<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-23192
CELADON GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3361050
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9503 EAST 33RD STREET
ONE CELADON DRIVE
INDIANAPOLIS, IN 46236-4207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 972-7000
Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No ____
The number of shares outstanding of the Common Stock ($.033 par value) of the
Registrant as of the close of business on November 6, 1996 was 7,632,580.
<PAGE>
<PAGE>
CELADON GROUP, INC.
INDEX TO
SEPTEMBER 30, 1996 FORM 10-Q
<TABLE>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets at September 30, 1996
and June 30, 1996..............................................................3
Condensed consolidated statements of operations - For the three months
ended September 30, 1996 and 1995..............................................4
Condensed consolidated statements of cash flows - For the three months ended
September 30, 1996 and 1995....................................................5
Notes to condensed consolidated financial statements ..........................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..............................................13
PART II. OTHER INFORMATION
Item 5. Other..................................................................16
Item 6. Exhibits and Reports on Form 8-K.......................................16
</TABLE>
2
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
CELADON GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1996 1996
----- ----
<S> <C> <C>
A S S E T S
Current assets:
Cash and cash equivalents................................................................... $ 4,573 $ 5,246
Trade receivables, net of allowance......................................................... 31,385 33,642
Accounts receivable - other................................................................. 5.946 4,338
Prepaid expenses and other current assets................................................... 2,645 3,247
Tires in service ........................................................................... 3,169 2,814
Income tax recoverable...................................................................... 5,950 3,926
Assets held for resale...................................................................... 97 2,548
Deferred income tax assets ................................................................. 1,085 3,404
--------- ---------
Total current assets ................................................ 54,850 59,165
-------- --------
Property and equipment, at cost ................................................................. 102,609 95,003
Less accumulated depreciation and amortization.............................................. 23,654 22,715
-------- --------
Net property and equipment........................................................ 78,955 72,288
-------- --------
Deposits......................................................................................... 525 809
Tires in service ................................................................................ 2,675 2,234
Intangible assets................................................................................ 844 875
Goodwill, net of accumulated amortization........................................................ 4,777 4,980
Other assets..................................................................................... 2,014 1,570
--------- ---------
Total assets................................................................................ $144,640 $141,921
========= ========
L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
Current liabilities:
Accounts payable............................................................................ 7,386 8,707
Accrued expenses ........................................................................... 19,369 20,122
Bank borrowings and current maturities of long-term debt.................................... 4,406 4,029
Notes payable............................................................................... ---- 1,200
Current maturities of capital lease obligations............................................. 8,749 7,356
Income taxes payable ....................................................................... 219 527
Current maturities of ESOP loan............................................................. 160 185
-------- --------
Total current liabilities............................................................. 40,289 42,126
-------- --------
Long-term debt, net of current maturities ....................................................... 18,700 26,552
Capital lease obligations, net of current maturities............................................. 35,313 23,473
Deferred income tax liabilities ................................................................. 8,295 7,796
-------- --------
Total liabilities........................................................................... 102,597 99,947
-------- --------
Minority interest................................................................................ 12 12
Commitments and contingencies
Stockholders' equity:
Common stock, $.033 par value, authorized 12,000,000 shares; issued and
outstanding 7,750,580 shares at September 30, 1996 and
June 30, 1996 ............................................................................ 256 256
Additional paid-in capital.................................................................. 56,281 56,281
Retained earnings .......................................................................... (13,145) (14,035)
Equity adjustment for foreign currency translation.......................................... (341) (355)
-------- --------
43,051 42,147
Treasury stock, at cost, 118,000 shares and zero shares at September 30, 1996
and June 30, 1996, respectively (860) ---
Less:
Debt guarantee for ESOP.......................................................................... (160) (185)
-------- --------
Total stockholders' equity.................................................................. 42,031 41,962
-------- --------
Total liabilities and stockholders' equity.................................................. $144,640 $141,921
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<PAGE>
CELADON GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1996 1995
---- ----
<S> <C> <C>
Operating revenue................................................................... $46,192 $38,821
------- -------
Operating expenses:
Salaries, wages and employee benefits.......................................... 17,134 14,373
Fuel........................................................................... 7,483 5,841
Operating costs and supplies................................................... 2,888 2,516
Insurance and Claims........................................................... 1,656 1,117
Depreciation and amortization.................................................. 2,288 1,687
Rent and purchased transportation ............................................. 8,752 7,853
Professional and consulting fees............................................... 210 477
Communications and utilities................................................... 745 651
Permits, licenses and taxes .................................................. 1,058 991
Employee stock ownership plan contribution..................................... 34 25
(Gain) on sale of revenue equipment............................................ --- (546)
Selling expenses............................................................... 822 836
General and administrative..................................................... 656 512
------- -------
Total operating expenses................................................... 43,726 36,333
------- -------
Operating income ................................................................... 2,466 2,488
Other (income) expense:
Interest expense, net.......................................................... 981 860
Other (income) expense net..................................................... (9) 13
------- -------
Income from continuing operations before
income taxes................................................................ 1,494 1,615
Provision for income taxes..................................................... 604 1,049
------- -------
Income from continuing operations........................................... 890 566
Discontinued operations:
Loss from operations of freight forwarding
division (net of tax)....................................................... --- (186)
Income from operations of logistics
division (net of tax)....................................................... --- 236
------- -------
Income from discontinued operations (net of tax)............................... --- 50
------- -------
Net income.................................................................. $890 $616
======= =======
Earnings per Common Share:
Continuing operations.......................................................... $0.12 $0.07
Discontinued operations........................................................ --- 0.01
------- -------
Net income per share........................................................ $0.12 $0.08
======= ========
Weighted average number of common shares and
equivalents outstanding........................................................ 7,643 8,037
======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
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<PAGE>
CELADON GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1996 1995
---- ----
<S> <C> <C>
Continuing Operations:
Cash flows from operating activities:
Net income (loss) from continuing operations............................................ $ 890 $ 566
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization....................................................... 2,288 1,687
Provision for deferred income taxes................................................. 496 544
Provision for doubtful accounts..................................................... 106 30
Net (gain) loss on sale of property and equipment................................... --- (546)
Changes in assets and liabilities:
(Increase) decrease in trade receivables........................................ (265) (1,924)
(Increase) decrease in accounts receivable -- other............................. (178) 1,396
Increase in income tax recoverable.............................................. 193 ----
Increase in tires in service.................................................... (795) (327)
(Increase) decrease in prepaid expenses and other current assets............... 378 (65)
(Increase) decrease in other assets............................................. 248 (2,683)
Increase (decrease) in accounts payable and accrued expenses.................... (107) 2,597
Increase (decrease) in income taxes payable..................................... (198) 457
-------- ---------
Net cash provided by (used for) operating activities.................................. 3,056 1,732
-------- ---------
Cash flows from investing activities:
Purchase of property and equipment....................................................... (176) (2,182)
Proceeds on sale of property and equipment............................................... 6,211 1,485
(Increase) decrease in deposits.......................................................... 284 (245)
-------- ---------
Net cash provided by (used for) investing activities................................. 6,319 (942)
Cash flows from financing activities:
Proceeds from issuance of common stock................................................... --- 135
Purchase of common stock held in treasury................................................ (135) ---
Proceeds from bank borrowings and debt................................................... 65 1,318
Payments of bank borrowings and debt .................................................... (8,766) (108)
Principal payments under capital lease obligations....................................... (1,680) (1,899)
-------- ---------
Net cash provided by (used for) financing activities ................................. (10,516) (554)
--------- ----------
Net cash provided by (used for) continuing operations................................. (1,141) 236
--------- ----------
Discontinued Operations:
Income (loss) from operations, net of income taxes....................................... --- 50
Change in net operating assets........................................................... 468 (1,610)
-------- ---------
Operating activities..................................................................... 468 (1,560)
Investing activities..................................................................... --- (658)
Financing activities..................................................................... --- 1,047
-------- ---------
Net cash provided by (used for) discontinued operations............................... 468 (1,171)
Increase (decrease) in cash and cash equivalents......................................... (673) (935)
Cash and cash equivalents at beginning of year........................................... 5,246 1,809
-------- ---------
Cash and cash equivalents at end of year................................................. $4,573 $ 874
======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
<PAGE>
CELADON GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial reporting and the general instructions to Form 10-Q of
Regulation S-X. Accordingly, they do not include certain information and note
disclosures required by generally accepted accounting principles for annual
financial reporting and should be read in conjunction with the consolidated
financial statements and notes thereto of Celadon Group, Inc. (the "Company")
for the years ended June 30, 1996, 1995 and 1994.
The unaudited interim financial statements reflect all adjustments (all
of a normal recurring nature) which management considers necessary for a fair
presentation of the financial condition and results of operations for these
periods. The results of operations for the interim period are not necessarily
indicative of the results that may be reported for the full year.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
The condensed consolidated balance sheet at June 30, 1996 was derived
from the audited consolidated balance sheet at that date.
(2) SEGMENT AND GEOGRAPHICAL INFORMATION; SIGNIFICANT CUSTOMER
The Company's continuing operations consist of two divisions: truckload
and flatbed, and the Company generates revenue from its operations in the United
States and Mexico. Revenue from Chrysler accounts for a significant amount of
the Company's trucking revenue. During December, 1995, the Company's Board of
Directors adopted a plan to discontinue its freight forwarding business which
was previously reported as a separate business segment. In the fourth quarter of
fiscal year 1996, the Company also discontinued the operations of the logistics
operations which was previously reported as a separate business segment. The
Company has presented the results of these segments as discontinued
operations, as described in note 5.
6
<PAGE>
<PAGE>
CELADON GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1996
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Information as to the Company's continuing operations by division is summarized
below (in thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
--------------------------------
1996 1995
----- ----
<S> <C> <C>
Operating revenue:
Truckload.................................................. $41,206 $34,144
Flatbed .................................................. 4,986 4,677
------- -------
Total................................................ $46,192 $38,821
======= =======
Operating income:
Truckload.................................................. $2,771 $3,280
Flatbed ................................................... 192 137
------- -------
Total from operating divisions....................... 2,963 3,417
Corporate expenses......................................... 497 929
Interest expense........................................... 981 860
Other expense (income)..................................... (9) 13
------- -------
Income from continuing operations
before income taxes.................................. $ 1,494 $1,615
======= =======
Total assets:
Truckload.................................................. $113,045 $ 95,912
Flatbed ................................................... 6,947 6,782
-------- --------
Total from operating divisions....................... 119,992 102,694
Corporate.................................................. 7,217 2,593
Discontinued operations.................................... 17,431 54,898
-------- --------
Total................................................ $144,640 $160,185
======== ========
Capital expenditures (including capital leases):
Truckload.................................................. $15,101 $10,420
Flatbed ................................................... 13 ---
Corporate.................................................. 7 4
------- -------
Total................................................ $15,121 $10,424
======= =======
Depreciation and amortization:
Truckload.................................................. $2,210 $1,632
Flatbed ................................................... 60 60
Corporate.................................................. 18 5
------ ------
Total................................................ $2,288 $1,697
====== ======
</TABLE>
7
<PAGE>
<PAGE>
CELADON GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED STATEMENTS -- (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
Information as to the Company's continuing operations by geographic area is
summarized below (in thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1996 1995
---- ----
<S> <C> <C>
Operating revenue:
United States........................ $45,117 $37,737
Mexico (i)........................... 1,075 1,084
------- -------
Total ........................ $46,192 $38,821
======= =======
Income (loss) before income taxes:
United States........................ $1,507 $1,397
Mexico (i)........................... (13) 218
------- --------
Total ...................... $1,494 $1,615
======= ========
Total assets:
United States........................ $124,796 $103,637
Mexico (i)........................... 2,413 1,649
-------- --------
Total.......................... $127,209 $105,286
======== ========
</TABLE>
- ----------
(i) Relates to the Company's trucking operations in Mexico.
Significant Customer:
Revenue from Chrysler accounted for approximately 52% and 46% of the
Company's trucking revenue for the three months ended September 30, 1996 and
1995, respectively. The Company transports Chrysler after-market replacement
parts and accessories within the United States and Chrysler original equipment
automotive parts primarily between the United States and the Mexican border,
which accounted for 29% and 71%, respectively, of the Company's revenue from
Chrysler for the three months ended September 30, 1996 and 35% and 65%,
respectively, for the three months ended September 30, 1995. Chrysler business
is covered by two agreements, one of which covers the United States-Mexico
business and the other of which covers domestic business. The international
contract was extended for three years and now expires on December 31, 1999. The
contract applicable to domestic movements is being renegotiated. No other
customer accounted for more than 5% of the Company's trucking revenue during any
of its three most recent fiscal years.
8
<PAGE>
<PAGE>
CELADON GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1996
(UNAUDITED)
(3) INCOME TAXES
The Company's effective tax rate differs from the statutory federal
tax rate of 35% due to state income taxes and certain expenses which are not
deductible for income tax purposes. The effective tax rates for continuing
operations for the three months ending September 30, 1996 and 1995 were 40.4%
and 65.0%, respectively. The 1995 tax provision include additional tax expense
related to the non-deductible portion of expense allowances paid to drivers
which pay practice was discontinued by the Company in September, 1995.
(4) HEDGING ACTIVITIES, COMMITMENTS AND CONTINGENCIES
The Company, from time-to-time, enters into arrangements to protect
against fluctuations in the price of the fuel used by its trucks. As of
September 30, 1996, the Company had contracts to purchase for future delivery
approximately 35% of its fuel requirements through February, 1997. Contracts for
fuel delivery in the period March through July 1997 were canceled in the
September 1996 quarter and the Company realized a cancellation gain of $85
thousand. This gain was reflected as a reduction in fuel expense in the quarter.
Additionally, the Company periodically acquires exchange-traded petroleum
futures contracts and various commodity collar transactions. At September 30,
1996, the market value of outstanding transactions which extended through March
of 1997 approximated carrying cost and covered approximately 40% of the
Company's fuel requirements. Gains and losses on closed transactions, not
designated as hedges, are recognized when realized and in the September 1996
quarter resulted in a gain of $83 thousand. This gain was reflected as a
reduction of fuel expense. The current and future delivery prices of fuel are
monitored closely and transaction positions adjusted accordingly. Total
commitments are also monitored to ensure they will not exceed actual fuel
requirements in any period.
Standby letters of credit, not reflected in the accompanying condensed
consolidated financial statements, aggregated approximately $2,125,000 at
September 30, 1996.
The Company has outstanding commitments to purchase approximately $12
million of revenue equipment at September 30, 1996.
The Company has been assessed approximately $750 thousand by the State
of Texas for Interstate Motor Carrier Sales and Use Tax for the period from
April 1988 through June 1992. The Company disagrees with the State of Texas over
the method used by the state in computing such taxes and intends to vigorously
pursue all of its available remedies. On October 30, 1996, the Company paid $1.1
million under protest which enables the Company to pursue resolution of this
matter with the State of Texas Attorney General. The Company has accrued an
amount that management estimates is due based upon methods they believe are
appropriate. The Company believes that the ultimate resolution of this matter
will not have a material adverse effect on its consolidated financial position.
There are various claims, lawsuits and pending actions against the
Company and its subsidiaries incident to the operation of its business. The
Company believes many of these proceedings are covered in whole or in part by
insurance and that none of these matters will have a material adverse effect on
its financial position.
9
<PAGE>
<PAGE>
(5) DISCONTINUED OPERATIONS
During December, 1995 the Board of Directors of Celadon Group, Inc.
authorized the disposal of the Company's freight forwarding business. In
connection with the Company's plan of disposition effective February 1, 1996,
the U.S. customer list together with certain assets and liabilities of the
Company's U.S. freight forwarding business, operating under the name
Celadon/Jacky Maeder Company, were sold to the Harper Group, Inc.'s primary
operating subsidiary, Circle International, Inc. Pursuant to the terms of the
transaction, the total purchase price for these assets and liabilities will be
paid in cash and will equal the net revenue derived from such customer list
during the twelve-month period following February 1, 1996. The Harper Group,
Inc. made an initial down payment of $9.5 million at closing with the balance of
the purchase price to be paid in quarterly installments as earned by the Harper
Group, Inc. It is now estimated that there will be no additional payments by
Harper Group, Inc., to the Company. The remaining assets and liabilities of this
segment are in the process of liquidation.
In the fourth quarter of fiscal 1996, the Company disposed of the two
primary operating subsidiaries of the logistics segment. At that time, the
Company determined that it would discontinue offering logistics services as a
separate product line. In accordance with the terms of sale of the South
American warehousing, logistics and distribution business, the Company received
payment on October 3, 1996, of the $2.5 million promissory note issued by the
purchaser.
10
<PAGE>
<PAGE>
CELADON GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 30, 1996
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
At September 30, 1996 and June 30, 1996, assets and liabilities included in
the Company's consolidated balance sheet related to the discontinued operations
are as follows (in thousands):
<TABLE>
<CAPTION>
Freight Forwarding: September 30, June 30,
1996 1996
---- ----
<S> <C> <C>
Assets:
Cash.................................................... $ 3,643 $ 3,142
Accounts receivable (net of allowance).................. 6,174 8,436
Accounts receivable other............................... 2,235 2,558
Assets held for resale.................................. 97 69
Deferred income tax receivable.......................... 2,266 2,369
Prepaid expenses and other current assets............... 115 224
--------- --------
Total.............................................. $ 14,530 $ 16,798
========= ========
Liabilities and Equity:
Accounts payable........................................ $ 4,266 $ 4,805
Accrued expenses........................................ 4,865 6,146
Income taxes payable.................................... (11) 105
Deferred income tax assets.............................. --- (11)
Equity adjustment for foreign currency translation...... 22 25
--------- --------
Total.............................................. $ 9,142 $ 11,070
========= ========
Logistics:
Assets:
Cash..................................................... $ --- $ 33
Accounts receivable (net of allowances)................. 150 303
Accounts receivable other............................... 2,386 632
Assets held for sale.................................... --- 2,479(1)
Income tax - receivable................................. 329 329
Deferred income tax receivable.......................... 36 36
--------- ---------
Total............................................... $ 2,901 $ 3,812
========= =========
Liabilities and Equity:
Accrued expenses........................................ $ 68 $ 214
Income taxes payable.................................... 272 276
Deferred income taxes payable........................... 209 206
Equity adjustment for foreign currency translation...... --- (2)
--------- ---------
Total.............................................. $ 549 $ 694
========= ========
</TABLE>
- ---------------------
(1) Represents the net investment in Celsur Inc., the stock of which was
sold on July 3, 1996.
11
<PAGE>
<PAGE>
The disposals of the freight forwarding and logistics segments has
been accounted for as discontinued operations in accordance with Accounting
Principles Board Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." As such, prior
period financial statements have been restated to reflect the discontinuation of
these lines of business.
(6) COMMON STOCK
On October 18, 1996, the Company's Board of Directors ("the Board")
authorized the sale of up to 250,000 shares of the Company's Common Stock to the
Celadon Group, Inc. Employee Stock Purchase Plan. The Common Stock, par value
$0.33 per share, may be treasury shares or newly issued shares, at a price equal
to 85% of the fair market value of the shares as of the day of purchase.
On September 24, 1996, the Board extended to November 1, 1997 the
expiration date for the International Bancshares Corporation stock purchase
warrant issued pursuant to the Employee Stock Ownership Plan loan agreement.
(7) SUPPLEMENTAL CASH FLOW INFORMATION
During the three months ended September 30, 1996 and 1995, capital
lease obligations in the amount of $14.2 million and $8.4 million, respectively
were incurred in connection with the purchase of, or option to purchase revenue
equipment (including tires in service).
12
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1995
Revenue. Consolidated revenue from continuing operations of the Company
increased by $7.4 million, or 19%, to $46.2 million for the three months ended
September 30, 1996 (the "1996 period") from $38.8 million for the three months
ended September 30, 1995 (the "1995 period"). Revenue from the truckload
division increased by $7.1 million, or 21%, to $41.2 million in the 1996 period
from $34.1 million in the 1995 period, primarily as a result of an increase in
the demand for the Company's transportation services between the United States
and Mexico. The Company's flatbed division acquired in June, 1995 represented
$0.3 million of the increase in consolidated revenues. The number of tractors
operated by the Company's U.S. truckload operation in over-the-road service rose
to 1,203 at September 30, 1996 compared to 1,036 at September 30, 1995 in both
cases excluding 49 tractors operated by the Company's Mexican affiliate in both
periods.
Operating income. The truckload division operating income decreased by
$0.5 million, or 15%, to $2.7 million in the 1996 period from $3.3 million in
the 1995 period. The operating ratio for the truckload division, which is the
percentage of operating expenses to its revenue, increased to 93.3% in the 1996
period from 90.4% in the 1995 period. This increase was principally attributable
to a one time gain of approximately $0.5 million on the sale of revenue
equipment in the 1995 period and losses experienced in the Company's Mexican
affiliate in the 1996 period. Average fuel cost per gallon increased to $1.14 in
the 1996 period compared with $1.02 in the 1995. This cost increase is net of
realized gains of $188 thousand achieved in the Company's fuel price management
program or $0.029 per gallon consumed. Increases in the Company's equipment
fleet and associated costs particularly related to trailers, exceeded growth in
revenue also contributing to an increase in expense as a percentage of revenue.
The Company's flatbed division operating ratio, which is typically higher than
the Company's truckload division since its revenue is generated by
owner-operators which are generally more expensive as a percentage of revenue
than the use of Company owned equipment, decreased to 96.1% in the 1996 period
from 97.1% in the 1995 period. This improvement was primarily due to a decrease
in the flatbed division's operating expenses. Costs associated with the rental
of flatbed owner-operated equipment is classified as rent expense in the
consolidated statement of operations.
Corporate expenses decreased by $0.5 million to $0.4 million in the 1996
period from $0.9 million in the 1995 period primarily due to senior management
changes implemented at the end of the June 1996 quarter and decreased
professional fees.
Interest expense. Interest expense increased by $0.1 million, or 11%, to
$1.0 million in the 1996 period from $0.9 million in the 1995 period, as a
result of higher average outstanding borrowings, which was partially offset by
lower average interest rates.
Income taxes. The effective tax rates for the September 30, 1996 and
1995 periods were 40.4% and 65.0% respectively. The higher effective tax rate
during the 1995 period is principally due to additional tax expense related to
the non-deductible portion of expense allowances paid to drivers, which pay
practice was discontinued in September, 1995.
13
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements in fiscal 1997 have been
funding the acquisition of revenue equipment for the trucking division. These
requirements have been met primarily by equipment leasing arrangements. At
September 30, 1996, the Company had a credit facility of $35.0 million from its
banks, of which $22.0 million was utilized as outstanding borrowings, and $2.1
million was utilized for standby letters of credit.
The credit facilities bear interest at either a margin over LIBOR or the
bank's prime rate, at the option of the Company. The weighted average interest
rate charged on outstanding borrowings was 7.48% at September 30, 1996. The
standby letter of credit portion of the Company's facility collaterizes the
Company's obligations under insurance policies for liability coverage relating
to its trucking operations.
The trucking division has financed some of its capital requirements by
obtaining lease financing and notes payable on revenue equipment. At September
30, 1996, the Company had an aggregate of $44.1 million in such financing at
interest rates ranging from 6.0% to 11.5%, maturing at various dates through
2003. Of this amount, $8.8 million is due within one year.
As of September 30, 1996, the Company had on order revenue equipment
representing an aggregate capital commitment of $12 million. All of the new
equipment has been or will be financed using a combination of operating and
capital leases and the Company's credit facility.
The Company's accounts receivable balance relating to continuing
operations at September 30, 1996, increased $0.2 million to $25.1 million from
$24.9 million at June 30, 1996. The truckload division accounted for $0.7
million of the increase. The 1% increase in accounts receivable for the
truckload division reflects the 20% increase in revenues for fiscal 1996.
Effective September 19, 1996, the Company completed a sale/leaseback
transaction relating to its new headquarters facility in Indianapolis, Indiana.
The proceeds from the transaction were used to reduce by approximately $6
million the borrowings outstanding under its bank credit facility.
The Company purchases fuel contracts from time-to-time for a portion of
its projected fuel needs. At September 30, 1996, the Company had contracts to
purchase for future delivery approximately 35% of its fuel requirements. The
Company's fuel price management program has not significantly impacted the
Company's recent operating results and has not adversely impacted the Company's
liquidity.
On September 24, 1996, the Company's Board of Directors extended to
November 1, 1997, the expiration date for the International Bancshares
Corporation stock purchase warrant issued pursuant to the Employee Stock
Ownership Plan loan agreement.
Management believes that there are presently adequate sources of secured
equipment financing together with its existing credit facilities and cash flow
from operations to provide sufficient funds to meet the Company's anticipated
working capital requirements and fund the acquisition of tractors and trailers
presently on order. Additional growth in the tractor and trailer fleet beyond
the Company's existing orders will require additional sources of financing.
14
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<PAGE>
SEASONALITY
To date, the Company's revenues have not shown any significant seasonal
pattern. However, because the Company's trucking subsidiary's primary traffic
lane is between the Midwest United States and Mexico, a severe winter generally
may have an unfavorable impact upon the Company's results of operations.
INFLATION
Many of the Company's operating expenses are sensitive to the effects of
inflation, which could result in higher operating costs. The effects of
inflation on the Company's businesses during fiscal 1997 and 1996 generally were
not significant.
15
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. OTHER
On November 8, 1996, the Company solicited proxies for its annual
meeting of stockholders to be held at the New York City Athletic Club, 180
Central Park South, New York City, New York 10019 on Tuesday, December 17, 1996
at 10:00 AM (local time) for stockholders of record as of November 1, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
<TABLE>
<S> <C> <C>
(a) Exhibits
* Exhibit 10.8 - Motor Carrier Transportation Contract dated August 30, 1996 between Chrysler
Corporation and Celadon Group, Inc.
Exhibit 10.9 - Motor Carrier Transportation Agreement, effective as of October 1, 1993,
between Chrysler Motors Corporation and Celadon Trucking Services, Inc., as
amended. Amendment incorporated by reference to Exhibit 10.9 of Form 10-K
filed October 14, 1994.
Exhibit 10.41 - Consulting and Non-Competition Agreement dated July 3, 1996 between Leonard
R. Bennett and the Company
Exhibit 10.42 - Third amendment, dated September 13, 1996, to the $35,000,000 Credit
Agreement dated June 1, 1994 between Celadon Group, Inc., Celadon Trucking
Services, Inc. and Randy International, Ltd. and NBD Bank N.A. and the First
National Bank of Boston.
Exhibit 10.43 - Amendment dated July 3, 1996 to Stockholders Agreement dated October 8, 1992
between Leonard R. Bennett, Stephen Russell, Hanseatic Corporation and the
Company. Incorporated by reference to Exhibit 10.17 of Form 10-K filed
September 26, 1996.
Exhibit 10.44 - Agreement dated July 3, 1996 terminating Voting Agreements dated October 8,
1992 and October 6, 1986 between Leonard R. Bennett, Stephen Russell and the
Company.
Exhibit 11 - Computation of per share earnings
Exhibit 27 - Financial Data Schedule
(b) Form 8-K Reports on Form 8-K were listed in Form 10-K filed September 26, 1996.
</TABLE>
* Confidential treatment for portions of this Exhibit has been
requested pursuant to Rule 406 of the Securities Act of 1933, as
amended.
16
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CELADON GROUP, INC.
(Registrant)
Date: November 14, 1996
/s/ Stephen Russell
----------------------------------------
Stephen Russell, Chief Executive Officer
/s/ Don S. Snyder
----------------------------------------
Don S. Snyder, Executive Vice President
Chief Financial Officer
17
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<PAGE>
EXHIBIT 10.8
CHRYSLER
CORPORATION
MOTOR CARRIER
TRANSPORTATION
CONTRACT
CHRYSLER CORPORATION (CHRYSLER) WITH A
BUSINESS ADDRESS AT 38111 VAN DYKE, STERLING
HEIGHTS, MI 48312, HEREBY AGREES TO PURCHASE AND
Celadon Trucking Inc.
One Celadon Drive
9503 East 33rd Street
New York, N.Y. 10106
(CARRIER) AGREES TO SELL AND DELIVER THE SERVICES
SPECIFIED HEREIN IN ACCORDANCE WITH THE TERMS AND
CONDITIONS ON THE FACE AND REVERSE SIDE HEREOF AND
ANY NUMBERED ATTACHMENTS HERETO.
DESCRIPTION OF SERVICES
COMMODITIES: TRUCKLOAD TRANSPORTATION OF PARTS AND RACKS TO AND FROM CHRYSLER
MEXICO LOCATIONS
EFFECTIVE DATE: Jan. 1, 1997 TERMINATION DATE: Dec. 31, 1999 PAYMENT TERMS:
30 DAYS
ORIGIN DESTINATION RATE TRANSIT TIME
*Various *Various *Various *Various
*As specified in Attachments A & B and subsequent acceptance letters executed by
Chrysler and the Carrier.
Chrysler reserves the right to add or delete business in order to meet its
changing business needs.
This contract is designed to meet the distinct needs of Chrysler Corporation.
CARRIER CHRYSLER CORPORATION
By: /s/ Stephen Russell By: /s/ R.P.Y.
Date: 9/16/96 Date: 8/30/96
<PAGE>
<PAGE>
GENERAL TRANSPORTATION TERMS
MOTOR CARRIER
1. PERSONNEL AND EQUIPMENT Carrier will be deemed an independent contractor
to Chrysler and will provide all resources necessary to perform
transportation services. Carrier may subcontract transportation
services, subject to Chrysler's consent, individuals engaged by Carrier
will be considered employees or subcontractors of Carrier and will be
subject to discharge, discipline and control solely and exclusively by
Carrier.
2. COMMODITY LOSS AND DAMAGE Carrier's performance of transportation
services without loss or damage to Commodities is an essential
obligations of this Agreement, Carrier will meet the requirements and
objectives of all written programs, practices and procedures instituted
by Chrysler regarding the quality of transportation services. Carrier
is deemed to have care, control, custody and possession of Commodities
from the time they are tendered to the Carrier for transportation until
delivery to Chrysler or its consignee. During such period, Carrier
assumes full responsibility for any and all loss of or damage to
Commodities. Carrier will promptly act on all claims submitted by
Chrysler or its agent.
3. INSURANCE AND INDEMNIFICATION Carrier will furnish to Chrysler and
maintain in effect during the term of this Agreement, as its sole
expense, insurance in amounts and coverages satisfactory to Chrysler.
Such insurance will be primary to, and not excess over or contributory
with, any other valid, applicable and collectible insurance in force for
Chrysler. Except for Commodity loss the damage claims filed by Chrysler
or its agent that are governed by Section 2, Carrier will defend,
indemnify and hold harmless Chrysler, its parent corporation,
subsidiaries, officers, directors and employees, from and against any
and all claims, liabilities, losses, damages, penalties, fees,
settlements and expenses in connection with 1) injury to or the death of
any person, 2) damage to or loss of any property of any person, or 3)
the violation of or non-compliance with any law or regulation, to the
extent such claims, liabilities, losses, damages, penalties, fees or
expenses result from or arise out of any act or omission of the
indemnifying party, or its employees or subcontractors, in connection
with the performance of transportation services.
4. COMPLIANCE WITH REGULATIONS Carrier will obtain, at its own expense, all
licenses, permits and approvals required under any applicable
governmental statute or regulation for the transportation of
Commodities. Carrier will obey all applicable governmental laws and
regulations connected with the transportation of Commodities.
5. FORCE MAJEURE The obligation of Carrier to furnish and of Chrysler to
use transportation services will be temporarily suspended during any
period in which either of the parties is unable to comply with this
Agreement because of fire, flood, civil commotion, closing of public
highways, government interference or regulations, or any other events
similar to the foregoing that are beyond the reasonable control of, and
are not due to the negligence of, the party claiming force majeure. The
parties will make all reasonable efforts to continue to meet their
obligations for the duration of the force majeure. Chrysler will have
the right to use other transportation services during the period of
force majeure, and any shipments made on alternate carriers during any
<PAGE>
<PAGE>
Carrier declared force majeure will be counted toward Chrysler's volume
obligation, if any, to Carrier.
6. PRECEDENCE OVER APPLICABLE TARIFFS To the extent permitted by applicable
laws and regulations, the terms of this Agreement will prevail over any
rules, regulations, tariffs, tariff circulars and terms and conditions
of bills of lading regarding transportation of Commodities.
7. DEFAULT, CURE AND TERMINATION In the event that Carrier fails to perform
any of its obligations herein, Chrysler will give the Carrier written
notice specifying the nature of the default and demanding cure
satisfactory to Chrysler within thirty (30) days following receipt of
the demand to cure. Failing such cure, Chrysler will have the right: 1)
to cease tendering all or a portion of Commodities for future shipments,
or 2) to terminate the Agreement. If Carrier's default is related to
transit times, then Chrysler may also, at any time and without written
notice as provided above, use alternate carriers to transport all or a
portion of Commodities. Carrier recognizes that Commodities must be
shipped on a timely basis and without the loss or damage in order for
Chrysler to avoid loss and expense as a consequence of plant shutdowns,
schedule realignments, off-line repairs or the necessity of procuring
higher-cost alternative transportation.
8. INSPECTION AND AUDIT Chrysler may, on reasonable notice, inspect any
Commodity and any equipment used to handle and transport Commodities
wherever located. Chrysler may also, on reasonable notice, inspect
Carrier's records relating to transportation of Commodities. Chrysler
may, at any time and with notice to Carrier, remove Commodities from
Carrier's care, possession, custody or control.
9. MISCELLANEOUS CLAUSES This Agreement will be binding on permitted
successors and assigns. The failure to exercise any of the terms of this
Agreement will not be construed as a continuing waiver of such term.
Neither this Agreement nor any of the duties herein may be assigned or
delegated without the written permission of the other party.
Carrier will notify Chrysler of all relevant information regarding any
actual or potential labor dispute delaying or threatening to delay
timely performance of this Agreement.
If any provision of this Agreement is held to be legally invalid or
unenforceable, such provision will be deemed omitted and all other
provisions of this Agreement will continue in force.
Carrier will not, without the prior written consent of Chrysler,
advertise or publish in any manner the rates established herein or use
the name or trademarks of Chrysler, its products or any of its
associated companies.
All notices or communications which are required to be given under this
Agreement will be sent by regular or certified mail, postage prepaid, to
the other party at the business address specified in this Agreement.
The terms of this Agreement will be governed by the laws of the State of
Michigan (without regard to its conflicts of laws rules), except to the
extent preempted by federal law.
10. ENTIRE AGREEMENT This Agreement, which consists of the Transportation
Contract, General Transportation Terms and other documents referred to
herein, constitutes the complete and entire agreement between Carrier
and Chrysler for the transportation services defined herein and
<PAGE>
<PAGE>
supersedes all prior and contemporaneous proposals, representations,
statements, agreements and promises, express or implied, with respect
thereto. This Agreement may be amended only in a writing signed by the
parties.
<PAGE>
<PAGE>
Chrysler Corporation (Chrysler) Chrysler Corporation
Auburn Hills, Michigan Motor Carrier Transportation
Contract
Hereby agrees to purchase and
Celadon Group
One Celadon Drive
9503 East 33rd Street
Indianapolis, Indiana 46236
(Carrier) agrees to sell and deliver the services
specified herein in accordance with the terms and
conditions on the fact and reverse side hereof and
any numbered attachments hereto.
CONTRACT NAME: Chrysler/Celadon CDM Truckload Contract
DESCRIPTION OF SERVICES
COMMODITIES: Auto Parts and Shipping Devices
EFFECTIVE DATE: 1/1/97 TERMINATION DATE: 12/31/99 PAYMENT TERMS
CONTRACT AMENDMENT AND EXTENSION
ORIGIN DESTINATION RATE TRANSIT TIME
Various Various See ATTACHMENT B See ATTACHMENT B
TO AMEND ATTACHMENTS A & B OF THE CHRYSLER/CELADON CDM TRUCKLOAD CONTRACT.
REVISE CONTRACT AS FOLLOWS:
1. CELADON shall [*]. Rates [*] the contract period.
* CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
2. CELADON reserves the right to review [*] selected rates to the United
States from Laredo which may be canceled or adjusted by mutual agreement
between the parties after January 1, 1998.
* CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
3. Southbound 53' trailers transloaded in Laredo shall be subject to a
charge to CHRYSLER [CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION
HAS BEEN REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933,
AND SUCH INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION.]
4. CELADON will commit to pick up [*] of all chrysler Southbound parts
shipments offered to CELADON which are described in the lanes shown in
ATTACHMENT B and in subsequent specific service/rate letters of
Agreement.
<PAGE>
<PAGE>
* CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
5. CELADON will pick up the Southbound parts shipments within the Response
Time Schedule shown in ATTACHMENT C.
6. CELADON will transport the Southbound parts shipments in accordance with
the transit times show in ATTACHMENT B, as measured from time of pick
up.
7. Programs developed and mutually implemented to achieve savings for
CELADON will be [*] CELADON and CHRYSLER. [*]
* CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
8. Celadon will commit to haul Northbound rack shipments at a minimum
weekly rate of [*] of the Southbound volume. The service level on these
Northbound shipments will be as follows:
Hot Racks - (as identified by Hastings or Chrysler Logistics) will move
with the same transit time as auto parts.
Other Racks - not designated as "hot", or in excess of [*] will move at
auto parts transit times, [*].
* CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
Celadon will provide weekly reports showing the actual NB/SB load ratio,
and our service against these transit time requirements. With prior
approval from Chrysler, Celadon may utilize intermodal service to avoid
NB Laredo shipments backlogs.
9. Both parties agree to negotiate amendments to any or all of the above
provisions in the event of force majeure or other significant and
unexpected economic fluctuations.
10. This contract will be in effect until December 31, 1999.
Carrier: Chrysler Corporation
BY: /s/ Michael J. Hodson BY: /s/ T.W.G.
<PAGE>
<PAGE>
One Celadon Drive
9503 E. 33rd St.
Indianapolis, IN 46236
Phone: (317) 972-7000 - Fax (317) 890-9401
CELADON TRUCKING SERVICES, INC.
CONTRACT RATES FOR:
Chrysler Corporation
800 Chrysler Drive East
Auburn Hills, MI 48326
EFFECTIVE: 8/20/96 ATTACHMENT "B"
ISSUED: CONTRACT RATES ITEM # CR0001
RATE SPECIAL TRANSIT
FROM: TO: (CPM) MILES TOTAL NOTES TIME
[CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION HAS
BEEN FILED SEPARATELY WITH THE COMMISSION.]
<PAGE>
<PAGE>
ATTACHMENT C
Celadon Response Time Schedule
[CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION HAS
BEEN FILED SEPARATELY WITH THE COMMISSION.]
<PAGE>
<PAGE>
EXHIBIT 10.9
CHRYSLER
CORPORATION
MOTOR CARRIER
TRANSPORTATION
CONTRACT
CHRYSLER CORPORATION (CHRYSLER) WITH A
BUSINESS ADDRESS AT 38111 VAN DYKE, STERLING
HEIGHTS, MI 48312, HEREBY AGREES TO PURCHASE AND
Celadon Trucking Inc.
888 Seventh Ave.
New York, N.Y. 10106
(CARRIER) AGREES TO SELL AND DELIVER THE SERVICES
SPECIFIED HEREIN IN ACCORDANCE WITH THE TERMS AND
CONDITIONS ON THE FACE AND REVERSE SIDE HEREOF AND
ANY NUMBERED ATTACHMENTS HERETO.
DESCRIPTION OF SERVICES
COMMODITIES: Truckload Transportation Services
EFFECTIVE DATE: Oct. 1, 1993 TERMINATION DATE: Sept. 30, 1996 PAYMENT
TERMS: 30 Days
ORIGIN DESTINATION RATE TRANSIT TIME
*Various *Various *Various *Various
*As specified in the rate acceptance letter(s) executed by Chrysler and the
Carrier.
Lanes awarded with this contract are to remain firm in price for a minimum
period extending thru January 1, 1995 as specified on the attachment. Business
awarded after the contract effective date will be as specified in the individual
rate acceptance letters.
Chrysler reserves the right to add or delete business in order to meet its
changing business needs.
CARRIER CHRYSLER CORPORATION
By: /s/ Leonard Bennett By: /s/ John A. Ryda
Date: 9/23/93 Date: 9/15/93
<PAGE>
<PAGE>
GENERAL TRANSPORTATION TERMS
MOTOR CARRIER
1. PERSONNEL AND EQUIPMENT Carrier will be deemed an independent contractor
to Chrysler and will provide all resources necessary to perform
transportation services. Carrier may subcontract transportation
services, subject to Chrysler's consent, individuals engaged by Carrier
will be considered employees or subcontractors of Carrier and will be
subject to discharge, discipline and control solely and exclusively by
Carrier.
2. COMMODITY LOSS AND DAMAGE Carrier's performance of transportation
services without loss or damage to Commodities is an essential
obligations of this Agreement, Carrier will meet the requirements and
objectives of all written programs, practices and procedures instituted
by Chrysler regarding the quality of transportation services. Carrier
is deemed to have care, control, custody and possession of Commodities
from the time they are tendered to the Carrier for transportation until
delivery to Chrysler or its consignee. During such period, Carrier
assumes full responsibility for any and all loss of or damage to
Commodities. Carrier will promptly act on all claims submitted by
chrysler or its agent.
3. INSURANCE AND INDEMNIFICATION Carrier will furnish to Chrysler and
maintain in effect during the term of this Agreement, as its sole
expense, insurance in amounts and coverages satisfactory to Chrysler.
Such insurance will be primary to, and not excess over or contributory
with, any other valid, applicable and collectible insurance in force for
Chrysler. Except for Commodity loss the damage claims filed by Chrysler
or its agent that are governed by Section 2, Carrier will defend,
indemnify and hold harmless Chrysler, its parent corporation,
subsidiaries, officers, directors and employees, from and against any
and all claims, liabilities, losses, damages, penalties, fees,
settlements and expenses in connection with 1) injury to or the death of
any person, 2) damage to or loss of any property of any person, or 3)
the violation of or non-compliance with any law or regulation, to the
extent such claims, liabilities, losses, damages, penalties, fees or
expenses result from or arise out of any act or omission of the
indemnifying party, or its employees or subcontractors, in connection
with the performance of transportation services.
4. COMPLIANCE WITH REGULATIONS Carrier will obtain, at its own expense, all
licenses, permits and approvals required under any applicable
governmental statute or regulation for the transportation of
Commodities. Carrier will obey all applicable governmental laws and
regulations connected with the transportation of Commodities.
5. FORCE MAJEURE The obligation of Carrier to furnish and of Chrysler to
use transportation services will be temporarily suspended during any
period in which either of the parties is unable to comply with this
Agreement because of fire, flood, civil commotion, closing of public
highways, government interference or regulations, or any other events
similar to the foregoing that are beyond the reasonable control of, and
are not due to the negligence of, the party claiming force majeure. The
parties will make all reasonable efforts to continue to meet their
obligations for the duration of the force majeure. Chrysler will have
the right to use other transportation services during the period of
force majeure, and any shipments made on alternate carriers during any
<PAGE>
<PAGE>
Carrier declared force majeure will be counted toward Chrysler's volume
obligation, if any, to Carrier.
6. PRECEDENCE OVER APPLICABLE TARIFFS To the extent permitted by applicable
laws and regulations, the terms of this Agreement will prevail over any
rules, regulations, tariffs, tariff circulars and terms and conditions
of bills of lading regarding transportation of Commodities.
7. DEFAULT, CURE AND TERMINATION In the event that Carrier fails to perform
any of its obligations herein, Chrysler will give the Carrier written
notice specifying the nature of the default and demanding cure
satisfactory to Chrysler within thirty (30) days following receipt of
the demand to cure. Failing such cure, Chrysler will have the right: 1)
to cease tendering all or a portion of Commodities for future shipments,
or 2) to terminate the Agreement. If Carrier's default is related to
transit times, then Chrysler may also, at any time and without written
notice as provided above, use alternate carriers to transport all or a
portion of Commodities. Carrier recognizes that Commodities must be
shipped on a timely basis and without the loss or damage in order for
Chrysler to avoid loss and expense as a consequence of plant shutdowns,
schedule realignments, off-line repairs or the necessity of procuring
higher-cost alternative transportation.
8. INSPECTION AND AUDIT Chrysler may, on reasonable notice, inspect any
Commodity and any equipment used to handle and transport Commodities
wherever located. Chrysler may also, on reasonable notice, inspect
Carrier's records relating to transportation of Commodities. Chrysler
may, at any time and with notice to Carrier, remove Commodities from
Carrier's care, possession, custody or control.
9. MISCELLANEOUS CLAUSES This Agreement will be binding on permitted
successors and assigns. The failure to exercise any of the terms of this
Agreement will not be construed as a continuing waiver of such term.
Neither this Agreement nor any of the duties herein may be assigned or
delegated without the written permission of the other party.
Carrier will notify Chrysler of all relevant information regarding any
actual or potential labor dispute delaying or threatening to delay
timely performance of this Agreement.
If any provision of this Agreement is held to be legally invalid or
unenforceable, such provision will be deemed omitted and all other
provisions of this Agreement will continue in force.
Carrier will not, without the prior written consent of Chrysler,
advertise or publish in any manner the rates established herein or use
the name or trademarks of Chrysler, its products or any of its
associated companies.
All notices or communications which are required to be given under this
Agreement will be sent by regular or certified mail, postage prepaid, to
the other party at the business address specified in this Agreement.
The terms of this Agreement will be governed by the laws of the State of
Michigan (without regard to its conflicts of laws rules), except to the
extent preempted by federal law.
10. ENTIRE AGREEMENT This Agreement, which consists of the Transportation
Contract, General Transportation Terms and other documents referred to
herein, constitutes the complete and entire agreement between Carrier
and Chrysler for the transportation services defined herein and
<PAGE>
<PAGE>
supersedes all prior and contemporaneous proposals, representations,
statements, agreements and promises, express or implied, with respect
thereto. This Agreement may be amended only in a writing signed by the
parties.
<PAGE>
<PAGE>
CHRYSLER TRUCKLOAD AWARD - EFF. 10/01/93
PLANT SUPPLIER SUPPLIER TYPE I/B O/B TRANS SHPT/ RACK
SCAC CODE CODE NAME ST. CITY MODE RATE RATE HRS. HRS. RET.
[CONFIDENTIAL TREATMENT FOR SUCH OMITTED INFORMATION HAS BEEN REQUESTED
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AND SUCH INFORMATION HAS
BEEN FILED SEPARATELY WITH THE COMMISSION.]
CARRIER APPROVAL BY: ____________________ DATE: _______ CHRYSLER APPROVAL
BY: /s/ John A. Ryda DATE: 9-15-93
<PAGE>
<PAGE>
Exhibit 10.41
CONSULTING AND NON-COMPETITION AGREEMENT
This CONSULTING AND NON-COMPETITION AGREEMENT (this "Agreement"),
is made as of the 3rd day of July, 1996, between Celadon Group, Inc., a Delaware
corporation (the "Company"), on the one hand, and Leonard R. Bennett (the
"Consultant"), on the other hand.
W I T N E S S E T H:
WHEREAS, prior to the date hereof the Consultant has served as a
member of the Board of Directors, the President, the Chief Operating Officer and
an employee of the Company and as such has provided services to the Company that
were both critical and integral to its operations; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Consultant is resigning from his positions as a director, officer
and employee of the Company; and
WHEREAS, the Company desires to formally engage the Consultant as
a consultant and adviser in connection with the Company's business operations,
and the Consultant desires to accept such engagement, upon the terms and subject
to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereto hereby agree
as follows:
SECTION 1. Engagement. The Company hereby engages the Consultant
as a consultant and adviser in connection with the Company's business
operations, and the Consultant hereby accepts such engagement, upon the terms
and subject to the conditions hereinafter set forth.
SECTION 2. Term. The services of the Consultant hereunder shall
commence as of the date hereof and, unless sooner terminated in the manner as
hereinafter provided, shall continue thereafter until the third anniversary of
the date hereof.
SECTION 3. Duties of the Consultant. During the term of his
engagement hereunder, the Consultant shall (a) perform such duties and serve the
Company to the best of his ability at such time and place and shall devote such
working time and attention to his engagement hereunder as the Consultant and the
Company shall mutually and reasonably deem necessary; provided, however, that in
no event shall the Consultant be required to travel to locations other than
Indianapolis, Indiana or New York, New York in connection with his obligations
hereunder, and (b) perform such duties and services as may reasonably be
required of him by the Board of Directors of the Company in connection with the
Company's business operations, it being understood by the parties hereto that
the Consultant shall not be required to devote more than three full business
days per month during the term hereof to the performance of his obligations
hereunder. The Consultant shall travel to the locations referenced in this
Section 3 in connection with the performance of his obligations hereunder, at
the request and expense of the Company, provided the Company notifies the
Consultant of the need therefor at least five business days in advance of any
such scheduled travel date.
SECTION 4. Compensation and Set-Off Rights. (a) As of the date
hereof and during the term of his engagement hereunder, the Company shall pay
to the Consultant as compensation for the Consultant's services hereunder and
<PAGE>
<PAGE>
for the Consultant's agreements under Section 9 hereof, a fee of $250,000 per
year, payable bi-weekly or at such other intervals as may be agreed to in
writing by the Consultant and the Company.
(b) In addition to the fee referred to in Section 4(a)
hereof, the Company shall pay to the Consultant as an additional fee for his
services hereunder an amount equal to and payable concurrently with the bonus,
if any, paid to Stephen Russell, the Chairman of the Board of Directors and
Chief Executive Officer of the Company, for the Company's 1996 fiscal year.
(c) The Company may set-off and otherwise apply payments
due pursuant to Section 4(a) and (b) hereof against monies which are past due
and owing, following the expiration of all applicable notice and cure periods,
from the Consultant to the Company or its subsidiaries pursuant to the terms of
that certain Agreement, dated as of even date herewith, between Celadon
Logistics Inc., a Delaware corporation, and the Consultant (a "Set-off
Payment"). In the event that a court having proper jurisdiction determines that
a Set-off Payment was not due and owing in whole or in part to the Company or
the applicable subsidiary, the Company shall promptly reimburse such amount to
the Consultant, with interest thereon at a rate of 12% per annum based on the
number of days elapsed from and including the date of such Set-off Payment
through and including the date of the reimbursement payment.
SECTION 5. Benefits; Stock Options and Expenses. (a) Except as
otherwise provided in Section 6 hereof, until the earliest of (x) a termination
of the Consultant's engagement hereunder by the Company for "cause" pursuant to
Section 8(a) hereof, if any, (y) a voluntary termination of the Consultant's
engagement hereunder by the Consultant (excluding a termination as a result of
his death or permanent disability), or (z) the third anniversary of the date
hereof, the Company shall where applicable pay for and shall otherwise provide
or cause to be provided to the Consultant the following benefits:
(i) A non-accountable benefits allowance in the amount of
$1,533 per month, to be paid simultaneously with the delivery of the first
bi-weekly check of each month pursuant to Section 4(a) hereof.
(ii) Continuation of premium payments on the disability
insurance policy listed on Exhibit A hereto which was maintained by the Company
with respect to the Consultant immediately prior to the date hereof.
(iii) Continuation of premium payments, in the manner of
payment set forth on Exhibit A hereto, on the life insurance policies listed on
Exhibit A hereto which were maintained by the Company with respect to the
Consultant immediately prior to the date hereof.
(b) The Company hereby represents and warrants to the Consultant
that attached hereto as Exhibit B is a list of all stock options relating to the
Company's capital stock granted to the Consultant prior to the date hereof
(collectively, the "Stock Options"). Notwithstanding anything to the contrary
contained in any stock option plan or agreement relating to the Stock Options
(collectively, the "Option Documents"), the Company shall cause all such Stock
Options to be exercisable by the Consultant until the earlier of (x) a
termination of the Consultant's engagement hereunder by the Company for "cause"
pursuant to Section 8(a) hereof, if any, or (y) the third anniversary of the
date hereof, in each case in accordance with the terms of the applicable Option
Documents, except that the expiration of this Agreement on the third anniversary
of the date hereof shall be deemed a termination of the Consultant's employment
with the Company for purposes of the Option Documents. The Company shall
indemnify and hold the Consultant, his heirs, executors, administrators,
personal representatives, successors and assigns harmless from
<PAGE>
<PAGE>
and against any and all losses, liabilities, damages and expenses (including
reasonable attorneys' fees and expenses) resulting from any breach by the
Company of its representations, warranties or obligations pursuant to this
Section 5(b).
(c) The Company shall reimburse the Consultant for all reasonable
out-of-pocket expenses incurred by the Consultant with the prior approval of the
Company in connection with the performance of the Consultant's obligations
hereunder, promptly following the Consultant's submission to the Company of
invoices therefor, except that such prior approval shall not be required for
reimbursement of all reasonable travel expenses incurred by the Consultant where
the Company has required such travel of the Consultant in accordance with the
terms hereof.
(d) Unless this Agreement is terminated upon the death of the
Consultant, until the earliest of (x) a termination of the Consultant's
engagement hereunder by the Company for "cause" pursuant to Section 8(a) hereof,
if any, (y) a voluntary termination of the Consultant's engagement hereunder by
the Consultant (excluding a termination as a result of his death or permanent
disability), or (z) the third anniversary of the date hereof, the Consultant
shall pay to the Company the then cash value of both of the "split whole life"
insurance policies listed on Exhibit A hereto and the Company shall execute and
deliver and take any and all actions necessary to have the Company removed as a
collateral beneficiary under each of the insurance policies listed on Exhibit A
hereto.
SECTION 6. Death or Permanent Disability. In the event of the
death or permanent disability (as defined below) of the Consultant during the
term of his engagement hereunder, this Agreement shall thereupon automatically
terminate and except as otherwise provided in Section 5(b) hereof, the parties
shall have no further obligations hereunder. For purposes of this Section 6,
"permanent disability" shall mean any physical or mental disability or
incapacity, as reasonably determined in good faith by a physician, mutually
acceptable to the Company and the Consultant or his personal representatives,
which permanently renders the Consultant incapable of performing the services
required of him pursuant to the terms hereof. If the parties are unable to
promptly select a mutually acceptable physician, either party may request that a
physician be selected for purposes of this Section 6, by the American
Arbitration Association. The Company shall pay all fees and other costs,
including the fees, if any, of the American Arbitration Association, of any
medical examinations required for purposes of this Section 6.
SECTION 7. Releases. (a) The Consultant, on behalf of himself and
anyone claiming through him including, but not limited to, his past, present and
future spouses, family members, relatives, agents, attorneys, representatives,
heirs, executors and administrators, and the predecessors, successors and
assigns of each of them, hereby releases and agrees not to sue the Company or
any of its divisions, subsidiaries, affiliates, other related entities (whether
or not such entities are wholly owned) or the officers, directors, agents,
attorneys or representatives thereof, or the predecessors, successors or assigns
of each of them (hereinafter jointly referred to as the "Released Parties"),
with respect to any and all known or unknown claims which the Consultant now
has, has ever had, or may in the future have, against any of the Released
Parties for or related in anyway to anything occurring from the beginning of
time up to and including the date hereof, including without limiting the
generality of the foregoing, any and all claims which in any way result from,
arise out of, or relate to, the Consultant's employment by the Company or the
termination of such employment, including, but not limited to, any and all
claims for severance or termination payments under any agreement between the
Consultant and the Company or any program or arrangement of the Company or any
claims that could have been asserted by the Consultant or on
<PAGE>
<PAGE>
his behalf against any of the Released Parties in any federal, state or local
court, commission, department or agency under any fair employment, contract or
tort law, or any other federal, state or local law, regulation or ordinance,
including, without limitation, Title VII of the Civil Rights Act of 1964, the
Employee Retirement Income Security Act of 1974, as amended, the Americans with
Disabilities Act or the Age Discrimination in Employment Act, or under any
compensation, bonus, severance, retirement or other benefit plan; provided,
however, that nothing contained in this Section 7 (a) shall apply to, or release
the Company from, any obligations (i) contained in this Agreement, (ii)
contained in the Stock Purchase Agreement, dated of even date herewith, between
the Consultant and Celadon Logistics Inc., a Delaware corporation, and the
agreements, documents and instruments contemplated thereby, (iii) contained in
the Amendment to Country Club Membership Agreement, dated of even date herewith
(the "Amendment to Country Club Membership Agreement"), among the Company, the
Consultant and Stephen Russell, or (iv) to indemnify the Consultant with respect
to matters occurring prior to the date hereof pursuant to the Company's
Certificate of Incorporation or Bylaws or insurance policies maintained by the
Company with respect thereto. The Consultant expressly represents and warrants
that he has not transferred or assigned any rights or causes of action of the
nature referred to in this Section 7(a) that he might have against any of the
Released Parties.
(b) The Company, on behalf of itself and anyone claiming through
it including, but not limited to, its officers, directors, agents, attorneys,
representatives, heirs, successors and assigns, and the predecessors, successors
and assigns of each of them, hereby releases and agrees not to sue the
Consultant, his family members, relatives, agents, attorneys, representatives,
heirs, executors and administrators, or the predecessors, successors or assigns
of each of them (hereinafter jointly referred to as the "Consultant Released
Parties"), with respect to any and all known or unknown claims which the Company
now has, has ever had, or may in the future have, against any of the Consultant
Released Parties for or related in anyway to anything occurring from the
beginning of time up to and including the date hereof, including without
limiting the generality of the foregoing, any and all claims which in any way
result from, arise out of, or relate to, the Consultant's employment by or
directorship with or offices held with the Company, including, but not limited
to, any and all claims for payments by the Consultant under any agreement
between the Consultant and the Company or any claims that could have been
asserted by the Company or on its behalf against any of the Consultant Released
Parties in any federal, state or local court, commission, department or agency
under any federal, state or local law, regulation or ordinance; provided,
however, that nothing contained in this Section 7(b) shall apply to, or release
the Consultant from, any obligations (i) contained in this Agreement, (ii)
contained in the Agreement, dated of even date herewith between the Consultant
and Celadon Logistics Inc., a Delaware corporation, and the agreements,
documents and instruments contemplated thereby, (iii) contained in the Amendment
to Country Club Membership Agreement, or (iv) based on acts of fraud or
violations of law committed by the Consultant. The Company expressly represents
and warrants that it has not transferred or assigned any rights or causes of
action of the nature referred to in this Section 7(b) that it might have against
any of the Consultant Released Parties.
SECTION 8. Termination. (a) The Consultant's engagement
hereunder may be terminated by the Company at any time if the Consultant shall
commit any of the following acts (such termination being for "cause"):
(i) The Board of Directors of the Company shall have
reasonably determined in good faith that the Consultant has committed an act of
fraud, theft or dishonesty against the Company; or
<PAGE>
<PAGE>
(ii) The Consultant shall be convicted of (or plead nolo
contendere to) any felony.
In the event the Company elects to terminate the engagement of the Consultant
for "cause" pursuant to this Section 8(a), the Board of Directors of the Company
shall send written notice to the Consultant terminating such engagement and
describing the basis for such termination; and thereupon the Company shall have
no further obligations under this Agreement to the Consultant, and the
Consultant shall have the obligations set forth in Section 9 hereof.
(b) Except as otherwise expressly provided in Section 6 or
Section 8(a) hereof, in the event the Company terminates the Consultant's
engagement hereunder for any other reason, the Company shall be obligated to
promptly pay in a lump sum payment to the Consultant the full amount of the
remaining payments pursuant to Sections 4(a) and (b) hereof and the Consultant
shall be entitled to receive all of the rights, payments and benefits provided
for in Section 5 hereof until the third anniversary of the date hereof.
SECTION 9. Non-Competition Covenants and Confidentiality. (a)
Provided that the Company is not in default to the Consultant with respect to
the Company's obligations under this Agreement (which default remains uncured
for ten days after notice thereof from the Consultant to the Company), the
Consultant shall not, directly or indirectly, do any of the following:
(i) own, manage, operate, control, or participate in the
ownership, management, operation or control of or be employed or engaged by or
otherwise affiliated or associated in any manner with, any other corporation,
partnership, proprietorship, firm, association, or other business entity which
is principally engaged in the business of providing full truckload trucking
services (w) within any of the United States, Canada or Mexico, (x) between the
United States and Mexico, (y) between the United States and Canada, or (z)
between Canada and Mexico (a "Competing Business"); provided, however, that the
Consultant's ownership of not more than five percent (5%) of the outstanding
stock of a company engaged in a Competing Business, if such stock is listed on a
national securities exchange, reported on The Nasdaq Stock Market or regularly
traded in the over-the-counter market, shall not be deemed violative of this
Section 9(a)(i); or
(ii) except for members of the Consultant's family, Ramiro
Leal and Sandra Hall, hire any person who is an employee of the Company or its
subsidiaries (other than persons who are employees of Celsur Inc. or its
subsidiaries) on the date hereof, unless such person's employment is terminated
by the Company or the applicable subsidiary and a period of six months has
passed following the date of such termination; or
(iii) disclose, divulge, discuss, copy or otherwise use or
suffer to be used, in any manner in competition with or contrary to the
interests of the Company, the customer lists, marketing methods, research or
data or other trade secrets or other proprietary information of the Company, it
being acknowledged by the Consultant that all such information regarding the
business of the Company, compiled or obtained by, or furnished to, the
Consultant while the Consultant shall have been engaged hereunder or associated
with the Company is confidential information and the exclusive property of the
Company; provided, however, that this Section 9(a)(iii) shall not apply to the
disclosure by the Consultant of confidential information (A) in the course of
carrying out his duties under this Agreement, (B) when required to do so by a
court of law or any governmental or administrative agency having jurisdiction
over the business of the Company; provided in such event, the Consultant shall
immediately notify the Company of the existence, terms and circumstances
surrounding such disclosure so that the Company may
<PAGE>
<PAGE>
seek an appropriate protective order prior to the disclosure of such
information, or (C) information which is in the public domain other than through
disclosure by the Consultant.
(b) Except as otherwise provided in Section 9(a) hereof, the
provisions of Sections 9(a)(i) and 9(a)(ii) hereof shall be operative until the
third anniversary of the date of this Agreement. All other obligations created
by the terms of this Section 9 are of a continuing nature and shall remain in
full force and effect during and beyond the Consultant's period of engagement by
and association with the Company.
(c) The Consultant expressly agrees and understands that the
remedy at law for any breach by him of this Section 9 will be inadequate and
that the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that upon adequate
proof of the Consultant's violation of any legally enforceable provision of this
Section 9, the Company shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach. Except as
provided in the immediately following sentence, nothing contained in this
Section 9 shall be deemed to limit the Company's remedies at law or in equity
for any breach of the provisions of this Section 9 by the Consultant. Any
covenant on the Consultant's part contained hereinabove which may not be
specifically enforceable shall nevertheless, if breached, give rise to a cause
of action for monetary damages, if such breach remains uncured for 30 days after
notice thereof in reasonable detail from the Company to the Consultant.
(d) Nothing contained herein shall prevent the Consultant from
being employed by, rendering services to or owning, managing or otherwise being
affiliated with other entities; provided such other entities are not engaged in
a Competing Business.
SECTION 10. Relationship of the Parties. In performing his
services hereunder, the Consultant shall be an independent contractor and, as
between the Company and the Consultant, the Company shall not be responsible for
withholding, collection or payment of income taxes or for other taxes of any
nature on behalf of the Consultant. Nothing contained herein shall make the
Consultant the agent or employee of the Company or provide the Consultant with
the power or authorization to bind the Company to any contract, agreement or
arrangement with an individual or entity except with the prior written approval
of the Chairman of the Board of Directors and Chief Executive Officer of the
Company.
SECTION 11. Termination of Employment Contract. The parties
hereto hereby agree that the Employment Contract, dated as of January 21, 1994
between the Company and the Consultant shall be terminated and the terms and
provisions thereof shall be null and void and of no further force and effect
effective as of the date hereof.
SECTION 12. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered personally,
sent by registered or certified mail, return receipt requested, or sent by a
nationally recognized overnight courier service addressed as follows:
If to the Company, to:
Celadon Group, Inc.
888 Seventh Avenue
Suite 402
New York, New York 10106
Attention: Stephen Russell
<PAGE>
<PAGE>
With a copy to:
Proskauer Rose Goetz & Mendelsohn L.L.P.
1585 Broadway
New York, New York 10036-8299
Attention: Arnold Jacobs, Esq.
If to the Consultant, to:
Leonard R. Bennett
2526 N.W. 59th Street
Boca Raton, Florida 33496
With a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
Attention: Robert G. Koen, Esq.
or to such other person or address as any party shall
specify by notice in writing to the other parties hereto.
SECTION 13. Assignability, Binding Effect and Survival. This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. The rights and obligations of the Consultant under this
Agreement shall inure to the benefit of and be binding upon the Consultant and
his heirs, personal representatives and estate. The provisions of Section 9
hereof shall survive termination of this Agreement and, to the extent
appropriate to the intention of the parties and the subject matter of this
Agreement, other rights and obligations of the parties may survive the
termination of this Agreement.
SECTION 14. Complete Understanding; Amendment. This Agreement
constitutes the complete understanding between the parties with respect to the
subject matter hereof, and no statement, representation, warranty or covenant
has been made by any party with respect thereto except as expressly set forth
herein. This Agreement shall not be altered, modified, amended or terminated
except by written instrument signed by each of the parties hereto. Waiver by any
party hereto of any breach hereunder by another party shall not operate as a
waiver of any other breach, whether similar to or different from the breach
waived.
SECTION 15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law thereof.
SECTION 16. 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.
SECTION 17. Severability. If any provision of this Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.
<PAGE>
<PAGE>
SECTION 18. Legal Fees and Expenses. The parties hereto shall
each pay all costs, fees and expenses incurred by it or him in connection with
the negotiation and preparation of this Agreement, including, without
limitation, the fees and expenses of its or his own advisors and counsel.
SECTION 19. Further Assurances. Each of the parties hereto shall,
whenever and as often as reasonably requested to do so by the other party, do,
execute, acknowledge and deliver any and all such other further acts, transfers
and any instruments of further assurances, approvals and consents as are
necessary or proper in order to accomplish and complete the transactions
contemplated hereby.
SECTION 20. Counterparts. This Agreement may be executed in two
or more separate counterparts, each of which shall be deemed an original and
all of which together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the day and year first above written.
CELADON GROUP, INC.
By: /s/ Stephen Russell
Name: Stephen Russell
Title: Chairman
/s/ Leonard R. Bennett
Leonard R. Bennett
<PAGE>
<PAGE>
EXHIBIT A
BENEFITS
Disability Insurance Policy:
Policy Number Insurer Policy Amount
31050-69733 Provident $17,000/month
Life Insurance Policies:
<TABLE>
<CAPTION>
Policy Insurer Policy Policy Manner of
Number Amount Type Payment
<S> <C> <C> <C> <C>
7214173 Mass Mutual $1,500,000 Split whole Borrowing
life against cash
value
7394226 Mass Mutual $1,000,000 Split whole Borrowing
life against cash
value
79774583 Prudential $2,000,000 Term Cash premium
payments
</TABLE>
<PAGE>
<PAGE>
EXHIBIT B
STOCK OPTIONS
<TABLE>
<CAPTION>
Number of Shares Exercise Price
<C> <C>
25,000 $20.00
25,000 $13.625
20,000 $10.00
</TABLE>
<PAGE>
<PAGE>
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of September 13, 1996
(this "Amendment") by and among CELADON GROUP, INC., a Delaware corporation
("CG"), CELADON TRUCKING SERVICES, INC., a New Jersey corporation ("Trucking")
(collectively with CG, referred to as the "Companies" and individually, each a
"Company"), the Banks set forth on the signature pages of the Credit Agreement
referred to below (collectively, the "Banks" and individually, each a "Bank"),
NBD BANK, a Michigan banking corporation, formerly known as NBD Bank, N.A., as
co-agent for the Banks ("Co-Agent A") and THE FIRST NATIONAL BANK OF BOSTON, a
national banking association, as co-agent for the Banks ("Co-Agent B" and
together with Co-Agent A, referred to as the "Co-Agents").
RECITALS
A. CG, Trucking, the Banks and the Co-Agents are parties to a Credit
Agreement dated as of June 1, 1994, as amended by a First Amendment to Credit
Agreement dated as of October 31, 1994, a Second Amendment to Credit Agreement
dated as of October 31, 1995 and letter agreements dated January 31, 1996,
February 15, 1996 and June 29, 1996 (as amended, the "Credit Agreement").
B. The Companies have defaulted under the Credit Agreement.
C. The Companies have requested that the Co-Agents and the Banks waive
such defaults, and the Co-Agents and the Banks are willing to do so strictly in
accordance with the terms hereof, and provided the Credit Agreement is amended
as set forth herein, and the Companies have agreed to such amendments.
AGREEMENT
Based upon these recitals, the parties agree as follows:
1. Upon satisfaction of the conditions set forth in paragraph 4 hereof,
the Credit Agreement shall hereby be amended as of the effective date hereof as
follows:
(a) The definition of "Applicable Margin" shall be amended as follows:
(i) Line 4 in the table shall be deleted and line 4 below shall be
substituted in place thereof and new lines 5 and 6 shall be added to the table
to read as follows:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Revolving Credit Letter of Commitment
Loans Term Loans Credit Fees Fees
---------------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
4. If the Leverage
Ratio is greater
than or equal to
2.25 to 1.0 and
less than 2.75 to
1.0 AND the Fixed
Charge Ratio is
less than or equal
to 1.35 to 1.0 and
greater than 1.20
to 1.00 1-3/8% 1-5/8% 1-3/8% 1/2%
5. If the Leverage
Ratio is greater
than or equal to
2.75 to 1.0 and
less than 3.0 to
1.0 AND the Fixed
Charge Coverage
Ratio is less than
or equal to 1.20 to
1.0 and greater than
1.10 to 1.0 1-5/8% 1-7/8% 1-5/8% 1/2%
6. If the Leverage
Ratio is greater
than or equal to
3.0 to 1.0 AND
the Fixed Charge
Coverage Ratio is
less than or equal
to 1.10 to 1.0 2% 2-1/4% 2% 1/2%
</TABLE>
(ii) The last paragraph of such definition shall be
amended by deleting the reference in the fourth
sentence to "clause 3" and inserting "clause 6" in
place thereof and the following language shall be
added at the bottom of the last paragraph:
Notwithstanding the foregoing, the Companies, the Banks
and the Agent agree that the Applicable Margin shall be
as set forth in line
-2-
<PAGE>
<PAGE>
6 of the table above until the Banks receive the
financial statements for the fiscal quarter ending
September 30, 1996, at which time the Applicable Margin
shall be determined as set forth above.
(b) The definition of "Borrowing Base" shall be amended by adding the
following at the end thereof: "plus, (e) during such time as the Banks shall
have a first mortgage lien on the Property pursuant to the Mortgage, an amount
equal to 50% of the depreciated cost basis of the Property, which depreciated
cost basis shall not exceed $6,500,000".
(c) The definition of "Eligible Equipment" shall be amended by adding
the following language at the end of clause (e) therein: "provided" however,
equipment which is leased to Greenbriar Rental Services, Inc. on terms which the
Banks have consented to in writing in each case and which leases have been
assigned to Co-Agent A, for the benefit of the Banks, shall not be excluded from
"Eligible Equipment" pursuant to this clause (e)."
(d) The definition of "Fixed Charge Ratio" shall be amended by adding
the following language at the end of clause (A)(ii): "and all rents paid or
required to be paid by such person in connection with any sale/leaseback
transaction of the Property."
(e) The definition of "Fixed Charges" shall be amended by adding the
following language at the end of clause (e): "and all rents paid or required to
be paid by such person in connection with any sale/leaseback transaction of the
Property."
(f) New definitions of "Mortgage" and "Property" shall be added in
appropriate alphabetical order to read as follows:
"Mortgage" shall mean the mortgage, security
agreement and assignnent of rents entered into by
Celadon Real Estate Corp. granting a mortgage lien on
the Property to the Agent and the Banks to secure the
Advances under this Agreement, in form and substance
satisfactory to the Bank.
"Property" shall mean the headquarters of the
Companies located at 9503 East 33rd Street,
Indianapolis, Indiana 46236.
(g) The definition of "Security Documents" shall be amended by adding
the following language immediately after the reference to "Security Agreement"
contained therein: "the Mortgage".
(h) The definition of "Termination Date" in Section 1.1 shall be amended
by deleting the reference therein to "September 15, 1996" and inserting "April
1, 1997" in place thereof.
-3-
<PAGE>
<PAGE>
(i) A new definition of "Third Amendment Effective Date" shall be added
to read as follows:
"Third Amendment Effective Date" shall mean September
13, 1996.
(j) Section 5.1(d)(iv) shall be amended by adding the following language
immediately after the reference to "hereto" in line 2: "and a profit and loss
statement for Trucking prepared as of the end of such month".
(k) Section 5.1(f) shall be amended by adding a new paragraph at the end
thereof:
Celadon Real Estate Corp. executed and delivered
the Mortgage to Co-Agent A and the Banks on the Third
Amendment Effective Date. In the event the Companies
and Celadon Real Estate Corp. complete the
sale/leaseback transaction currently contemplated for
the Property, Co-Agent A shall execute and deliver to
the Companies a release of the Mortgage and the Banks
hereby authorize Co-Agent A to execute such release on
their behalf. In the event such sale/leaseback is not
completed on or before 90 days after the Third
Amendment Effective Date, the Companies also agree to
deliver, within 15 days thereafter, a survey, a title
insurance policy, environmental investigation and any
and all other documents or instruments reasonably
requested by the Banks in connection therewith, in each
case satisfactory to the Banks.
(l) Sections 5.2(a), (b), (c) and (d) shall be deleted in their entirety
and the following shall be inserted in place thereof:
(a) Tangible Net Worth. Permit or suffer the
Consolidated Tangible Net Worth of the Companies and
their Subsidiaries to be less than (i) at any time
during the period from and including September 30, 1996
to and including December 30, 1996, $35,250,000, (ii)
at any time during the period from and including
December 31, 1996 to and including March 30, 1997,
$36,250,000, (iii) at any time during the period from
and including March 31, 1997 to and including June 29,
1997, $36,750,000, (iv) at any time during the period
from and including June 30, 1997 to and including
September 29, 1997, $38,000,000, (v) at any time during
the period from and including September 30, 1997 to and
including December 30, 1997, $39,250,000, (vi) at any
time during
-4-
<PAGE>
<PAGE>
the period from and including December 31, 1997 to and
including March 30, 1998, $40,500,000, (vii) at any
time during the period from and including March 31,
1998 to and including June 29, 1998, $41,500,000, and
(viii) at any time thereafter, an amount equal to the
sum of (A) $43,000,000 p lus (B) an amount equal to 75%
of the Consolidated Cumulative Net Income (without
reduction for net loss) of the Companies and their
Subsidiaries, to be added as of the end of each fiscal
quarter of the Company commencing with the fiscal
quarter ending September 30, 1998 plus (C) an amount
equal to 80% of the proceeds received in connection
with the offering of any securities of any Company.
(b) Leverage Ratio. Permit or suffer the Leverage
Ratio as of the end of any fiscal quarter of the
Companies to be greater than: (i) as of the fiscal
quarter ending in September, 1996, 3.85 to 1.0, (ii) as
of the fiscal quarter ending in December, 1996, 3.45 to
1.0, (iii) as of the fiscal q quarter ending in March,
1997, 3.30 to 1.0, (iv) as of the fiscal quarter ending
in June, 1997, 3.15 to 1.0, (v) as of the fiscal
quarter ending in September, 1997, 3.0 to 1.0, (vi) as
of the fiscal quarter ending in December, 1997, 2.75 to
1.0, (vii) as of the fiscal quarter ending in March,
1998, 2.5 to 1.0 and (viii) as of the fiscal quarter
ending in June, 1998 and as of the end of each fiscal
quarter thereafter, 2.25 to 1.0.
(c) Fixed Charge Ratio. Permit or suffer the Fixed
Charge Ratio to be less than: (i) 0.85 to 1.0 as of and
for the fiscal quarter ending in September, 1996, (ii)
1.0 to 1.0 as of and for the fiscal quarter ending in
December, 1996 and for the immediately preceding fiscal
quarter, (iii) 1.05 to 1.0 as of and for the fiscal
quarter ending in March, 1997 and for the preceding two
fiscal quarters, (iv) 1.10 to 1.0 as of and for the
fiscal quarter ending in June, 1997 and for the
preceding three fiscal quarters, and (v) 1.20 to 1.0
thereafter, as of the end of each fiscal quarter of the
Companies for the preceding twelve-month period.
(d) Interest Coverage Ratio. Permit or suffer the
Interest Coverage Ratio to be less than (i) 1.0 to 1.0
as of and for the fiscal quarter ending in September,
1996, (ii) 1.50 to 1.0 as of and for the fiscal quarter
ending in December, 1996 and for the immediately
preceding fiscal quarter, (iii) 1.50 to 1.0 as of and
for the fiscal quarter ending in March, 1997 and for
the preceding two fiscal quarters, (iv) 1.75 to 1.0 as
of and for the fiscal quarter ending in June, 1997 and
for the preceding three fiscal quarters, (v) 2.25 to
-5-
<PAGE>
<PAGE>
1.0 as of and for the fiscal quarter ending in
September, 1997 and for the preceding three fiscal
quarters, and (vi) 2.5 to 1.0 thereafter, as of the end
of each fiscal quarter of the Companies for the
preceding twelve-month period.
(m) Section 5.2 shall be amended by adding a new Section 5.2(m) at the
end thereof to read as follows:
(m) EBIT. Permit or suffer the EBIT of Trucking
for each fiscal month to be less than $0 as of the end
of each fiscal month of Trucking.
(n) Schedules 4.4, 4.5, 4.13, 5.2(e), 5.2(f) and 5.2(k) attached to the
Credit Agreement shall be replaced with the forms of such respective Schedules
attached hereto.
2. From and after the effective date of this Amendment, references to
the "Credit Agreement" in the Credit Agreement, the Revolving Credit Notes, the
Term Notes, the Security Documents and all other documents executed pursuant to
the Credit Agreement shall be deemed references to the Credit Agreement as
amended hereby.
3. Each Company represents and warrants to the Co-Agents and the Banks
that:
(a) (i) The execution, delivery and performance of this Amendment by the
Company and all agreements and documents delivered pursuant hereto by the
Company have been duly authorized by all necessary corporate action and do not
and will not require any consent or approval of its stockholders, violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
of its articles of incorporation or bylaws, or result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Company is a party or by which
it or its properties may be bound or affected; (ii) no authorization, consent,
approval, license, exemption of or filing a registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary to the valid execution, delivery or
performance by the Company of this Amendment and all agreements and documents
delivered pursuant hereto and (iii) this Amendment and all agreements and
documents delivered pursuant hereto by the Company are the legal, valid and
binding obligations of the Company enforceable against it in accordance with the
terms thereof.
(b) After giving effect to the amendments contained herein and effected
pursuant hereto, the representations and warranties contained in Article IV of
the Credit Agreement are true and correct on and as of the effective date hereof
with the same force and effect as if made on and as of such effective date.
-6-
<PAGE>
<PAGE>
(c) Other than the Existing Defaults, as defined in and to be waived
pursuant to paragraph 5, no Event of Default (as defined in Article VI of the
Credit Agreement) and no Default shall have occurred and be continuing or will
exist under the Credit Agreement as of the effective date hereof
4. This Amendment shall not become effective until:
(a) The favorable written opinion of counsel for the Companies in form
and substance satisfactory to the Co-Agents;
(b) Celadon Real Estate Corp. shall have executed and delivered the
Mortgage to Co-Agent A;
(c) Trucking shall have assigned its interest as lessor in the lease
agreements with Greenbriar Rental Services, Inc. pursuant to an assignment
agreement in form and substance satisfactory to the Banks;
(d) The Company shall have delivered to the Banks a copy of the contract
between the Company and Chrysler Corporation regarding the Mexican business,
executed by all parties thereto;
(e) The Banks shall have completed their comprehensive field audit of
the Companies and the results of such audit shall be satisfactory to the Banks;
(f) The Companies shall have delivered to Co-Agent A such other
documents and instruments as the Co-Agents and the Banks may request; and
(g) The Company shall have paid an amendment fee to the Banks for their
pro rata benefit in the amount of $87,500 and all expenses of counsel described
in paragraph 6 hereof.
5. The Companies acknowledge that Events of Default have occurred
because: (a) the Companies have breached the covenants contained in Sections
5.2(a), (b), (c) and (d) of the Credit Agreement for the fiscal quarter ending
June 30, 1996; (b) the Companies have breached the Credit Agreement by including
in the Borrowing Base equipment which does not qualify as "Eligible Equipment"
because either Co-Agent A is not listed as lienholder on the title for such
equipment and, therefore, Co-Agent A does not hold a perfected security interest
in such equipment or the equipment is subject to a lease; (c) the Companies have
breached the covenant contained in Section 5.2(j) of the Credit Agreement
because Group repurchased approximately $130,000 of its capital stock during the
continuance of a Default and (d) the Companies have breached the covenant
contained in Section 5.2(e)(viii) because the Companies incurred additional
Indebtedness after the occurrence and during the continuance of an Event of
Default (the "Existing Defaults"). The Companies acknowledge that the Co-Agents
and the Banks have the
-7-
<PAGE>
<PAGE>
ability to accelerate all indebtedness and exercise all of their rights and
remedies under the Credit Agreement. In consideration of the execution of this
Amendment and subject to the satisfaction of all conditions required by
Paragraph 4 hereof, the Co-Agents and the Banks agree to waive the Existing
Defaults, provided that: (a) such waiver shall waive only the Existing Defaults
and does not waive any other Event of Default, including without limitation any
future Event of Default caused by any violation of Sections 5.2(a), (b), (c),
(d), (e) or j) or any miscalculation of the Borrowing Base and (b) the Companies
covenant and agree that they shall complete title applications for all
certificated vehicles/equipment for which NBD Bank, as Co-Agent A, is not listed
as lienholder and all such applications shall be submitted to the Illinois
Secretary of State within l5 days after the Third Amendment Effective Date,
copies of which shall promptly be submitted to the Banks to demonstrate
compliance with this covenant. This waiver shall not be deemed to be a waiver,
or a consent to any modification or amendment, of any other term or condition of
the Credit Agreement or any term or condition of any agreement, instrument or
document referred to therein or executed pursuant thereto, or to prejudice any
present or future right or rights which the Co-Agents or any of the Banks now
has or may have thereunder.
6. Each Company agrees to pay and save Co-Agents harmless from liability
for the payment of all costs and expenses arising in connection with this
Amendment, including the reasonable fees and expenses of Dickinson, Wright,
Moon, Van Dusen & Freeman, counsel to Co-Agent A, and Bingham, Dana & Gould,
counsel for Co-Agent B, in connection with the preparation and review of this
Amendment and any related documents and review of documents related to any
sale/leaseback transaction involving the Property.
7. The terms used but not defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement. Except as expressly
contemplated hereby, the Credit Agreement, and all related notes, guaranties,
certificates, instruments and other documents, are hereby ratified and confirmed
and shall remain in full force and effect, and each Company acknowledges that it
has no defense, offset or counterclaim thereunder.
8. This Amendment shall be governed by and construed in accordance with
the laws of the State of Michigan.
9. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Amendment by signing any such counterpart.
-8-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
CELADON GROUP, INC.
By: Don S. Snyder
----------------------------------------
Its: Chief Financial Officer
------------------------------------
CELADON TRUCKING SERVICES, INC.
By: Don S. Snyder
----------------------------------------
Its: Chief Financial Officer
------------------------------------
NBD BANK, formerly known as NBD Bank, N.A.,
individually and as Co-Agent A
By:
----------------------------------------
Its:
------------------------------------
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Co-Agent B
By:
----------------------------------------
Its:
------------------------------------
-9-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
CELADON GROUP, INC.
By:
----------------------------------------
Its:
------------------------------------
CELADON TRUCKING SERVICES, INC.
By:
----------------------------------------
Its:
------------------------------------
NBD BANK, formerly known as NBD Bank, N.A.,
individually and as Co-Agent A
By: Michael C. Malony
---------------------------------------
Its: Vice President
-----------------------------------
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Co-Agent B
By:
----------------------------------------
Its:
------------------------------------
-9-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
CELADON GROUP, INC.
By:
----------------------------------------
Its:
------------------------------------
CELADON TRUCKING SERVICES, INC.
By:
----------------------------------------
Its:
------------------------------------
NBD BANK, formerly known as NBD Bank, N.A.,
individually and as Co-Agent A
By:
----------------------------------------
Its:
------------------------------------
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Co-Agent B
By: Michael J. Blake
---------------------------------------
Its: Director
------------------------------------
-9-
<PAGE>
<PAGE>
Exhibit 10.43
AMENDMENT
TO
STOCKHOLDERS AGREEMENT
This Amendment to Stockholders Agreement (this "Amendment"), is entered into as
of this 3rd day of July, 1996, by and among Celadon Group, Inc., a Delaware
corporation ("Company"), Leonard R. Bennett ("Bennett"), Stephen Russell
("Russell"), and Hanseatic Corporation, a New York corporation ("Hanseatic").
W I T N E S S E T H:
WHEREAS, the Company, Bennett, Russell and Hanseatic are parties to that certain
Stockholders Agreement, dated as of October 8, 1992 (the "Stockholders
Agreement");
WHEREAS, Bennett is entering into a Stock Purchase Agreement, dated of even date
herewith (the "Stock Purchase Agreement"), with Peter Bennett, Russell,
individually and as agent, and Hanseatic, individually and as agent; and
WHEREAS, it is a condition to the consummation of the transactions contemplated
by the Stock Purchase Agreement that Bennett, the Company, Russell and Hanseatic
enter into this Amendment, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in furtherance of the Stock Purchase Agreement and the
consummation of the transactions contemplated thereby and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Capitalized terms used in this Amendment which are not otherwise
defined herein shall have the meanings given to such terms in the Stockholders
Agreement.
SECTION 2. The Stockholders Agreement shall be terminated with respect to
Bennett and the terms and provisions thereof relating to Bennett shall be null
and void and of no further effect effective as of the date hereof. Effective as
of the date hereof, Bennett shall no longer be a party to the Stockholders
Agreement and all references to "Bennett" shall be deleted and Bennett shall no
longer be a Stockholder (as each term is defined in the Stockholders Agreement)
under the Stockholders Agreement.
SECTION 3. References. All references in the Stockholders Agreement to "this
Agreement" shall mean the Stockholders Agreement as amended by this Amendment.
SECTION 4. Amendments.
(a) From and after the date hereof, each and every reference in the Stockholders
Agreement to the "the Purchaser" shall be deemed to be a reference to
"Hanseatic".
(b) Article I of the Stockholders Agreement shall be amended in its entirety
to read as follows:
ARTICLE I
BOARD OF DIRECTORS
<PAGE>
<PAGE>
The Corporation shall use its best efforts to take all such action as may be
necessary so that its Board of Directors shall, from and after the date hereof
and until the Expiration Date (as hereinafter defined), at all times include one
member who shall be selected by Russell and one member who shall be selected by
Hanseatic, each reasonably satisfactory to the Corporation (and any successor or
successors to each such member who shall be reasonably satisfactory to the
Corporation), including, without limitation, the nomination and recommendation
for election and re-election, as the case may be, of such designees (and any
such successor or successors); and each of Russell and Hanseatic agrees that he
or it will vote all shares of Common Stock beneficially owned by him or it in
favor of a Board of Directors that shall include such designees (and any such
successor or successors), and take all such other action as may be necessary so
that the Board of Directors of the Corporation shall be constituted as
aforesaid; provided, however, that in the event of the death of Russell, the
foregoing commitment contained in this sentence shall extend to such person
(reasonably satisfactory to the Corporation) as shall be selected by the holder
or holders of a majority of the shares of Common Stock held by Russell on the
date hereof (reasonably satisfactory to the Corporation), unless Hanseatic shall
be reasonably uncertain as to the identity of such holder or holders. For
purposes hereof, the "Expiration Date" shall mean the date on which either
Russell or Hanseatic, and their respective heirs, successors, personal or legal
representatives, and assigns, shall beneficially own less than five per cent of
the outstanding shares of Common Stock.
SECTION 5. Governing Law. This Amendment shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without regard to
the principles thereof relating to conflict of laws.
SECTION 6. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same instrument.
SECTION 7. No Other Amendments. Except as expressly amended hereby, the
terms and conditions of the Stockholders Agreement shall continue in full
force and effect.
IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment
as of the date first written above.
CELADON GROUP, INC.
By: /s/ Stephen Russell
Name: Stephen Russell
Title: Chairman
HANSEATIC CORPORATION
By: /s/ Paul A. Biddelman
Name:
Title:
/s/ Leonard Bennett
Leonard Bennett
/s/ Stephen Russell
Stephen Russell
<PAGE>
<PAGE>
Exhibit 10.44
TERMINATION
OF
AGREEMENTS
Reference is hereby made to that certain Voting Agreement, dated as of October
8, 1992 among Celadon Group, Inc., a Delaware corporation ("Company"), Leonard
R. Bennett ("Bennett"), and Stephen Russell ("Russell"), and the Agreement,
dated as of October 6, 1986 among the Company, Bennett and Russell
(collectively, the Agreements).
Celadon, Bennett and Russell hereby agree that the each of the Agreements shall
be terminated and shall be null and void and of no further effect effective as
of the date hereof.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
termination as of this 3rd day of July, 1996.
CELADON GROUP, INC.
By: /s/ Stephen Russell
Name: Stephen Russell
Title: Chairman
/s/ Leonard Bennett
Leonard Bennett
/s/ Stephen Russell
Stephen Russell
<PAGE>
<PAGE>
EXHIBIT 11
CELADON GROUP, INC.
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
----------------------------
1996 1995
---- ----
<S> <C> <C>
PRIMARY:
Weighted average shares issued............................... 7,750,580 7,948,819
Weighted average shares in treasury.......................... (110,858) ---
Dilutive effect of options and warrants using the average
market price under the treasury stock method............... 3,719 88,556
--------- ----------
Shares used to compute primary earnings per share............ 7,643,441 8,037,375
========= =========
Net income attributable to common stockholders.................... $890,396 $616,409
======== ========
Net income per common share....................................... $0.12 $0.08
===== =====
FULLY DILUTED:
Shares used to compute primary earnings per share............ 7,643,441 8,037,375
Incremental dilutive effect of options and warrants
using the period end price under the treasury
stock method............................................... 10,867 ---
--------- ----------
Shares used to compute fully diluted earnings per share 7,654,308 8,037,375
========= ==========
Net income attributable to common stockholders.................... $890,396 $616,409
======== ========
Net income per common share....................................... $0.12 $0.08
===== =====
</TABLE>
18
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF CELADON GROUP, INC. AS OF SEPTEMBER 30,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 865941
<NAME> CELADON GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 3-MOS
<CASH> 4,573
<SECURITIES> 0
<RECEIVABLES> 36,914
<ALLOWANCES> (5,529)
<INVENTORY> 0
<CURRENT-ASSETS> 54,850
<PP&E> 102,609
<DEPRECIATION> (23,654)
<TOTAL-ASSETS> 144,640
<CURRENT-LIABILITIES> 40,289
<BONDS> 62,308
<COMMON> 256
0
0
<OTHER-SE> 41,787
<TOTAL-LIABILITY-AND-EQUITY> 144,640
<SALES> 0
<TOTAL-REVENUES> 46,192
<CGS> 0
<TOTAL-COSTS> 43,726
<OTHER-EXPENSES> (9)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 981
<INCOME-PRETAX> 1,494
<INCOME-TAX> 0
<INCOME-CONTINUING> 890
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 890
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
