Exhibit 10.6
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of the
29th day of January, 1999, by and between M.R.B., INC., a Georgia corporation
(the "Company"), and DAVID F. HERRING (the "Employee").
R E C I T A L S
The Company desires to obtain the services of the Employee in the employment of
the Company on the terms and subject to the conditions set forth in this
Agreement, and the Employee desires to make his services available to the
Company on the terms and subject to the conditions set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, agreements and mutual
covenants set forth herein, the parties hereto, intending to be bound legally,
hereby agree as follows:
2. DEFINITIONS. The following terms when used herein, unless the context
otherwise requires, shall be defined as follows:
1.1. "Cause" shall have the meaning set forth in Section 5.1 hereof.
1.2. "CAM" shall mean Chancellor Asset Management, Inc., a Delaware
corporation and parent company of the Company.
1.3. "Chancellor" shall mean Chancellor Corporation, a Massachusetts
corporation and parent company of CAM.
1.4. "Companies" shall mean the Company, together with Tomahawk Truck and
Trailer Sales, Inc., a Florida corporation, Tomahawk Truck and Trailer
Sales of Virginia, Inc., a Virginia corporation, and Tomahawk Truck
and Trailer Sales of Missouri, Inc, a Missouri corporation.
1.5. "Company" shall mean M.R.B. Inc., a Georgia corporation.
1.6. "Confidential Information" shall have the meaning set forth in Section
7.1 hereof.
1.7. "Term" shall have the meaning set forth in Section 3 hereof.
1.8. "Stock Purchase Agreement" shall mean the Stock Purchase Agreement
entered into among CAM, M. Rea Brookings, and the Employee dated as of
the 29th day of January, 1999.
18. EMPLOYMENT.
18.1.General. The Company hereby agrees to employ the Employee as Vice
President of the Company during the Term on the terms and subject to
the conditions contained in
this Agreement, and the Employee hereby agrees to accept such
employment on the terms and subject to the conditions contained in
this Agreement.
18.2.Duties of Employee. During the Term, the Employee shall diligently
perform all duties and responsibilities as may be assigned to him by
the Company's Board of Directors, and shall exercise such power and
authority as may from time to time be delegated to him thereby. The
Employee shall devote his full business time and attention to the
business and affairs of the Companies as necessary to perform his
duties and responsibilities hereunder, render such services to the
best of his ability, and use his best efforts to promote at all times
the interests of the Companies.
19. TERM. Subject to the provisions of Section 5 of this Agreement, the
Company shall employ the Employee for a term of five (5) years (the
"Term") commencing as of the date first written above (the "Effective
Date).
20. COMPENSATION.
20.1.Salary. The Employee shall receive an annual salary of Two Hundred
Thousand Dollars ($200,000.00) during the Term, and such salary shall
be payable in equal installments consistent with the Company's normal
payroll schedule commencing on either the first or fifteenth day of
the month, as the case may be, following the Effective Date. The
Employee's annual salary shall be subject to such increases as shall
be approved by the Company's Board of Directors in its sole
discretion.
20.2.Benefits. During the Term, the Employee shall be entitled to
participate in all plans adopted for the general benefit of the
Company's employees, such as stock option plans, 401(k) plans, pension
plans, profit sharing plans, medical plans, group or other insurance
plans and benefits, to the extent that the Employee is and remains
eligible to participate therein and subject to the eligibility
provisions of such plans in effect from time to time. For each
calendar year during the Term, the Employee shall be entitled to four
(4) weeks of paid vacation at such times as shall be mutually
acceptable to the Employee and the Company, and to sick and holiday
time as prescribed by the established Chancellor policies in effect
from time to time.
20.3.Withholding. Notwithstanding any provision in this Agreement to the
contrary, all payments required to be made by the Company hereunder to
the Employee in connection with the Employee's employment hereunder
shall be subject to withholding of such amounts relating to taxes as
the Company may reasonably determine it should withhold pursuant to
any applicable law or regulation. In lieu of withholding such amounts,
in whole or in part, the Company may, in its sole discretion, accept
other provisions for the payment of taxes, provided that the Company
is satisfied that all requirements of law affecting its
responsibilities to withhold have been satisfied.
20.4.Reimbursement of Expenses. The Company agrees to reimburse the
Employee for all reasonable business expenses (including, without
limitation, reasonable travel and entertainment expenses) incurred by
the Employee in the discharge of his duties hereunder, subject to the
Company's reimbursement policies in effect from time to time. The
Employee agrees to maintain reasonable records of his business
expenses in such form and detail as the Company may request and to
make such records available to the Company as and when requested.
21. TERMINATION.
21.1.Termination by the Company for Cause. Notwithstanding any provision
in this Agreement to the contrary, this Agreement may be terminated by
the Company for "Cause" at any time during the Term hereof, and such
termination shall be effective immediately upon written notice to the
Employee. For purposes of this Agreement, "Cause" for the termination
of the Employee's employment hereunder shall be deemed to exist only
if, in the reasonable judgment of the Company's Board of Directors:
(a) the Employee commits fraud, theft or embezzlement against any of
the Companies; (b) the Employee commits a felony or a crime involving
moral turpitude; (c) the Employee discloses trade secrets or other
proprietary information of Chancellor or any of the Companies or any
subsidiary or affiliate thereof to any unauthorized person or entity;
(d) the Employee breaches any non-competition or non-solicitation
agreement with Chancellor or any of the Companies or any subsidiary or
affiliate thereof; (e) the Employee breaches any of the terms of this
Agreement (other than those referenced in clauses (c) and (d) of this
Section 5.1) and fails to cure such breach within twenty (20) days
after the receipt of written notice of such breach from the Company;
or (f) the Employee engages in gross negligence or willful misconduct
that causes harm (or could reasonably be expected to cause harm) to
the business and operations of Chancellor or any of the Companies or a
subsidiary or affiliate thereof. Upon any termination pursuant to this
Section 5.1, the Employee shall be entitled to be paid solely the
Employee's salary then in effect through the effective date of
termination, and the Company shall have no further liability or other
obligation of any kind whatsoever to the Employee hereunder.
21.2.Termination by the Company Without Cause. The Company may, in its
sole and absolute discretion, terminate the employment of the Employee
hereunder at any time without "Cause" (as such term is defined in
Section 5.1 above), or otherwise without any cause, reason or
justification, provided that the Company provides to the Employee at
least ninety (90) days' prior written notice (the "Termination
Notice") of such termination. In the event of any such termination by
the Company, (a) the Employee's employment with the Company shall
cease and terminate on the date specified in the Termination Notice
(or, if no date is so specified, on the date which is ninety (90) days
following the date of such notice), and (b) the Employee shall be
entitled to receive and be paid (i) in the case of a termination under
this Section 5.2 at any time prior to or on the third anniversary of
the Effective Date, the Employee's entire salary, at the rate in
effect as of the effective date of such termination and in equal
monthly installments, through such third anniversary, and thereafter
fifty percent (50%) of the Employee's salary, at the rate in effect as
of the effective date of such termination and in equal monthly
installments, during the then remaining Term, and (ii) in the case of
termination under this Section 5.2 at any time after the third
anniversary of the Effective Date, fifty percent (50%) of the
Employee's salary, at the rate in effect as of the effective date of
such termination and in equal monthly installments, during the then
remaining Term, payable in either of the cases set forth in clauses
(i) and (ii) over the applicable period at the Company's regular and
customary intervals for the payment of salaries as then in effect and
in equal monthly installments, and the Company shall have no further
liability or other obligation of any kind whatsoever to the Employee
hereunder.
21.3.Death of the Employee. In the event that the Employee shall die
during the Term, the Employee's employment with the Company shall
immediately cease and terminate and the Employee's estate, heirs (at
law), devisees, legatees or other proper and legally entitled
descendants, or the personal representative, executor, administrator
or other proper legal representative on behalf of such descendants,
shall be entitled to receive and be paid solely the Employee's salary
through the date of death, and the Company shall have no further
liability or other obligation of any kind whatsoever to the Employee
hereunder.
21.4.Disability of the Employee. In the event that the Employee becomes
incapacitated during the Term by reason of sickness, accident or other
mental or physical disability such that he is substantially unable to
perform his duties and responsibilities hereunder for a period of
ninety (90) consecutive days, or for shorter or intermittent periods
aggregating one hundred twenty (120) days during any 12-month period
(a "Disability"), the Company thereafter shall have the right, in its
sole and absolute discretion, to terminate the Employee's employment
under this Agreement by sending written notice of such termination to
the Employee or his legal guardian or other proper legal
representative and thereupon his employment hereunder shall
immediately cease and terminate; provided, however, that
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notwithstanding the foregoing, the Employee's employment shall not be
terminated as aforesaid if the Company's Board of Directors
determines, in its reasonable judgment, that after the termination of
such Disability, the Employee is able to resume his duties and
responsibilities to the Company in accordance with the terms hereof in
the manner theretofore provided. In the event of any such termination,
the Employee shall be entitled to receive and be paid solely the
Employee's salary then in effect through the effective date of
termination, and the Company shall have no further liability or other
obligation of any kind whatsoever to the Employee hereunder.
21.5.Termination by the Employee. Provided that the Company does not have
"Cause" to terminate the Employee pursuant to Section 5.1 above, the
Employee may terminate the Employee's employment with the Company
hereunder at any time and for any reason. Employee must provide to the
Company written notice of such termination not less than ninety (90)
days prior to the date such termination is to be effective. Upon any
termination pursuant to this Section 5.5, the Employee shall be
entitled to be paid solely the Employee's salary then in effect
through the effective date of termination, and the Company shall have
no further liability or other obligation of any kind whatsoever to the
Employee hereunder.
22. AGREEMENT NOT TO COMPETE. In addition to the separate non-competition
covenants made by the Employee as a "Seller" in Section 10.2 of the
Stock Purchase Agreement, which non-competition covenants the Employee
agrees and acknowledges are being given in consideration of the
acquisition by CAM of the outstanding capital stock of the Companies,
and are fully and independently enforceable in accordance with their
terms, the Employee agrees that in the event that the Employee's
employment with the Company is terminated either (a) at the expiration
of the full five (5) year Term, or (b) at any time during the fifth
year of the Term (the actual effective date of such employment
termination being referred to herein as the "Termination Date"), the
Employee shall not, for an additional one (1) year period commencing
as of the Termination Date, without the prior written consent of the
Company, (a) engage anywhere in the United States, directly or
indirectly, alone or as a shareholder (other than as a holder of less
than 3% of the capital stock of any publicly traded
corporation), member, partner, manager, officer, director, employee or
consultant, in any business that is engaged or becomes engaged in the
business of any of the Companies as existing on the Effective Date,
(b) divert or attempt to divert to any competitor of any of the
Companies or any Affiliate of any such competitor, any customer or
client, or prospective customer or client, of any of the Companies, or
(c) solicit or encourage, or attempt to solicit or encourage, any
employee of any of the Companies to leave its employ for employment by
or with either Employee or Employee's Affiliates, or any competitor of
any of the Companies or any of any such competitor's Affiliates. If at
any time the provisions of this Section 6 shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as
to area, duration or scope of activity, this Section 6 shall be
considered divisible and shall become and be immediately amended to
only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and the Employee agrees that this
Section 6 as so amended shall be valid and binding as though any
invalid or unenforceable provisions had not been included therein.
Notwithstanding anything to the contrary set forth in this Section 6,
in the event that the non-competition covenants of the Employee set
forth in Section 10.2 of the Stock Purchase Agreement terminate in
accordance with the last sentence thereof, then the non-competition
covenants set forth in this Section 6 shall also terminate as to the
Employee as of the date such non-competition covenants set forth in
the Stock Purchase Agreement so terminate.
23. OWNERSHIP AND NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.
23.1.As used in this Agreement, "Confidential Information" shall mean all
customer sales and marketing information, customer account records,
proprietary receipts and/or processing techniques, information
regarding vendors and products, training and operations memoranda and
similar information, personnel records, pricing information, financial
information and trade secrets concerning or relating to the business,
accounts, customers, employees and affairs of the Companies, or any
subsidiary or affiliate thereof, obtained by or furnished, disclosed
or disseminated to the Employee, or obtained, assembled or compiled by
the Employee or under his supervision during the course of his
employment by the Company, and all physical embodiments of the
foregoing, all of which are hereby agreed to be the property of and
confidential to the Companies, but Confidential Information shall not
include any of the foregoing to the extent the same is or becomes
publicly known through no fault or breach of this Agreement by the
Employee.
23.2.The Employee acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, are confidential to
and shall be and remain the sole and exclusive property of the
Companies. Upon request by any of the Companies, and in any event upon
termination of the Employee's employment with the Company for any
reason whatsoever, as a prior condition to the Employee's receipt of
any final salary or benefit payments hereunder, the Employee shall
deliver to the Companies all property belonging to the Companies or
any of its subsidiaries or affiliates, including, without limitation,
all Confidential Information (and all embodiments thereof), then in
his custody, control or possession, but any forfeiture of such salary
or benefit shall not be considered a satisfaction or a release of or
liquidated damages for any claim(s) for damages against the Employee
which may accrue to the Companies, as a result of any breach of this
Section 7 by the Employee.
23.3.The Employee agrees that he will not, either during the Term or at
any time thereafter, without the prior written consent of the Company,
use, disclose or make available any Confidential Information to any
person or entity, nor shall he use, disclose, make available or cause
to be used, disclosed or made available, or permit or allow, either on
his own behalf or on behalf of others, any use or disclosure of such
Confidential Information other than in the proper performance of the
Employee's duties hereunder. Notwithstanding anything to the contrary
set forth herein, after the expiration of the longer of (a) the
non-competition period applicable to the Employee set forth in the
Stock Purchase Agreement, and (b) the non-competition period set forth
herein, the Employee shall be permitted to utilize the customer lists
of the Companies for any purpose whatsoever.
23.4.Notwithstanding anything to the contrary set forth in this Section 7,
in the event the non-competition covenants of the Employee set forth
in Section 10.2 of the Stock Purchase Agreement terminate in
accordance with the last sentence thereof, then the provision of this
Section 7 shall also terminate as to the Employee as of the date such
non-competition covenants set forth in the Stock Purchase Agreement so
terminate.
24. INVENTIONS. The Employee shall disclose promptly to the Companies any and
all conceptions and ideas for inventions, improvements, business methods
and systems, and valuable discoveries, whether patentable or not, that are
conceived or made by the Employee, solely or jointly with another, during
the Term and that are directly related to the business or activities of the
Companies and that the Employee conceives as a result of his employment by
the Company, regardless of whether or not such ideas, inventions, or
improvements qualify as "works for hire." The Employee hereby assigns and
agrees to assign all his interests therein to the Companies or their
nominees. Whenever requested to do so by any of the Companies, the Employee
shall execute any and all applications, assignments or other instruments
that such Company shall deem necessary to apply for and obtain Letters
Patent of the United States or any foreign country or to otherwise protect
any of the Companies' interest therein.
25. REASONABLENESS OF RESTRICTIONS. In the event that any provision relating to
time period or geographic area of any restriction set forth in Sections 6,
7 or 8 shall be declared by a court of competent jurisdiction to exceed the
maximum time period or area of restriction that the court deems reasonable
and enforceable, the time period or area of restriction which the court
finds to be reasonable and enforceable shall be deemed to become, and
thereafter shall be, the maximum time period or geographic area of such
restriction.
26. ENFORCEABILITY. Any provision of Sections 6, 7 or 8 which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, but shall be enforced to the
maximum extent permitted by law, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
27. INJUNCTION. It is recognized and hereby acknowledged by the parties hereto
that a breach or threat of breach by the Employee of any of the covenants
contained in Sections 6, 7 or 8 of this Agreement will cause irreparable
harm and damage to the Companies, the monetary amount of which may be
virtually impossible to ascertain. As a result, the Employee recognizes and
hereby acknowledges that the Companies shall be entitled to an injunction
from any court of competent jurisdiction enjoining and restraining any
violation or threatened
violation of any or all of the covenants contained in Sections 6, 7 or 8 of
this Agreement by the Employee or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies
the Companies may possess.
28. ASSIGNMENT; BINDING EFFECT. The Employee shall not assign any of his rights
or obligations pursuant to this Agreement to any other person without the
prior written consent of the Company, which consent may be unreasonably
withheld or delayed. Subject to the foregoing, this Agreement shall be for
the benefit of and binding upon the parties hereto and their respective
heirs, personal representatives, legal representatives, successors and
assigns.
29. EMPLOYER'S AUTHORITY. The relationship between the parties hereto is that
of employer and employee. The Employee agrees to observe and comply with
the rules and regulations of the Companies, as adopted by the Companies
from time to time with respect to the performance of the duties of the
Employee. The Employee acknowledges that he has no authority to enter into
any contracts or other obligations that are binding upon any of the
Companies unless such contracts or obligations are authorized by the Board
of Directors of such Companies. The Company shall have the power to direct,
control and supervise the duties to be performed by the Employee, the
manner of performing said duties, and the time of performing said duties.
30. GOVERNING LAW. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by
and construed in accordance with the laws of the State of Delaware,
excluding the choice of law rules thereof.
31. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to such subject matter.
This Agreement may not be modified or amended in any way, unless by a
written instrument signed by both the Company and the Employee.
32. NOTICES. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given upon receipt or
actual delivery by hand or after sent by certified United States mail,
return receipt requested, postage prepaid, or by a reputable overnight
courier service, addressed as follows:
ii) If to the Employee:
David F. Herring
4382 S. Moreland Ave.
Conley, GA 30288
Fax: 404-362-9460
with a copy given in the manner prescribed above to:
Frank L. Wilson, III, Esq.
Wilson Brock & Irby, L.L.C.
Overlook I, Suite 700
2849 Paces Ferry Rd., N.W.
Atlanta, GA 30339
Fax: 404-853-1812
iii) If to the Company:
c/o Peter J. Mullen, Clerk
Chancellor Corporation
210 South Street
10th Floor
Boston, MA 02111
Fax: 617-422-5851
with a copy given in the manner prescribed above to:
Victor J. Paci, Esq.
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Fax: 617-951-8736
or to such other addresses as either party hereto may from time to time
give notice of to the other party hereto in the aforesaid manner.
20. DAMAGES. Nothing contained herein shall be construed to prevent any of the
Companies or the Employee from seeking and recovering from the other
damages sustained by either or both of them as a result of its or his
breach of any term or provision of this Agreement. In the event that either
party hereto brings suit for the collection of any damages resulting from,
or the injunction of any action constituting, a breach of any of the terms
or provisions of this Agreement, then the non-prevailing party shall pay
all reasonable court costs and attorneys' fees of the other party.
21. SECTION HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
22. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person or
entity other than the parties hereto and their respective heirs, personal
representative, legal representative, successors and assigns, and except
for the other Companies (other than the Company), any rights or remedies
under or by reason of this Agreement.
23. WAIVER. No delay or failure at any time on the part of any of the Companies
in exercising any right, power or privilege under this Agreement, or in
enforcing any provision of this Agreement, shall impair any such right,
power or privilege, or be construed as a waiver of any default or as any
acquiescence therein, or shall affect the right of any of the Companies
thereafter to enforce each and every provision of this Agreement in
accordance with its terms. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall neither operate
nor be construed as a waiver of any subsequent breach or violation.
IN WITNESS WHEREOF, the undersigned have executed this Agreement under seal
as of the date first above written.
M.R.B., INC.
By: /s/ Franklyn E. Churchill
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Name: Franklyn E. Churchill
Title: CEO and President, Chancellor Asset Management, Inc.
EMPLOYEE
By: /s/ David F. Herring
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Name: David F. Herring