PACIFIC MOTOR TRANSPORT COMPANY

                     3746 MT. DIABLO BOULEVARD, SUITE 110

                         LAFAYETTE, CALIFORNIA  94549

 

 

                                                  March 31, 1997

 

 

 

Mr. Don C. Orris

10007 Oak Tree Court

Littleton, Colorado  80124

 

                             Employment Agreement

                             --------------------

 

Dear Don:

 

          This letter sets forth the terms of your continued employment with

Pacific Motor Transport Company (the "Company").

 

          1.   Duties.  On the terms and subject to the conditions contained

               ------

in this Agreement, you will be employed as the President of the Company (the

"Company"), and shall perform such duties and services consistent with such

position as may reasonably be assigned to you from time to time by the Board of

Directors.

 

          2.   Term.  Unless sooner terminated in accordance with the

               ----

applicable provisions of this Agreement, your employment hereunder shall be for

the period (including any extensions thereof, the "Employment Period")

commencing on the date hereof (the "Commencement Date") and initially ending on

the second anniversary of the date hereof. Subject to the applicable provisions

of Section 8 of this Agreement regarding earlier termination, the Employment

Period shall be extended automatically one day prior to each anniversary of the

Commencement Date, beginning with the second anniversary thereof, for an

additional period of one year.

 

          3.   Time to be Devoted to Employment.  During the Employment Period,

               --------------------------------

you will devote your working energies, efforts, interest, abilities and time

exclusively to the business and affairs of the Company. You will not engage in

any other business or activity which, in the reasonable judgment of the Board of

Directors of the Company, would conflict or interfere with the performance of

your duties as

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Mr. Don C. Orris

March 31, 1997

Page 2

 

set forth herein, whether or not such activity is pursued for gain, profit or

other pecuniary advantage.

 

          4.   Base Salary; Bonus; Benefits.

               ----------------------------

 

                    (a)  During the Employment Period, the Company (or any of

its affiliates) shall pay you a minimum annual base salary (the "Base Salary")

of $165,000, payable in such installments (but not less often than monthly) as

is generally the policy of the Company with respect to the payment of regular

compensation to its executive officers. On the first anniversary of the

Commencement Date, the Base Salary will be increased to $225,000 per annum, and

on the second anniversary of the Commencement Date, the Base Salary will be

adjusted to an amount that reflects customary market compensation for a company

in the same industry and of comparable size and income as the Company, which

Base Salary, as adjusted, shall be agreed upon by you and the Board of Directors

of the Company. At all times after the second anniversary of the Commencement

Date, increases in the Base Salary, if any, will be determined by the Board of

Directors in its sole discretion. During the Employment Period, you will also be

entitled to four weeks vacation per year and such other benefits as may be made

available to other executive officers of the Company generally, including,

without limitation, (i) participation in such health, life and disability

insurance programs and retirement or savings plans as the Company may from time

to time maintain in effect and (ii) the use of a vehicle provided by the Company

or an equivalent monthly car allowance in accordance with the Company's policy

with respect to its senior executives.

 

                    (b)  In addition to the Base Salary and benefits set forth

in paragraph (a) above, you will be entitled to receive a cash incentive bonus,

if any, with respect to each fiscal year of the Company occurring during the

Employment Period, as provided in this paragraph. The bonus, if any, for each

fiscal year of the Company ending on or prior to December 31, 2001, shall be

calculated in the manner set forth on Annex A attached to this Agreement and

                                      -------

shall be due and payable as soon as practicable, but in no event later than 30

days, following the Company's receipt from its public accountants of the audited

financial statements of the Company. If your employment with the Company is

terminated for any reason other than without "cause" pursuant to Section 8(b),

the Company will not pay you a bonus with respect to the fiscal year in which

your employment is terminated or thereafter. If your employment with the Company

is terminated without "cause" as

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Mr. Don C. Orris

March 31, 1997

Page 3

 

provided in Section 8(b) below, you will be entitled to receive that portion of

the bonus payable for such fiscal year pro rated through the date of such

termination based on the number of days elapsed through the termination date

over 365 days, payable in accordance with the second sentence of this Section

4(b). For each fiscal year ending after December 31, 2001, the amount of the

bonus and the criteria therefor shall be determined by the Board of Directors.

In the event that the Company consummates any mergers or acquisitions (whether

of assets, stock or other interests) or other extraordinary transactions, the

Board of Directors shall in good faith make such adjustments to the targets set

forth on Annex A for Operating Income (as defined on Annex A) to take into

         -------                                     -------

account the effects of any such acquisition or transaction.

 

          5.   Reimbursement of Expenses.  During the Employment Period, the

               -------------------------

Company shall reimburse you in accordance with Company policy for all reasonable

and necessary traveling expenses and other disbursements incurred by you for or

on behalf of the Company in connection with the performance of your duties

hereunder upon presentation of appropriate receipts or other documentation

therefor, in accordance with all applicable policies of the Company.

 

          6.   Options.  The Company will grant you options (the "Options") to

               -------

purchase shares of common stock, $.01 par value (the "Common Stock"), of the

Company pursuant to the Company's 1997 Stock Option Plan (the "Option Plan").

The Options will be evidenced by a Stock Option Agreement between you and the

Company. The Option Plan and the Stock Option Agreement will contain all of the

terms and conditions of your Options.

 

          7.   Disability or Death.  If, during the Employment Period, you are

               -------------------

incapacitated or disabled by accident, sickness or otherwise (hereinafter, a

"Disability") so as to render you mentally or physically incapable of performing

the services required to be performed by you under this Agreement for an

aggregate of 210 days in any period of 360 consecutive days, the Company may, at

any time thereafter, at its option, terminate your employment under this

Agreement immediately upon giving you written notice to that effect. In the

event of your death, your employment will be deemed terminated as of the date of

death.

 

          8.   Termination.

               -----------

 

                    (a)  The Company may terminate your employment hereunder at

any time for "cause" by giving you written notice

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Mr. Don C. Orris

March 31, 1997

Page 4

 

of such termination, with reasonable specificity of the grounds therefor. For

purposes of this Section 8, "cause" shall mean (i) willful misconduct with

respect to the business and affairs of the Company, PMT Holdings, Inc. ("PMT")

or any of their respective subsidiaries, (ii) willful neglect of your duties or

the failure to follow the lawful directions of the Board or more senior officers

of the Company to whom you report, including, without limitation, the violation

of any material policy of the Company, PMT or any of their respective

subsidiaries applicable to you, (iii) the breach of Section 7 of the

Subscription Agreement or the material breach of any of the provisions of this

Agreement or any Related Agreement (as defined below) and if such breach is

capable of being cured, your failure to cure such breach within 30 days of

receipt of written notice thereof from the Company, (iv) the commission of a

felony, (v) the commission of an act of fraud or financial dishonesty with

respect to the Company, PMT or any of their respective subsidiaries or

affiliates or (vi) any conviction for a crime involving moral turpitude or

fraud. A termination pursuant to this Section 8(a) shall take effect immediately

upon the giving of the notice contemplated hereby. In this Agreement, the term

"Related Agreements" means (i) the Stock Subscription Agreement dated as of the

date hereof between you and PMT (the "Subscription Agreement"), and (ii) the

Stockholders Agreement dated as of the date hereof among PMT, you and the other

stockholders named therein.

 

               (b)  The Company may terminate your employment hereunder at any

time without "cause" by giving you written notice of such termination, which

termination shall be effective as of the date set forth in such notice, provided

that such date shall not be earlier than the date of the notice.

 

          9.   Effect of Termination.

               ---------------------

 

                    (a)  Upon the effective date of a termination of your

employment under this Agreement for any reason other than a termination without

cause pursuant to Section 8(b), neither you nor your beneficiaries or estate

shall have any further rights under this Agreement or any claims against the

Company or any of its subsidiaries or affiliates arising out of this Agreement,

except the right to receive, within 30 days after the effective date of such

termination:

 

                         (i)  the unpaid portion of the Base Salary provided for

in Section 4, computed on a pro rata basis to the effective date of such

                            --- ----

termination;

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Mr. Don C. Orris

March 31, 1997

Page 5

 

 

                         (ii)  reimbursement for any expenses for which you

shall not have theretofore been reimbursed, as provided in Section 5; and

 

                         (iii) the unpaid portion of any amounts earned by you

prior to the effective date of such termination pursuant to any benefit program

in which you participated during the Employment Period; provided, however, you

                                                        --------  -------

shall not be entitled to receive any benefits under any benefit program that

have accrued during any period if the terms of such program require that the

beneficiary be employed by the Company as of the end of such period.

 

               (b)  Upon termination of your employment under this Agreement

pursuant to Section 8(b), neither you nor your beneficiaries or estate shall

have any further rights under this Agreement or any claims against the Company,

PMT or any of their respective subsidiaries or affiliates arising out of this

Agreement, except the right to receive, within 30 days after the effective date

of such termination, in the case of amounts due pursuant to clause (i) below,

and at such other times as provided in clause (ii) and (iii) below in the case

of amounts due thereunder:

 

                         (i)   the payments, if any, referred to in Section 9(a)

above, to the extent not covered by clause (ii) and (iii) of this Section 9(b);

 

                         (ii)  the right to continue to receive the Base Salary

for a period equal to the greater of (A) the number of months remaining in the

Employment Period on the effective date of termination or (B) twelve months, in

either case commencing on the first month following the effective date of such

termination, payable during such period in such manner as the Base Salary is

payable pursuant to Section 4(a), reduced by 50% of any amounts you (or your

beneficiaries or estate) receive or are entitled to receive as salary or other

cash compensation from subsequent employment or for services rendered during

such period, up to a maximum of 50% of all amounts due to you under this Section

9(b)(ii). In order to carry out the intent of the immediately preceding

sentence, you agree, for yourself and your beneficiaries or estate, to provide

the Company with such information as the Company may reasonably request

regarding your receipt of salary and other cash compensation from subsequent

employment or for services rendered or to be rendered during or with respect to

such period.

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Mr. Don C. Orris

March 31, 1997

Page 6

 

                         (iii)  the right to receive any bonus payable in

accordance with Section 4(b) with respect to the fiscal year in which such

termination occurs.

 

          Notwithstanding anything in this Agreement to the contrary, your

beneficiaries or estate will be entitled to continue to receive all payments

specified in this Section 9(b) if you die after the date of a termination

without "cause."

 

          10.  Disclosure of Information.

               -------------------------

 

                    (a)  From and after the date hereof, you shall not at any

time use or disclose to any person or entity (other than any officer, director,

employee, affiliate or representative of the Company), except as required in

connection with the performance of your duties under and in compliance with this

Agreement and as required by law and judicial process, any Confidential

Information (as hereinafter defined) heretofore acquired or acquired during the

Employment Period for any reason or purpose whatsoever, nor shall you make use

of any of the Confidential Information for your own purposes or for the benefit

of any person or entity except the Company or any subsidiary thereof.

 

                    (b)  For purposes of this Agreement, "Confidential

Information" shall mean (i) the Intellectual Property Rights (as hereinafter

defined) of the Company and its subsidiaries and (ii) all other information of a

proprietary or confidential nature relating to the Company or any subsidiary

thereof, or the business or assets of the Company or any such subsidiary,

including, without limitation, books, records, agent and independent contractor

lists and related information, customer lists and related information, vendor

lists and related information, supplier lists and related information,

distribution channels, pricing information, cost information, marketing plans,

strategies, forecasts, financial statements, budgets and projections, other than

(i) information which is generally available to the public on the date hereof,

or which becomes generally available to the public after the date hereof without

action by you or (ii) information which you receive from a third party who does

not have any independent obligation to the Company to keep such information

confidential.

 

                    (c)  As used herein, the term "Intellectual Property Rights"

means all industrial and intellectual property rights, including, without

limitation, patents, patent applications, patent rights, trademarks, trademark

<PAGE>

 

Mr. Don C. Orris

March 31, 1997

Page 7

 

applications, trade names, service marks, service mark applications, copyrights,

copyright applications, know-how, certificates of public convenience and

necessity, franchises, licenses, trade secrets, proprietary processes and

formulae, inventions, development tools, marketing materials, instructions,

confidential information, trade dress, logos and designs and all documentation

and media constituting, describing or relating to the foregoing, including,

without limitation, manuals, memoranda and records.

 

          11.  Noncompetition Covenant.

               -----------------------

 

                    (a)  You acknowledge and recognize that during the

Employment Period you will be privy to Confidential Information. You further

acknowledge and recognize that the relationships with vendors, agents and

customers of the Company that you have developed prior to the date hereof and

those that you will maintain or develop during the Employment Period with the

use and assistance of the Company and its properties and assets are of special

and unique value to the Company and its affiliates and that the Company would

find it extremely difficult to replace you. Accordingly, in consideration of the

premises contained herein and the consideration you will receive hereunder

(including, without limitation, the severance compensation described in Section

9(b)(ii), if applicable), without the prior written consent of the Company, you

shall not, at any time during the Employment Period and the period beginning on

the effective date of any termination of your employment with the Company and

its subsidiaries and ending on the third anniversary thereof, (a) directly or

indirectly engage in, represent in any way, or be connected with, any Competing

Business (as defined below), whether such engagement shall be as an officer,

director, owner, employee, partner, affiliate or other participant in any

Competing Business, (b) assist others in engaging in any Competing Business in

the manner described in clause (a) above, (c) induce other employees of the

Company, PMT or any of their respective subsidiaries to terminate their

employment with the Company or any of their respective subsidiaries or to engage

in any Competing Business or (d) induce any customer, vendor or agent or any

other person or entity with which the Company or any subsidiary or affiliate

thereof has a business relationship, contractual or otherwise, to terminate or

alter such business relationship. This covenant is considered an integral part

of this Agreement. The foregoing restriction shall not apply to your ownership

of publicly traded securities which represent not more than 5% of the ownership

interests of the issuer.

<PAGE>

 

Mr. Don C. Orris

March 31, 1997

Page 8

 

                    (b)  You understand that the foregoing restrictions may

limit your ability to earn a livelihood in a business similar to the business of

the Company or any subsidiary or affiliate thereof, but you nevertheless believe

that you have received and will receive sufficient consideration and other

benefits as an employee of the Company and under the terms of this Agreement to

justify clearly such restrictions which, in any event (given your education,

skills and ability), you do not believe would prevent you from earning a living.

 

                    (c)  As used herein, the term "Competing Business" shall

mean any business conducted in any city or county in any state of the United

States which is engaged in (A) intermodal marketing or (B) providing flatbed

specialized hauling services utilizing owner-operators or agents; provided,

however, that an entity which has separate divisions or business units, one or

more of which are engaged in a business described in clause (A) or (B) hereof,

will not be deemed a Competing Business with respect to those portions of such

entity which are not engaged in a business described in clause (A) or (B) above

so long as the Employee's association with any such separate division or

business unit (fully taking into account his functions and the nature of his

work at such division or business unit) does not relate in any material respect

to such portion of such business which would be a Competing Business hereunder.

 

                    (d)  Notwithstanding anything contained in this Agreement to

the contrary, if, following the termination of your employment with the Company

and/or its subsidiaries, the Company fails to pay to you any sums due under

Section 9(b)(ii) hereof and (i) you have complied in all material respects with

all of the provisions of the last sentence of Section 9(b)(ii) and (ii) such

failure to pay continues for a period of fifteen (15) days following receipt by

the Company of written notice thereof, the restrictions contained in this

Section 11 shall terminate and be of no further force or effect. Any termination

of the restrictions contained in this Section 11 pursuant to this subsection (d)

shall not affect the Company's obligations under this Agreement or constitute a

waiver by you of any other rights or remedies you may have against the Company

for breach of any term hereof.

 

          12.  Inventions Assignment.  During the Employment Period, you shall

               ---------------------

promptly disclose, grant and assign to the Company for its sole use and benefit

any and all inventions, improvements, technical information and suggestions

reasonably

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Mr. Don C. Orris

March 31, 1997

Page 9

 

relating to the business of the Company, PMT or any of their respective

subsidiaries (collectively, the "Inventions") which you may develop or acquire

during the Employment Period (whether or not during usual working hours),

together with all patent applications, letters patent, copyrights and reissues

thereof that may at any time be granted for or with respect to the Inventions.

In connection therewith (a) you shall, at the expense of the Company (including

a reasonable payment (based on your last per diem earnings) for the time

involved if you are not then in the Company's employ or receiving severance

payments from the Company pursuant to Section 9(b)(ii)), promptly execute and

deliver such applications, assignments, descriptions and other instruments as

may be necessary or proper in the opinion of the Company to vest title to the

Inventions and any patent applications, patents, copyrights, reissues or other

proprietary rights related thereto in the Company and to enable it to obtain and

maintain the entire right and title thereto throughout the world; and (b) you

shall render to the Company, at its expense (including a reasonable payment

(based on your last per diem earnings) for the time involved if you are not then

in the Company's employ or receiving severance payments from the Company

pursuant to Section 9(b)(ii)), reasonable assistance as it may require in the

prosecution of applications for said patents, copyrights, reissues or other

proprietary rights, in the prosecution or defense of interference's which may be

declared involving any said applications, patents, copyrights or other

proprietary rights and in any litigation in which the Company may be involved

relating to the Inventions.

 

          13.  Assistance in Litigation.  At the request and expense of the

               ------------------------

Company (including a reasonable payment (based on your last per diem earnings)

for the time involved if you are not then in the Company's employ or receiving

severance payments from the Company pursuant to Section 9(b)(ii)) and upon

reasonable notice, you shall, at all times during and after the Employment

Period, furnish such information and assistance to the Company as it may

reasonably require in connection with any issue, claim or litigation in which

the Company may be involved. If such a request for assistance occurs after the

expiration of the Employment Period, then you will only be required to render

assistance to the Company to the extent that you can do so without materially

affecting your other business obligations.

 

          14.  Entire Agreement; Amendment and Waiver.  This agreement and the

               --------------------------------------

other writings referred to herein contain the entire agreement between the

parties hereto with respect to the

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Mr. Don C. Orris

March 31, 1997

Page 10

 

subject matter hereof and thereof and supersede any prior agreement between you

and the Company or any predecessor of the Company or any of their respective

affiliates (including, without limitation, that certain letter agreement dated

January 29, 1997, among you, Eos Partners, L.P., and the other parties thereto).

No waiver, amendment or modification of any provision of this Agreement shall be

effective unless in writing and signed by each party hereto. The waiver by

either party of a breach of any provision of this Agreement by the other party

shall not operate or be construed as a waiver of any subsequent breach by such

other party.

 

          15.  Notices.  All notices or other communications pursuant to this

               -------

Agreement shall be in writing and shall be deemed to be sufficient if delivered

personally, telecopied, sent by nationally-recognized, overnight courier or

mailed by registered or certified mail (return receipt requested), postage

prepaid, to the parties at the following addresses (or at such other address for

a party as shall be specified by like notice):

 

               (a)  if to the Company, to:

 

                         Pacific Motor Transport Company

                         10007 Oak Tree Court

                         Littleton, CO 80124

                         Attention:  President

                         Telecopier:  (303) 790-4685

                         Telephone:   (303) 799-1443

 

                         with a copy to:

 

                         Eos Partners, L.P.

                         320 Park Avenue

                         22nd Floor

                         New York, NY  10022

                         Attention:  Douglas R. Korn

                         Telecopier:  (212) 832-5805

                         Telephone:  (212) 832-5800

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Mr. Don C. Orris

March 31, 1997

Page 11

 

               (b)  if to you, to:

 

                         Mr. Don Orris

                         10007 Oak Tree Court

                         Littleton, Colorado  80124

                         Telecopier:  (303) 790-4685

                         Telephone:   (303) 790-4160

 

 

          16.  Headings.  The section headings in this Agreement are for

               --------

convenience only and shall not control or affect the meaning of any provision of

this Agreement.

 

          17.  Severability.  In the event that any provision of this

               ------------

Agreement is determined to be partially or wholly invalid, illegal or

unenforceable in any jurisdiction, then such provision shall, as to such

jurisdiction, be modified or restricted to the extent necessary to make such

provision valid, binding and enforceable, or if such provision cannot be

modified or restricted, then such provision shall, as to such jurisdiction, be

deemed to be excised from this Agreement; provided, however, that the binding

                                          --------  -------

effect and enforceability of the remaining provisions of this Agreement, to the

extent the economic benefits conferred upon the parties by virtue of this

Agreement remain substantially unimpaired, shall not be affected or impaired in

any manner, and any such invalidity, illegality or unenforceability with respect

to such provisions shall not invalidate or render unenforceable such provision

in any other jurisdiction.

 

          18.  Remedies.  You acknowledge and understand that the provisions

               --------

of this Agreement are of a special and unique nature, the loss of which cannot

be adequately compensated for in damages by an action at law, and thus, the

breach or threatened breach of the provisions of this Agreement would cause the

Company irreparable harm. You further acknowledge that in the event of a breach

of any of the covenants contained in paragraphs 10, 11, or 12, the Company shall

be entitled to immediate relief enjoining such violations in any court or before

any judicial body having jurisdiction over such a claim. All remedies hereunder

are cumulative, are in addition to any other remedies provided for by law and

may, to the extent permitted by law, be exercised concurrently or separately,

and the exercise of any one remedy shall not be deemed to be an election of such

remedy or to preclude the exercise of any other remedy.

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Mr. Don C. Orris

March 31, 1997

Page 12

 

          19.  Representation.  You hereby represent and warrant to the Company

               --------------

that (a) the execution, delivery and performance of this Agreement by you does

not breach, violate or cause a default under any agreement, contract or

instrument to which you are a party or any judgment, order or decree to which

you are subject and (b) you are not a party to or bound by any employment

agreement, consulting agreement, noncompete agreement, confidentiality agreement

or similar agreement with any other person or entity.

 

          20.  Benefits of Agreement; Assignment.  The terms and provisions of

               ---------------------------------

this Agreement shall be binding upon and inure to the benefit of the parties

hereto and their respective successors, assigns, representatives, heirs and

estate, as applicable. Anything contained herein to the contrary

notwithstanding, this Agreement shall not be assignable by any party hereto

without the consent of the other party hereto.

 

          21.  Counterparts.  This Agreement may be executed in any number of

               ------------

counterparts, and each such counter part shall be deemed to be an original

instrument, but all such counterparts together shall constitute but one

agreement.

 

          22.  Governing Law.  This Agreement shall be governed by and

               -------------

construed in accordance with the domestic laws of the State of California

without giving effect to any choice or conflict of law provision or rule

(whether of the State of California or any other jurisdiction) that would cause

the application of the laws of any jurisdiction other than the State of

California.

<PAGE>

 

Mr. Don C. Orris

March 31, 1997

Page 13

 

          23.  Mutual Waiver of Jury Trial.  BECAUSE DISPUTES ARISING IN

               ---------------------------

CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY

RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE

LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR

DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO

ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF

ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,

SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER

THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.

 

          If the above terms are satisfactory to you, please acknowledge our

agreement by signing the enclosed copy of this letter in the space provided

below and returning it to the undersigned.

 

                                   Very truly yours,

 

                                   PACIFIC MOTOR TRANSPORT COMPANY

 

 

                                   By:___________________________

                                      Name:

                                      Title:

 

 

 

Accepted and agreed to:

 

 

_____________________________

[Name]

<PAGE>