Exhibit 10.2
AMENDED
EMPLOYMENT AGREEMENT
This Agreement, as amended, effective as of May 15, 1999, is
made by and between Consolidated Freightways Corporation, a
Delaware corporation (hereinafter, together with any successor
Corporation(s), the "Company"), and Xxxxx X. Xxxxxxxx
(hereinafter "Executive").
Recitals
Whereas, Executive is currently employed by the Company as
its Executive Vice President and Chief Financial Officer;
Whereas, Executive previously entered into an Employment
Agreement with the Company, dated December 8, 1998;
Whereas, the Company and Executive wish to set forth in this
Amended Employment Agreement the amended terms and conditions
under which Executive is to be continued to be employed by the
Company on and after the effective date hereof; and
Whereas, the Company wishes to be assured that Executive
will be available to the Company through December 31, 1999.
Now, Therefore, the Company and Executive, in consideration
of the mutual promises set forth herein, agree that Employment
Agreement, dated December 8, 1998, be amended, effective as of
the date of this Amended Employment Agreement, to read in full as
follows:
Article 1.
Term of Agreement
1.1 Commencement Date. Executive's employment with the
Company under this Agreement shall commence as of the date of
this Agreement ("Commencement Date") and shall expire on December
31, 1999.
1.2 Renewal. This Agreement shall automatically terminate
on December 31, 1999, and shall not be renewed or extended unless
otherwise agreed in writing by the parties. Effective December
31, 1999, Executive shall and hereby irrevocably does without
further action resign as an employee, officer and director of the
Company and any of its Affiliates.
Article 2.
Employment Duties
2.1 Title/Responsibilities. Executive hereby accepts
employment with the Company pursuant to the terms and conditions
hereof. Executive agrees to serve the Company in his current
position at the corporate headquarters, until such time as the
Company appoints a new Chief Financial Officer, in its sole
discretion. Thereafter, Executive shall serve the Company at the
corporate headquarters in such executive capacity and with such
duties commensurate with Executive's background and skills as may
from time to time be requested by the Board of Directors of the
Company or the individual to whom the Executive reports.
Executive shall report to the Chief Executive Officer of the
Company, the Chief Financial Officer of the parent company of any
company that may acquire the Company, or the Chief Financial
Officer the Company may appoint to replace Executive. Executive
shall have the powers and duties commensurate with his position,
including but not limited to, hiring personnel necessary to carry
out the responsibilities for such position as set forth in the
annual business plan approved by the Board of Directors of the
Company.
2.2 Part-Time Attention. Executive shall devote his best
efforts and 25% of his business time and attention to the
performance of the services customarily incident to such
position and to such other services as Executive's direct report
may reasonably request.
2.3 Other Activities. Except upon the prior written
consent of the Board of Directors or Executive's direct report,
Executive shall not during the period of employment engage,
directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage) that is or may be
competitive with, or that might place him in a competing position
to that of the Company or any other corporation or entity that
directly or indirectly controls, is controlled by, or is under
common control with the Company or any entity in which the
Company directly or indirectly owns 49% or more of the voting
stock (an "Affiliate"), provided that Executive may own less than
two percent (2%) of the outstanding securities of any such
publicly traded competing corporation.
Article 3.
3.1 Base Salary. Executive shall receive a base salary at
an annual rate of 25% of his current salary payable weekly in
equal installments in accordance with the Company's normal
payroll practices ("Base Salary").
3.2 Incentive Bonus. Executive shall continue to
participate in the incentive bonus plan applicable to Executive
at the target percentage of 50% of actual salary paid or payable
but deferred in 1999 ("Target Bonus"). If earned, bonuses will
be paid at the same time as bonuses are paid to other senior
executives. The Board of Directors or Committee thereof shall,
in its sole discretion, determine the extent to which such
performance objectives have been obtained. No new short-term
incentives will be awarded to Executive.
3.3 Long-Term Incentives. Executive shall continue to have
the right to earn restricted stock. However, the number of
shares in the third installment which may be earned under
Executive's Restricted Stock Award and Deferral Agreement shall
be reduced from 50,000 shares of Common Stock to 29,688. In
addition, provided that Executive performs his employment duties
through December 31, 1999, the restricted stock may vest at any
time on or prior to December 2, 2001 notwithstanding Executive's
termination of employment on December 31, 1999. The stock shall
continue to be subject to earlier termination for death,
disability or termination for cause under the terms of the
Restricted Stock Award and Deferral Agreement, and all other
terms of the Executive's Restricted Stock Award and Deferral
Agreement shall otherwise continue in effect. Executive
acknowledges that the Compensation Committee intends to
distribute any vested restricted stock in January 2000, or if not
then vested, upon vesting, notwithstanding Executive's election
to defer receipt of such stock. No new long-term incentives will
be awarded to Executive.
3.4 Withholdings. All compensation and benefits payable to
Executive hereunder shall be subject to all federal, state, local
and other withholdings and similar taxes and payments required by
applicable law.
Article 4.
Benefits and Other Compensation
4.1 Vacation. Executive shall not accrue vacation during
the term of this Agreement.
4.2 Benefits. During the term of this Agreement, the
Company shall also provide Executive with the usual health
insurance benefits it generally provides to its other senior
officers of the Company. The Company shall provide Executive
with the right to participate in and to receive benefits from
life, accident, disability, medical, retirement medical, pension,
supplemental retirement, the 401(k), and 25% of standard car
allowance. Provided however, Executive shall not be entitled to
any other benefits provided generally to employees or to
executives, and short-term and long-term incentives shall be
limited to those described in Sections 3.2 and 3.3.
4.3 Business Expense Reimbursement. During the term of
this Agreement, Executive shall be entitled to receive
reimbursement for all reasonable out-of-pocket expenses incurred
by him (in accordance with the policies and procedures
established by the Company for its senior executive officers) in
performing services hereunder. Executive agrees to furnish to
the Company adequate records and other documentary evidence of
such expenses for which Executive seeks reimbursement. Such
expenses shall be reimbursed and accounted for under the policies
and procedures established by the Company and the Audit Committee
of the Board of Directors.
Article 5.
5.1 Non-disclosure of Proprietary Information - Non
Competition. Executive shall execute upon request the Company's
standard Non-Disclosure Agreement for officers of the Company and
its Affiliates in a form acceptable to the Company's counsel.
In any event, Executive shall maintain the confidentiality and
not use confidential information of the Company during his term
of employment and for two years following termination of his
employment. While employed hereunder, Executive shall not engage,
directly or indirectly, in any other business activity that is
competitive with, or that places him in a competing position to
that of the Company or any Affiliates (provided that Executive
may own less than two percent (2%) of the outstanding securities
of any publicly traded corporation).
5.2 No Solicitation of Employees. As a condition of
receiving benefits under this Agreement, Executive may not
directly solicit employees or full-time consultants of the
Company to leave during his employment with the Company or for a
period of two years from termination of employment.
5.3 Waiver of Claims. Executive shall also waive any
known or unknown claim against the Company and its Affiliates,
including, if applicable, any acquiring corporation, other than
those arising under the Agreement. Executive shall sign an
appropriate release if so requested upon termination of
employment.
5.4 Return of Property. All documents, records, apparatus,
equipment and other physical property which if furnished to or
obtained by Executive in the course of his employment with the
Company shall be and remain the sole property of the Company.
Executive agrees that, upon the termination of his employment, he
shall return all such property (whether or not it pertains to the
Company's proprietary information), and agrees not to make or
retain copies, reproductions or summaries of any such property.
Article 6.
Termination
6.1 By Death. The period of employment shall terminate
automatically upon the death of Executive. In such event, the
Company shall pay to Executive's beneficiaries or his estate, as
the case may be, any accrued Base Salary, pro-rata Target Bonus
based upon performance to date of death relative to target
performance, any vested deferred compensation (other than pension
plan, supplemental retirement, 401(k), or profit-sharing plan
benefits which will be paid in accordance with the terms of the
applicable plan), any benefits under any plans of the Company in
which Executive is a participant to the full extent of
Executive's rights under such plans, any accrued vacation pay and
any appropriate business expenses incurred by Executive in
connection with his duties hereunder, all to the date of
termination (collectively "Accrued Compensation"). Thereafter,
the Company's obligations hereunder shall terminate.
6.2 By Disability. If Executive is prevented from properly
performing his duties hereunder by reason of any physical or
mental incapacity for a period of more than 60 days in the
aggregate in any 365-day period, or if a determination is made by
a qualified physician selected by the Company and acceptable to
Executive or Executive's representative that continued employment
with the Company by Executive would jeopardize Executive's
physical or mental health, then, to the extent permitted by law,
the Company may terminate the employment on the 60th day of such
incapacity or following such a determination by a qualified
physician. In such event, the Company shall pay to Executive all
Accrued Compensation. Thereafter, the Company's obligations
hereunder shall terminate. Nothing in this Agreement shall
affect Executive's rights under any disability plan in which he
is an eligible participant.
6.3 By Company for Cause. The Company may terminate
Executive's employment for Cause (as defined below) without
liability at any time with or without advance notice to
Executive. The Company shall pay Executive all Accrued
Compensation, but no other compensation or reimbursement of any
kind, including without limitation, severance compensation, and
thereafter the Company's obligations hereunder shall terminate.
Termination shall be for "Cause" in the event of the occurrence
of any of the following: (a) any intentional action or
intentional failure to act by Executive which was performed in
bad faith and to the material detriment of the Company; (b)
intentional refusal or intentional failure to act in accordance
with any lawful and proper direction or order of the Board; (c)
willful and habitual neglect of his duties of employment; or (d)
conviction of a felony crime involving fraud or an act of
dishonesty against the Company, provided that in the event that
any of the foregoing events is capable of being cured, the
Company shall provide written notice to Executive describing the
nature of such event and Executive shall thereafter have ten (10)
business days to cure such event.
6.4 At Will. At any time, the Company may terminate
Executive's employment without liability other than as set forth
below, for any reason not specified in Section 6.3 above, by
giving thirty (30) days advance written notice to Executive. If
the Company elects to terminate Executive pursuant to this
Section 6.4, the Company shall pay to Executive all Accrued
Compensation and shall pay to Executive as provided herein
Executive's Base Salary, Target Bonus and continue to pay the
benefits described in Section 4.2 (except as otherwise explicitly
provided in this Section 6.4) over the period equal to the
remaining term of this Agreement, and thereafter all obligations
of the Company shall terminate. Notwithstanding the preceding
sentence, Executive shall receive (i) his incentive bonus as
described in Section 3.2 only for the proportion of the Company's
fiscal year in which termination occurs based upon the Company's
year-to-date performance against the selected objectives, (ii)
his long-term incentive compensation, if any, only for the
proportion of the applicable period based on the Company's
performance to date of termination against selected objectives,
(iii) additional age and service credits under the Company's
defined benefit pension plan and supplemental retirement plan for
the remainder of the then current term of this Agreement as if
Executive had continued to perform services for such period, and
(iv) acceleration of vesting in full for all stock awards,
whether stock options, restricted stock, or otherwise, then held
by Executive. All such severance compensation amounts shall be
earned and become payable in full immediately upon termination of
employment. If the Company terminates this Agreement or the
employment of Executive with the Company other than pursuant to
Section 6.1, 6.2 or 6.3, then this Section 6.4 shall apply.
6.5 Constructive Termination. In the event that the
Company changes the terms and conditions of Executive's
employment with the Company such that a "Constructive
Termination" has occurred, and Executive ceases performance of
services for the Company thereafter, such action shall be deemed
to be a termination of employment of Executive without cause
pursuant to Section 6.4. For purposes of this Agreement,
"Constructive Termination" shall mean (i) reduction of
Executive's Base Salary and/or Target Bonus, (ii) failure to
provide a package of welfare benefit plans, pension benefit
plans, and fringe benefits for Executive required hereunder
which, taken as a whole, provide substantially similar benefits
to those in which the Executive is entitled to participate
immediately prior to the Commencement Date of this Agreement, or
any action by the Company which would adversely affect
Executive's participation, (iii) material reduction of
Executive's benefits under any of such plans, (iv) change in
Executive's responsibilities, authority, title, office, or
reporting relationship resulting in diminution of position,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith which is remedied by
the Company promptly after notice thereof is given by Executive,
and except as contemplated elsewhere herein, (v) a request that
Executive relocate to a worksite that is more than 15 miles from
his prior worksite, unless Executive accepts such relocation
opportunity, (vi) material reduction in Executive's duties,
except as contemplated hereunder, (vii) failure or refusal of a
successor to the Company and any parent company to assume the
Company's obligations under this Agreement, as provided in
Section 7.2.2, or (viii) material breach by the Company or any
successor to the Company or any parent company of any of the
material provisions of this Agreement.
6.6 Termination by Executive. At any time, whether or not
as a result of Executive's retirement, Executive may terminate
his employment by giving thirty (30) days advance written notice
to the Company. The Company shall pay Executive all Accrued
Compensation, but no other compensation or reimbursement of any
kind, including without limitation, severance compensation, and
thereafter the Company's obligations hereunder shall terminate.
Article 7.
General Provisions
7.1 Governing Law. The validity, interpretation,
construction and performance of this Agreement and the rights of
the parties thereunder shall be interpreted and executed under
California law without reference to principles of conflicts of
laws. The parties expressly agree that inasmuch as the Company's
headquarters and principal place of business are located in
California, it is appropriate that California law govern this
Agreement.
7.2 Assignment; Successors; Binding Agreement.
7.2.1 Executive may not assign, pledge or
encumber his interest in this Agreement or any part thereof.
7.2.2 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company, by operation of law or by agreement in
form and substance reasonably satisfactory to Executive, to
assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform
it if no such succession had taken place.
7.2.3 This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amount
is at such time payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legates
or other designee or, if there be no such designee, to his
estate.
7.3 Attorney Fees. The Company will reimburse Executive or
Executive's successor-in-interest for all reasonable attorney
fees and costs associated with bringing any action under this
Agreement to enforce their rights hereunder, regardless of the
outcome of such proceeding, provided the court does not find the
claim was brought in bad faith.
7.4 Non-Publication. The parties mutually agree not to
disclose publicly the terms of this Agreement except to the
extent that disclosure is mandated by applicable law.
7.5 No Waiver of Breach. The waiver by any party of the
breach of any provision of this Agreement shall not be deemed to
be a waiver of any subsequent breach. No delay in exercising
any right hereunder shall be deemed to be a waiver of the party's
rights hereunder.
7.6 Notice. For the purposes of this Agreement, notices
and all other communications provided for in this agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth below or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be
effective only upon receipt.
To the Company: Consolidated Freightways Corporation
000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Chairman of Compensation Committee
To Executive: Xxxxx X. Xxxxxxxx
7.7 Modification; Waiver; Entire Agreement. No provisions
of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing
signed by Executive and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver
by either party hereto at any time of any breach by the other
party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
7.8 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
7.9 Executive Acknowledgment. Executive acknowledges (a)
that he has consulted with or had had the opportunity to consult
with independent counsel of his own choice concerning this
Agreement, and has been advised to do so by the Company, and (b)
that he has read and understands the Agreement, is fully aware of
its legal effect, and has entered into it freely based on his own
judgment.
7.10 Injunctive Relief. The parties agrees that the
services to be rendered by Executive hereunder are of a unique
nature and that in the event of any breach or threatened breach
of any of the covenants contained herein, the damage or imminent
damage to the value and the goodwill of the Company's business
will be irreparable and extremely difficult to estimate, making
any remedy at law or in damages inadequate. Accordingly, the
parties agree that the Company shall be entitled to injunctive
relief against Executive in the event of any breach or threatened
breach of any such provisions by Executive, in addition to any
other relief (including damages) available to the Company under
this Agreement or under law. Both parties agree that the remedy
specified in this section is not exclusive of any other remedy
for the breach by Executive of the terms hereof.
7.11 Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute
one and the same Agreement.
7.12 No Mitigation. The Executive shall not be required to
mitigate the amount of payments hereunder by seeking other
employment or otherwise, and any amount earned by Executive as a
result of employment by other employer after the date of
termination shall not reduce the payments hereunder.
7.13 Indemnity. The Company and its Affiliates shall
indemnify and hold Executive harmless against any loss, cost or
expense arising out of or relating to the performance of his
duties to the Company and its Affiliates, and shall maintain
adequate liability insurance covering such Executive's acts and
omissions occurring during the term of this Agreement and for a
period of six years thereafter.
7.14 Taxes. Except as specifically provided in this
Agreement, Executive shall be responsible for all taxes, interest
and penalties that Executive may incur by reason of the
performance of this Agreement by the Company, notwithstanding any
statement of income furnished by the Company. Executive shall be
fully responsible for determining the amount and timing of any
such taxes.
Executed by the parties as of the date and year first above
written.
Consolidated Freightways Corporation
/s/W. Xxxxx Xxxxx
W. Xxxxx Xxxxx
President and Chief Executive Officer
Consolidated Freightways Corporation
Executive:
/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Executive Vice President & Chief
Financial Officer
Consolidated Freightways Corporation
