highpt8kex10e_103107.htm


     

    
      

      

    

    Exhibit
      10.e

     

    
       

      EMPLOYMENT
        AGREEMENT

      


      This
        EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by
        and between Cannon Freight System, Inc., a Michigan corporation, (the
“Company”), with the guaranty of High Point Transport, Inc., a Florida
        corporation, and Anthony Vallone, Sr. (“Employee”)
        effective as  of October 25, 2007 or the actual date Employee first
        reports for work (“Start Date”).

      


      RECITAL

      


      The
        Company desires to continue to employ Employee, and Employee is willing to
        continue his employment by the Company, in each case on the terms and subject
        to
        the conditions set forth in this Agreement.  The parties agree that
        any and every preexisting agreement, understanding and arrangement with respect
        to Employee’s employment and benefits (not including accrued and unpaid
        compensation and retirement benefits, if any) between the Company and the
        Employee is cancelled and terminated and replaced by this
        agreement.

      


      NOW,
        THEREFORE, the parties hereto hereby agree as follows:

      


      1.     
        Position and Duties.

      


      1.1    During
        the
        term of this Agreement, Employee agrees to be employed by and to serve the
        Company on a full-time basis as President and Chief Operating Officer, and
        to perform such duties consistent with such position, or as may be assigned
        to
        him from time to time by the Board of Directors. Employee’s principal place of
        business with respect to his services to the Company shall be Harrison Township,
        Michigan. All travel expenses of Employee shall be reimbursed in accordance
        with
        Section 3.4(c), below.

      


      1.2           Employee
        shall carry out his duties under the general supervision and direction of
        the
        Board of Directors of the Company in accordance with the Company’s policies,
        rules and procedures in force from time to time.

      


      1.3    Employee
        shall devote his full time, attention, skill and efforts to his tasks and
        duties
        hereunder and to the affairs of the Company.  Without the prior
        written consent of the Company based on approval by the board of directors,
        Employee shall not provide services for compensation to any other person
        or
        business entity during the Term of his employment by the Company, as defined
        in
        paragraph 2.1, or engage in any other business activity (not including any
        passive investment activities), whether or not such other business activity
        is
        pursued for profit or pecuniary advantage.

      


      2.     
Term
        of Employment.

      


      2.1    Basic
        Term.  The term of employment under this Agreement (the
“Term”) shall begin on Start Date and shall continue through three (3)
        calendar
        years after the Start Date (the “Expiration Date”), unless earlier terminated in
        accordance with Article 2 or extended pursuant to the following
        sentence.  Unless written notice is given by the Company or Employee
        to the other at


      
        
          
          

        

        
          1.

          
            

          

        

        
          
          

        

      


      least
        ninety (90) days prior to the Expiration Date (or any later date to which
        the
        Term shall have been extended in accordance with this Section 2.1) advising
        that
        the one giving such notice does not desire to extend this Agreement, the
        Term shall automatically be extended for additional one-year periods without
        further action of either the Company or Employee.

      


      2.2    Termination
        for
        Cause Only.  Employee
        may be terminated for cause only.  Termination for Cause (as defined
        in Section 2.7(a), below) may be effected by the Company at any time during
        the
        Term of this Agreement and shall be effected by written notification to Employee
        from the Chairman of the Board of Directors or his designee, stating the
        reason
        for termination.  Such termination shall be effective immediately upon
        the giving of such notice (subject to the terms set forth in Section 2.7(a)
        below), unless the Board of Directors shall otherwise determine.  Upon
        Termination for Cause, Employee shall be paid all accrued salary, any benefits
        under any plans of the Company in which Employee is a participant to the
        full
        extent of Employee’s rights under such plans, accrued vacation pay, and any
        appropriate business expenses incurred by Employee in connection with his
        duties
        hereunder prior to such termination, all to the date of termination, but
        Employee shall not be entitled to any other compensation or reimbursement
        of any
        kind, including without limitation, severance compensation.

      


      2.3    Voluntary
        Termination.  In the event of a Voluntary Termination (as
        defined in Section 2.7(b), below), the Company shall pay to Employee all
        accrued
        salary, bonus compensation to the extent earned, any benefits under any plans
        of
        the Company in which Employee is a participant to the full extent of Employee’s
        rights under such plans, accrued vacation pay and any appropriate business
        expenses incurred by Employee in connection with his duties hereunder, all
        to
        the date of termination, but no other compensation or reimbursement of any
        kind,
        including without limitation, severance compensation. Employee may affect
        a
        Voluntary Termination by giving sixty (60) days’ written notice of such
        termination to the Company.

      


      2.4     Termination
        by Death.  In the event of Employee’s death during the Term
        of this Agreement, Employee’s employment shall be deemed to have terminated as
        of the last day of the month during which his death occurs and the Company
        shall
        pay to his estate or such beneficiaries, as Employee may from time to time
        designate, all accrued salary, bonus to the extent earned, any benefits under
        any plans of the Company in which Employee is a participant to the full extent
        of Employee’s rights under such plans, accrued vacation pay and any appropriate
        business expenses incurred by Employee in connection with his duties hereunder,
        all to the date of termination, but Employee’s estate shall not be paid any
        other compensation or reimbursement of any kind, including without limitation,
        severance compensation.

      


      2.5    Termination
        by Reason of Disability.  If, during the Term of this
        Agreement, a physician selected by the Company certifies that Employee has
        become physically or mentally incapacitated or unable to perform his full-time
        duties under this Agreement, and that such incapacity has continued for a
        period
        of five consecutive months or 180 calendar days within any period of 365
        consecutive days, the Company shall have the right to terminate Employee’s
        employment hereunder by written notification to Employee, and such termination
        shall be effective on the seventh (7th) day
        following the
        giving of such notice (“Termination by Reason of Disability”).  In
        such event, the Company will pay to Employee all accrued salary, bonus to
        the
        extent earned, any benefits under any plans of the Company in which Employee
        is
        a participant to the full extent of


      
        
          
          

        

        
          2.

          
            

          

        

        
          
          

        

      


      Employee’s
        rights under such plans, accrued vacation pay, any appropriate business expenses
        incurred by Employee in connection with his duties hereunder, all to the
        date of
        termination, and all severance compensation required under Section 4.1, but
        Employee shall not be paid any other compensation or reimbursement of any
        kind.  In the event of a Termination by Reason of Disability, upon the
        termination of the disability, the Company will use its best efforts to reemploy
        Employee, provided that such reemployment need not be in the same capacity
        or at
        the same salary or benefits level as in effect prior to the Termination by
        Reason of Disability.

      


      2.6    Employee’s
        Obligation Upon Termination. Upon the Termination of Employee’s
        employment for any reason, Employee shall within ten (10) days of such
        termination return to the Company all personal property and proprietary
        information in Employee’s possession belonging to the Company.  Unless
        and until all such property and information is returned to the Company (which
        shall be determined by the Company’s standard termination and check-out
        procedures), the Company shall have no obligation to make any payment of
        any
        kind to Employee hereunder.

      


      2.7    Definitions.  For
        purposes of this Agreement the following terms shall have the following
        meanings.

      


      (a)    “Termination
        for Cause” shall mean termination by the Company
        of Employee’s employment by the Company by reason of:

      


      (i)    Employee’s
        willful dishonesty towards, fraud upon, or deliberate injury or attempted
        injury
        to, or breach of fiduciary duty to, the Company;

      


      (ii)    Employee’s
        material breach of this Agreement, or any other agreement to which Employee
        and
        the Company are parties, provided that in the event of a claimed material
        breach, notice shall be given in writing by Company to the Employee of the
        circumstances alleged to constitute a material breach and
        Employee shall have a period of thirty (30) days
        to cure whatever condition or circumstance which would otherwise constitute
        a
        material breach and, provided further that, no notice shall be required with
        respect to the third material breach of the same nature within a period of
        six
        months;

      


      (iii)    Employee’s
        use or possession of illegal drugs at any time, use of alcoholic beverages
        during working hours or on Company property except when specifically allowed
        by
        a Company sponsored function, improper use of prescription drugs during working
        hours or on Company property or Employee reporting to work under the influence
        of illegal drugs or alcohol;

      


      (iv)    Conduct
        by
        Employee, whether or not in connection with the performance of the duties
        contemplated hereunder, that would result in serious prejudice to the interests
        of the Company if Employee were to continue to be employed, including, without
        limitation, the conviction of a felony or a good faith determination by the
        Board of Directors that Employee has committed acts involving moral
        turpitude;

      


      (v)    Any
        material
        violation of any rule, regulation or policy of the Company by Employee or
        Employee’s failure to follow reasonable instructions or directions of the Board
        of Directors of the Company (as it relates to the Employee’s written job
        description) or any policy, rule or procedure


      
        
          
          

        

        
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      of
        the
        Company in force from time to time, provided that in the event of a claimed
        material breach, notice shall be given in writing by Company to the Employee
        of
        the circumstances alleged to constitute a material breach and
        Employee shall have a period of thirty (30) days
        to cure whatever condition or circumstance which would otherwise constitute
        a
        material breach and, provided further that, no notice shall be required with
        respect to the third material breach of the same nature within a period of
        six
        months.  All Company policies, rules, regulations and procedures
        currently in force must be provided to Employee in writing before execution
        of
        this Agreement.  Any changes to Company policies, rules and procedures
        must be provided to Employee in writing thirty (30) days prior to the changes
        becoming effective.

      


       (b)    “Voluntary
        Termination” shall mean termination by Employee of Employee’s
        employment other than (i) Termination by Reason of Disability and (ii)
        Termination by reason of Employee’s Death.

      


      3.      
        Salary, Benefits and Bonus Compensation.

      


      3.1    Base
        Salary.  As payment for the services to be rendered by
        Employee as provided in Section 1 and subject to the terms and conditions
        of
        Section 2, the Company agrees to pay to Employee a “Base Salary “at the rate of
        $ 225,000 (U S Dollars) per year payable in accordance with the Company’s
        regular payroll practices. On the  anniversary date of
        this Agreement each year, an increase of at least 10% in the “Base Pay”
rate will occur. Such rate and Employee’s performance shall be reviewed by the
        Company’s Board of Directors on an annual basis, commencing Starting Date, for a
        determination of whether other adjustment(s) in Employee’s Base Salary should be
        made, which adjustment shall be in sole discretion of the Company’s Board of
        Directors.   In no event shall Employee’s Base Pay be
        decreased.

      


      3.2    Performance
        Bonus.  Employee shall be paid a performance bonus upon the
        occurrence of certain earned annual gross revenues by the Company (“Gross
        Revenue”) according to the following terms:

      


      (a)    Employee
        shall receive $75,000 if the Company achieves Revenue From Operations (“RFO”) of
        $50 million, and an additional $75,000 for every $15 million increment
        thereafter (e.g., $65 million, $80 million, etc.).


      


      (b)    Any
        bonus
        paid pursuant to this section shall be paid upon only the first achievement
        of initial RFO amount and increments thereto identified in
        3.2(a).

      


      (c)    The
        RFO from
        audited financial statements of the most recent fiscal year prior to acquisition
        (as of the date of acquisition) of any businesses or entities acquired pursuant
        to Section 3.3 below shall not be calculated in the Gross Revenue figure
        used
        for this section.  However, amounts over the RFO shall be included in
        the calculation of Employee’s bonus pursuant to Section 3.2(a).  If
        any acquired business or entity ceases its affiliation with the Company in
        any
        way, its RFO shall be removed from the calculation of Employee’s bonus pursuant
        to this section.

      


      (d)    The
        RFO of
        the Company shall be audited gross revenues beginning for the 2008
        fiscal


      
        
          
          

        

        
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      year
        and
        shall be done on a consolidated basis for the Company and all of its acquired
        companies, subsidiaries and affiliates.

      


      (e)     The
        performance bonus shall be payable in cash, common stock, or any combination
        of
        both, at the sole election of Employee.  If the Employee elects a
        stock distribution, the stock shall be issued not later than forty-five days
        following the filing of the Company’s annual report on Form 10-KSB.

      


      (f)    Upon
        the
        occasion that the RFO of the Company exceeds $200 million, the Parties agree
        to
        attempt to renegotiate this Agreement.  During the pendency of the
        renegotiation, or if agreement cannot be reached as a result of the
        renegotiation, the terms of this Agreement shall remain in force and effect;
        provided, however, that the incremental amount specified in 3.2(a) shall
        increase to $20 million for RFO exceeding $200 million (e.g. $220
        million, $240 million, etc.).

      


      3.3    Acquisition
        Bonus.  Notwithstanding the terms set forth in Section 3.2
        above, Employee shall be paid an acquisition bonus of $75,000 for each $15
        million of RFO of any company acquired directly or indirectly by the Company,
        its parents, or subsidiaries, the acquisition of which is identified and
        substantially negotiated by the Employee, provided that neither the Company
        nor
        the acquired company are obligated to pay brokerage fees to a third
        party.  By way of illustration, if Employee identifies a business
        which the Company or its affiliate acquires (by way of stock or asset
        acquisition) that earned $45 million RFO, Employee shall be entitled to an
        acquisition bonus of $225,000.  The bonus shall be paid within thirty
        days following the closing of such acquisition.

      


      3.4    Additional
        Benefits.  During the Term of this Agreement, Employee shall
        be included in all group insurance plans and other benefit plans and programs
        made available to management employees of the Company.  In addition to
        said benefits, Employee shall be entitled to the following fringe
        benefits:

      


      (a)    Automobile
        Allowance. Company shall provide Employee with an automobile
        allowance during the term of this Agreement in the amount of $1,000 per
        month.  In addition to said allowance, Company shall also reimburse
        Employee for gas and automobile insurance.

      


      (b)    Disability
        Insurance. Company shall continue to provide Employee the MetLife
        Disability Income Insurance Policy currently in place, or any other equivalent
        policy that the Employee shall elect.

      


      (c    Life
        Insurance. Company shall continue to provide Employee with an
        expense allowance of equal premium obligation under that certain life insurance
        policy with Lincoln Financial Group, Policy No. 506039097, or any other
        equivalent policy that the Employee shall elect.

      


      (d)    Vacation. Employee
        is entitled to take five (5) weeks paid vacation annually, as measured from
        the
        Starting Date.  Employee shall be entitled to an additional one (1)
        week of vacation upon each anniversary as measured from the Starting Date,
        but
        shall accrue no more than eight (8) weeks of paid vacation per
        year.  Vacation time banked and unused may be rolled over to
        subsequent years or paid out in cash, at the sole election of
        Employee.


      
        
          
          

        

        
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      (e)    Reimbursement
        for Expenses. The Company shall reimburse Employee for reasonable and
        properly documented out-of-pocket business and/or entertainment expenses
        incurred by Employee in connection with his duties under this Agreement in
        accordance with the Company’s reimbursement policy in effect from time to time.
        Company’s reimbursement policy currently in force must be provided to Employee
        in writing before execution of this Agreement.  Any changes to
        Company’s policy must be provided to Employee in writing thirty (30) days prior
        to the changes becoming effective.

      


      4.     
        Severance Compensation.

      


      4.1    Payment. Following
        a Termination by Reason of Disability, Employee shall be entitled to severance
        compensation equal to the Base Salary remaining under the term of this Agreement
        at the time of said termination.  The severance compensation will be
        paid in accordance with the Company’s customary payroll practices. The
        Company may, in the Company’s sole discretion, if Employee so requests within
        thirty (30) days following a Termination by Reason of Disability, elect to
        pay
        to Employee a lump sum severance payment by bank cashier’s check equal to the
        present value based on a factor of five percent (5%) of the flow of cash
        payments that would otherwise be paid to Employee pursuant to this
        Agreement.

      


      4.2    No
        Severance
        Compensation Under Other
        Termination.  In the event
        of a
        Voluntary Termination, Termination for Cause, or Termination by reason of
        Employee’s
        Death, neither Employee nor his
        estate shall be paid any severance compensation.

      


      5.     
        Restrictive Covenants.

      


      5.1     Agreement
        Not
        to Compete. Employee shall not enter into or engage for a period
        beginning on the date of this agreement and ending one year after the
        termination of Employee’s employment with Company, in any business in
        competition with Company and any subsidiary of the Company (defined as “the
        transportation of general commodity goods and automotive parts in the Midwestern
        part of the United States, or that business which may be conducted in the
        future
        under Employee’s management,” or “the Protected Business”), either as an
        individual on his own account, or as a partner, joint venturer, employee,
        agent,
        or consultant for any person, or as a director, officer, or stockholder (other
        than as a passive investor) of a corporation or other enterprise, or otherwise,
        in the territory served by such business.  The parties acknowledge
        that even thought eh Employee has been engaged as the owner and employee
        of
        Company, Employee acknowledges that he believes he will be able to engage
        in a
        livelihood apart from the activities which are prohibited by this covenant
        during the specified period, and that the value and expected value of the
        consideration given for this covenant is sufficient compensation for this
        agreement.

      


      5.2    Non-solicitation. From
        a period one year after the termination of Employee’s employment with the
        Company, Employee shall not, without the Company’s prior written consent,
        directly or indirectly, (a) call on any person or entity who, at the time
        of
        Employee’s employment, is a customer of the Company or any subsidiary of
        the Company, with respect to the purchase of any goods or services which
        are, at
        the time, being offered by the Company or any subsidiary of the Company,
        or which are under development by the Company or any subsidiary of the
        Company at the time of Employee’s employment, (b) solicit or induce or attempt
        to solicit or induce any


      
        
          
          

        

        
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      customer
        of the Company or any subsidiary of the Company to reduce, or take any action
        which would reduce, its business with the Company or any subsidiary of the
        Company, (c) solicit or attempt to solicit any employees of the Company or
        any
        subsidiary of the Company to leave the employ of the Company or any subsidiary
        of the Company, or (d) hire any employees or former employees of the Company
        or
        any subsidiary of the Company, or cause any entity with which Employee is
        affiliated or in which Employee owns an equity interest to hire any such
        employees or former employees except as specifically defined in this
        Agreement.  As used herein, the term “former employee” means a person
        who has been an employee of the Company or any subsidiary of the Company
        within
        the twelve-month period prior to the date of termination.

      


      5.3    Enforcement.  It
        is agreed by the parties that the covenants contained in this Article 5 may
        be
        enforced against Employee by injunction, without requirement imposed by the
        court for posting bond which Employee specifically and knowingly waives,
        as well
        as by all other legal remedies available to the Company.  It is agreed
        by the parties that if any portion of the covenants contained in this Article
        5
        are held to be unreasonable, arbitrary, or against public policy, the covenant
        shall be considered divisible both as to time and geographical area so that
        a
        lesser period or geographical area shall remain effective so long as the
        court
        determines the same is not unreasonable, arbitrary, or against public
        policy.  In the event the Company permanently cease conducting the
        Protected Business, Employee shall be released from this covenant.

      


      5.4    Liquidated
        Damages.  it is agreed by the parties that in the event of
        breach by Employee of the covenants contained in this Article 5, that as
        liquidated damages, the Company shall be entitled to recover from Employee,
        at
        the Company’s election, either (i) $25,000, or (ii) its actual
        damages.

       

      5.5    Preservation
        of Business.  During the period of this Agreement, Employee
        will not engage in any conduct, nor encourage others to engage in any conduct
        detrimental to the business of the Company, and shall not commit any act,
        or in
        any way assist others to commit any act which will injury such business,
        and
        will not divulge any confidential information or make available to any others
        any documents, files or other papers concerning the business or financial
        performance of the business of the Company.

      


      6.      
        Miscellaneous.

      


      6.1    Waiver.  The
        waiver of the breach of any provision of this Agreement shall not operate
        or be
        construed as a waiver of any subsequent breach of the same or other provision
        hereof.

      


      6.2    Entire
        Agreement; Modifications.  This Agreement represents the
        entire understanding among the parties with respect to the subject matter
        hereof, and this Agreement supersedes any and all prior understandings,
        agreements, plans and negotiations, whether written or oral with respect
        to the
        subject matter hereof including without limitation, any understandings,
        agreements or obligations respecting any past or future compensation, bonuses,
        reimbursements or other payments to Employee from the Company.  All
        modifications to this Agreement must be in writing and signed by both parties
        hereto.

      


      6.3    Notices.  All
        notices and other communications under this Agreement shall be in writing
        and
        shall be given by first class mail, certified or registered with return receipt
        requested, and shall


      
        
          
          

        

        
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      be
        deemed
        to have been duly given three (3) days after mailing to the respective persons
        named below:

      


      If
        to
        the
        Company:                                
Cannon Freight System, Inc.

      25325
        Henry B. Joy Blvd.

      Harrison
        Township, Michigan
        48045

      Copy
        of notice to

      Company sent
        to:                                 
High Point Transport, Inc.

      23730
        County Rd. 675

      Myakka
        City, Florida 34251

      Attn:
        Paul Henley CEO

      


      If
        to
        Employee:                                      
Anthony Vallone, Sr.

      39050
        Parkway Circle

      Harrison
        Township, Michigan 48045

      


      Any
        party
        may change such party’s address for notices by notice duly given pursuant to
        this Section.

      


      6.4     Headings.  The
        Section headings herein are intended for reference and shall not by themselves
        determine the construction or interpretation of this Agreement.

      


      6.5     Governing
        Law.  This Agreement shall be governed by and construed in
        accordance with the laws of the State of Michigan.

      


      6.6     Severability.  Should
        a court or other body of competent jurisdiction determines that any provision
        of
        this Agreement is invalid or unenforceable, such provision shall be adjusted
        rather than voided, if possible, and all other provisions of this Agreement
        shall be deemed valid and enforceable to the extent possible.

      


      6.7    Benefits
        of
        Agreement.  The provisions of this Agreement shall be binding
        upon and inure to the benefit of the executors, administrators, heirs,
        successors and assigns of the parties; provided, however, that except as
        herein
        expressly provided, this Agreement shall not be assignable either by the
        Company
        (except to an affiliate of the Company) or by Employee.

      


      6.8    Counterparts.  This
        Agreement may be executed in one or more counterparts, all of which taken
        together shall constitute one and the same Agreement.

      


      6.9    Withholdings.  All
        compensation and benefits to Employee hereunder shall be reduced by all federal,
        state, local and other withholdings and similar taxes and payments required
        by
        applicable law.

      


      6.10    Remedies.  All
        rights and remedies of the Company hereunder shall be cumulative and the
        exercise of any right or remedy shall not preclude the exercise of
        another.  In the event of a breach of this Agreement, the non-breaching
        party shall be entitled to all costs and actual attorney fees incurred as
        a
        result of the breach.


      
        
          
          

        

        
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      6.11    Interpretation
        Review.  Counsel in the negotiation and execution of this
        Agreement has represented both parties to this Agreement, and no inference
        shall
        be drawn against the drafting party.  Employee acknowledges that he
        has in fact reviewed and discussed this Agreement with his counsel and that
        he
        understands and assents to the terms hereof.

      


                 IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement effective
        as of
        the day and year first above written.

      


      
        	
                Company:

                 

              	
                Employee:

              
	
                Cannon
                  Freight System, Inc.

              	 
	 	 
	
                By:  /s/
                  Paul A. Henley

              	
                /s/
                  Anthony Vallone, Sr.

              
	
                           Paul
                  A.
                  Henley                                                      

              	
                   
                  Anthony Vallone, Sr.

              
	
                Its:       Chief
                  Executive Officer

              	 
	 	 
	
                This
                  Agreement, and the covenants, representations, and provisions contained
                  herein are GUARANTEED by:

              
	 	 
	
                High
                  Point Transport, Inc.,

              	 
	
                a
                  Florida corporation

              	 
	 	 
	 	 
	
                By:  /s/
                  Paul A. Henley

              	 
	
                           Paul
                  A. Henley

              	 
	
                Its:       President

              	 


      

       

      9.