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EXHIBIT 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made and entered into this
16th day of July, 1998 by and between DONALD G. JOHNSTON, an individual resident
of Alabama (hereinafter referred to as "Consultant") and BOYD BROS.
TRANSPORTATION INC., a Delaware corporation (hereinafter referred to as the
"Company").
W I T N E S S E T H:
WHEREAS, Consultant has heretofore been employed by the Company as
President and Chief Executive Officer;
WHEREAS, Consultant has retired from his employment with the Company;
WHEREAS, Company desires for Consultant to provide certain consulting
services for the Company and to agree to certain restrictions concerning
confidential information and noncompetition as set forth herein and to make
certain payments to Consultant in consideration therefor;
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. CONSULTING.
1.1 The Company hereby engages the Consultant to perform and the
Consultant hereby agrees to perform the consulting services in Section 1.2 below
to commence August 1, 1998 and terminate on July 31, 2001 (the "Term").
Consultant shall make himself available to perform consulting services for the
Company for up to eight (8) working days per month, on such days, at such times,
and in such locations as the Chief Executive Officer of the Company shall
reasonably request.
1.2 The consulting services to be performed by Consultant shall include
advice on marketing, sales, driver recruitment and retention and such other
consulting services as may be agreed upon from time to time by Consultant and
the Company ("Consulting Services"). Consultant shall report to the Chief
Executive Officer of the Company only, or to the Chief Executive Officer's
designee.
2. COMPENSATION.
2.1 In consideration for the Consulting Services to be performed by
Consultant described in Section 1.2 hereof, Consultant's undertakings concerning
Confidential Information set forth in Section 3 hereof, and Consultant's
undertakings concerning noncompetition set forth in Section 5 hereof, the
Company shall pay Consultant a consultant
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fee of $12,500 per month (less applicable taxes and withholdings as required by
law) in accordance with Boyd's normal payroll procedures (the "Consulting Fee")
through and including January 31, 2001. The Consulting Fee shall not exceed
$375,000 in the aggregate through the end of the Term of this Agreement.
2.2 Consultant shall be entitled to reimbursement of all reasonable
expenses incurred in performance of his duties hereunder, including without
limitation, reimbursement of mileage expenses when on business of the Company.
2.3 Except as explicitly set forth in this Section 2, Consultant shall
not be entitled to any compensation or benefits from the Company or any of its
affiliates for services under this Agreement.
2.4 In the event of Consultant's death or disability, the payments
contemplated in Section 2.1 shall be paid to his estate or to Consultant, as the
case may be, in accordance with the terms thereof regardless of the provisions
of Section 1 hereof.
3. CONFIDENTIAL INFORMATION.
3.1 Subject to the provisions of Subsection 3.3 hereof, Consultant
shall keep confidential and not directly or indirectly disclose or divulge to
any person nor use or otherwise appropriate for Consultant's own benefit,
pricing information, marketing information, sales techniques of the Company or
any other of the following confidential information or documents of or relating
to the Company: confidential records, client and customer lists, information
about client requirements, terms of contracts with clients and customers, and
planning and financial information of the Company (hereinafter referred to as
the "Confidential Information"). Consultant hereby acknowledges and agrees that
the prohibitions against disclosure of Confidential Information recited herein
are in addition to, and not in lieu of, any rights or remedies which the Company
may have available pursuant to the laws of any jurisdiction or at common law to
prevent the disclosure of trade secrets or proprietary information, and the
enforcement by the Company of its rights and remedies pursuant to this Agreement
shall not be construed as a waiver of any other rights or available remedies
which it may possess in law or equity absent this Agreement.
3.2 Consultant shall not utilize the Confidential Information for any
purpose except the purpose for which the Confidential Information is being
disclosed to the Consultant.
3.3 The obligation of nondisclosure and nonuse set forth in this
Section 3 shall expire two (2) years after the last date on which the Consultant
performs consulting services hereunder and shall not apply to any Confidential
Information that was: (a) in the public domain at the time it was disclosed to
the Consultant or subsequently came into the public domain through no fault of
the Consultant; (b) rightfully known by the Consultant prior to its disclosure
to him or independently developed by the Consultant outside of his employment or
consulting engagement with the Company; or (c) received by the Consultant as a
matter of
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right from a source other than the Company or another person subject to a
confidentiality obligation to Company.
4. DISCLOSURE UNDER LEGAL COMPULSION.
In the event that Consultant or any of Consultant's representatives
become legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand, any similar process or otherwise) to
disclose any of the Confidential Information, Consultant shall provide the
Company with prompt prior written notice of such requirement so that the Company
may seek a protective order or other appropriate remedy and/or waive compliance
with the terms of this Agreement. In the event that such protective order or
other remedy is not obtained, or that the Company waives compliance with the
provisions hereof, Consultant agrees to furnish only that portion of the
Confidential Information which is required to be disclosed in the written
opinion of Consultant's counsel, and to use reasonable efforts to obtain
confidential treatment of such of the disclosed information which the Company so
designates.
5. NONCOMPETITION.
5.1 The Consultant recognizes that he has acquired and will continue to
acquire and develop unique contacts, skills and talents during his relationship
with the Company. The Consultant will have many opportunities to develop on the
Company's behalf the loyalty and goodwill of the Company's customers,
prospective customers and suppliers in the commercial trucking industry. The
Consultant realizes and agrees that the Company has a protectible interest in
such relationships the Consultant establishes or nurtures with the Company's
customers, prospective customers and suppliers while engaged by the Company.
Accordingly, the Consultant agrees that the Company should be allowed to prevent
Consultant, before and after termination of his consulting relationship with the
Company hereunder, from unfairly competing with the Company or benefiting from
the expenditures made by the Company in establishing or nurturing its
relationships with customers and prospective customers. The Consultant
acknowledges that such conduct on his part would harm and damage the legitimate
business interests of the Company.
5.2 During the term of the Consultant's consulting relationship with
the Company hereunder, the Consultant covenants that he will not, within the
territories listed on Exhibit A hereto ("Territories"), directly or indirectly
compete with the Company by carrying on Business (as defined in Section 5.5
below) which is substantially similar to the Business of the Company. The
Consultant acknowledges that he has, and will continue to have, substantial
direct or indirect contact with customers, prospective customers, and suppliers
in the Territories.
5.3 For the purposes of this Agreement, the term "compete" shall mean
with respect to the Business: (i) managing, supervising, or otherwise
participating in a management or supervisory capacity in flatbed and related
non-enclosed truckload carrier for hire operations; (ii) calling on, soliciting,
taking away, accepting as a customer or attempting to call on,
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solicit, take away or accept as a customer any individual, partnership,
corporation, limited liability company or association that is or was a customer
of the Company during the twelve calendar month period immediately preceding
such act with whom the Consultant had contact; (iii) soliciting, taking away or
attempting to solicit or take away any employee of the Business, either on the
Consultant's behalf or on behalf of any other person or entity, who was an
employee of the Company during the twelve calendar month period immediately
preceding such act, or (iv) entering into or attempting to enter into any
business substantially similar to the Business, either alone or with any
individual, partnership, corporation, limited liability company or association.
It is expressly acknowledged that Johnston may hire Becky Ryland, David
Johnston, Scott Schell and Rosie Clark.
5.4 For the purposes of this Agreement, the words "directly or
indirectly" as used herein shall mean (i) acting as an agent, representative,
consultant, officer, director, member, independent contractor, or employee of
any entity or enterprise which is competing with the Business, (ii)
participating in any such competing entity or enterprise as an owner, partner,
limited partner, joint venturer, member, creditor or stockholder (except as a
stockholder holding less than one percent (1%) interest in a corporation whose
shares are actively traded on a regional or national securities exchange or in
the over-the-counter market), and (iii) communicating to any such competing
entity or enterprise the names or addresses or any other information concerning
any past, present, or identified prospective customer of the Company.
5.5 For purposes of this Agreement, the term "Business" shall mean the
flatbed or related non-enclosed truckload carrier for hire operations, in which
the Company now or hereafter engages, or has an immediate intention to engage.
5.6 During the term of the Consultant's consulting relationship with
the Company hereunder, the Consultant also covenants and agrees not to hire or
attempt to hire for himself or another employer any employee of the Company or
directly or indirectly cause any such employee to leave his employment in order
to work for another.
5.7 In the event the Company shall have failed to make any payments
called for under this Agreement which shall remain uncured for more than ninety
(90) days, Consultant shall not be obligated under this Section 5, but only for
such time as the Company's payment defaults shall remain uncured.
6. INJUNCTION.
6.1 It is the understanding of the parties that the obligations of the
Consultant set forth in Sections 3 and 5 of this Agreement relating to
Confidential Information and noncompetition will be enforced to the fullest
extent permissible under the laws and public policies in any jurisdiction in
which enforcement is sought, and shall survive the termination of this Agreement
and/or Consultant's engagement with the Company.
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6.2 If there is a breach or threatened breach of any provision of this
Agreement, the Company shall be entitled to seek and obtain an injunction
restraining the Consultant from such breach. Nothing contained in this Agreement
shall be construed as prohibiting the Company from pursuing any other remedies
for such breach or threatened breach.
6.3 If any court shall determine that the duration, geographical limit
or any other aspect of any restriction contained in this Agreement is
unenforceable, it is the intention of the parties that any restrictive covenants
set forth herein shall not thereby be terminated, but shall be deemed amended to
the extent required to render them valid and enforceable.
6.4 The Consultant acknowledges and agrees that the prohibition against
disclosure of Confidential Information recited in Section 3 hereof is in
addition to, and not in lieu of, any rights or remedies which the Company may
have available pursuant to the laws of any jurisdiction or at common law to
prevent the disclosure of trade secrets and that the enforcement by the Company
of its rights and remedies pursuant to this Agreement shall not be construed as
a waiver of any other rights or remedies which it may possess in law or at
equity absent this Agreement.
7. SEVERABILITY.
If any particular provision of this Agreement shall be adjudicated to
be invalid or unenforceable (subject to Subsection 6.3 above), such provision
shall be deemed amended to delete therefrom the portion adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of this Section in the particular jurisdiction in which such
adjudication is made.
8. NOTICES.
Any notice required or permitted to be given under this Agreement shall
be given in writing and sent by certified mail, postage prepaid, return receipt
requested, to the last known residence in the case of the Consultant or to the
Company's principal office in the case of the Company.
9. AMENDMENT; SUCCESSORS AND ASSIGNS.
This Agreement may not be changed orally, but only by an agreement in
writing, duly signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors or assigns, and, in the case of Consultant, shall inure to the
benefit of his heirs, legatees, executors, administrators and guardians.
10. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Alabama.
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11. BREACH OF AGREEMENT.
Consultant agrees that in the event Consultant breaches any material
provisions of this Agreement, the Company shall be entitled, in addition to any
other remedies the Company may have under this Agreement, to offset to the
extent of any liability, loss, damage or injury from such breach any payments
due to Consultant pursuant to this or any other agreement to which Consultant
and the Company are parties, which notice of offset shall include an indication
of the reasons therefor.
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IN WITNESS WHEREOF, the parties have executed this Agreement
and set their hands and seals thereto as of the date first above written.
BOYD BROS. TRANSPORTATION INC.
[SEAL]
By: /s/ Miller Welborn
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Name: Miller Welborn
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Title: Chief Executive Officer
/s/ Donald G. Johnston
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DONALD G. JOHNSTON
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EXHIBIT A
LIST STATES IN WHICH BOYD
IS PRESENTLY CONDUCTING BUSINESS
Louisiana Michigan
Mississippi Virginia
Alabama West Virginia
Georgia Pennsylvania
Florida New York
South Carolina Maryland
North Carolina District of Columbia
Tennessee Vermont
Kentucky New Hampshire
Illinois Maine
Indiana Massachusetts
Ohio Connecticut
Wisconsin Rhode Island
Texas Oklahoma
Arkansas Missouri
Kansas Nebraska
Iowa Minnesota
Delaware New Jersey