EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT, made this 20th day of November, 2002, by and between SCS
Transportation, Inc., a Delaware corporation ("SCST"), and Xxxxxxx X. Xxxxxxxxx,
III (the "Executive").
WITNESSETH
WHEREAS, the Board of Directors of SCST has approved the employment of
the Executive on the terms and conditions set forth in this Agreement; and
WHEREAS, the Executive is willing, for the consideration provided, to
enter into employment with SCST on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Employment. SCST hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, upon the terms
and conditions set forth in this Agreement.
2. Term. The term of this Agreement shall be for three years from
the date hereof (the "Effective Date"), with said term
renewing daily, and ending on the date of termination of the
Executive's employment determined pursuant to Section 5, 6 or
7, whichever shall be applicable.
3. Position and Duties. The Executive shall serve as President
and Chief Executive Officer, and shall have such
responsibilities and authority as commensurate with such
offices and as may from time to time be prescribed by or
pursuant to SCST's bylaws. The Executive shall devote
substantially all of his working time and efforts to the
business and affairs of SCST.
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4. Compensation. During the period of the Executive's employment,
SCST shall provide the Executive with the following
compensation and other benefits:
(a) Base Salary. SCST shall pay to the Executive base
salary at the rate of $450,000.00 per annum which
shall be payable in accordance with the standard
payroll practices of SCST. Such base salary rate
shall be reviewed annually in accordance with SCST's
normal policies beginning in calendar year 2003;
provided, however, that at no time during the term of
this Agreement shall the Executive's base salary be
decreased from the rate then in effect.
(b) Annual Bonus. The Executive shall participate in a
bonus program established and maintained by SCST. The
criteria for establishment of the parameters for
payments shall be determined annually by the
Compensation Committee of the Board of Directors of
SCST.
(c) Stock Options. The Compensation Committee of the
Board of Directors of SCST shall determine the number
of stock options, if any, to be granted to the
Executive and the terms and conditions of any such
options.
(d) Supplemental Retirement Benefit. SCST shall provide
the Executive with a Supplemental Retirement Benefit
following his termination of employment. The
Supplemental Retirement Benefit shall be paid in
monthly installments for life commencing on the first
day of the month coincident with or next following
the later of (a) the
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Executive's termination of employment or (b) the
Executive's attainment of age 65. The amount of the
monthly Supplemental Retirement Benefit shall equal
(i) minus (ii) minus (iii) below, where.
(i) is [Total Credited Service multiplied by Final
Average Earnings multiplied by 1-3/7% (.0142857)]
less [Primary Social Security multiplied by Total
Credited Service multiplied by 1-3/7% (.0142857)];
(ii) is the sum of (a) the monthly normal retirement
benefit payable from the qualified Yellow Freight
Office, Clerical, Sales and Supervisory Personnel
Pension Plan, and (b) the monthly Supplemental
Retirement Benefit payable under the Executive's
Employment Agreement with Yellow Corporation; and
(iii) is the benefit payable at age 65 that is the
Actuarial Equivalent of the portion of SCST's
non-qualified Deferred Compensation Plan attributable
to SCST contributions at date of termination.
(e) Adjustment for Early Retirement. The Executive may
commence his Supplemental Retirement Benefit on or
after age 55 so long as he has terminated employment.
The Supplemental Retirement Benefit shall be
actuarially reduced for early commencement on the
Early Retirement Actuarial Equivalence Basis.
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(f) Death Benefits.
i. If at the time of the Executive's death,
the Supplemental Retirement Benefit payments had
already commenced, the Supplemental Retirement
Benefit shall continue to the Eligible Spouse (if
any) for her life.
ii. If at the time of the Executive's death,
the Supplemental Retirement Benefit had not yet
commenced, the Supplemental Retirement Benefit shall
be payable to the Eligible Spouse (if any) for her
life, commencing on or after the first day of the
month coincident with or next following the later of
(a) the date the Executive would have attained age 55
or (b) the date of the Executive's death. Death
benefits under this paragraph (f)(ii) commencing
prior to what would have been the Executive's 65th
birthday shall be actuarially reduced for early
commencement on the Early Retirement Actuarial
Equivalence Basis.
iii.If at the time of his death the
Executive has no Eligible Spouse, no further
Supplemental Retirement Benefit shall be payable
following his death.
(g) Definitions. The following terms used in Sections
4(d) through (f) shall have the meanings assigned to
such terms below:
i. "Total Credited Service" means the sum of
(a), (b), and (c) below, where (a) is the Executive's
actual years and months of service with Yellow and
SCST, from June 1, 1994 through the date of
termination; (b) is
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16 years; and (c) is 1/3 of [the sum of (a) and (b),
minus 1/2 of the sum of the Executive's projected
credited service to age 65 and (b)].
ii. "Final Average Earnings" means the
highest 5 complete consecutive years of base pay and
incentive compensation during the last ten calendar
years prior to the Executive's termination of
employment. Incentive compensation will be included
in the year in which it is paid and will only be
included if it is part of an annual ongoing incentive
program.
iii."Primary Social Security" means the
annual amount payable at age 65 under the Social
Security law in effect at retirement. If the
Executive terminates employment prior to age 65, the
Primary Social Security benefit is estimated assuming
that the Social Security Law does not change and
earnings are constant until age 65 at the level
during the last full calendar year of employment.
iv. "Actuarial Equivalent" is based on the
Applicable Mortality Table and Applicable Interest
rate specified in IRC Section 417(e)(3)(A).
v. "Early Retirement Actuarial Equivalence
Basis" is the same basis as specified in the Yellow
Freight Office, Clerical, Sales and Supervisory
Personnel Pension Plan.
vi. "Eligible Spouse" means the spouse
married to the Executive on the date hereof.
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(h) Other Benefits. In addition to the compensation and
benefits otherwise specified in this Agreement, the
Executive (and, if provided for under the applicable
plan or program, his spouse) shall be entitled to
participate in, and to receive benefits under, SCST's
employee benefit plans and programs that are or may
be available to senior executives generally and on
terms and conditions that are no less favorable than
those generally applicable to other senior executives
of SCST. At no time during the term of this Agreement
shall the Executive's participation in or benefits
received under such plans and programs be decreased.
(i) Expenses. The Executive shall be entitled to prompt
reimbursement of all reasonable expenses incurred by
him in performing services hereunder, provided he
properly accounts therefore in accordance with SCST's
policies.
(j) Office and Services Furnished. SCST shall furnish the
Executive with office space, secretarial assistance
and such other facilities and services as shall be
suitable to the Executive's position and adequate for
the performance of his duties hereunder.
5. Termination of Employment by SCST.
(a) Cause. SCST may terminate the Executive's employment
for "Cause" if the Executive willfully engages in
conduct which is materially and demonstrably
injurious to SCST or willfully engages in an act or
acts of dishonesty resulting in material personal
gain to the Executive at the expense of SCST. SCST
shall exercise its right to terminate the Executive's
employment for
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Cause by (i) giving him written notice of termination
at least 30 days before the date of such termination
specifying in reasonable detail the circumstances
constituting such Cause; and (ii) delivering to the
Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the
entire membership of the Board of Directors after
reasonable notice to the Executive and an opportunity
for the Executive and his counsel to be heard before
the Board of Directors, finding that the Executive
has engaged in the conduct set forth in this
subsection (a). In the event of such termination of
the Executive's employment for Cause, the Executive
shall be entitled to receive (i) his base salary
pursuant to Section 4(a) and any other compensation
and benefits to the extent actually earned pursuant
to this Agreement or any benefit plan or program of
SCST as of the date of such termination at the normal
time for payment of such salary, compensation or
benefits, but not including the Supplemental
Retirement Benefits described in Sections 4(d)
through 4(f), and (ii) any amounts owing under
Section 4(i). In addition, in the event of such
termination of the Executive's employment for Cause,
all outstanding options held by the Executive at the
effective date of such termination which had not
already been exercised shall be forfeited. Except as
provided in Section 9, the Executive shall receive no
other compensation or benefits from SCST.
(b) Disability. If the Executive incurs a Permanent and
Total Disability, as defined below, SCST may
terminate the Executive's employment by giving him
written notice of termination at least 30 days before
the date of such termination. In the event of such
termination of the Executive's
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employment because of Permanent and Total Disability,
(i) the Executive shall be entitled to receive his
base salary pursuant to Section 4(a) and any other
compensation and benefits to the extent actually
earned by the Executive pursuant to this Agreement or
any benefit plan or program of SCST as of the date of
such termination of employment at the normal time for
payment of such salary, compensation or benefits,
including specifically the Supplemental Retirement
Benefits described in Sections 4(d) through 4(f) and
any amounts owing under Section 4(i), and (ii) all
outstanding stock options held by the Executive at
the time of his termination of employment shall
become immediately exercisable at that time, and the
Executive shall have one year from the date of such
termination of employment to exercise any or all of
such outstanding options (but not beyond the term of
such option). For purposes of this Agreement, the
Executive shall be considered to have incurred a
"Permanent and Total Disability" if he is unable to
engage in any substantial gainful employment by
reason of any materially determinable physical or
mental impairment which can be expected to result in
death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.
The existence of such Permanent and Total Disability
shall be evidenced by such medical certification as
the Secretary of SCST shall require and shall be
subject to the approval of the Compensation Committee
of the Board of Directors of SCST.
(c) Without Cause. SCST may terminate the Executive's
employment at any time and for any reason, other than
for Cause or because of Permanent and
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Total Disability, by giving him a written notice of
termination to that effect at least 30 days before
the date of termination. In the event of such
termination of the Executive's employment without
Cause, the Executive shall be entitled to the
benefits described in Section 8.
6. Termination of Employment by the Executive.
(a) Good Reason. The Executive may terminate his
employment for Good Reason by giving SCST a written
notice of termination at least 30 days before the
date of such termination specifying in reasonable
detail the circumstances constituting such Good
Reason. In the event of the Executive's termination
of his employment for Good Reason, the Executive
shall be entitled to the benefits described in
Section 8. For purposes of this Agreement, "Good
Reason" shall mean (i) the failure of SCST in any
material way either to pay or provide to the
Executive the compensation and benefits that he is
entitled to receive pursuant to this Agreement by the
later of (A) 60 days after the applicable due date or
(B) 30 days after the Executive's written demand for
payment, or (ii) the failure to maintain the titles,
positions and duties of the Executive commensurate
with those titles and positions and as required by
this Agreement except with the Executive's written
consent, or (iii) Executive's receipt of notice from
SCST of the cut-off of the automatic renewal of the
term of this Agreement as described in Section 2
above or (iv) a transfer of the Executive to a
location which is more than 50 miles away from the
location where the Executive is employed on the date
hereof or any other location to which the Executive
is transferred with his consent.
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(b) Other. The Executive may terminate his employment at
any time and for any reason, other than pursuant to
subsection (a) above, by giving SCST a written notice
of termination to that effect at least 30 days before
the date of termination. In the event of the
Executive's termination of his employment pursuant to
this subsection (b), the Executive shall be entitled
to receive (i) his base salary pursuant to Section
4(a) and any other compensation and benefits to the
extent actually earned by the Executive pursuant to
this Agreement or any benefit plan or program of SCST
as of the date of such termination at the normal time
for payment of such salary, compensation or benefits,
including specifically the Supplemental Retirement
Benefits described in Sections 4(d) through 4(f), and
(ii) any amounts owing under Section 4(i). In the
event of the Executive's termination of his
employment pursuant to this subsection (b), all
outstanding options held by the Executive not
previously exercised by the date of termination shall
be forfeited. Except as provided in Section 9, the
Executive shall receive no other compensation or
benefits from SCST.
7. Termination of Employment By Death. In the event of the death
of the Executive during the course of his employment
hereunder, (i) the Executive's estate shall be entitled to
receive his base salary pursuant to Section 4(a) and any other
compensation and benefits to the extent actually earned by the
Executive pursuant to this Agreement or any other benefit plan
or program of SCST as of the date of
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such termination at the normal time for payment of such
salary, compensation or benefits, including specifically the
Supplemental Retirement Benefits described in Section 4(f) and
any amounts owing under Section 4(i) and (ii) all outstanding
stock options held by the Executive at the time of his death
shall become immediately exercisable upon his death, and the
Executive's spouse or, if predeceased, the Executive's estate,
shall have one year from the date of his death to exercise any
or all of such outstanding options (but not beyond the term of
such option).
8. Benefits Upon Termination Without Cause or Good Reason. If the
Executive's employment with SCST shall terminate (i) because
of termination by SCST pursuant to Section 5(c) and not for
Cause or because of Permanent and Total Disability, or (ii)
because of termination by the Executive for Good Reason
pursuant to Section 6(a), the Executive shall be entitled to
the following:
(a) SCST shall pay to the Executive his base salary
pursuant to Section 4(a) and, subject to the further
provisions of this Section 8, any other compensation
and benefits to the extent actually earned by the
Executive under this Agreement or any benefit plan or
program of SCST as of the date of such termination at
the normal time for payment of such salary,
compensation or benefits.
(b) SCST shall pay the Executive any amounts owing under
Section 4(i).
(c) SCST shall pay to the Executive as a severance
benefit an amount equal to three times his annual
rate of base salary immediately preceding his
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termination of employment. Such severance benefit
shall be paid in a lump sum within 30 days after the
date of such termination of employment.
(d) SCST shall pay to the Executive a pro rated target
bonus based on the actual portion of the fiscal year
elapsed prior to the termination of Executive's
employment under SCST's target bonus plan for the
fiscal year in which his termination of employment
occurs as if the target had been exactly met. Such
payment shall be made in a lump sum within 30 days
after the date of such termination of employment, and
the Executive shall have no right to any further
bonuses under said program.
(e) The Executive shall become eligible for payment of
the Supplement Retirement Benefits pursuant to
Sections 4(d) through 4(f), and SCST's nonqualified
defined contribution plans. Payment of benefits under
such plans shall be made at the time and in the
manner determined under the applicable plan.
(f) During the period of 36 months beginning on the date
of the Executive's termination of employment, the
Executive (and, if applicable under the applicable
program, his spouse) shall remain covered by the
employee benefit plans and programs that covered him
immediately prior to his termination of employment as
if he had remained in employment for such period;
provided, however, that there shall be excluded for
this purpose any plan or program providing payment
for time not worked (including without limitation
holiday, vacation, and long- and short-term
disability). In the event that the Executive's
participation in any such employee benefit plan
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or program is barred, SCST shall arrange to provide
the Executive with substantially similar benefits.
Any medical insurance coverage for such three-year
period pursuant to this subsection (f) shall become
secondary upon the earlier of (i) the date on which
the Executive begins to be covered by comparable
medical coverage provided by a new employer, or (ii)
the earliest date upon which the Executive becomes
eligible for Medicare or a comparable Government
insurance program.
(g) All outstanding stock options held by the Executive
at the time of termination of his employment shall
become fully exercisable upon such termination of
employment and the Executive shall have three years
from the date of such termination of employment to
exercise any or all of such outstanding options (but
not beyond the term of such option).
(h) If any payment or benefit received by or in respect
of the Executive under this Agreement or any other
plan, arrangement or agreement with SCST (determined
without regard to any additional payments required
under this subsection (h) and Exhibit A of this
Agreement) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") (or any
similar tax that may hereafter be imposed) or any
interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax,
together with any such interest and penalties, being
hereinafter collectively referred to as the "Excise
Tax"), SCST shall pay to the Executive with respect
to such Payment at the time specified in Exhibit A an
additional amount (the
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"Gross-up Payment") such that the net amount retained
by the Executive from the Payment and the Gross-up
Payment, after reduction for any Excise Tax upon the
payment and any federal, state and local income and
employment tax and Excise Tax upon the Gross-up
Payment, shall be equal to the Payment. The
calculation and payment of the Gross-up Payment shall
be subject to the provisions of Exhibit A.
9. Entitlement To Other Benefits. Except as provided in this
Agreement, this Agreement shall not be construed as limiting
in any way any rights to benefits that the Executive may have
pursuant to any other plan or program of SCST.
10. Termination or Resignation Following a Change of Control. In
the event that Executive resigns his employment with SCST or
suffers a "Termination" of such employment within two years
after a "Change of Control" of SCST under the circumstances
described and the definitions set forth in paragraphs 3 and 1
(e) of the Executive Severance Agreement entered into between
Executive and SCST on September 28, 2002 (the "Executive
Severance Agreement"), the provisions of which are hereby
incorporated by reference, the Executive shall be entitled to
the greater of each benefit described in Section 8 or each
benefit provided for under the Executive Severance Agreement.
11. Non-Competition, Non-Solicitation and Confidentiality. The
Executive acknowledges that in the course of his employment
with SCST he has become, and in the course of his employment
with SCST he will continue to become, familiar with SCST's
trade secrets and those of any person or entity controlling,
controlled
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by or under common control with such person or entity,
including, without limitation, for SCST, each of Xxxx Motor
Freight Line, Inc. and Jevic Transportation, Inc. (an
"affiliate") and with other confidential information
concerning SCST and its affiliates and that his services will
be of special, unique and extraordinary value to SCST.
Therefore, the Executive agrees that:
(a) so long as the Executive is employed by SCST or
an affiliate of SCST and for a period of two years
after the date the Executive ceases to be employed by
SCST or an affiliate of SCST (the "Non-Compete
Period"), the Executive shall not, and shall not
allow any of his affiliates to, engage (whether as an
owner, operator, manager, employee, officer,
director, consultant, advisor, representative or
otherwise), directly or indirectly in any endeavor,
activity or business in (x) any country in the world
where SCST or any of its affiliates is doing business
during the term of such Non-Compete Period or (y) any
state in the United States or any province in Canada,
that engages, in whole or in part, in or that
otherwise competes, in whole or in part, with the
business of providing trucking transportation,
including, but not limited to, offering regional,
interregional or national less-than-truckload
services or truckload services, freight brokerage,
transportation logistics or any other business of
SCST and its affiliates or any of them (collectively,
the "Business") as conducted or as proposed to be
conducted at any time during the term of the
Executive's employment with SCST or any of its
affiliates; provided that this paragraph shall not be
construed to prohibit the ownership of less than 3%
of the outstanding stock of any publicly-traded
corporation.
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(b) The Executive agrees that so long as the
Executive is employed by SCST or an affiliate of SCST
and for a period of two years after the date the
Executive ceases to be employed by SCST or an
affiliate of SCST (the "Non-Solicitation Period"), he
shall not, and shall not permit any of his affiliates
to, directly or indirectly,
(i) contact, approach or solicit for the
purpose of offering employment to or hiring
(whether as an employee, consultant, agent,
independent contractor, salesperson,
distributor, supplier, vendor, manufacturer,
representative, agent, jobber or otherwise)
or actually hire any person employed by SCST
or any of its affiliates during the
Non-Solicitation Period, without the prior
written consent of SCST, or otherwise induce
any person or entity transacting business
with SCST or any of its affiliates to
terminate any relationship, association or
arrangement with SCST or any of its
affiliates, or to represent, distribute or
sell services or products of SCST or its
affiliates; or
(ii) divert or attempt to divert from SCST
or any of its affiliates any business with
any customer or account the identity of
which was learned by the Executive, as a
result of his operation of the Business or
employment with SCST or any of its
affiliates.
12. Confidentiality. The Executive shall treat and hold as
confidential any information concerning the Business, SCST or
any of its affiliates that is not already generally
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available to the public (the "Confidential Information"),
refrain from using any of the Confidential Information except
in connection with his employment with SCST or any of its
affiliates, and deliver promptly to SCST, at the request and
option of SCST, all tangible embodiments (and all copies) of
the Confidential Information which are in his possession or
under his control. In the event that the Executive is
requested or required (by oral question or request for
information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, the
Executive shall notify SCST promptly of the request or
requirement so that SCST may seek an appropriate protective
order or waive compliance with the provisions of this Section
12. If, in the absence of a protective order or the receipt of
a waiver hereunder, the Executive is, on the advice of
counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, the Executive
may disclose the Confidential Information to the tribunal;
provided, that the Executive shall use his best efforts to
obtain, at the request of and at the cost of SCST, an order or
other assurance that confidential treatment shall be accorded
to such portion of the Confidential Information required to be
disclosed as SCST shall designate.
13. Use of Information of Prior Employers. During the term of this
Agreement, the Executive will not improperly use or disclose
any confidential information or trade secrets, if any, of any
former employers or any other person to whom the Executive has
an obligation of confidentiality, and will not bring onto the
premises of SCST or any of its affiliates any unpublished
documents or any property belonging to any former employer or
any other person to whom the Executive has an obligation of
confidentiality unless consented to in writing by the former
employer or person.
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14. Remedy for Breach. The Executive acknowledges and agrees that
in the event of a breach by the Executive of any of the
provisions of Sections 11, 12 or 13 monetary damages shall not
constitute a sufficient remedy. Consequently, in the event of
any such breach, SCST and/or its respective successors or
assigns may, in addition to other rights and remedies existing
in their favor, apply to any court of law or equity of
competentjurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof, in each case without the
requirement of posting a bond or proving actual damages.
15. Enforcement. If the final judgment of a court of competent
jurisdiction declares that any term or provision of Sections
11, 12, 13 or 14 is invalid or unenforceable, each of the
Executive and SCST agree that the court making the
determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace
any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable
term or provision, and the terms provided herein shall be
enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
16. Acknowledgment. The Executive acknowledges and agrees that (i)
the restrictions contained in Sections 11, 12, 13, 14 or 15
are reasonable in all respects (including, without limitation,
with respect to subject matter, time period and geographical
area)
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and are necessary to protect SCST's interest in, and value of,
the Business (including, without limitation, the goodwill
inherent therein) and (ii) Executive is responsible for the
creation of such value.
17. Arbitration.
(a) Arbitration of Disputes. Except as otherwise
expressly provided herein, any dispute between the
parties hereto arising out of, in connection with, or
relating to this Agreement or the breach thereof
shall be settled by arbitration in Kansas City,
Missouri, in accordance with the rules then in effect
of the American Arbitration Association ("AAA").
Arbitration shall be the exclusive remedy for any
such dispute except only as to failure to abide by an
arbitration award rendered hereunder. Regardless of
whether or not both parties hereto participate in the
arbitration proceeding, any arbitration award
rendered hereunder shall be final and binding on each
party hereto and judgment upon the award rendered may
be entered in any court having jurisdiction thereof.
The party seeking arbitration shall notify the other
party in writing and request the AAA to submit a list
of 5 or 7 potential arbitrators. In the event the
parties do not agree upon an arbitrator, each party
shall, in turn, strike one arbitrator from the list,
SCST having the first strike, until only one
arbitrator remains, who shall arbitrate the dispute.
The parties shall have the opportunity to conduct
reasonable discovery as determined by the arbitrator,
and the arbitration hearing shall be conducted within
30 to 60 days of the selection of an arbitrator or at
the earliest date thereafter that the arbitrator is
available or as otherwise set by the arbitrator.
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(b) Indemnification. If arbitration occurs as provided
for herein and the Executive is awarded more than
SCST has asserted is due him or otherwise
substantially prevails therein, SCST shall reimburse
the Executive for his reasonable attorneys' fees,
costs and disbursements incurred in such arbitration
and hereby agrees to pay interest on any money award
obtained by the Executive from the date payment
should have been made until the date payment is made,
calculated at the prime interest rate of Bank of
America, N.A., Kansas City, Missouri in effect from
time to time from the date that payment(s) to him
should have been made under this Agreement. If the
Executive enforces the arbitration award in court,
SCST shall reimburse the Executive for his reasonable
attorneys' fees, costs and disbursements incurred in
such enforcement.
18. Indemnification under Charter and Bylaws. SCST shall provide
the Executive with rights to indemnification by SCST that are
no less favorable to the Executive than those set forth in
SCST's governing documents as in effect as of the Effective
Date.
19. Successors. This Agreement shall be binding upon and inure to
the benefit of the Executive and his estate and SCST and any
successor of SCST, but neither this Agreement nor any rights
arising hereunder may be assigned or pledged by the Executive.
20. Severability. Any provision in this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be
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ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
21. Survival. The parties agree that the obligations contained in
this Agreement which by their terms survive the expiration,
termination or cancellation of this Agreement shall survive
any expiration, termination or cancellation of this Agreement
and continue to be enforceable.
22. Notices. All notices required or permitted to be given under
this Agreement shall be given in writing and shall be deemed
sufficiently given if delivered by hand or mailed by
registered mail, return receipt requested, to his residence in
the case of the Executive and to its principal executive
offices in the case of SCST. Either party may by giving
written notice to the other party in accordance with this
Section 22 change the address at which it is to receive
notices hereunder.
23. Controlling Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the
State of Missouri.
24. Changes to Agreement. This Agreement may not be changed orally
but only in a writing, signed by the party against whom
enforcement is sought.
25. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed
an original but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
20th of November, 2002.
EXECUTIVE SCS TRANSPORTATION, INC.
/s/ Xxxxxxx X. Xxxxxxxxx III By: /s/ Xxxxx X. Xxxxxxxxxxxxx
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Xxxxxxx X Xxxxxxxxx III
ATTEST
By: /s/ X. Xxxxx
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EXHIBIT A
GROSS-UP PAYMENTS
The following provisions shall be applicable with respect to the
Gross-Up Payments described in Section 8 (h) of this Agreement.
(a) For purposes of determining whether any of the Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Payments received or to be received shall be treated as "parachute payments"
within the meaning of Section 280G(b) (2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b) (1) of the Code shall be treated
as subject to the Excise Tax unless, in the opinion of tax counsel selected by
SCST, the Payments (in whole or in part) do not constitute parachute payments,
including by reason of Section 280G(b) (4) (A) of the Code, or excess parachute
payments (as determined after application of Section 280G(b) (4) (B) of the
Code), and (ii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by independent auditors selected by SCST in
accordance with the principles of Sections 280G(d) (3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, the Executive 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 to
which such payment could be subject based upon the state and locality of the
Executive's residence or employment, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local
taxes. In addition, for purposes of determining the amount of the Gross-Up
Payment, SCST shall make a determination of the amount of any employment taxes
required to be paid on the Gross-Up Payment. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time the
Gross-Up Payment is made (including by reason of any payments the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), SCST
shall make an additional gross-up payment in respect of such excess (plus any
interest, penalties or additions payable with respect to such excess) at the
time that the amount of such excess is finally determined. Notwithstanding the
foregoing, SCST shall withhold from any payment due to the Executive the amount
required by law to be so withheld under Federal, state or local wage or
employment tax withholding requirements or otherwise (including without
limitation Section 4999 of the Code), and shall pay over to the appropriate
government authorities the amount so withheld.
(b) The Gross-Up Payment with respect to a Payment shall be paid not
later than the thirtieth day following the date of the Payment; provided,
however, that if the amount of such Gross-Up Payment or portion thereof cannot
be finally determined on or before such day, SCST shall pay to the Executive on
such date an estimate, as determined in good faith by SCST, of the amount of
such payments and shall pay the remainder of such payments (together with
interest at the Federal short-term rate provided in Section 1274(d) (1) (C) (i)
of the Code) as soon as the amount thereof can be determined. At the time that
payments are made under Section 8(h) and this
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Exhibit A, SCST shall provide the Executive with a written statement setting
forth the manner in which such payments were calculated and the basis for such
calculations, including, without limitation, any opinions or other advice SCST
has received from outside counsel, auditors or consultants (and any such
opinions or advice which are in writing shall be attached to the statement).
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