EMPLOYMENT AND NONCOMPETE AGREEMENT
THIS AGREEMENT, dated this first day of April 1, 1992, is made by
and among R.C. Matney, a resident of the State of Indiana
("Executive"); and MNX INCORPORATED, a Missouri corporation
("Employer").
RECITALS
A. Employer and it's subsidiaries are engaged in the business
of freight transportation services, both providing and arranging
transportation of goods. Subsequent references to Employer herein
shall be deemed to also include Employer's subsidiary corporations.
B. Executive desires to be employed by Employer as Chairman,
and Employer desires to employ Executive in such capacity under the
terms set forth herein.
AGREEMENT
In consideration of the mutual promises, covenants and agreements
contained herein and other good and valuable consideration,
sufficiency of which is hereby acknowledged by Executive and Employer,
the parties agree as follows:
1. Employment and Term of Employment.
Employer hereby employs Executive and Executive hereby accepts
employment which Employer for the term commencing on the date hereof
and continuing for a period of ten (10) years subsequent to the date
hereof , unless sooner terminated as provided in Section 5. The
parties hereto entered into any earlier "Employment and Noncompete
Agreement" dated March 31, 1989 which is superceded in its entirety by
this Agreement.
2. Duties and Authority.
2.01 Duties and Position of Executive. Executive shall undertake
and assume the responsibility for those duties that Employer's Board
of Directors shall, from time to time, assign to Executive.
Executive's principal duties as of the date of this Agreement shall be
and are those typically performed by the Chairman of a company;
however, Employer may, for any reason whatsoever, reassign Executive's
duties to another person.
Subject to appropriate action by Employer's Board of Directors,
Executive has been elected as Chairman of Employer; however, nothing
contained in this Agreement shall be interpreted to require Employer's
Board of Directors to elect Executive to any corporate office or to
prevent Employer's Board of Directors, in their sole discretion and
without cause, from removing Executive from an office to which he may
be elected.
2.02 Full Time Employment. Executive shall, at all times,
faithfully and to the best of his ability, experience and talents,
perform the duties set forth herein or to which Executive may, in the
future, be assigned, always acting solely in the best interests of the
Employer.
Executive shall devote his full time and attention to performance
of the above described duties; provided, however, he shall be allowed
to engage in appropriate civic, charitable or religious activities and
to devote a reasonable amount of time to passive private investments.
2.03 Reassignment of Duties of Chairman. In the event the
Employer's Board of Directors shall reassign the duties of the
Executive as Chairman to another person, the Executive shall
thereafter serve as President of Mark VII Transportation Co. (a wholly
owned subsidiary of Employer) and as a member of the Executive
Committee of MNX, engaged in the performance and management of
marketing services of Mark VII and the management and administration
of those specific projects which are acceptable to the Employee and
which are consistent with his experience and competence.
Employer undertakes and agrees to make such reassignment of the
duties of Chairman should Executive so request at any time following
the seventh anniversary of this Agreement.
3. Compensation.
During the term of this Agreement, Employer shall pay to
Executive the following compensation:
3.01 Base Salary. Executive shall be paid an initial base
salary of One Hundred Seventy-Five Thousand and No/100 Dollars
($175,000) per year ("Base Salary"), payable in regular equal
installments not less often than monthly. Employer's Board of
Directors shall have the complete discretion to increase or decrease
Executive's salary at any time; however, it shall not be reduced to
less than the original Base Salary. Executive shall be given equal
consideration, along with other members of senior executive
management, for merit, longevity, and cost of living salary increases.
3.02 Bonus. Commencing January 1, 1992, Executive shall
participate equally in any senior executive management bonus program
established by Employer.
3.03 Fringe Benefits. Executive shall receive all of the fringe
benefits Employer offers to other members of senior executive
management.
3.04 Reimbursement of Expenses. Employer shall reimburse
Executive for ordinary, necessary and reasonable business expenses
incurred to conduct or promote Employer's business, including travel
and entertainment, provided Executive submits an itemization of such
expenses and supporting documentation therefor, all according to
Employer's generally applicable procedures.
3.05 Stock Options. By separate document, Employer shall provide
Employee with an option to purchase 60,000 shares of Employer's common
stock, exercisable at not more than $8.25 per share, of which 30,000
shall vest immediately with the balance vesting in 5 equal annual
installments , commencing January 1, 1993, exercisable one year after
vesting. All such options shall lapse 10 years subsequent to vesting.
4. Nondisclosure and Noncompetition.
Executive hereby covenants and agrees as follows:
4.01 Confidentiality. Executive acknowledges that as a result of
his employment by Employer, he has, in the past, used and acquired
and, in the future, will use and acquire knowledge and information
used by Employer in its business and which is not generally available
to the public or to persons in the transportation industry, including,
without limitation, its future products, services, patents and
trademarks; designs; plans; specifications; models; computer software
programs; test results; data; manuals; methods of accounting;
financial information; devices; systems; procedures; manuals; internal
reports; lists of shippers and carriers; methods used for and
preferred by its customers; and the pricing structure of its existing
and contemplated products and service, except such information known
by Executive prior to his employment by Employer ("Confidential
Information"). As a material inducement to Employer to enter into
this Agreement, and to pay to Executive the compensation set forth
herein, Executive agrees that, during the term of this Agreement and
subject to the provisions of section 6.05 below, Executive shall not,
directly or indirectly, divulge or disclose to any person, for any
purpose, for a period of three (3) years after the termination of this
Agreement,any Confidential Information, except to those persons
authorized by Employer to receive Confidential Information and then
only if use by such person is for Employer's benefit.
4.02 Covenant Against Competition. During the term of this
Agreement and subject to the provisions of section 6.05 below, for a
period of three (3) years after the termination of this Agreement,
Executive shall not have any interest in or be engaged by any business
or enterprise that is in the business of providing motor freight
transportation services or arranging for the transportation of goods,
including any business that acts as a licensed property broker or
shipper's agent, which is directly competitive with any aspect of the
business Employer now conducts or which Employer is conducting or is
in the process of developing at the time of any competitive actions by
Executive ("Prohibited Activity") except to the extent provided in
section 2. For purposes of this Section 4.02, Executive shall be
deemed to have an "interest in or be engaged by a business or
enterprise" if Executive acts (a) individually, (b) as a partner,
officer, director, shareholder, employee, associate, agent or owner of
any entity or (c) as an advisor, consultant, lender or other person
related, directly or indirectly, to any business or entity that is
engaging in, or is planning to engage in, any Prohibited Activity.
Ownership of less than five percent (5%) of the outstanding capital
stock of a publicly traded entity that engages in any Prohibited
Activity shall not be a violation of this Section 4.02.
4.03 Employment of Other Employees by Executive. During the term
of this Agreement and, subject to the provisions of section 6.05
below, for a period of three (3) years after the termination of this
Agreement , Executive shall not directly or indirectly solicit for
employment, or employ, except on behalf of Employer, any person who
was an employee of Employer at any time during the six (6) months
preceding such solicitation or employment.
4.04 Judicial Amendment. If a court of competent jurisdiction
determines any of the limitations contained in this Agreement are
unreasonable and may not be enforced as herein agreed, the parties
hereto expressly agree this Agreement shall be amended to delete all
limitations judicially determined to be unreasonable and to substitute
for those limitations found to be unreasonable the maximum limitations
such court finds to be reasonable under the circumstances.
4.05 Irreparable Injury. Executive acknowledges that his
abilities and the services he will provide to Employer are unique and
that his failure to perform his obligations under this Section 4 would
cause Employer irreparable harm and injury. Executive further
acknowledges that the only adequate remedy is one that would prevent
him from breaching the terms of Section 4. As a result, Executive and
Employer agree that Employer's remedies may include preliminary
injunction, temporary restraining order or other injunctive relief
against any threatened or continuing breach of this Section 4 by
Executive. Nothing contained in this Section 4.05 shall prohibit
Employer from seeking and obtaining any other remedy, including
monetary damages, to which it may be entitled.
5. Termination.
5.01 Events Causing Termination. This Agreement shall terminate
upon the first of the following events to occur:
a) At the end of ten (10) years subsequent to the date hereof;
b) On the date of Executive's death;
c) At Employer's option, upon Executive's disability as defined
in section 5.02 (a) below, effective on the day Executive receives
notice from Employer that it is exercising its option granted by this
Section to terminate this Agreement;
d) On the day Executive receives written notice from Employer
that Executive's employment is being terminated for cause, as defined
in section 5.02 (b) below;
e) Fifteen (15) days after receipt by Executive of notice from
Employer specifying any act of insubordination or failure to comply
with any instructions of Employer's Board of Directors or any act or
omission that Employer's Board of Directors believes, in good faith,
materially does, or may, adversely affect Employer's business or
operations provided Executive fails to remedy or cease said acts
within said fifteen (15) day period;
f) On the date Executive resigns or, at the Company's option,
the date Executive commits any act that is a material breach of this
Agreement; and
g) At Executive's option, on the date Employer commits any act
that is a material breach of this Agreement.
5.02 Definitions. For purposes of Section 5.01 the following
definitions shall apply:
a) "Disability" means Executive's inability, because of
sickness or other incapacity, whether physical or mental, to perform
his duties under this Agreement for a period in excess of one hundred
eighty (180) substantially consecutive days, as professionally
determined by two medical doctors licensed to practice medicine, one
of which is selected by the Employer and one of which is selected by
the Executive. In the event the doctors should disagree as to whether
the Executive is disabled, they shall select a third licensed medical
doctor to make such termination which shall be binding on the parties
hereto.
b) "Cause" means (i) a willful failure by Executive to
substantially perform his duties hereunder, other than a failure
resulting from Executive's incapacity to do so because of physical or
mental illness, (ii) a willful act by Executive that constitutes gross
misconduct and which is materially injurious to Employer, (iii)
Executive's commitment of any act of dishonesty toward Employer, theft
of corporate property or unethical business conduct or (iv)
Executive's conviction of any felony involving dishonest, or immoral
conduct.
6. Payments Upon Termination.
6.01 Payments Upon Executive's Death or Disability. Upon the
termination of this Agreement pursuant to Section 5.01 (b) (death) or
Section 5.01 (c) (disability), Employer shall pay, or cause to be
paid, to Executive, his designated beneficiary or his legal
representative,
a) the Base Salary and fringe benefits through the period
ending twelve (12) months after occurrence of the event causing
termination; and
b) all necessary, ordinary, and reasonable business expenses
incurred by Executive prior to termination of this Agreement.
Employer shall not be obligated to make any other payments to
Executive.
6.02 Payments Upon Expiration of Term or Termination, for Cause,
Insubordination, Resignation or Breach by Executive. Upon termination
of this Agreement pursuant to Section 5.01 (a) (lapse of term),
Section 5.01 (d) (cause), Section 5.01 (e) (insubordination), or
Section 5.01 (f) (resignation or breach by Executive), Employer shall
pay, or cause to be paid, to Executive,
a) the Base Salary and fringe benefits for the period ending on
the date this Agreement is terminated pursuant to the appropriate
subsection of Section 5.01; and
b) all necessary, ordinary, and reasonable business expenses
incurred by Executive prior to termination hereof.
Employer shall not be obligated to make any other payments to
Executive.
6.03 Payments Upon Termination for Breach by Employer. Upon
termination of this Agreement pursuant to Section 5.01 (g) (Employer's
breach), Employer shall pay to Executive all of the compensation set
forth in Section 3 thru the period ending on the tenth anniversary of
this Agreement . All compensation paid by Employer under the terms of
this Section 6.03 shall be paid in the manner set forth in Section 3.
6.04 Payment of Amounts Due Upon Termination and Mitigation. If
Executive is entitled to payment of Base Salary, fringe benefits or
business expenses upon termination of this Agreement, Employer shall
make said payments within the ordinary course of its business and
pursuant to the terms hereof. All such payments shall be reduced by
the amount of compensation earned by the Executive from other
employment.
6.05 Effect of Termination on Nondisclosure, Noncompete and
Nonsolicitation Provisions.
a) All of the provisions of Section 4(confidentiality,
noncompete and nonemployment of other employees ) of this Agreement
shall survive termination hereof pursuant to Section 5.01 (d) (cause),
Section 5.01 (e) (insubordination) or Section 5.01 (f) (resignation)
even though the remaining terms and provisions of this Agreement shall
be void, including the terms of Section 3(compensation).
b) Upon termination of this Agreement pursuant to Section 5.01
(a) (lapse of term) Employer may elect to continue the obligations of
Executive set forth in Section 4 (confidentiality noncompete and
nonemployment) for so long as the Employer continues to provide all
compensation set forth in Section 3, but not to exceed three years
subsequent to termination.
c) Upon termination pursuant to Section 5.01 (c) (disability)
the provisions of Section 4 (confidentiality, noncompete and
nonemployment of other employees) shall survive for one year
thereafter.
d) Upon termination of this Agreement pursuant to Section 5.01
(g) (Employer breach), all of the provisions of Section 4
(confidentiality, noncompete and nonemployment of other employees)
shall be void.
6.06 Provisions Void Upon Termination. Except as specifically
provided herein to the contrary, all terms and provisions of this
Agreement shall be void upon any termination hereof.
7. Conflict of Interest.
During the term of this Agreement, Executive shall not, directly
or indirectly, have any interest in any business which is a supplier
of Employer without the express written consent of Employer's Board of
Directors. Such interest shall include, without limitation, an
interest as a partner, officer, director, stockholder, advisor or
employee of or lender to such a supplier. An ownership interest of
less than five percent (5%) in a supplier whose stock is publicly held
or regularly traded shall not be a violation of this Section 7.
8. Indemnification of Executive
The Employer will indemnify the Executive and hold him harmless
(including reasonable attorney fees and expenses) to the fullest
extent now or hereafter permitted by law in connection with any actual
or threatened civil, criminal, administrative or investigative action,
suit or proceeding in which the Executive is a party or witness as a
result of his employment with the Employer. This indemnification
shall survive the termination of this Agreement.
9. General Provisions.
9.01 Location of Employment. Executive's principal office shall
be located at Indianapolis, Indiana, or at such other location where
Employer and Executive shall mutually agree.
9.02 Assignment. Neither party may assign any of the rights or
obligations under this Agreement without the express written consent
of the other party. For purposes of the foregoing sentence, the term
"assign" shall not include an assignment of this Agreement by written
agreement or by operation of law to any of Employer's wholly owned
subsidiaries.
9.03 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties' heirs, successors and assigns, to
the extent allowed herein.
9.04 Severability. The provisions of this Agreement are
severable. The invalidity or unenforceability of any one or more of
the provisions hereof shall not affect the validity or enforceability
of any other part of this Agreement.
9.05 Waiver. Waiver of any provision of this Agreement or any
breach thereof by either party shall not be construed to be a waiver
of any other provision or any subsequent breach of this Agreement.
9.06 Notices. Any notice or other communication required or
permitted herein shall be sufficiently given if delivered in person or
sent by certified mail, return receipt requested, postage prepaid,
addressed to:
Employer: MNX Incorporated
P.O. Box 939
5310 St. Joseph Avenue
St. Joseph, Missouri 64505
Attention: Chairman of the Board
cc: Randy Sunberg
Shook, Hardy & Bacon
One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105
Executive: R.C. Matney Indianapolis, Indiana
or such other address as shall be furnished in writing by any such
party. Any notice sent by the above-described method shall be deemed
to have been received on the date personally delivered or so mailed.
Notices sent by any other method shall be deemed to have been received
when actually received by the addressee or its or his authorized
agent.
9.07 Applicable Law. Except to the extent preempted by federal
law, this Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of Missouri, without
considering its laws or rules related to choice of law.
9.08 Jurisdiction and Venue. Subject to the arbitration
provision in section 9.11 below, the parties hereby consent, and waive
any objection, to the jurisdiction of either the Circuit Court of
Buchanan County, Missouri or the United States District Court for the
Western District of Missouri over the person of either party for
purposes of any action brought under or as the result of a breach of
this Agreement. The parties agree that their execution of this
Agreement constitutes doing or conducting business within the State of
Missouri. The parties further consent that venue of any action
brought under or as the result of a breach of this Agreement shall be
proper in either of the above named courts and they each waive any
objection thereto.
9.09 Ownership and Return of Documents and Objects. Every plan,
drawing, blueprint, flowchart, listing of source or object code,
notation, record, diary, memorandum, worksheet, manual or other
document, magnetic media and every physical object created or acquired
by Executive as part of his employment by Employer, or which relates
to any aspect of Employer's business, is and shall be the sole and
exclusive property of Employer. Executive shall, immediately upon
Employer's request or upon termination of this Agreement for any
reason, deliver to Employer each and every original, copy, complete or
partial reproduction, abstract or summary, however reproduced, of all
documents and all original and complete or partial reproductions of
all magnetic media or physical objects owned by Employer then in
Executive's possession.
9.10 Attorney's Fees. Subject to the arbitration provision in
Section 9.11 below, if either party brings an action to enforce the
terms hereof, the prevailing party in such action, on trail or appeal,
shall be entitled to its reasonable attorney's fees, costs and
expenses to be paid by the losing party as fixed by the court.
9.11 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association and judgement upon the award rendered
by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
/s/ R.C. Matney
---------------------------------------
R.C. Matney, in his individual capacity
(Executive)
MNX INCORPORATED
a Missouri corporation
By: /s/ J. Michael Head
---------------------------------------
(Employer) J. Michael Head
President and Chief Executive Officer
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REVISED ADDENDUM TO
EMPLOYMENT AND NONCOMPETE AGREEMENT
R.C. MATNEY
THIS AGREEMENT, dated this 1st day of July, 1994, is made by and among
R.C. Matney, a resident of the State of Indiana ("Executive"), and
Mark VII, Inc., a Missouri corporation. ("Employer").
RECITALS
Executive and Employer previously entered into "Employment and
Noncompete Agreement" as of April 1, 1992, of which a true and
correct copy is attached ("Agreement"). The parties hereto undertake
and agree to modify said Agreement to the extent expressly stated
herein. In all other respects, said Agreement shall remain as
originally stated.
AGREEMENTS
In consideration of the mutual promises, covenants and agreements
contained herein and in the underlying Agreement, the parties do
hereby further agree as follows:
1. Base Salary.
The base salary of Executive shall be $235,000 a year commencing July
1,1994.
2. Annual Performance Bonus.
Commencing in 1995, Executive shall be paid two annual cash bonuses,
neither of which shall exceed half of his base salary.
Once such bonuses shall be paid immediately following the completion
of the annual audit for the fiscal year in an amount equal to that
percentage of the base salary of the Executive by which consolidated
income from continuing operations before income tax for the fiscal
year 1994 exceeds $4,199,325 (the fiscal 1993 amount) plus 25% each
year thereafter. However, for any fiscal year during which a 25%
increase in consolidated income from continuing operations before
income tax is not attained, this bonus shall not be paid.
The other bonus shall be paid immediately following June 30 each year
in an amount equal to that percentage of the base salary of the
Executive by which the increase (if any) in the per share price of the
common stock of Mark VII from July 1, 1994 to June 30, 1995, and each
subsequent year thereafter during the term hereof, exceeds the
increase in the average of per share prices of the common stock of
certain other companies in the Company's industry (the "transportation
services peer group").
Employer's Board of Directors shall indentify those companies deemed
to constitute Employer's "peer group" from time to time in its
direction. It is agreed, however, that initially said peer group is
deemed by said Board to constitute the following companies:
Air Express Internationl Harper Group
Expediters International Intertrans
Fritz Company
3. Stock Options.
In addition to options to purchase 60,000 shares of Employers common
stock set forth at 3.05 of Agreement by separate instrument Employer
shall provide Executive with options to purchase an additional 250,000
shares of Employer's common stock, exercisable at a price equal to
$14.00, the closing price on July 1, 1994. Such options will vest at
the rate of 31,250 shares a year commencing with the effective date
of this Agreement and shall lapse five years subsequent to vesting.
It is agreed and understood that this grant of options is subject to
(1)stockholder approval of an increase in the number of shares of
common stock reserved for issuance upon the exercise of options, a
proposal which has been recommended by the Board to the stockholders
for their vote at the annual meeting of the shareholders of Mark VII,
Inc. which is expected to be conducted in September of 1994 and (2)
consummation of the sale of assets by Missouri-Nebraska Express to
Swift Transportation Co., Inc. on or before December 31, 1994.
4. Duties and Position of Executive.
Employer's Board of Directors has elected Executive as Chairman,
President and Chief Executive Officer. Executive herewith agrees to
undertake and assume responsibility for the duties of such offices.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum on
the day and year first above written.
"EXECUTIVE" "EMPLOYER"
MARK VII, INC.
a Missouri corporation
/s/ R. C. Matney By: /s/ James T. Graves
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R.C. Matney James T. Graves, Vice Chairman