment. Xxxxxx'x employment with
Celadon will end on August 3, 2007 (the "Termination Date"). In
response to any inquiries directed to Celadon with respect to Xxxxxx’x
employment with the Company, Celadon will respond to any such inquiry or request
for job reference concerning Xxxxxx by stating that the termination was due
to
his retirement from the Company.
2. Xxxxxx’x
General Release. In consideration of
the promises set forth in this Agreement and other good and valuable
consideration, Xxxxxx hereby irrevocably and unconditionally releases, acquits,
and forever discharges Celadon, Celadon’s parent, Celadon Group, Inc.
("Celadon Group"), its subsidiaries, affiliates, and divisions, as well as
each
of their respective officers, directors, employees, shareholders, members,
and
agents (Celadon, Celadon Group, its subsidiaries, affiliates, and divisions,
and
their respective officers, directors, employees, and agents being collectively
referred to herein as the "Releasees"), or any of them, from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts, and expenses (including attorney fees and costs actually
incurred), of any nature whatsoever, known or unknown, in law or equity,
including but not limited to those claims arising out of Xxxxxx'x employment
with the Company or the termination of his employment with Celadon, including,
without limitation of the foregoing general terms, any and all claims arising
from any alleged violation by the Releasees of any federal, state, or local
statutes, ordinances, or common law, including but not limited to, the Age
Discrimination in Employment Act ("ADEA"), as amended by the Older Workers
Benefit Protection Act ("OWBPA"); the Americans with Disabilities Act; Title
VII
of the Civil Rights Act of 1964, as amended; 42 U.S.C. § 1981, as
amended; the Fair Labor Standards Act; the Equal Pay Act; the
Employee Retirement Income Security Act; the Rehabilitation Act of
1973; the Civil Rights Act of 1991; the Family and Medical Leave Act; the Civil
Rights Act of 1866; the Indiana Civil Rights Act; and any other employment
discrimination laws, as well as any other claims based on constitutional,
statutory, common law, or regulatory grounds, as well as any claims based on
theories of breach of contract or implied covenant, deprivation of equity
interest, shareholder rights, conversion, defamation, retaliation, wrongful
or
constructive discharge, fraud, misrepresentation, promissory estoppel, or
intentional and/or negligent infliction of emotional distress, ("Claim" or
"Claims"), which Xxxxxx now has, owns, or holds, or claims to have, own, or
hold, or which Xxxxxx had, owned, or held, or claimed to own at any
time before execution of this Agreement, against any or all of the
Releasees. Notwithstanding the foregoing, Xxxxxx reserves all rights
to enforce the terms of this Agreement and his rights to continue health
insurance coverage as provided under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA").
3. Covenant
Not to Xxx. Xxxxxx covenants and agrees
that he has not filed any charges, complaints, lawsuits, claims, or other
proceedings against Celadon with the Equal Employment Opportunity Commission
("EEOC"), the Indiana Civil Rights Commission ("ICRC"), or with any other local,
state, or federal court, arbitral tribunal, or agency. Xxxxxx
covenants not to xxx, commence, or maintain any state or federal court action,
arbitral proceeding, or any administrative proceeding before the Indiana
Department of Labor, the United States Department of Labor, or the National
Labor Relations Board against Celadon, related in any way to Xxxxxx'x employment
with Celadon or the termination of his employment with the
Company. In further consideration of the promises contained in this
Agreement, Xxxxxx agrees that he will never institute a legal or equitable
action in any state or federal court against the Company, with respect to the
matters herein resolved and settled, except to enforce the terms of this
Agreement. Xxxxxx hereby unequivocally and without reservation waives
his right to recover either monetary damages or equitable relief in any
proceeding that results from any charge he, or any person acting on his behalf,
has filed, or will file, with either the EEOC, the ICRC, or any local human
rights or equal opportunity commission against any of the Releasees, or from
any
proceeding that the EEOC or the ICRC has brought, or will bring, on his behalf
against any of the Releasees. This waiver applies to all proceedings
instituted with the EEOC and/or the ICRC, or by either of these agencies in
other forums, based upon currently existing facts, whether such facts are
currently known or unknown to Xxxxxx, the EEOC, or the ICRC. To the
extent allowed by the federal civil rights laws, Xxxxxx intends to extinguish
with this Agreement any and all claims, known or unknown, that he may have
against the Company.
4. Xxxxxx’x
Separation Payment. As consideration for this Agreement,
the Company agrees that it will pay Xxxxxx’x current salary through
August 3, 2008, which will be paid through the Company’s regular payroll, less
payroll advances and applicable withholding for federal, state, and local taxes
paid in the normal course. The Company will also continue Xxxxxx’x employment
related benefits for group medical insurance, group life insurance, worker’s
compensation and disability insurance through August 31, 2007 as
well. This coupled with the provisions set forth in Paragraphs
5 and 6 below constitute the total amount that Xxxxxx will be paid or benefits
received as a result of his termination of employment with the Company and
this
amount is to compensate Xxxxxx for all amounts that are due or that otherwise
may be due from the Company, including, but not limited to, wages, vacation
pay,
bonuses, severance pay, benefits, consulting fees, interest and any other
amounts that may heretofore have accrued or will accrue in the future but for
this Agreement. Xxxxxx further understands and agrees that this Separation
Payment constitutes consideration to which he would not otherwise be entitled
but for his execution of this Agreement. Xxxxxx shall pay any and all taxes,
interest and penalties with respect thereto and shall indemnify and hold the
Company harmless from any and all liability with regard thereto.
5. Xxxxxx’x
Monetary Obligations to the Company. All of
Xxxxxx'x obligations in respect of the Code of Ethics evaluation in June 2007
are deemed satisfied in full as a result of Xxxxxx'x separation from the Company
in accordance with the terms of this Agreement.
6. Equity
Grants.
A. Stock
Options. Notwithstanding anything herein to the
contrary, Xxxxxx and the Company agree that during the course of his
employment with the Company, Xxxxxx has been granted and is hereby:
(1) 25% vested in the option to purchase 7,650 shares of stock of Celadon Group,
at $12.81 per share as referenced in Stock Option number ISO 2 which was granted
on January 12, 2006; and (2) 25% vested in Non-Qualified Stock Option to
purchase 96,300 shares of the stock of Celadon Group at $12.81 per share as
reflected in the Non-Qualified Stock Option numbered NQ 2 which was granted
on
January 12, 2006. The Company will permit Xxxxxx to exercise any of
these stock options, to the extent vested, in accordance with the terms of
the
Celadon Group, Inc. Stock Option Plan of 1994, as amended, or the 2006 Omnibus
Incentive Plan (hereafter collectively referred to as the Plans") and the
related agreements or award notices and retain such stock or sell the aforesaid
stock on the open market; provided, notwithstanding anything in the Plans and
related agreements or award notices to the contrary, any exercise made under
this paragraph must be made on or before September 4, 2007.
B. Restricted
Stock Grants. Xxxxxx has also been granted and is
hereby: (1) 75% vested in 40,050 Restricted Stock Grants as referenced in
Restricted Stock Grant number 6 which was granted on October 30, 2003; and
(2)
25% vested in 19,800 Restricted Stock Grants as referenced in Restricted Stock
Grant number 2 which was granted on January 12, 2006. The Company will permit
Xxxxxx to acquire any of these Restricted Stock Grants, to the extent vested,
in
accordance with the terms of the Plans and the related agreements or award
notices and he may retain such stock or sell the aforesaid stock on the open
market; provided, notwithstanding anything in the Plans and related agreements
or award notices to the contrary. The Company will issue such vested
shares of Celadon Group stock on or before September 4, 2007.
2
C. Stock
Appreciation Rights. Xxxxxx has also been granted and
is hereby 50% vested in Stock Appreciation Rights to purchase 67,500 shares
of
Celadon Group’s stock at the price of $8.65 per share as referenced in the Stock
Appreciation Rights grant numbered 89 which was granted on October 28,
2004. The Company will calculate the value of the vested portion of
his Stock Appreciation Rights based on Celadon Group’s closing stock price on
August 3, 2007 and remit payment, less applicable withholding for federal,
state, and local taxes paid in the normal course, to Xxxxxx on or before
September 4, 2007.
In
addition to the above, the Company will also allow Xxxxxx’x Restricted Stock
Grants that were granted to him on October 30, 2003 as set forth in section
6(B)(1) above under the Plans to continue to vest in the normal course while
he
provides consulting services for the Company. He is permitted to
retain the stock or sell the aforesaid stock on the open market. To
the extent that there may be a conflict between the Plans or the related
agreements or award notices and the provisions of this paragraph 6, the language
of this paragraph will supercede the provisions of the Plans and related
agreements or award notices.
7. Confidentiality. Xxxxxx
covenants and agrees that he will keep confidential and will not repeat or
disclose any of the terms or conditions of this Agreement, or any of the
negotiations which resulted in this Agreement, except to his legal counsel,
financial advisors, and his immediate family.
8. Non-disparagement. Xxxxxx
agrees that neither he nor members of his immediate family shall engage in
any
disparagement of the Releasees, or their respective officers, directors,
employees and agents. The Company agrees that it shall not engage in
any disparagement of Xxxxxx.
9. Non-Disclosure
of Trade Secret and Confidential
Information. During his employment with
the Company, Xxxxxx has had access to confidential, proprietary and/or trade
secret information ("Proprietary Information") of the Company, Celadon Group,
its subsidiaries, affilitates and divisions (the Company, Celadon Group, its
subsidiaries, affiliates and divisions being collectively referred to herein
as
the "Celadon Group of Companies"). The Parties acknowledge that the
Company is and will at all times remain the exclusive owner of the Proprietary
Information. Given the position Xxxxxx held with the Company, and the
potentially sensitive and/or private nature of this Proprietary Information,
Xxxxxx acknowledges and agrees that he will not directly or indirectly use
or
disclose the Proprietary Information outside of the Company for Twenty-Four
(24)
months after August 3, 2007, without the express written permission of the
Chief
Executive Officer of the Company. "Proprietary Information" is
defined to mean all materials and information (whether written or not) about
the
Celadon Group of Companies’ services; processes; research;
development; past, present, and identifiable prospective customers; personnel;
purchasing; marketing; costs; improvements; discoveries; business methods;
formulas; inventions; philosophies and other business aspects of the Celadon
Group of Companies which are not generally known and accessible to the public
at
large or which provide the Celadon Group of Companies with a competitive
advantage.
3
10. Non-Competition. Xxxxxx
warrants and represents that for a period of Twenty-Four (24) months from August
3, 2007 that he will not, directly or indirectly:
A. Release
to any person, firm or corporation in any manner whatsoever, any information
obtained primarily as a result of his employment with the Company concerning
any
matters affecting or relating to the business of the Celadon Group of Companies,
including, but not limited to, any customer lists or other information
concerning the business of the Celadon Group of Companies, its manner of
operation, its plans, practices, processes or other data, without regard to
whether all of the foregoing matters will be deemed confidential, material
or
important; or
B. Call
or solicit, either for himself or for any other person, firm or corporation,
any
of the customers of the Celadon Group of Companies; or
C. Make
known to any person, firm or corporation, either directly or indirectly any
of
the plans, financial information, sales and marketing information, or potential
undertakings of the Celadon Group of Companies; or
D. Engage
in any employment or business activity that is in competition or is reasonably
expected to be in competition with the Celadon Group of Companies or which
performs services or sells goods or services which are similar to those provided
or sold by the Celadon Group of Companies, except that Xxxxxx shall be free
to
participate in the transportation of materials provided that they are not
transported in dry van equipment at any time and Xxxxxx shall be permitted
to
participate in third party logistics operations on and after August 3,
2008. However, the exceptions set forth in this subsection 10 (D)
shall have no affect on subsections 10(A), 10(B), 10(C) or 10(E) in this section
10; or
E. Solicit
or attempt to hire, for himself or any other person, any of the Celadon Group
of
Companies’ employees, independent contractors or to attempt to or encourage any
of the Celadon Group of Companies’ employees or independent contractors to
terminate their employment, or business relationship, with the Celadon Group
of
Companies.
4
11. Consulting
Agreement.
A. Engagement. Xxxxxx
agrees to furnish transportation consulting services and advice to Celadon
or to
such third parties as Celadon may direct, for the benefit of Celadon, at such
times and at such places as may be mutually agreed upon between an authorized
representative of Celadon and Xxxxxx, up to but not more than ten (10) hours
per
month. In carrying out this Agreement, Xxxxxx will report to Xxxxxxx
Xxxxxxx, Celadon’s Chief Executive Officer and Chairman of the
Board. Should Xxxxxxx Xxxxxxx not be available, Xxxxxx may also take
direction from such other person as directed by Xxxxxxx Xxxxxxx in
advance.
B. Term. This
consulting agreement shall commence on August 3, 2007, and shall continue for
twenty-four (24) months until August 3, 2009. Upon the termination of
this consulting agreement, the rights and obligations of the parties under
this
consulting agreement shall end, except as otherwise provided for in this
Agreement.
C. Compensation. Xxxxxx’x
compensation for these consulting services is incorporated in paragraphs 4
- 6
above.
D. Expenses
and Equipment. Xxxxxx shall procure and provide at his
own expense any normal business related supplies, materials, expenses and
equipment reasonably necessary for him to satisfactorily perform his consulting
and advisory services for Celadon. Celadon may also make available to
him, as and when reasonably required in Celadon's sole discretion, such
technical and/or supporting personnel and such information and/or data as are
deemed necessary for the satisfactory performance of Xxxxxx'x consulting
services. To the extent that Xxxxxx utilizes equipment and other
items furnished by Celadon, he shall at all times and places comply with all
provisions pertaining to the use, care, and protection of such items established
by Celadon to the same extent as would be applicable to Celadon employees under
the same or similar circumstances. Upon the expiration or termination
of this Agreement for any reason, Xxxxxx shall immediately return to Celadon
any
and all Celadon equipment or property furnished to him.
E. Capacity/Independent
Contractor. As a consultant, Xxxxxx is an INDEPENDENT
CONTRACTOR and is not an employee of Celadon and thus shall not be entitled
to
anyemployee benefits of any type other than as may be expressly provided for
in
this Agreement. Any references herein to "employee" shall in no way
be construed as establishing Xxxxxx'x right to compensation or benefits not
expressly provided for herein or as establishing Xxxxxx as an employee or
agent. Xxxxxx shall be solely responsible for the payment of any
applicable taxes, including, but not limited to, any applicable federal and
state income taxes, as well as social security and employment taxes of any
nature, resulting from his services as an INDEPENDENT CONTRACTOR.
F. Confidentiality. Xxxxxx shall
not, either during or subsequent to the term of this Agreement, directly or
indirectly, publish or otherwise divulge, to any unauthorized person, any
information, whether acquired by Xxxxxx in the course of the performance of
his
services, hereunder, or from employees of Celadon, which is known by Xxxxxx
to
be designated confidential information, or to be in the nature of a trade
secret, or to be of the type not usually divulged to the public by Celadon,
or
is of the type not known to the general public, or relates directly or
indirectly to any invention or trade secret to which Celadon may have a right
within the scope of this consulting agreement.
5
12. Remedies
for Breach of Covenants by Xxxxxx. In
the event that Xxxxxx breaches the provisions in sections 2 - 11 above, the
Parties hereby agree that the Company, in addition to any other right or remedy
available to it in law or equity, will have the following additional rights
and
remedies:
A. The
Company reserves the right to revoke the grant of any unexercised or unvested
Stock Options or Restricted Stock Grants made to Xxxxxx as described in section
6 above and to require the disgorgement of any profits derived by Xxxxxx on
any
exercised Stock Options, Stock Appreciation Rights or Restricted Stock Grants
granted to him by the Company as set forth in section 6 above; and
B. Since
the damages to the Company resulting from a breach by Xxxxxx of sections 2
- 11
above could not adequately be compensated by money damages, the Company shall
also be entitled to an injunction restraining such breach or threatened breach,
and in any case, no bond or other security shall be required in connection
therewith except as provided by law. Xxxxxx agrees that the
provisions of sections 2 - 11 are necessary and reasonable to protect the
Company in the conduct of its business. If any restriction contained
in sections 2 - 11 shall be deemed invalid, illegal or unenforceable by reason
of the extent, duration or geographical scope hereof, or otherwise, then the
court making such determination shall have the right to reduce such extent,
duration, geographical scope or other provisions hereof and, in its reduced
form, such restriction shall then be enforceable in the manner contemplated
hereby.
13. Remedies
for Breach of Covenants by the Company. In the event
that the Company breaches the sections 4 - 6 above, the Parties agree that
Xxxxxx shall have any right or remedy available to him in law or equity for
redress of his grievances.
14. Return
of Property. Xxxxxx warrants and
represents that he will return to the custody of the Company property and
Proprietary Information, as well as all copies thereof, that were in his
possession, custody, or control, by no later than August 10,
2007. This includes all tangible personal property (such as keys,
access keys, telephones, computers, credit cards, equipment, company car, etc.)
and all writings, contracts, records, files, tape recordings, correspondence,
communications, summaries, data, notes, memoranda, diskettes, or any other
source containing information which relates to or references the Celadon Group
of Companies and which was provided by the Company or obtained as a result
of
Xxxxxx’x employment with the Company. The sole exception to the
provisions set forth in this section 14 is that Xxxxxx will be permitted to
continue to have the use of his company car (2005 Acura RL) until February
3,
2008, at which time Celadon will assign the lease for the company car to Xxxxxx
and he will be solely responsible for all subsequent fees and expenses connected
with said lease. Xxxxxx will be responsible for insurance coverage on
the company car on and after August 3, 2007.
6
15. Construction. The
fact that one party drafted this Agreement or any specific provision hereof
shall not be construed against either party. The Parties hereby
confirm and agree that this Agreement is the result of negotiation and
compromise, and that in interpreting this Agreement neither party shall be
considered to be the drafter of the document, and that the language should
not
be strictly construed against either party. Instead, the language of
the Agreement should be interpreted consistently with the ordinary and
reasonable meaning of the words used.
16. Non-reliance
on Other Statements or Promises. Xxxxxx
represents and acknowledges that in executing this Agreement, he does not and
has not relied on any representation or statement by the Company or its agents,
except the statements that are contained within this Agreement.
17. Mutual
Cooperation. The Parties agree to
cooperate with each other in the preparation and execution of all documents
and
agree to perform any and all actions necessary to facilitate the completion
of
the responsibilities of the Parties under this agreement.
18. Enforcement
Costs. If any legal action or other
proceeding is brought for enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any
provisions of this Agreement, the prevailing party or parties shall be entitled
to recover any reasonable attorney's fees, court costs and all expenses, even
if
not taxable as court costs (including, without limitation, all such fees, costs
and expenses incident to appeals), incurred in that action or proceeding, in
addition to any other relief to which such party or parties may be
entitled.
19. Limitation
of Remedies. Xxxxxx acknowledges and
agrees that the release and discharge granted by him in this Agreement shall
survive the execution of this Agreement and shall also remain binding upon
Xxxxxx even in the event of a breach of any part of this Agreement by the
Company. In the event of any such breach by the Company, Xxxxxx
acknowledges and agrees that his sole and exclusive remedy against the Company
shall be limited to an action for breach of this Agreement and in no event
shall
any breach of this Agreement, of any nature or magnitude by the Company, entitle
Xxxxxx to revoke or cancel this Agreement or any part thereof or to otherwise
avoid and limit in any way the binding nature of the release and discharge
as
contained in this Agreement.
20. Severability. If
any one or more of the provisions contained in this Agreement as to any of
the
parties to this Agreement shall for any reason be held to be invalid, illegal
or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other party to
this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision(s) had never been contained
therein.
21. Binding
Agreement. The terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective heirs, legal representatives, agents, successors
and
assigns; provided, however, that in no event shall Xxxxxx be entitled to assign
any rights or delegate any duties or obligations under this Agreement without
the written approval of the Company.
7
22. Governing
Law. This Agreement shall be subject to
and governed by the laws of the State of Indiana. The Parties agree
to submit any dispute to jurisdiction before any Xxxxxx County, Indiana Court,
and any claim arising under this Agreement may only be brought before the state
or federal courts with jurisdiction over Xxxxxx County, Indiana.
23. Headings. Paragraph
headings are included for ease of reference only, and shall have no effect
on
the meaning or construction of this Agreement.
24. Counterparts. This
Agreement may be executed in identical counterparts, each of which shall
constitute an original of this Agreement. It is herein agreed and
acknowledged that each party to this Agreement shall bear its own costs and
attorney fees incurred as of the date of this Agreement.
25. Time
for Consideration and Revocation. The
Company and Xxxxxx acknowledge and agree that Xxxxxx has had at least twenty-one
(21) days to consider this Agreement, and that he was encouraged by the Company
to consult with an attorney prior to executing this Agreement. Upon
executing this Agreement, Xxxxxx shall have seven (7) days following his
execution of this Agreement in which he may revoke this
Agreement. This Agreement shall not be enforceable until this
revocation period has expired. Notice of the revocation of this
Agreement must be in writing and delivered to Xxxxxxx X. Core, Celadon Trucking
Services, Inc., One Celadon Drive, 0000 Xxxx 00xx Xx., Xxxxxxxxxxxx,
Xxxxxxx, 00000, no later than 10:00 o'clock a.m. on the next business day
following the expiration of the seven (7) day period.
26. Advice
Concerning Attorney, Understanding and
Voluntariness. XXXXXX REPRESENTS AND
AGREES THAT HE HAS BEEN ADVISED BY THE COMPANY TO SEEK LEGAL COUNSEL PRIOR
TO
EXECUTING THIS AGREEMENT, THAT HE HAS SOUGHT AND RECEIVED THE ADVICE OF COUNSEL,
THAT HE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS
AGREEMENT, AND THAT HE IS VOLUNTARILY ENTERING INTO THIS AGREEMENT.
PLEASE
READ THIS AGREEMENT CAREFULLY. THIS AGREEMENT AND GENERAL RELEASE OF
ALL CLAIMS INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
(SIGNATURES
CONTINUE ON FOLLOWING PAGE)
8
|
CELADON
TRUCKING SERVICES, INC.
|
XXXXXX
X. XXXXXX
|
|
| /s/Xxxxxxx Xxxxxxx | /s/Xxxxxx X. Xxxxxx | |
|
Xxxxxxx
Xxxxxxx – Chief Executive Officer
|
Xxxxxx
X. Xxxxxx
|
|
|
Dated: July
25, 2007
|
Dated:
July 25, 2007
|
