EXHIBIT 10.37
EMPLOYMENT AGREEMENT dated as of June __, 2000, between
PACER INTERNATIONAL, INC., a Tennessee corporation (the
"Company"), and XXXXXX X. XXXXXXXXXX (the "Executive").
------- ---------
The Company and the Executive are entering into this Agreement to set forth
the terms of the Executive's employment with the Company. Accordingly, in
consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Company and the Executive,
the Company and the Executive hereby agree as follows:
Section 22. Duties. On the terms and subject to the conditions contained
------
in this Agreement, the Executive will be employed by the Company as an Executive
Vice President of the Company and as the President and Chief Operating Officer
of the Company's Pacer Stacktrain division (the "Division"). The Executive
--------
shall perform such duties and services on behalf of the Company and its
affiliates consistent with such positions as may reasonably be assigned to the
Executive from time to time by the Board of Directors of the Company (the
"Board") or the more senior officers of the Company. Such duties will include
-----
(i) responsibility for the overall financial performance of the Division and
(ii) strategic positioning of the Division for long-term strong financial
performance.
Section 23. Term. Unless sooner terminated in accordance with the
----
applicable provisions of this Agreement, the Executive's employment hereunder
shall be for the period (including any extensions thereof, the "Employment
----------
Period") commencing on the date hereof (the "Commencement Date") and initially
------ -----------------
ending on the fifth anniversary of the date hereof. Subject to the applicable
provisions of this Agreement regarding earlier termination, the Employment
Period shall be extended automatically one day prior to each anniversary of the
Commencement Date, beginning with the fourth anniversary thereof, in each case
for an additional period of one year.
Section 24. Time to be Devoted to Employment. During the Employment
--------------------------------
Period, the Executive will devote all of the Executive's working energies,
efforts, interest, abilities and time exclusively to the business and affairs of
the Company and its affiliates. The Executive will not engage in any other
business or activity which, in the reasonable judgment of the Board, would
conflict or interfere with the performance of the Executive's duties as set
forth herein, whether or not such activity is pursued for gain, profit or other
pecuniary advantage.
Section 25. Base Salary; Bonus; Benefits.
----------------------------
(a) During the Employment Period, the Company (or any of its
affiliates) shall pay the Executive a minimum annual base salary (the "Base
----
Salary") of $250,000, payable in such installments (but not less often than
------
monthly) as is generally the policy of
1
the Company with respect to the payment of regular compensation to its executive
officers. The Base Salary may be increased from time to time in the sole
discretion of the Board. The Executive will also be entitled to vacation under
the Company's policy, but in any event no less than four (4) weeks vacation per
year occurring during the Employment Period, commencing after the first
anniversary of the Commencement Date, and such other benefits as may be made
available to other executive officers of the Company generally, including,
without limitation, participation in such health, life and disability insurance
programs and retirement or savings plans, if any, as the Company may from time
to time maintain in effect, subject to the Company's right from time to time to
amend, modify, change or terminate in any respect any of its Executive benefit
plans, policies, or programs. The Executive will also be entitled to the use of
a vehicle provided by the Company or its affiliates or an equivalent monthly car
allowance in accordance with the Company's or its affiliates' policy with
respect to its executive officers.
(b) In addition to the Base Salary and benefits set forth in
paragraph (a) above, during the Employment Period the Executive will be entitled
to receive a cash incentive bonus, if any, with respect to each calendar year
occurring during the Employment Period, commencing with the calendar year ending
December 31, 2000, such bonus to be paid in a lump sum following the end of the
calendar year with respect to which such bonus is payable (such payment to be
made at the same time performance bonuses are paid to the other executive
officers of the Company). If the Executive's employment with the Company is
terminated for any reason other than without "cause" pursuant to Section 7(b)
below, neither the Company nor any of its subsidiaries or affiliates will be
obligated to pay the Executive any bonus with respect to the calendar year of
the Company in which such termination occurred or thereafter. If the Executive's
employment with the Company is terminated without "cause" pursuant to Section
7(b) below, the Executive will be entitled to receive that portion of the bonus
payable for the calendar year of the Company during which such termination
occurs pro rated through the date of such termination based on the number of
days elapsed through the termination date over 365 days, payable in accordance
with the first sentence of this Section 4(b). The bonus payable with respect to
the year ending December 31, 2000, will be determined in the manner described on
Exhibit A attached hereto. The bonus payable for each calendar year occurring
---------
during the Employment Period after the year 2000, if any, shall be subject to
and determined based on the achievement specified performance targets determined
by Board and applicable to the other executive officers of the Company and its
subsidiaries.
(c) The Executive acknowledges his receipt from the Company of the
amount of $85,000 in payment or reimbursement of moving expenses and other
relocation transaction costs incurred and to be incurred by the Executive in
connection with his commencement of work for the Company. To the extent that
such payment is taxable to the Executive, the Company will pay the Executive a
bonus in an amount equal (as nearly as may be practicable) to his actual net
federal and state income tax liability incurred and attributable to such payment
and such bonus (such net tax liability to be jointly determined by the Company
and the Executive in consultation with their respective tax advisers, including
taking into account the tax savings realized or realizable by the Executive as a
result of deductions taken or allowable with respect to
2
such moving expenses and other relocation transaction costs).
Section 26. Reimbursement of Expenses. During the Employment Period, the
-------------------------
Company shall reimburse the Executive in accordance with Company policy for all
reasonable and necessary traveling expenses and other disbursements incurred by
the Executive for or on behalf of the Company in connection with the performance
of the Executive's duties hereunder upon presentation of appropriate receipts or
other documentation therefor, in accordance with all applicable policies of the
Company.
Section 27. Disability or Death. If, during the Employment Period, the
-------------------
Executive is incapacitated or disabled by accident, sickness or otherwise
(hereinafter, a "Disability") so as to render the Executive mentally or
----------
physically incapable of performing the services required to be performed by the
Executive under this Agreement for any period of 90 consecutive days or for an
aggregate of 180 days in any period of 360 consecutive days, the Company may, at
any time thereafter, at its option, terminate the Executive's employment under
this Agreement immediately upon giving the Executive written notice to that
effect. In the event of the Executive's death, the Executive's employment will
be deemed terminated as of the date of death.
Section 28. Termination.
-----------
(a) The Company may terminate the Executive's employment hereunder at
any time for "cause" by giving the Executive written notice of such termination,
containing reasonable specificity of the grounds therefor. For purposes of this
Agreement, "cause" shall mean (i) willful misconduct with respect to the
business and affairs of the Company or any of its affiliates, (ii) willful
neglect of the Executive's duties or the failure to follow the lawful directions
of the Board or more senior officers of the Company to whom the Executive
reports, including, without limitation, the violation of any material policy of
the Company or of any of its affiliates that is applicable to the Executive,
(iii) the material breach of any of the provisions of this Agreement or any
other written agreement between the Executive and the Company or any of its
affiliates and, if such breach is capable of being cured, the Executive's
failure to cure such breach within 30 days of receipt of written notice thereof
from the Company, (iv) the Executive's commission of a felony, (v) the
Executive's commission of an act of fraud or financial dishonesty with respect
to the Company or any of its affiliates or (vi) any conviction of the Executive
for a crime involving moral turpitude or fraud. A termination pursuant to this
Section 7(a) shall take effect immediately upon the giving of the notice
contemplated hereby.
(b) The Company may terminate the Executive's employment hereunder at
any time without "cause" by giving the Executive written notice of such
termination, which termination shall be effective as of the date set forth in
such notice, provided that such date shall not be earlier than the date of the
notice.
Section 29. Effect of Termination.
---------------------
(a) Upon the effective date of a termination of the Executive's
employment under this Agreement for any reason other than a termination without
cause pursuant to Section 7(b), neither the Executive nor the Executive's
beneficiaries or estate shall have
3
any further rights under this Agreement or any claims against the Company or any
of its affiliates arising out of this Agreement, except the right to receive,
within 30 days after the effective date of such termination (or such earlier
period as may be required by applicable law):
(i) the unpaid portion of the Base Salary provided for in
Section 4, computed on a pro rata basis to the effective date of such
termination;
(ii) reimbursement for any expenses for which the Executive
shall not have theretofore been reimbursed, as provided in Section 5; and
(iii) the unpaid portion of any amounts earned by the Executive
prior to the effective date of such termination pursuant to any benefit
program in which the Executive participated during the Employment Period;
provided, however, the Executive shall not be entitled to receive any
-------- -------
benefits under any benefit program that have accrued during any period if
the terms of such program require that the beneficiary be employed by the
Company as of the end of such period.
(b) Upon termination of the Executive's employment under this
Agreement pursuant to Section 7(b), neither the Executive nor the Executive's
beneficiaries or estate shall have any further rights under this Agreement or
any claims against the Company or any of its affiliates arising out of this
Agreement, except the right to receive, within 30 days after the effective date
of such termination, in the case of amounts due pursuant to clause (i) below,
and at such other times as provided in clause (ii) and (iii) below in the case
of amounts due thereunder (or in each case such earlier period as may be
required by applicable law):
(i) the payments, if any, referred to in Section 8(a) above;
(ii) provided that the Executive is not in breach of any
provision of this Agreement surviving such termination, continued payment
of the Base Salary for a period of twenty-four months following the
effective date of such termination, payable during such period in such
manner as the Base Salary is payable pursuant to Section 4(a), reduced by
any amounts the Executive (or the Executive's beneficiaries or estate)
receives or is entitled to receive as salary or other cash compensation
from subsequent employment or for services rendered during such period, up
to a maximum of all amounts due to the Executive under this Section
8(b)(ii) (and in order to carry out the intent of the immediately preceding
sentence, the Executive agrees, for the Executive and the Executive's
beneficiaries or estate, to provide the Company with such information as
the Company may reasonably request regarding the Executive's receipt of, or
right to receive, salary and other cash compensation from subsequent
employment or for services rendered or to be rendered during or with
respect to such period); and
(iii) provided that the Executive is not in breach of any
provision of this Agreement surviving such termination, continued payment
of any bonus (or portion thereof), if any, payable in accordance with
Section 4(b) with respect to the fiscal year in which such termination
occurs.
4
Section 30. Disclosure of Information.
-------------------------
(a) From and after the date hereof, the Executive shall not at any
time use or disclose to any person or entity (other than any officer, director,
employee, affiliate or representative of the Company), except as required in
connection with the performance of the Executive's duties under and in
compliance with this Agreement and as required by law and judicial process, any
Confidential Information (as hereinafter defined) heretofore acquired or
acquired during the Employment Period for any reason or purpose whatsoever, nor
shall the Executive make use of any of the Confidential Information for the
Executive's own purposes or for the benefit of any person or entity except the
Company or any subsidiary thereof. The covenant contained in this Section 9
shall survive the termination or expiration of the Employment Period and any
termination of this Agreement.
(b) For purposes of this Agreement, the term "Confidential
------------
Information" means (i) the Intellectual Property Rights (as hereinafter defined)
-----------
of the Company and its affiliates and (ii) all other information of a
proprietary or confidential nature relating to the Company or any affiliate
thereof, or the business or assets of the Company or any such subsidiary,
including, without limitation, books, records, agent and independent contractor
lists and related information, customer lists and related information, vendor
lists and related information, supplier lists and related information,
distribution channels, pricing information, cost information, marketing plans,
strategies, forecasts, financial statements, budgets and projections, other than
(A) information which is generally available to the public on the date hereof,
or which becomes generally available to the public after the date hereof without
action by the Executive or (B) information which the Executive receives from a
third party who does not have any independent obligation to the Company to keep
such information confidential.
(c) As used herein, the term "Intellectual Property Rights" means all
----------------------------
industrial and intellectual property rights, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service xxxx applications, copyrights, copyright
applications, know-how, certificates of public convenience and necessity,
franchises, licenses, trade secrets, proprietary processes and formulae,
inventions, development tools, marketing materials, instructions, confidential
information, trade dress, logos and designs and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, manuals, memoranda and records.
Section 31. Noncompetition Covenant.
-----------------------
(a) The Executive will not during the period (the "Non-Competition
---------------
Period") encompassing the Employment Period and the two years following the date
------
of the termination of his employment with the Company and its subsidiaries for
any reason (i) in any geographic area where the Company or any of its
subsidiaries or affiliates conducts business during the Non-Competition Period,
directly or indirectly engage or participate in (whether as an officer,
director, employee, partner, consultant, holder of an equity or debt investment,
lender or in any other manner, or capacity, including, without limitation, by
the rendering of services or advice to any person), or lend his name (or any
part or variant thereof) to, any Competing Business (as defined in below); (ii)
deal,
5
directly or indirectly, in a competitive manner with any customers doing
business with the Company or any of its subsidiaries or affiliates during the
Non-competition Period; (iii) solicit or employ any officer, director or agent
of the Company or any of its subsidiaries or affiliates to become an officer,
director, or agent of the Executive, the Executive's affiliates or anyone else;
or (iv) engage in or participate in, directly or indirectly, any business
conducted under any name that shall be the same as or similar to the name of the
Company or any of its subsidiaries or affiliates or any trade name used by any
of them. Ownership by the Executive for investment purposes only of less than 2%
of the outstanding shares of capital stock or class of debt securities of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or actively traded in the over-the-counter market shall not
constitute a breach of the foregoing covenant. The covenant contained in this
Section 10 shall survive the termination or expiration of the Employment Period
and any termination of this Agreement.
(b) As used herein, the term "Competing Business" means any
------------------
transportation or other business that the Company or any of its affiliates has
engaged in at any time during the Employment Period in any city or county in any
state of the United States, Canada or Mexico including, without limitation, any
business engaged in (i) intermodal marketing, (ii) flatbed specialized hauling
services, (iii) less-than-truckload common carrier services, (iv) drayage,
consolidation, deconsolidation or distribution services, (v) contract
warehousing, freight handling or logistic services, (vi) comprehensive
transportation management programs or services to third party customers, (vii)
freight consolidation and deconsolidation, (viii) traffic management, and (ix)
railroad signal project management.
Section 32. Inventions Assignment. During the Employment Period, the
---------------------
Executive shall promptly disclose, grant and assign to the Company for its and
its affiliates' sole use and benefit any and all inventions, improvements,
technical information and suggestions reasonably relating to the business of the
Company and its affiliates (collectively, the "Inventions") which the Executive
----------
may develop or acquire during the Employment Period (whether or not during usual
working hours), together with all patent applications, letters patent,
copyrights and reissues thereof that may at any time be granted for or with
respect to the Inventions. In connection with the previous sentence, (a) the
Executive shall, at the expense of the Company (including a reasonable payment
(based on the Executives last per diem earnings) for the time involved if the
Executive is not then in the Company's employ or receiving severance payments
from the Company pursuant to Section 8(b)(ii)), promptly execute and deliver
such applications assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain and
maintain the entire right and title thereto throughout the world, and (b) at the
expense of the Company (including a reasonable payment, based on the Executive's
last per diem earnings, for the time involved if the Executive is not then in
the Company's employ or receiving severance payments from the Company pursuant
to Section 8(b)(ii)), the Executive shall render reasonable assistance to the
Company as may be required in the prosecution of applications for said patents,
copyright, reissues or other proprietary rights, in the prosecution or defense
of
6
interferences or infringements that may be declared involving any said
applications, patents, copyrights or other proprietary rights and in any
litigation in which the Company may be involved relating to the Inventions. The
covenant contained in this Section 11 shall survive the termination or
expiration of the Employment Period and any termination of this Agreement.
Section 33. Assistance in Litigation. At the request and expense of the
------------------------
Company (including a reasonable payment, based on the Executive's last per diem
earnings, for the time involved if the Executive is not then in the Company's
employ or receiving severance payments from the Company pursuant to Section
8(b)(ii)) and upon reasonable notice, the Executive shall, at all times during
and after the Employment Period, furnish such information and assistance to the
Company as it may reasonably require in connection with any issue, claim or
litigation in which the Company may be involved. If such a request for
assistance occurs after the expiration of the Employment Period, then the
Executive will only be required to render assistance to the Company to the
extent that the Executive can do so without materially affecting the Executive's
other business obligations. The covenant contained in this Section 12 shall
survive the termination or expiration of the Employment Period and any
termination of this Agreement.
Section 34. Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes any prior agreement between the Executive
and the Company or any predecessor of the Company or any of their respective
affiliates. No waiver, amendment or modification of any provision of this
Agreement shall be effective unless in writing and signed by each party hereto.
The waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach by such other party.
Section 35. Notices. All notices or other communications pursuant to this
-------
Agreement shall be in writing and shall be deemed to be sufficient if delivered
personally, telecopied, sent by nationally-recognized, overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to the Company, to it at:
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Chairman of the Board
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(b) if to the Executive, to him or her at his or her last known
address contained in the records of the Company.
Section 36. Headings. The section headings in this Agreement are for
--------
convenience only and shall not control or affect the meaning of any provision or
this Agreement.
7
Section 37. Severability. In the event that any provision of this
------------
Agreement is determined to be partially or wholly invalid, illegal or
unenforceable in any jurisdiction, then such provision shall, as to such
jurisdiction, be modified or restricted to the extent necessary to make such
provision valid, binding and enforceable, or if such provision cannot be
modified or restricted, then such provision shall, as to such jurisdiction, be
deemed to be excised from this Agreement: provided, however, that the binding
effect and enforceability of the remaining provisions of this Agreement, to the
extent the economic benefits conferred upon the parties by virtue of this
Agreement remain substantially unimpaired, shall not be affected or impaired in
any manner, and any such invalidity, illegality or unenforceability with respect
to such provisions shall not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 38. Remedies. The Executive acknowledges and understands that the
--------
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
thus, the breach or threatened breach of the provisions of this Agreement would
cause the Company irreparable harm. The Executive further acknowledges that in
the event of a breach of any of the covenants contained in Section 9, 10 and 11
of this Agreement, the Company shall be entitled to immediate relief enjoining
such violations in any court or before any judicial body having jurisdiction
over such a claim. All remedies hereunder are cumulative, are in addition to
any other remedies provided for by law, and may, to the extent permitted by law,
be exercised concurrently or separately. The exercise of any one remedy shall
not be deemed to be an election of such remedy or to preclude the exercise of
any other remedy.
Section 39. Representation. The Executive hereby represents and warrants
--------------
to the Company that (a) the execution, delivery and performance of this
Agreement by the Executive do not breach, violate or cause a default under any
agreement, contract or instrument to which the Executive is a party or any
judgment, order or decree to which the Executive is subject and (b) the
Executive is not a party to or bound by any employment agreement, consulting
agreement, noncompete agreement, confidentiality agreement or similar agreement
with any other person or entity.
Section 40. Benefits of Agreement; Assignment. The terms and provisions
---------------------------------
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns, representatives, heirs and
estate, as applicable. This Agreement shall not be assignable by any party
hereto without the consent of the other party hereto, except that the Company
may assign this Agreement or its right hereunder to a direct or indirect wholly-
owned subsidiary of the Company or to any person or entity succeeding to all or
any substantial portion of their respective businesses.
Section 41. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the domestic laws of the State of California
without giving effect to any choice of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.
Section 42. Mutual Waiver of Jury Trial. THE PARTIES DESIRE THAT THEIR
---------------------------
DISPUTES BE RESOLVED BY A JUDGE APPLYING APPLICABLE LAWS.
8
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND APPLICABLE LAWS, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
Section 43. Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each such counter part shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
*****
9
IN WITNESS WHEREOF, the parties have executed and delivered this Employment
Agreement effective as of the date first written above.
THE COMPANY:
-----------
PACER INTERNATIONAL, INC.
By:___________________________________
Xxxxxxxx X. Xxxxxxxx
E. V. P. & Chief Financial Officer
THE EXECUTIVE:
-------------
______________________________________
Xxxxxx X. Xxxxxxxxxx
10
Exhibit A
to the
Employment Agreement with Xxxxxx X. Xxxxxxxxxx
----------------------------------------------
Bonus Payable for Fiscal Year 2000
----------------------------------
In this Exhibit A, the term "Operating Income" means the operating income of the
--------- ----------------
Division for the period from January 1 through December 31, 2000, determined in
accordance with generally accepted accounting principles consistently applied
through such period as set forth in the final statement of income or operations
for the Division for such period (after giving effect to the liability for any
such bonus payable hereunder and under other bonus plans of the Division).
The bonus payable for fiscal year 2000, if any, will be calculated as follows:
(1) if Operating Income is less than or equal to $47,500,000, then no bonus
shall be due or payable;
(2) if Operating Income is greater than $47,500,000 and less than or equal to
$51,700,000, then the Executive shall be entitled to receive a bonus in an
amount equal to the product of (x) $135,000 multiplied by (y) the quotient
-------------
obtained by dividing (1) the amount by which such Operating Income exceeds
$47,500,000 by (2) $4,200,000;
(3) if Operating Income is greater than $51,700,000, the Executive shall be
entitled to receive a bonus in an amount equal to the sum of (a) the amount
calculated pursuant to clause (2) above, plus (b) the product of (x)
----
$35,000 multiplied by (y) the quotient obtained by dividing (1) the amount
-------------
by which such Operating Income exceeds $51,700,000 by (2) $2,100,000;
provided, however, that in no event will the aggregate bonus payable with
-------- -------
respect to the calendar year 2000 exceed $170,000.
11
