EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
this 8th day of November, 2006, by and between Xxxxxxx Xxxxxx, residing at 000
Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 (the "Executive"), and Summit Global
Logistics, Inc., a Delaware corporation (the "Company").
BACKGROUND
WHEREAS, the Executive is expected to make a major contribution to
the growth, profitability and financial strength of the Company; and
WHEREAS, the Company desires to retain the services of the
Executive, and the Executive desires to be retained by the Company, on the terms
and conditions set forth below.
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in this Agreement, the receipt
and sufficiency of which are hereby acknowledged, the Company and Executive
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. The following terms, when used in this Agreement, shall
have the following meanings, unless the context clearly requires otherwise (such
definitions to be equally applicable to both the singular and plural of the
defined terms):
1.1.1 "AFFILIATE" means, (a) with respect to the Executive, any
other Person directly or indirectly Controlling, Controlled by, or under
common Control with the Executive and (b) with respect to the Company, (i)
any Person which directly or indirectly beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) securities or
other equity interests possessing more than 50% of the aggregate voting
power in the election of directors (or similar governing body) represented
by all outstanding securities of the Company or (ii) any Person with
respect to which the Company beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) securities or other equity
interests possessing more than 50% of the aggregate voting power in the
election of directors (or similar governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities or other
equity interests of such Person.
1.1.2 "BASE SALARY" shall have the meaning set forth in section
3.1.
1.1.3 "BOARD" means the Board of Directors of the Company.
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1.1.4 "CHANGE IN CONTROL" means the occurrence of the first step
(e.g., commencement of negotiations) in a process that results in any one
of the following events:
1.1.4.1 the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934,
as amended) (the "Act") of beneficial ownership
(within the meaning of Rule 13d-3 of the Act) of
more than 20% of the (A) then outstanding voting
stock of a Company; or (B) the combined voting
power of the then outstanding securities of the
Company entitled to vote;
1.1.4.2 an ownership change in which the shareholders of
the Company before such ownership change do not
retain, directly or indirectly, at least a
majority of the beneficial interest in the voting
stock of the Company after such transaction, or in
which the Company is not the surviving company;
1.1.4.3 the direct or indirect sale or exchange by the
beneficial owners (directly or indirectly) of the
Company of all or substantially all of the stock
of the Company;
1.1.4.4 a majority of the directors comprising the entire
Board as of the Effective Date changes during any
12-month period (other than a Qualified
Successor);
1.1.4.5 a reorganization, merger or consolidation in which
the Company is a party;
1.1.4.6 the sale, exchange, or transfer of all or
substantially all of the assets of the Company;
1.1.4.7 the bankruptcy, liquidation or dissolution of the
Company; or
1.1.4.8 any transaction including the Company in which the
Company acquires an ownership interest of any
percentage in, enters into a joint venture,
partnership, alliance or similar arrangement with,
or becomes owned in any percentage by, any other
entity that is engaged in a business similar to
the business engaged in by the Company and that
has operations in North America immediately before
such transaction or within one year thereafter.
1.1.5 "CAUSE" means, as determined by the Company in its sole
discretion, the Executive's
1.1.5.1 material act of dishonesty with respect to the
Company;
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1.1.5.2 conviction for a felony, gross misconduct that is
likely to have a material adverse effect on the
Company's business and affairs; or
1.1.5.3 other misconduct, such as excessive absenteeism,
or material failure to comply with Company rules.
1.1.6 "CODE" means the Internal Revenue Code of 1986, as amended.
1.1.7 "COMMON STOCK" means the common stock of the Company, par
value of $.001 per share.
1.1.8 "COMPANY LOCATION" means a Company office consisting of one
or more buildings within 25 miles of each other.
1.1.9 "COMPENSATION COMMITTEE" means the Compensation Committee
of the Board or such other committee designated by the Board that
satisfies any then applicable requirements of the New York Stock Exchange,
Nasdaq, or such other principal national stock exchange on which the
Common Stock is then traded, and which consists of two or more members of
the Board, each of whom shall be an outside director within the meaning of
Section 162(m) of the Code.
1.1.10 "CONFIDENTIAL INFORMATION" means:
1.1.10.1 proprietary information, trade secrets and
know-how of the Company and/or its Affiliates;
1.1.10.2 confidential information relating to the business,
operations, systems, networks, services, data
bases, customer lists, pricing policies, business
plans, marketing plans, product development plans,
strategies, inventions and research of the Company
and/or its Affiliates; and
1.1.10.3 confidential information relating to the financial
affairs and results of operations and forecasts or
projections of the Company and/or its Affiliates;
provided that information shall not constitute Confidential
Information if such information: (i) is generally known or
reasonably knowable by Persons other than the Company or
its Affiliates or Persons employed by, in control of or
otherwise affiliated with the Company or its Affiliates,
(ii) is known or reasonably knowable by Persons other than
the Company or its Affiliates or Persons employed by, in
control of or otherwise affiliated with the Company or its
Affiliates, by reason of the action of such Person or
Persons other than the Executive or any Person acting at
the Executive's direction or with the Executive's prior
consent, (iii) was known or reasonably knowable by the
Executive, by lawful means, prior to the date
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of the Executive's employment with the Company or (iv) is
compelled to be disclosed by law, regulation or legal
process.
1.1.11 "CONTROL" (including the terms "Controlled by" and "under
common Control with") means the possession, directly or indirectly or as a
trustee or executor, of the power to direct or cause the direction of the
management of a Person (including the direction of any Person related to
the Executive), whether through the ownership of stock, as a trustee or
executor, by contract or credit agreement or otherwise.
1.1.12 "DISABILITY" means any physical or mental condition which
renders Executive incapable of performing his essential functions and
duties hereunder for a period of at least 180 days, as determined in good
faith by a physician appointed by the Company.
1.1.13 "EFFECTIVE DATE" means the date of Closing as defined in
that certain Equity Purchase Agreement by and between Maritime Logistics
US Holdings Inc., FMI Holdco I, LLC, FMI Blocker, Inc. and each of the
Sellers set forth in Schedule A thereto, dated as of October 23, 2006.
1.1.14 "EMPLOYMENT TERM" shall have the meaning set forth in
section 2.2.
1.1.15 "EQUITY INCENTIVE PLAN" means the Summit Global Logistics,
Inc. 2006 Equity Incentive Plan, attached as Exhibit A hereto.
1.1.16 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
1.1.17 "FISCAL YEAR" means the calendar year.
1.1.18 "GOOD REASON" means the occurrence of any of the following:
1.1.18.1 without the Executive's prior written consent, any
material diminution in the Executive's authority,
duties or responsibilities, including those
pertaining to his status as a director of the
Board, if applicable; provided, however, that
prior to any termination pursuant to this Section
1.1.18.1, the Company must be given notice by the
Executive of his/her objection to such material
diminution and no less than 20 days to cure the
same;
1.1.18.2 any failure by the Company to pay the Executive
any portion of the Base Salary or other payments
to which the Executive is entitled under Sections
3.1 through 3.5 hereof, provided, however, that
prior to any termination pursuant to this Section
1.1.18.2 on account of the non-payment of Base
Salary, the Company must be given notice by the
Executive of such acts or omissions and no less
than 30 days to cure the same;
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1.1.18.3 without the Executive's prior written consent, the
relocation of the principal place of the
Executive's employment to a location a further
distance than the Company Location where the
individual was working immediately prior to the
relocation;
1.1.18.4 a material breach by the Company of any of the
material provisions of this Agreement, provided,
however, that prior to any such termination
pursuant to this Section 1.1.18.4, the Company
must be given notice by the Executive of such acts
or omissions and no less than 20 days to cure the
same; or
1.1.18.5 an event described in Section 1.1.4.4 hereof
occurs.
1.1.19 "MANAGEMENT INCENTIVE PLAN" means the Summit Global
Logistics, Inc. 2007 Management Incentive Plan, attached as Exhibit B
hereto.
1.1.20 "PERSON" means an individual, corporation, partnership,
association, limited liability company or partnership, trust, government,
governmental agency or body, or any other group or entity, no matter how
organized and whether or not for profit.
1.1.21 "QUALIFIED SUCCESSOR" means in the event there is a vacancy
in the Board occurring between annual meetings as a result of death,
incapacity or resignation, or if one or more of the Directors shall
decline to stand for election to the Board or, if he is unable or
unwilling to so serve, then the shareholders that are party to that
certain voting agreement ("Voting Agreement") dated on or about the date
hereof between the Company and the parties thereto to elect Messrs.
Agresti, DeSaye, MacAvery and XxXxxxxxx (the "Shareholders") shall
designate one or more individuals of standing within the business world
reasonably comparable to that of such Director (each a "Qualified
Successor") as one or more successor Directors in the following manner.
The Shareholders shall select an individual to serve as the Qualified
Successor, which individual shall be independent both of the Company
(except through proposed service as a member of the Board or a subsidiary
of the Company) and of the Shareholders. The selected individual shall be
subject to the prior approval of a super-majority of the Shareholders,
which consent shall not unreasonably be withheld. A Shareholder's approval
of a designated Director shall be deemed given if such Shareholder has not
responded to a notice by the Chairman of the Board of the Company within
30 days of notice to the Shareholder of the identity of the selected
individual. Upon selection and approval hereunder, such Qualified
Successor shall for all purposes be deemed a Director of the Company and
shall be subject to the Voting Agreement in the event of his/her death,
incapacity, resignation or decision not to be a Director.
1.1.22 "TERMINATION DATE" means the date on which the Executive's
employment with the Company terminates for any reason.
1.1.23 "YEAR OF SERVICE" means the completion by the Executive of
Year One, Year Two, Year Three, Year Four , Year Five, or any additional
one-year period under Section 2.2 hereof, as applicable. For purposes of
Section 3.5 hereof, and only for such purposes, partial years of service
will be credited as one (1) Year of Service if the
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Executive has worked at least 1,000 hours during the applicable year.
1.1.24 "Year One" means the 12-consecutive-month period beginning
on the Effective Date and ending on the day immediately prior to the first
day of Year Two.
1.1.25 "Year Two" means the 12-consecutive-month period beginning
on the first anniversary of the Effective Date and ending on the day
immediately prior to the first day of Year Three.
1.1.26 "Year Three" means the 12-consecutive-month period
beginning on the second anniversary of the Effective Date and ending on
the day immediately prior to the first day of Year Four.
1.1.27 "Year Four" means the 12-consecutive-month period beginning
on the third anniversary of the Effective Date and ending on the day
immediately prior to the first day of Year Five.
1.1.28 "Year Five" means the 12-consecutive-month period beginning
on the fourth anniversary of the Effective Date and ending on the day
immediately prior to the fifth anniversary of the Effective Date.
ARTICLE 2
EMPLOYMENT AND TERM
2.1 EMPLOYMENT. The Company employs Executive and the Executive hereby
agrees to such employment by the Company during the Employment Term to serve as
Senior Vice President of Summit Global Logistics, Inc., with the customary
duties, authorities and responsibilities of an officer of a corporation and such
other duties, authorities and responsibilities relative to the Company or its
Affiliates that have been agreed upon in writing by the Company and Executive.
This Agreement supersedes any and all prior agreements between Executive and the
Company or the Company's predecessors in interest with respect to Executive's
employment, and any such prior agreements shall be void and of no further force
and effect as of the Effective Date.
2.2 EMPLOYMENT TERM. The "Employment Term" of this Agreement shall
commence on the Effective Date, and unless sooner terminated as provided in
Article 4, shall terminate upon the fifth (5th) anniversary of such date.
Thereafter, and unless sooner terminated as provided in Article 4, the
Employment Term shall automatically be renewed on each anniversary date of the
expiration of the initial Employment Term for a period of one (1) year, unless
and until either the Company or the Executive terminates such automatic renewal
upon sixty (60) days' advance written notice to the other of an intention not to
renew (that is, upon written notice of an intention not to renew delivered to
the other at least sixty (60) days prior to the beginning of the next one-year
period); provided, however, that in no event shall the Employment Term exceed a
period of ten (10) continuous years beginning with the Effective Date.
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2.3 FULL WORKING TIME. During the Employment Term, the Executive shall
devote substantially all of his ability and attention, all of his skill and
experience and efforts during normal business hours and at such other times as
reasonably required for the proper performance of his duties hereunder and to
the business and affairs of the Company. During the Employment Term, the
Executive shall not, either directly or indirectly, actively participate in any
other business or accept any employment or business office whatsoever from any
other Person; provided, however, that the foregoing shall not preclude the
Executive, subject to Article 5, from: (i) serving as a director of any
non-profit or charitable organization, or any company not in competition with
the Company, or (ii) making an investment in any other business, so long as in
any such case, the Executive does not actively participate in such other
business or organization and such activity does not interfere with the
Executive's ability to perform his duties hereunder and does not constitute a
conflict of interest with the Company.
ARTICLE 3
COMPENSATION AND BENEFITS
3.1 BASE SALARY. During the Employment Term, as compensation for
services hereunder and in consideration for the protective covenants set forth
in Article 5 of this Agreement, the Executive shall be paid a base salary of Two
Hundred Fifty Thousand United States Dollars (US$250,000) for Year One, with an
annual cost of living increase of 3% for each of Year Two, Year Three, Year Four
and Year Five, and, if applicable under Section 2.2 hereof, for each additional
one-year period of the Employment Term thereafter, or such greater amount as may
from time to time be approved by the Compensation Committee (the "Base Salary").
Cost-of-living increases shall be effective as of the first day of Year Two,
Year Three, Year Four and Year Five, respectively, and, if applicable under
Section 2.2 hereof, as of the first day of each additional one-year period of
the Employment Term thereafter, and shall be cumulative. Base Salary shall be
paid to the Executive in accordance with the Company's normal payroll practices.
3.2 BONUSES. Such bonuses shall include the following:
3.2.1 NON-COMPETE BONUS. As consideration for the Executive
entering into this Agreement, the Company shall pay the Executive a bonus
in the amount of Eighty Thousand United States Dollars (US$80,000) upon
the condition that the executive agrees to be bound by the terms of
Section 5.2 of this Agreement, as set forth in Article 5 hereof,
hereinafter referred to as the "Non-Compete Bonus". The Non-Compete Bonus
shall be payable in cash no later the thirtieth (30th) day following the
date of this Agreement.
3.2.2 MANAGEMENT INCENTIVE BONUSES. The Executive shall receive
an annual bonus in accordance with the terms of a grant agreement made
pursuant to the terms of the Management Incentive Plan (the "Annual Bonus
Grant Agreement"). The Executive also shall receive a multi-year bonus,
pursuant to the terms of the Management Incentive Plan, if certain
performance targets are met (the "Multi-Year Bonus Grant Agreement"). The
Annual Bonus Grant Agreement and Multi-Year Bonus Grant Agreement are
attached as Exhibits C and D, respectively, hereto. If the Management
Incentive Plan is terminated for any reason whatsoever, whether by the
Company or any other Person, the
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Executive shall be paid the annual bonus and multi-year bonus that
otherwise would be payable to him with respect to the Performance Period
within which the termination of such Plan occurs, notwithstanding the
termination of such Plan. For purposes of the immediately preceding
sentence, the Executive's annual bonus and multi-year bonus that otherwise
would be payable to him with respect to the Performance Period within
which the termination of the Management Incentive Plan occurs shall be
identical to that set forth in Exhibits C and D, respectively, hereto, and
shall be fully vested, subject to the satisfaction of the conditions set
forth in Section 5.2 of such Plan.
3.3 EQUITY COMPENSATION. On or about the Effective Date, or as soon as
administratively practicable thereafter, the Executive shall receive grants
under the Equity Incentive Plan as follows:
3.3.1 INCENTIVE STOCK OPTIONS. A grant of an Incentive Stock
Option, as defined in the Equity Incentive Plan, in respect of 126,000
shares of Common Stock, pursuant to an option grant agreement annexed as
Exhibit E hereto.
3.3.2 STOCK APPRECIATION RIGHTS. A grant of 94,500 Stock
Appreciation Rights, as defined in the Equity Incentive Plan, each in
respect of one share of Common Stock, pursuant to a Stock Appreciation
Rights grant agreement annexed as Exhibit F hereto. The parties intend
that such grant cover the approximate combined federal and state income
tax liability associated with both (i) the number of shares of Common
Stock with respect to which the Incentive Stock Option is exercised and
(ii) the number of shares of Common Stock underlying the exercise of the
Stock Appreciation Rights used to pay for the tax liability under clause
(i).
All such grants and/or awards shall conform to the terms and conditions of the
Equity Incentive Plan and the annexed grant agreements between the Company and
the Executive. In its discretion, the Compensation Committee may make additional
grants or awards to the Executive from time to time. If the Equity Incentive
Plan is terminated for any reason whatsoever, whether by the Company or any
other Person, the Executive shall be entitled to the benefits due to him under
Exhibits E and F, respectively, hereto, notwithstanding the termination of such
Plan. For purposes of the immediately preceding sentence, the termination of the
Equity Incentive Plan shall result in all unvested Incentive Stock Options and
Stock Appreciation Rights granted to the Participant under Exhibits E and F,
respectively, to be fully vested and exercisable.
3.4 SERP BENEFITS. During the Employment Term, the Executive shall be
entitled to participate in the Summit Global Logistics, Inc. Supplemental
Executive Retirement Plan (the "SERP") in accordance with the terms thereof.
Such eligibility to participate in the SERP shall commence effective as of the
later of the Effective Date or the effective date of the SERP. The SERP is
attached as Exhibit G hereto.
3.5 RETIREMENT, WELFARE AND FRINGE BENEFITS. To the maximum extent that
he is eligible under the terms of the applicable plan or program, the Executive
shall participate in the current or future plans or programs maintained by the
Company for its employees and/or senior executives that provide insurance,
medical benefits, retirement benefits, or similar fringe benefits as set forth
in SCHEDULE A attached hereto, as well as any additional plans or programs that
may be adopted that are generally applicable to senior executives; provided,
however, that if within
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the Employment Term, the Executive leaves the employment of the Company and is
eligible for severance benefits, then $7,500 per Year of Service shall be added
to the severance amount in lieu of any forfeited (non-vested) qualified plan
amount. In addition, the Executive shall be entitled to a minimum of twenty (20)
vacation days for each calendar year beginning with or within a Year of Service,
which must be taken in accordance with the Company's vacation policy then in
effect. The Executive shall also be entitled at least six (6) days of sick day
leave, seven (7) personal days leave and seven (7) fixed holidays for each
calendar year beginning with or within a Year of Service, which must be taken in
accordance with the Company's applicable policies then in effect. Unused
vacation days, sick days or personal days shall not carry forward into the
subsequent year. In the event that the Company establishes a more favorable
vacation, sick leave or personal day policy generally applicable to senior
executives, the Executive shall be entitled to any such additional benefits.
During the Employment Term, the Company shall pay the Executive an automobile
allowance, which shall not exceed $1,250 per month, plus an annual inflation
adjustment reflecting market conditions. The Executive is responsible for the
tax consequences of the personal usage of the automobile. The Executive shall be
entitled to a $5,000 per year golf, health, country and/or other recreational
club membership allowance for each Year of Service, to be allocated among the
foregoing as the Executive sees fit. The Executive is responsible for the tax
consequences of the personal usage of the golf, health, country and/or other
recreational club membership. In addition, or in lieu of the Company policy for
executives with respect to annual physical examinations, during each Year of
Service, the Executive shall be reimbursed up to $1000 for an annual physical
examination conducted by a physician designated by the Executive.
3.6 INDEMNIFICATION AND INSURANCE.
3.6.1 D&O INSURANCE. During the entirety of the Employment Term,
the Company shall cause the Executive to be covered by and named as an
insured or as a member of a class of insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as an
officer or director of the Company or service in other capacities at its
request ("D&O Insurance Coverage"). The D&O Insurance Coverage provided to
the Executive pursuant to this Section 3.6.1 shall be of the same scope
and on the same terms and conditions as the coverage (if any) provided to
other officers or directors of the Company and shall continue for so long
as the Executive shall be subject to personal liability relating to such
service.
3.6.2 EPLI INSURANCE. During the entirety of the Employment Term,
the Company shall cause the Executive to be covered by and named as an
insured or as a member of a class of insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as a
director or officer of the Company, where such personal liability could
arise under or in connection with, or be attributable to, the Company's
employment practices and procedures "EPLI Insurance Coverage"). The EPLI
Insurance Coverage provided to the Executive pursuant to this Section
3.6.2 shall be of the same scope and on the same terms and conditions as
the coverage (if any) provided to other officers or directors of the
Company and shall continue for so long as the Executive shall be subject
to personal liability relating to such service.
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3.6.3 INDEMNIFICATION. To the maximum extent permitted under
applicable law, and provided that the Executive has acted within the scope
of his authority hereunder, the Company shall indemnify the Executive
against and hold him harmless from any costs, liabilities, losses and
exposures (each, a "Cost," and collectively, "Costs") to the fullest
extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the Company or
any subsidiary or Affiliate thereof and shall survive the termination of
this Agreement and continue for so long as the Executive shall be subject
to personal liability relating to such service; provided, however, that
the Company shall not indemnify and hold harmless the Executive from a
Cost to the extent that such Cost is attributable to the Executive's (i)
willful misconduct or gross negligence in the performance of his duties or
exercise of his authority hereunder or (ii) material breach of any of the
provisions of this Agreement.
3.7 EXPENSES. The Company shall pay or reimburse the Executive for
reasonable business expenses actually incurred or paid by the Executive during
the Employment Term, in the performance of his services hereunder; provided,
however, that such expenses are consistent with the Company's policy. Such
payment or reimbursement is expressly conditioned upon presentation of expense
statements or vouchers or other supporting documentation by the Executive in a
manner that is acceptable to the Company and otherwise in accordance with the
Company's policy then in effect.
3.8 DEDUCTIONS. The Company shall deduct from all compensation or
benefits payable pursuant to this Agreement such payroll, withholding and other
taxes and medical, pension and other benefits in accordance with the Company's
benefit programs and the Executive's selections and as may in the reasonable
opinion of the Company be required by law and any such additional amounts
requested in writing by the Executive.
ARTICLE 4
TERMINATION
4.1 GENERAL. The Company shall have the right to terminate the
employment of the Executive at any time with or without Cause and the Executive
shall be paid the Standard Termination Entitlements (as defined in Section
4.3.1).
4.2 TERMINATION UNDER CERTAIN CIRCUMSTANCES.
4.2.1 TERMINATION WITHOUT SEVERANCE BENEFITS. In the event the
Executive's employment with the Company is terminated prior to the
expiration of the Employment Term by reason of (i) the Executive's
resignation without Good Reason, (ii) the Executive's death or (iii) the
Executive's discharge by the Company for Cause prior to the occurrence of
a Change in Control, this Agreement shall terminate including, without
limitation, the Company's obligations to provide any compensation,
benefits or severance to the Executive under Article 3 of this Agreement
or otherwise, other than the Standard Termination Entitlements (as defined
in section 4.3.1).
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4.2.2 DISABILITY. The Company may terminate the Executive's
employment upon the Executive's Disability. In such event, in addition to
the Standard Termination Entitlements (as defined in section 4.3.1), the
Company shall continue to pay the Executive his Base Salary in accordance
with the Company's normal payroll practices, at the annual rate in effect
for him immediately prior to the termination of his employment, during a
period ending on the earliest of: (a) the date on which long-term
disability insurance benefits are first payable to him under any long-term
disability insurance plan covering employees of the Company; and (b) the
date of his death. A termination of employment due to Disability under
this Section 4.2.2 shall be effected by notice of termination given to the
Executive by the Company and shall take effect on the later of the
effective date of termination specified in such notice or the date on
which the notice of termination is deemed given to the Executive.
4.2.3 TERMINATION WITH SEVERANCE BENEFITS. In the event that the
Executive's employment with the Company is terminated by the Executive
prior to the expiration of the Employment Term for Good Reason or by the
Company prior to the expiration of the Employment Term other than for
Cause or Disability, the Company shall pay the Standard Termination
Entitlements (as defined in section 4.3.1) and the Severance Benefits (as
defined in section 4.3.2); provided, however, that any payment required by
this section 4.2.3 is expressly conditioned upon:
4.2.3.1 The Executive's continued material compliance with
the terms of this Agreement, including, without
limitation, Article 5; and
4.2.3.2 The Executive's resignation from any and all
positions which he holds as an officer, director
or committee member with respect to the Company or
any Affiliate thereof.
4.3 Standard Termination Entitlements; Severance Benefits.
4.3.1 STANDARD TERMINATION ENTITLEMENTS. For all purposes of this
Agreement, the Executive's "Standard Termination Entitlements" shall mean
and include:
4.3.1.1 the Executive's earned but unpaid compensation
(including, without limitation, Base Salary, and
all other items which constitute wages under
applicable law, interpreting the term "wages" in
the broadest possible sense) as of the date of his
termination of employment. This payment shall be
made at the time and in the manner prescribed by
law applicable to the payment of wages including,
specifically, payment for accrued, but unused
vacation days;
4.3.1.2 reimbursement for reasonable business expenses and
authorized travel expenses incurred but still
outstanding; and
4.3.1.3 the benefits, if any, due to the Executive, and
the Executive's estate, surviving dependents or
his designated beneficiaries under the employee
benefit plans and programs and
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compensation plans and programs maintained for the
benefit of, or covering, the officers, executives
and employees of the Company, including, but not
limited to, all plans or arrangements listed on
SCHEDULE A, the Equity Incentive Plan and the
Management Incentive Plan. The time and manner of
payment or other delivery of these benefits and
the recipients of such benefits shall be
determined according to the terms and conditions
of the applicable plans and programs.
4.3.2 SEVERANCE BENEFITS. For all purposes of this Agreement, the
Executive's "Severance Benefits" shall mean the benefits set forth in
Exhibit H. If the Summit Global Logistics, Inc. Severance Benefit Plan, as
set forth in Exhibit H, is terminated for any reason whatsover, whether by
the Company or any other Person, the Executive shall be paid severance
benefits identical to those set forth in Appendix A of such Plan,
notwithstanding the termination of such Plan.
ARTICLE 5
RESTRICTIVE COVENANTS
5.1 PROPRIETARY INFORMATION.
5.1.1 DISCLOSURE DURING THE EMPLOYMENT TERM. Subject to Section
5.5 hereof, the Executive shall promptly disclose to the Company in such
form and manner as the Company may reasonably require (a) all operations,
systems, services, methods, developments, inventions, improvements and
other information or data pertaining to the business or activities of the
Company and its Affiliates as are conceived, originated, discovered or
developed by the Executive during the Employment Term and (b) such
information and data pertaining to the business, operations, personnel,
activities, financial affairs, and other information relating to the
Company and its Affiliates and their respective customers, suppliers,
employees and other persons having business dealings with the Company and
its Affiliates as may be reasonably required for the Company to operate
its business. It is understood that such information is proprietary in
nature and shall (as between the Company and Executive) be for the
exclusive use and benefit of the Company and shall be and remain the
property of the Company both during the Employment Term and thereafter.
5.1.2 DISCLOSURE AFTER EMPLOYMENT. In the event that the
Executive leaves the employ of the Company for any reason, including,
without limitation, the expiration of the Employment Term, the Executive
shall deliver to the Company any and all devices (including any lap top,
personal hand-held devices or mobile telephone), records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, materials, equipment, other documents or property
belonging to the Company or any Affiliate thereof or any of their
respective successors or assigns.
5.2 NON-COMPETITION. During the Employment Term and for twelve months
after the date employment with the Company has ended, the Executive agrees, and
shall cause each Person Controlled by him to agree, that he shall not, directly
or indirectly, or through any Person
12
Controlled by the Executive: (a) engage in any logistic activities competitive
with the business of the Company and its Affiliates for his or their own account
or for the account of any other Person, or (b) become interested in any Person
engaged in logistic activities competitive with the business of the Company and
its Affiliates as a partner, shareholder, member, principal, agent, employee,
trustee, consultant or in any other relationship or capacity.
5.3 NON-SOLICITATION. During the Employment Term and for a period of
twelve months after the date employment with the Company has ended, the
Executive will not, directly or indirectly, use proprietary knowledge or
information relating to the Company or its Affiliates obtained during the course
of the Executive's employment with the Company for his own benefit or the
benefit of any third party with the intention to, or which a reasonable person
would construe to, (a) interfere with or disrupt any present relationship,
contractual or otherwise, between the Company or its Affiliates and any
customer, supplier, employee, consultant or other person having business
dealings with the Company or its Affiliates, or (b) employ or solicit the
employment or engagement by others of any employee or consultant of the Company
or its Affiliates who was such an employee or consultant at the time of
termination of the Executive's employment hereunder. Upon leaving the employment
of the Company, the Executive shall notify his new employer of his obligations
under this Agreement and grants consent to notification by the Company to the
Executive's new employer concerning Executive's rights and obligations under
this Agreement.
5.4 NON-DISCLOSURE. Except with the prior written consent of the Company
in each instance or as may be reasonably necessary to perform the Executive's
services hereunder, the Executive shall not disclose, use, publish, or in any
other manner reveal, directly or indirectly, at any time during or after the
Employment Term, any Confidential Information relating to the Company or any
Affiliate thereof acquired by him prior to, during the course of, or incident
to, his employment hereunder; provided, however, that necessary or appropriate
disclosures may be made to the Executive's legal counsel.
5.5 OWNERSHIP OF INTELLECTUAL PROPERTY. Subject to applicable law, the
Executive acknowledges and agrees that all work performed, and all ideas,
concepts, materials, products, software; documentation, designs, architectures,
specifications, flow charts, test data, programmer's notes, deliverables,
improvements, discoveries, methods, processes, or inventions, trade secrets or
other subject matter related to the Company's business (collectively,
"Materials") conceived, developed or prepared by the Executive alone, or with
others, during the period of Executive's employment by the Company in written,
oral, electronic, photographic, optical or any other form are the property of
the Company and its successors or assigns, and all rights, title and interest
therein shall vest in the Company and its successors or assigns, and all
Materials shall be deemed to be works made for hire and made in the course of
the Executive's employment by the Company. To the extent that title to any
Materials has not or may not, by operation of law, vest in the Company and its
successors or assigns, or such Materials may not be considered works made for
hire. Notwithstanding the foregoing, the parties acknowledge and understand that
Executive may previously have developed and may continue to develop certain
ideas, concepts and designs which are unrelated to the business of the Company
and may continue to do so provided that such activities do not interfere with
his duties under this Agreement.
13
5.6 REASONABLE LIMITATIONS. Executive acknowledges that given the nature
of the Company's business, the covenants contained in this Article 5 contain
reasonable limitations as to time, geographical area and scope of activity to be
restrained, and do not impose a greater restraint than is necessary to protect
and preserve the Company's business and to protect the Company's legitimate
business interests. If, however, this Article 5 is determined by any arbitrator
to be unenforceable by reason of its extending for too long a period of time or
over too large a geographic area or by reason of its being too extensive in any
other respect, or for any other reason, it will be interpreted to extend only
over the longest period of time for which it may be enforceable and/or over the
largest geographical area as to which it may be enforceable and/or to the
maximum extent in all other aspects as to which it may be enforceable, all as
determined by such court or arbitrator in such action.
5.7 SURVIVAL OF PROTECTIVE COVENANTS. Each covenant on the part of
Executive contained in this Article 5 shall be construed as an agreement
independent of any other provision of this Agreement, unless otherwise indicated
herein, and shall survive the termination of Executive's employment under this
Agreement.
ARTICLE 6
DISPUTE RESOLUTION
6.1 ARBITRATION OF DISPUTES. Both parties agree that all controversies
or claims that may arise between the Executive and the Company in connection
with this Agreement shall be settled by arbitration. The parties further agree
that the arbitration shall be held in the State of New Jersey, and administered
by the American Arbitration Association under its Commercial Arbitration Rules,
applying New Jersey law.
6.1.1 QUALIFICATIONS OF ARBITRATOR. The arbitration shall be
submitted to a single arbitrator chosen in the manner provided under the
rules of the American Arbitration Association. The arbitrator shall be
disinterested and shall not have any significant business relationship
with either party, and shall not have served as an arbitrator for any
disputes involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her date of
appointment. The arbitrator shall be a person who is experienced and
knowledgeable in employment and executive compensation law and shall be an
attorney duly licensed to practice law in one or more states.
6.1.2 POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of
this Agreement and shall not have the authority to award punitive or
exemplary or damages under any circumstances. The parties shall equally
share the expense of the arbitrator selected and of any stenographer
present at the arbitration. The remaining costs of the arbitrator
proceedings shall be allocated by the arbitrator, except that the
arbitrator shall not have the power to award attorney's fees.
6.1.3 EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall
render its decision within thirty (30) days after termination of the
arbitration proceeding, which decision
14
shall be in writing, stating the reasons therefor and including a brief
description of each element of any damages awarded. The decision of the
arbitrator shall be final and binding. Judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
6.2 SERVICE OF PROCESS. The parties agree that service of process may be
made on it by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to its address specified in Section 7.1 (or
applicable forwarding address), or by any other method of service provided for
under the applicable laws in effect in the applicable jurisdiction.
ARTICLE 7
GENERAL PROVISIONS
7.1 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to the Executive: Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
If to the Company: Summit Global Logistics, Inc.
000 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
with a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
or to such other address as the party to whom notice is given may have
previously furnished to the other parties hereto in writing in the manner set
forth above.
7.2 ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the Executive and the Company with respect to the Company's
employment of the Executive and supersedes any and all prior agreements and
understandings, written or oral, with respect thereto
7.3 AMENDMENTS AND WAIVERS. Any term of this Agreement or any Schedule,
Exhibit or attachment hereto may be amended only by (a) an instrument in writing
and signed by
15
the party against whom such amendment is sought to be enforced, and (b) in the
case of the Company, such amendment also must be duly authorized by an
appropriate resolution of the Company. In addition, any term of this Agreement
or any Schedule, Exhibit or attachment hereto may be waived by the party against
whom the obligation runs to by an instrument in writing signed by such party and
delivered to the Company as reasonable time prior to the effective date of the
waiver
7.4 SUCCESSORS AND ASSIGNS. The Company shall have the right to assign
this Agreement, subject to the Executive's consent which shall not be
unreasonably withheld and subject to. This Agreement shall inure to the benefit
of, and be binding upon (a) the parties hereto, (b) the heirs, administrators,
executors and personal representatives of the Executive and (c) the successors
and assigns of the Company as provided herein.
7.5 GOVERNING LAW. This Agreement, including the validity hereof and the
rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey without
giving effect to any conflicts of law provisions or rule, that would cause the
application of the laws of any other jurisdiction.
7.6 SEVERABILITY. If any provisions of this Agreement as applied to any
part or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances or the
validity or enforceability of this Agreement.
7.7 NO CONFLICTS. The Executive represents to the Company that the
execution, delivery and performance by the Executive of this Agreement does not
and will not conflict with or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default under any contract,
agreement or understanding, whether oral or written, to which the Executive is
or was a party or of which the Executive is or should be aware.
7.8 SURVIVAL. The rights and obligations of the Company and Executive
pursuant to Articles 4, 5 and 6 shall survive the termination of the Executive's
employment with the Company and the expiration of the Employment Term.
7.9 CAPTIONS. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
7.10 COUNTERPARTS. This Agreement be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE
_________________________________
Xxxxxxx Xxxxxx
SUMMIT GLOBAL LOGISTICS, INC.
By: _____________________________
Name
Title:
17
SCHEDULE A
EMPLOYEE BENEFIT SUMMARY TERM SHEET
As of January 1, 2007, the Executive shall be eligible to participate in
all of the retirement and welfare benefit plans sponsored, maintained or
contributed to by FMI International, LLC and/or its affiliates or subsidiaries,
which plans shall be amended accordingly. Without in any way limiting the
generality of the foregoing, the Executive shall be entitled to participate in
the following plans:
o FMI International, LLC 401(k) Profit Sharing Plan;
o FMI International West Health Plan;
o FMI International, LLC PPO Health Insurance Plan;
o FMI International, LLC Dental Plan; and the
o FMI International, LLC Life Insurance Plan.
18
EXHIBIT A
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
1. PURPOSE AND ELIGIBILITY. The purpose of this 2006 Equity Incentive Plan
(the "Plan") of Summit Global Logistics, Inc., a Delaware corporation (the
"COMPANY") is to provide stock options, stock issuances and other equity
interests in the Company (each, an "AWARD") to (a) Employees, officers,
Directors, consultants, independent contractors, and advisors of the Company or
any Parent or Subsidiary thereof, and (b) any other Person who is determined by
the Committee of the Board of Directors of the Company (the "BOARD") to have
made (or is expected to make) contributions to the Company or any Parent or
Subsidiary thereof. Any person to whom an Award has been granted under the Plan
is called a "PARTICIPANT." Additional definitions are contained in Section 2 and
certain other Sections of the Plan.
2. CERTAIN DEFINITIONS.
a. "AFFILIATE" shall mean
i. any Person which directly or indirectly beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by all
outstanding securities of the Company; or
ii. any Person with respect to which the Company beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
b. "BASE SALARY" shall mean a Participant's "Base Salary" as such term
is defined in the Employment Agreement.
c. "BUSINESS ENTITY" shall mean (i) the Company or (ii) any Parent or
Subsidiary thereof.
d. "BUSINESS ENTITY LOCATION" means a Business Entity office consisting
of one or more buildings within 25 miles of each other.
e. "CAUSE" shall mean, "Cause," as defined in the Participant's
Employment Agreement or Director's Agreement, and in the absence of such
definition, Cause shall mean, as determined by the Committee in its sole
discretion, the Participant's
i. material act of dishonesty with respect to the Business Entity
that employs the Participant;
ii. conviction for a felony, gross misconduct that is likely to
have a material adverse effect on the business and affairs of
the Business Entity that employs the Participant; or
iii. other misconduct, such as excessive absenteeism or failure to
comply with the rules of the Business Entity that employs the
Participant.
f. "CHANGE IN CONTROL" shall mean the occurrence of the first step,
including, but not limited to, commencement of negotiations, in a process that
results in any one of the following events:
i. the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) (the "Act") of beneficial
ownership (within the meaning of Rule 13d-3 of the Act) of 20%
or more of the (A) then outstanding voting stock of the
Company; or (B) the combined voting power of the then
outstanding securities of the Company entitled to vote;
ii. an ownership change in which the shareholders of the Company
before such ownership change do not retain, directly or
indirectly, at least a majority of the beneficial interest in
the voting stock of the Company after such transaction, or in
which the Company is not the surviving company;
iii. the direct or indirect sale or exchange by the beneficial
owners (directly or indirectly) of the Company of all or
substantially all of the stock of the Company;
iv. a majority of the directors comprising the entire Board as of
the Effective Date changes during any 12-month period (other
than a Qualified Successor);
v. a reorganization, merger, or consolidation in which the
Company is a party;
vi. the sale, exchange, or transfer of all or substantially all of
the assets of the Company;
vii. the bankruptcy, liquidation or dissolution of the Company; or
viii. any transaction including the Company in which the Company
acquires an ownership interest of any percentage in, enters
into a joint venture, partnership, alliance or similar
arrangement with, or becomes owned in any percentage by, any
other entity that is engaged in a business similar to the
business engaged in by the Company and that has operations in
North
America immediately before such transaction or within one year
thereafter.
g. "CODE" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
h. "COMMITTEE" shall mean the Compensation Committee of the Board or
such other committee designated by the Board that satisfies any then applicable
requirements of the New York Stock Exchange, Nasdaq, or such other principal
national stock exchange on which the Common Stock is then traded, and which
consists of two or more members of the Board, each of whom shall be an outside
director within the meaning of Section 162(m) of the Code. Notwithstanding the
foregoing, in the case of any Award granted to any Participant who is a "covered
employee" within the meaning of Section 162(m), the Committee shall consist of
two or more members of the Board who are "outside directors" within the meaning
of such Section.
i. "COMMON STOCK" shall mean the common stock of the Company, par value
of $.001 per share.
j. "COMPANY" shall mean Summit Global Logistics, Inc., and any
successor thereto, and, for purposes of Awards other than Incentive Stock
Options, shall include any other business venture in which the Company has a
direct or indirect significant interest, as determined by the Committee in its
sole discretion.
k. "CONTROL" (including the terms "Controlled by" and "under common
Control with") shall mean the possession, directly or indirectly, or as a
trustee or executor, of the power to direct or cause the direction of the
management of a Person, whether through the ownership of stock, as a trustee or
executor, by contract or credit agreement or otherwise.
k. "DESIGNATED BENEFICIARY" shall mean the beneficiary designated by a
Participant, in accordance with Section 15h hereof, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant's estate.
l. "DETERMINATION PERIOD" shall mean, with respect to any Performance
Period, a period commencing on or before the first day of the Performance Period
and ending not later than the earlier of (i) 90 days after the commencement of
the Performance Period and (ii) the date on which twenty-five percent (25%) of
the Performance Period has been completed. Any action required to be taken
within a Determination Period may be taken at a later date if permissible under
Section 162(m) of the Code or regulations promulgated thereunder, as they may be
amended from time to time.
m. "DIRECTOR" shall mean a member of the Board or the board of
directors of a Parent or Subsidiary who is not an Employee.
n. "DIRECTOR'S AGREEMENT" shall mean the Participant's agreement with
the Company or any Parent or Subsidiary thereof to serve as a non-Employee
director of such Business Entity.
o. "DISABILITY" shall mean any physical or mental condition which
renders the Participant incapable of performing his or her essential functions
and duties as an Employee for a continuous period of at least 180 days, as
determined in good faith by a physician appointed by the Business Entity that
employs the Participant.
p. "EFFECTIVE DATE" shall mean the date specified in Section 15c
hereof.
q. "EMPLOYEE" shall mean an employee of the Company or any Parent or
Subsidiary thereof, but only if the employee is reported as such on the payroll
records of such entity.
r. "EMPLOYMENT AGREEMENT" shall mean the Participant's employment
agreement with the Business Entity that employs him or her as in effect as of
the Effective Date.
s. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
t. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
u. "GOOD REASON" shall mean "Good Reason," as defined in the
Participant's Employment Agreement or Director's Agreement, and in the absence
of such definition, shall mean:
i. without the Participant's prior written consent, any material
diminution in the Participant's authority, duties or
responsibilities, including those pertaining to his or her
status as a director, if applicable, provided, however, that
prior to any termination pursuant to this Section 2ui., the
applicable Business Entity must be given notice by the
Participant of his/her objection to such material diminution
and no less than 20 days to cure the same;
ii. any failure by the Business Entity to pay the Participant any
portion of the Base Salary to which the Participant is
entitled under Section 2b or any payments to which the
Participant is entitled under his or her employment agreement,
if applicable, provided, however, that prior to any
termination on account of the non-payment of Base Salary, the
Business Entity must be given no less than 30 days to cure the
same;
iii. without the Participant's prior written consent, the
relocation of the principal place of the Participant's
employment to a location more than 30 miles from the Business
Entity Location where the individual was working immediately
prior to the relocation; or
iv. a material breach by the Company of any of the material
provisions of this Plan, provided, however, that prior to any
termination pursuant to this Section 2uiv., the applicable
Business Entity must be given notice by the Participant of
such acts or omissions and no less than 20 days to cure the
same.
v. "PARENT" shall mean, in the case of an Incentive Stock Option, a
"parent corporation," within the meaning of Section 424(e) of the Code, with
respect to the Company, and in all other instances, an entity, directly or
indirectly, in Control of the Company.
w. "PERFORMANCE PERIOD" shall mean a one (1), two (2), three (3), four
(4) or five (5) fiscal or calendar year or other 12 consecutive month period for
which performance goals are established pursuant to Article IV.
x. "PERSON" shall mean a person within the meaning of Section 3(a)(9)
of the Exchange Act.
y. "PLAN" shall mean the Summit Global Logistics, Inc., 2006 Equity
Incentive Plan, as set forth herein, as it may be amended from time to time.
z. "QUALIFIED SUCCESSOR" shall mean have the meaning ascribed thereto
in the Employment Agreement or Director's Agreement, as applicable. If such
terms does not appear in the Employment Agreement or Director's Agreement, all
Plan provisions in respect of a Qualified Successor shall be null and void with
respect to the affected Participant.
aa. "RETIREMENT" shall mean the voluntary termination of the Participant
at any time on or after attaining age 65.
bb. "SUBSIDIARY" shall mean, in the case of an Incentive Stock Option, a
"subsidiary corporation," within the meaning of Section 424(f) of the Code, with
respect to the Company, and in all other instances, an entity, directly or
indirectly, Controlled by the Company.
cc. "VESTING PERIOD" shall mean a continuous period of time pursuant to
which an Award is partially or fully forfeitable to the Company.
3. ADMINISTRATION.
a. GENERAL. The Plan shall be administered by the Committee. The
Committee, in its sole discretion, shall have the authority to grant and amend
Awards, to adopt, amend and repeal rules relating to the Plan and to interpret
and correct the provisions of the Plan and any Award.
x. XXXXXX AND RESPONSIBILITIES. Subject to the express limitations of
the Plan, the Committee shall have the following discretionary powers, rights
and responsibilities, in addition to those described in Section 3a.:
i. to construe and determine the respective Stock Option
Agreements, other Agreements, Awards and the Plan;
ii. to prescribe, amend and rescind rules and regulations relating
to the Plan and any Awards;
iii. to determine the extent to which Award vesting schedules shall
be accelerated or Award payments made to, or forfeited by, a
Participant in
the event of (A) the Participant's termination of employment
with the Company or any Parent or Subsidiary thereof due to
Disability, Retirement, death, Good Reason, Cause or other
reason, or (B) a Change in Control of the Company;
iv. to determine the terms and provisions of the respective Stock
Option Agreements, other Agreements and Awards, which need not
be identical;
v. to grant Awards to Participants based upon the attainment of
performance goals that do not constitute "objective
performance goals" within the meaning of Section 162(m);
vi. to grant Awards that are Options or Stock Appreciation Rights
based solely upon a Vesting Schedule; and
vii. to make all other determinations in the judgment of the
Committee necessary or desirable for the administration and
interpretation of the Plan.
The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Stock Option
Agreement, other Agreement or Award in the manner and to the extent
it shall deem expedient to carry the Plan, any Stock Option
Agreement, other Agreement or Award into effect and it shall be the
sole and final judge of such expediency. All decisions by the
Committee shall be final and binding on all interested persons.
Neither the Company nor any member of the Committee shall be liable
for any action or determination relating to the Plan.
c. DELEGATION OF POWER. The Committee may delegate some or all of its
power and authority hereunder to the President and Chief Executive Officer of
the Company or other executive officer of the Company or, with respect to a
Subsidiary, the shareholders of such Subsidiary, as the Committee deems
appropriate. Notwithstanding the foregoing, with respect to any person who is a
"covered employee" within the meaning of Section 162(m) of the Code or who, in
the Committee's judgment, is likely to be a covered employee at any time during
the applicable Performance Period, only the Committee shall be permitted to (i)
designate such person to participate in the Plan for such Performance Period,
(ii) establish performance goals and Awards for such person, and (iii) certify
the achievement of such performance goals. For purposes of the immediately
preceding sentence, "Committee" shall mean two or more members of the Board who
are "outside directors" within the meaning of Section 162(m) of the Code. No
member of the Committee may make any decisions under this Plan whatsoever in
respect of an Award to be granted to such member.
4. PERFORMANCE GOALS AND OTHER CRITERIA.
a. ROLE OF COMMITTEE. The Committee shall establish within the
Determination Period of each Performance Period (i) one or more objective
performance goals for each Participant or for any group of Participants (or
both), provided that the outcome of each goal is substantially uncertain at the
time the Committee establishes such goal and/or (ii) other criteria, including,
but not limited to, performance criteria that do not satisfy the requirements of
Treasury Regulation Section 1.162-27(e)(2) or time vesting criteria, the
satisfaction of which is required for the payment of an Award. Notwithstanding
any provision of this Plan to the contrary, Awards that are Options or Stock
Appreciation Rights may be granted solely on the basis of a Vesting Schedule,
and without regard to performance or any other criteria.
b. PERFORMANCE FACTORS. Performance goals shall be based exclusively on
one or more of the following objective Company (including any division or
operating unit thereof) or individual measures, stated in either absolute terms
or relative terms, such as rates of growth or improvement, the attainment by a
share of Common Stock of a specified fair market value for a specified period of
time, earnings per share, earnings per share excluding non-recurring, special or
extraordinary items, return to stockholders (including dividends), return on
capital, return on total capital deployed, return on assets, return on equity,
earnings of the Company before or after taxes and/or interest, revenues, revenue
increase, new business development or acquisition, repeat purchase rate,
recurring revenue, recurring revenue increase, market share, cash flow or cost
reduction goals, cash flow provided by operations, net cash flow, short-term or
long-term cash flow return on investment, interest expense after taxes, return
on investment, return on investment capital, economic value created, operating
margin, gross profit margin, net profit margin, pre-tax income margin, net
income margin, net income before or after taxes, pretax earnings before
interest, depreciation and amortization, pre-tax operating earnings after
interest expense and before incentives, and/or extraordinary or special items,
operating earnings, net cash provided by operations, and strategic business
criteria, consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion goals, cost targets, customer
satisfaction, reductions in errors and omissions, reductions in lost business,
management of employment practices and employee benefits, supervision of
litigation and information technology, quality and quality audit scores,
productivity, efficiency, and goals relating to acquisitions or divestitures, or
any combination of the foregoing.
c. PARTICIPANTS WHO ARE COVERED EMPLOYEES. With respect to Participants
who are "covered employees" within the meaning of Section 162(m) of the Code or
who, in the Committee's judgment, are likely to be covered employees at any time
during the applicable Performance Period, an Award other than an Option or a
Stock Appreciation Right may be based only on performance factors that are
compliant with the requirements of Treasury Regulation Section 1.162-27(e)(2).
For this purpose, the factors listed in Section 4.1b shall be deemed to be
compliant with the requirements of such Treasury Regulation.
d. PARTICIPANTS WHO ARE NOT COVERED EMPLOYEES. Notwithstanding any
provision of this Plan to the contrary, with respect to Participants who are not
"covered employees" within the meaning of Section 162(m) of the Code and who, in
the Committee's judgment, are not likely to be covered employees at any time
during the applicable Performance Period, the performance goals established for
the Performance Period may consist of any objective Company (including any
division or operating unit thereof) or individual measures, whether or not
listed in (b) above or whether or not compliant with the requirements of
Treasury Regulation Section 1.162-27(e)(2), and the Committee may grant Awards
without regard to the need for satisfaction of any performance goals whatsoever
and/or without reference to any particular Performance Period. Without in any
way limiting the generality of the foregoing, such performance goals may include
subjective goals, the satisfaction of which shall be determined by the
Committee, in its sole and absolute discretion, and the Committee may grant
Awards subject only to the requirement of
satisfying the applicable Vesting Period. Performance goals shall be subject to
such other special rules and conditions as the Committee may establish at any
time within the Determination Period.
e. APPLICABILITY OF SECTION RULE 16b-3. Notwithstanding anything to the
contrary in the foregoing if, or at such time as, the Common Stock is or becomes
registered under Section 12 of the Securities and Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), or any successor statute, the Plan shall be
administered in a manner consistent with Rule 16b-3 promulgated thereunder, as
it may be amended from time to time, or any successor rules ("RULE 16b-3"), such
that all subsequent grants of Awards hereunder to Reporting Persons, as
hereinafter defined, shall be exempt under such rule. Those provisions of the
Plan which make express reference to Rule 16b-3 or which are required in order
for certain option transactions to qualify for exemption under Rule 16b-3 shall
apply only to such persons as are required to file reports under Section 16 (a)
of the Exchange Act (a "REPORTING PERSON").
5. STOCK AVAILABLE FOR AWARDS.
a. NUMBER OF SHARES. Subject to adjustment under Section 5c, the
aggregate number of shares of Common Stock of the Company that may be issued
pursuant to the Plan is the Available Shares (as defined on the last page). If
any Award expires, or is terminated, surrendered or forfeited, in whole or in
part, the unissued Common Stock covered by such Award shall again be available
for the grant of Awards under the Plan. If an Award granted under the Plan shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject to such Award shall again be available for subsequent
Awards under the Plan. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
b. PER-PARTICIPANT LIMIT. Subject to adjustment under SECTION 5c, no
Participant may be granted Awards during any one fiscal year to purchase more
than 250,000 shares of Common Stock.
c. ADJUSTMENT TO COMMON STOCK. Subject to Section 13, in the event of
any stock split, reverse stock split, stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off, split-up, or other similar change in
capitalization or similar event, (i) the number and class of securities
available for Awards under the Plan and the per-Participant share limit and (ii)
the number and class of securities, vesting schedule and exercise price per
share subject to each outstanding Option and Stock Appreciation Right shall be
adjusted by the Company (or substituted Awards may be made if applicable) to the
extent the Committee shall determine, in good faith, that such an adjustment (or
substitution) is appropriate.
6. STOCK OPTION AWARDS.
a. GENERAL. The Committee may grant options to purchase Common Stock
(each, an "OPTION") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the shares of Common
Stock issued upon the exercise of each Option,
including, but not limited to, vesting provisions and restrictions relating to
applicable federal or state securities laws. Each Option will be evidenced by a
Stock Option Agreement, consisting of a Notice of Stock Option Award and a Stock
Option Award Agreement (collectively, a "STOCK OPTION AGREEMENT").
b. INCENTIVE STOCK OPTIONS. An Option that the Committee intends to be
an incentive stock option (an "INCENTIVE STOCK OPTION") as defined in Section
422 of the Code, as amended, or any successor statute ("SECTION 422"), shall be
granted only to an Employee and shall be subject to and shall be construed
consistently with the requirements of Section 422 and regulations thereunder.
The Committee, the Board and the Company shall have no liability if an Option or
any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "NONSTATUTORY STOCK OPTION" or
"NONQUALIFIED STOCK OPTION."
c. DOLLAR LIMITATION. For so long as the Code shall so provide, Options
granted to any Employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to qualify as Incentive Stock Options
shall not qualify as Incentive Stock Options to the extent that such Options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate Fair Market Value (as defined below
and determined as of the respective date or dates of grant) of more than
$100,000. The amount of Incentive Stock Options which exceed such $100,000
limitation shall be deemed to be Nonqualified Stock Options. For the purpose of
this limitation, unless otherwise required by the Code or regulations of the
Internal Revenue Service or determined by the Committee, Options shall be taken
into account in the order granted, and the Committee may designate that portion
of any Incentive Stock Option that shall be treated as Nonqualified Option in
the event that the provisions of this paragraph apply to a portion of any
Option. The designation described in the preceding sentence may be made at such
time as the Committee considers appropriate, including after the issuance of the
Option or at the time of its exercise.
d. EXERCISE PRICE. The Committee shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify the exercise price in the applicable
Stock Option Agreement; provided, however, in no event may the per share
exercise price be less than the Fair Market Value (as defined below) of the
Common Stock on the date of grant; and provided, further, however, that, except
as may be required under SECTION 5c, the Committee may not reduce, directly or
indirectly, at any time following the grant of the Option, the exercise price
per share of Common Stock underlying the Option to a level below the Fair Market
Value per share of Common Stock on the date of grant. In the case of an
Incentive Stock Option granted to a Participant who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, then
the exercise price shall be no less than 110% of the Fair Market Value of the
Common Stock on the date of grant. In the case of a grant of an Incentive Stock
Option to any other Participant, the exercise price shall be no less than 100%
of the Fair Market Value of the Common Stock on the date of grant.
e. TERM OF OPTIONS. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may specify in the
applicable Stock Option Agreement; provided, that the term of any Incentive
Stock Option may not be more than ten (10)
years from the date of grant. In the case of an Incentive Stock Option granted
to a Participant who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be no longer than five (5) years from the date of grant. The term of any
Nonqualified Stock Option may not be more than ten (10) years from the date of
grant.
f. EXERCISE OF OPTION. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 6g and the Stock Option Agreement
for the number of shares for which the Option is exercised.
g. PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option shall be paid for by delivery of an irrevocable and unconditional
undertaking by a creditworthy broker (selected by the Participant and otherwise
without the financial involvement of the Company) to deliver promptly to the
Company sufficient funds to pay the exercise price, or delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price (each, a "CASHLESS EXERCISE").
Settlement of an Option shall be made solely in cash.
h. ACCELERATION, EXTENSION, ETC. The Committee may, in its sole
discretion, and in all instances subject to any relevant tax and accounting
considerations which may adversely impact or impair the Company, (i) accelerate
the date or dates on which all or any particular Options or Awards granted under
the Plan may be exercised, or (ii) extend the dates during which all or any
particular Options or Awards granted under the Plan may be exercised or vest.
i. DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded under the
Exchange Act, "FAIR MARKET VALUE" shall mean (i) if the Common Stock is listed
on any established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq Small Cap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the last reported sales
price for such stock (on that date) or the closing bid, if no sales were
reported as quoted on such exchange or system as reported in The Wall Street
Journal or such other source as the Committee deems reliable; or (ii) the
average of the closing bid and asked prices last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Common
Stock is not reported on a national market system. In the absence of an
established market for the Common Stock, the Fair Market Value thereof shall be
determined in good faith by the Committee after taking into consideration all
factors which it deems appropriate.
7. RESTRICTED COMPENSATION SHARE AWARDS.
a. GRANTS. The Committee may grant Awards entitling recipients to
acquire shares of Common Stock, subject to (i) restrictions on transfer as set
forth in the applicable Award instrument and (ii) forfeiture unless and until
all specified employment, vesting and/or performance conditions, as set forth in
the applicable Award instrument, are met (such shares of Common Stock,
"RESTRICTED COMPENSATION SHARES," and each such Award, a "RESTRICTED
COMPENSATION SHARE AWARD").
b. TERMS AND CONDITIONS. The Committee shall determine the terms and
conditions of any such Restricted Compensation Share Award. Any stock
certificates issued in respect of a Restricted Compensation Share Award shall be
registered in the name of the Participant and, unless otherwise determined by
the Committee, deposited by the Participant, together with a stock power
endorsed in blank, with the Company (or its designee). Restricted Compensation
Share Awards shall be issued for no cash consideration or such minimum
consideration as may be required by law. After the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or, if
the Participant has died, to the Designated Beneficiary.
8. RESTRICTED COMPENSATION SHARE UNIT AWARDS.
x. XXXXX. The Committee may grant Awards entitling recipients to the
right to acquire, at some time in the future, Restricted Compensation Shares,
subject to such other conditions as the Committee may prescribe in the
applicable Award Agreement (each such Award, a "RESTRICTED COMPENSATION SHARE
UNIT AWARD"). Restricted Compensation Share Unit Awards are subject to
forfeiture unless and until all specified Award conditions are met, as
determined by the Committee and set forth in the particular Agreements
applicable to such Awards.
b. TERMS AND CONDITIONS. The Committee shall determine the terms and
conditions of any such Restricted Compensation Share Unit Award. No stock
certificates shall be issued in respect of a Restricted Compensation Share Unit
Award at the time of grant. However, upon exercise, the Company (or the
Company's counsel as its designee) shall deliver stock certificates to the
Participant or, if the Participant has died, to the Designated Beneficiary.
9. STOCK APPRECIATION RIGHT AWARDS.
x. XXXXX. The Committee may grant Awards entitling recipients to the
right to acquire, at some time in the future, upon exercise, one or more shares
of Common Stock, in an amount equal to the product of (i) the excess of (A) the
Fair Market Value of a share of Common Stock on the date of exercise over (B)
the exercise price per share set forth in the applicable Award Agreement and
(ii) the number of shares of Common Stock with respect to which the right is
exercised, subject to such other conditions as the Committee may prescribe in
the applicable Award Agreement (each, a "STOCK APPRECIATION RIGHT AWARD"). Stock
Appreciation Right Awards are subject to forfeiture unless and until all
specified Award conditions are met, as determined by the Committee and set forth
in the particular Agreements applicable to such Awards.
b. TERMS. The Committee shall determine the terms and conditions of any
such Stock Appreciation Right Award. A Stock Appreciation Right Award may be
issued either in tandem with, or by reference to, an Option (each such Award, a
"TANDEM SAR") or not so issued (each such Award, a "FREE-STANDING SAR"). It is
the intention of the Committee that the exercise of Tandem SARs assist the
recipient of an Option with the ability to pay applicable taxes with respect to
the exercise of an Option and the SARs themselves. The exercise price of a
Tandem SAR shall be the exercise price per share of the related Option. The
exercise price of a
Free-Standing SAR shall be determined by the Committee in its sole discretion;
provided, however, that exercise price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant; and provided,
further, however, that, except as may be required under SECTION 5c, the
Committee may not reduce, at any time following the grant of the Free-Standing
SAR, the exercise price per share of Common Stock underlying such Free-Standing
SAR to a level below the Fair Market Value per share of Common Stock on the date
of grant. No stock certificates shall be issued in respect of a Stock
Appreciation Right Award, and such Award shall be reflected merely in book entry
form on the Company's books and records. A Stock Appreciation Right Award may be
settled only in cash.
10. PERFORMANCE SHARE AWARDS
a. GRANTS. The Committee may grant Awards entitling recipients to
acquire shares of Common Stock upon the attainment of specified performance
goals within a specified Performance Period, which shares may or may not be
Restricted Compensation Shares, subject to such other conditions as the
Committee may prescribe in the applicable Award (each such share of Common
Stock, a "PERFORMANCE SHARE," and each such Award, a "PERFORMANCE SHARE AWARD").
Performance Share Awards are subject to forfeiture unless and until all
specified Award conditions are met, as determined by the Committee and set forth
in the particular Agreements applicable to such Awards.
b. TERMS AND CONDITIONS. The Committee shall determine the terms and
conditions of any such Performance Share Award. Unless otherwise determined by
the Committee, the payment value of the Performance Share Awards shall be based
upon the Fair Market Value of the Common Stock underlying such Award on the date
the Performance Shares are earned or on the date the Committee determines that
the Performance Shares have been earned. The Committee shall establish
performance goals for each Performance Period for the purpose of determining the
extent to which Performance Shares awarded for such cycle are earned. As soon as
administratively practicable after the end of a performance cycle, the Committee
shall determine the number of Performance Shares which have been earned in
relation to the established performance goals. No stock certificates shall be
issued in respect of a Performance Share Award at the time of grant unless the
Performance Shares are Restricted Compensation Shares, in which case the rules
of Section 9b with respect to the issuance of certificates shall apply. However,
upon the lapse of all applicable restrictions, the Company (or the Company's
counsel as its designee) shall deliver stock certificates to the Participant or,
if the Participant has died, to the Designated Beneficiary.
11. AWARD SHARES
a. GRANTS. The Committee may grant Awards entitling recipients to
acquire shares of Common Stock, subject to such terms, restrictions, conditions,
performance criteria, vesting requirements and payment needs, if any, as the
Committee shall determine in the applicable Award Agreement (each such Award, an
"AWARD SHARE.") Award Shares are subject to forfeiture unless and until all
specified Award conditions are met, as determined by the Committee and set forth
in the particular Agreements applicable to such Awards.
b. TERMS AND CONDITIONS. The Committee shall determine the terms and
conditions
of any such Award Share. Award Shares shall be issued for no cash consideration
or such minimum consideration as may be required by law. When paid, the Company
(or the Company's counsel as its designee) shall deliver stock certificates for
the Award Shares to the Participant or, if the Participant has died, to the
Designated Beneficiary.
12. OTHER STOCK-BASED AWARDS. The Committee shall have the right to grant
other Awards based upon the Common Stock having such terms and conditions as the
Committee may determine, including, without limitation, the grant of securities
convertible into Common Stock and the grant of phantom stock awards or stock
units.
13. GENERAL PROVISIONS APPLICABLE TO AWARDS.
a. TRANSFERABILITY OF AWARDS. Except as the Committee may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant; provided, however, except as the Committee
may otherwise determine or provide in an Award, that Nonstatutory Options and
Restricted Compensation Share Awards may be transferred pursuant to a qualified
domestic relations order (as defined in ERISA) or to a grantor-retained annuity
trust or a similar estate-planning vehicle in which the trust is bound by all
provisions of the Stock Option Agreement and Restricted Compensation Share
Award, which are applicable to the Participant. References to a Participant, to
the extent relevant in the context, shall include references to authorized
transferees.
b. DOCUMENTATION. Each Award under the Plan shall be evidenced by a
written instrument (each, an "AGREEMENT") in such form as the Committee shall
determine or as executed by an officer of the Company pursuant to authority
delegated by the Committee or Board. Each Award Agreement may contain terms and
conditions in addition to those set forth in the Plan, provided that such terms
and conditions do not contravene the provisions of the Plan or applicable law.
c. COMMITTEE DISCRETION. The terms of each type of Award need not be
identical, and the Committee need not treat Participants uniformly.
d. ADDITIONAL AWARD PROVISIONS. The Committee may, in its sole
discretion, include additional provisions in any Stock Option Agreement,
Restricted Compensation Share Award or other Award granted under the Plan,
including without limitation restrictions on transfer, commitments to pay cash
bonuses, to make, arrange for or guaranty loans (subject to compliance with
SECTION 13m) or to transfer other property to Participants upon exercise of
Awards, or transfer other property to Participants upon exercise of Awards, or
such other provisions as shall be determined by the Committee; provided that
such additional provisions shall not be inconsistent with any other term or
condition of the Plan or applicable law.
e. TERMINATION OF STATUS. The Committee shall determine the effect on
an Award of the Disability, death, Retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, or the Participant's
legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award, subject to applicable law and
the provisions of the Code related to Incentive Stock Options. Such
determination shall be reflected in the applicable Award Agreement.
f. CHANGE IN CONTROL OF THE COMPANY.
i. Unless otherwise expressly provided in the applicable
Agreement, in connection with the occurrence of a Change in
Control, the Committee shall, in its sole discretion as to any
outstanding Award (including any portion thereof; on the same
basis or on different bases, as the Committee shall specify),
take one or any combination of the following actions:
A. make appropriate provision for the continuation of such
Award by the Company or the assumption of such Award by
the surviving or acquiring entity and by substituting on
an equitable basis for the shares then subject to such
Award either (x) the consideration payable with respect
to the outstanding shares of Common Stock in connection
with the Change in Control, (y) shares of stock of the
surviving or acquiring corporation or (z) such other
securities as the Committee deems appropriate, the fair
market value of which (as determined by the Committee in
its sole discretion) shall not materially differ from
the fair market value of the shares of Common Stock
subject to such Award immediately preceding the Change
in Control;
B. accelerate the date of exercise or vesting of such
Award;
C. permit the exchange of such Award for the right to
participate in any stock option or other employee
benefit plan of any successor corporation;
D. provide for the repurchase of the Award for an amount
equal to the difference of (x) the consideration
received per share for the securities underlying the
Award in the Change in Control minus (y) the per share
exercise price of such securities. Such amount shall be
payable in cash or the property payable in respect of
such securities in connection with the Change in
Control. The value of any such property shall be
determined by the Committee in its discretion; or
E. provide for the termination of such Award immediately
prior to the consummation of the Change in Control;
provided that no such termination will be effective if
the Change in Control is not consummated.
g. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
or liquidation of the Company, the Committee shall notify each Participant as
soon as practicable prior to the effective date of such proposed transaction.
The Committee in its sole discretion may provide
for a Participant to have the right to exercise his or her Award until fifteen
(15) days prior to such transaction as to all of the shares of Common Stock
covered by the Option or Award, including shares as to which the Option or Award
would not otherwise be exercisable, which exercise may in the sole discretion of
the Committee, be made subject to and conditioned upon the consummation of such
proposed transaction. To the extent it has not been previously exercised, an
Award will terminate upon the consummation of such proposed action.
h. ASSUMPTION OF AWARDS UPON CERTAIN EVENTS. In connection with a
merger or consolidation of an entity with the Company or the acquisition by the
Company of property or stock of an entity, the Committee may grant Awards under
the Plan in substitution for stock and stock-based awards issued by such entity
or an affiliate thereof. The substitute Awards shall be granted on such terms
and conditions as the Committee considers appropriate in the circumstances.
i. PARACHUTE PAYMENTS AND PARACHUTE AWARDS. Notwithstanding the
provisions of SECTION 13f, but subject to any contrary provisions in a
Participant's employment agreement with the Company or any Parent or Subsidiary
thereof, if, in connection with a Change in Control, a tax under Section 4999 of
the Code would be imposed on the Participant (after taking into account the
exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code), then
the Company shall pay the Participant an amount equal to the tax under Section
4999.
j. AMENDMENT OF AWARDS. The Committee may amend, modify or terminate
any outstanding Award including, but not limited to, substituting therefor
another Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Committee determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
k. CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations. Notwithstanding any provision of the Plan to the contrary, in no
event may an Option or Stock Appreciation Right be settled in a form other than
cash.
l. ACCELERATION. The Committee may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Compensation Share Awards shall be free of some or all restrictions, or that any
other stock-based Awards may become exercisable in full or in part or free of
some or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be, despite the fact that the foregoing actions may (i)
cause the application of Sections 280G and 4999 of the Code if a change in
control of the Company occurs, or (ii) disqualify all or part of the Option as
an Incentive Stock Option.
x. XXXXXXXX-XXXXX ACT COMPLIANCE. Notwithstanding any provision of the
Plan to the contrary, the Committee, in accordance with any applicable rules or
regulations promulgated by the Securities and Exchange Commission (the "SEC")
and/or the United States Department of Labor, shall (i) notify in a timely
manner each Participant who is a Reporting Person of any transaction occurring
under the Plan that requires reporting by the Reporting Person on SEC Form 4 or
5 as applicable, each as revised pursuant to changes to Exchange Act Rule 16a-3,
16a-6 or 16a-8, as applicable, made by Xxxxxxxx-Xxxxx Act of 2002, P.L. No.
107-204 (the "ACT"); (ii) otherwise comply with all notice, disclosure and
reporting requirements applicable to the Program pursuant to such Act; and (iii)
prohibit the making or guaranteeing of loans under Section 8c of this Program to
the extent necessary to comply with Section 402 of the Act.
14. TAXES/CODE 409A. The Company shall have the right to deduct from payments
of any kind otherwise due to the optionee or recipient of an Award any federal,
state or local taxes of any kind required by law to be withheld with respect to
any shares issued upon exercise of Options or other Awards under the Plan, the
purchase of shares subject to the Award or the grant of Common Stock free and
clear of any restrictions thereon. Notwithstanding anything herein to the
contrary, to the extent a delay in payment or other modification to this Plan or
an Agreement is required as determined in the opinion of Company's tax advisors
to prevent the imposition of an additional tax to the recipient under Section
409A of the Code, then such payment shall not be made until the first date on
which such payment is permitted or other modifications shall be made to comply
with Section 409A and interpretive guidance issued thereunder.
15. MISCELLANEOUS.
a. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan.
b. NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder thereof.
c. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the later of the date on which it is adopted by the Committee or the date on
which it is approved by the Company's shareholders (the "Effective Date). No
Awards shall be granted under the Plan after the completion of ten years from
the Effective Date, but Awards previously granted may extend beyond that date.
Notwithstanding any provision of this Plan to the contrary, if the Company has
executed a definitive acquisition or similar agreement pursuant to which a
Change in Control will occur upon the closing of the transaction(s) contemplated
thereby, the Committee, in its sole discretion, may treat the execution of such
agreement itself as triggering a Change in Control.
d. AMENDMENT OF PLAN. The Committee may amend, suspend or terminate the
Plan or any portion thereof at any time; provided, however, that no amendment
shall be made without
stockholder approval if such approval is necessary to comply with any applicable
law, rules or regulations.
e. NO TRUST FUND OR ERISA PLAN CREATED. Neither the Plan nor any Award
granted thereunder shall create or be construed as creating a trust or separate
fund of any kind or a fiduciary relationship between the Company and a
Participant, Designated Beneficiary or any other person. To the extent that any
Participant, Designated Beneficiary or any other person acquires any Award under
the Plan, his or her rights with respect thereto shall be not greater than the
rights of any unsecured general creditor of the Company. The Plan is not
intended to constitute any type of plan, fund or program providing retirement
income or resulting in the deferral of income for periods extending to the
termination of employment of beyond, and ERISA shall not apply to the Plan. No
provision of this Plan shall be construed as subjecting any portion of the Plan
to any requirements of ERISA.
f. ARBITRATION OF DISPUTES. Both parties agree that all controversies
or claims that may arise between the Participant and the Company in connection
with this Plan shall be settled by arbitration. The parties further agree that
the arbitration shall be held in the State of New Jersey, and administered by
the American Arbitration Association under its Commercial Arbitration Rules,
applying New Jersey law, except to the extent such law is preempted by ERISA.
i. QUALIFICATIONS OF ARBITRATOR. The arbitration shall be
submitted to a single arbitrator chosen in the manner provided under the
rules of the American Arbitration Association. The arbitrator shall be
disinterested and shall not have any significant business relationship
with either party, and shall not have served as an arbitrator for any
disputes involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her date of
appointment. The arbitrator shall be a person who is experienced and
knowledgeable in employment and executive compensation law and shall be an
attorney duly licensed to practice law in one or more states.
ii. POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of
this Plan and shall not have the authority to award punitive or exemplary
or damages under any circumstances. The parties shall equally share the
expense of the arbitrator selected and of any stenographer present at the
arbitration. The remaining costs of the arbitrator proceedings shall be
allocated by the arbitrator, except that the arbitrator shall not have the
power to award attorney's fees.
iii. EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall
render its decision within thirty (30) days after termination of the
arbitration proceeding, which decision shall be in writing, stating the
reasons therefor and including a brief description of each element of any
damages awarded. The decision of the arbitrator shall be final and
binding. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.
g. GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall
be governed by and interpreted in accordance with the laws of the state of New
Jersey, without regard to any applicable conflicts of law.
h. DESIGNATION OF BENEFICIARY. A Participant may file with the
Committee a written designation of one or more persons as such Participant's
Designated Beneficiary or Designated Beneficiaries. Each beneficiary designation
shall become effective only when filed in writing with the Committee during the
Participant's lifetime on a form prescribed by the Committee. The spouse of a
married Participant domiciled in a community property jurisdiction shall join in
any designation of a beneficiary other than such spouse. The filing with the
Committee of a new beneficiary designation shall cancel all previously filed
beneficiary designations. If a Participant fails to designate a beneficiary, or
if all designated beneficiaries of a Participant predecease the Participant,
then each outstanding award shall be payable to the Participant's estate.
APPROVALS
2006 EQUITY INCENTIVE PLAN
Available Shares:
(1) Incentive Stock Options 851,500
---------
(2) Non-Qualified Stock Options 548,500
---------
(3) Total for Options 1,400,000
(4) Restricted Compensation Shares 233,500
---------
Total* 1,633,500
* Excludes equity-based awards, e.g., Stock Appreciation Rights, pursuant to
which actual shares are not being issued.
Adopted by the Compensation Committee of
the Board of Directors on: November 8, 2006
Approved by the Stockholders on: November 8, 2006
EXHIBIT B
SUMMIT GLOBAL LOGISTICS, INC.
2007 MANAGEMENT INCENTIVE PLAN
I. PURPOSES
1.1 GENERAL. The purposes of the Summit Global Logistics, Inc. 2007
Management Incentive Plan (the "PLAN") are to retain and motivate the Eligible
Employees and Directors of Summit Global Logistics, Inc. (the "COMPANY") or any
Parent or Subsidiary thereof who have been designated by the Committee to
participate in the Plan for a specified Performance Period by providing them
with the opportunity to earn incentive payments based upon the extent to which
specified performance or other goals have been achieved or exceeded for an
applicable Performance Period. Additional definitions are contained in Article
II and certain other Sections of the Plan.
1.2 STATUS OF COMPENSATION FOR "COVERED EMPLOYEES" AS QUALIFIED
PERFORMANCE-BASED COMPENSATION. It is intended that all amounts payable to
Participants who are "covered employees" within the meaning of Section 162(m) of
the Code will constitute "qualified performance-based compensation" within the
meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and
the terms of any awards hereunder to such Participants shall be so interpreted
and construed to the maximum extent possible. Notwithstanding any provision of
the Plan to the contrary, however, an individual Award Agreement, as defined in
Section 4.1(f) hereof, may contain terms that do not comply with the "qualified
performance-based compensation" exception to the applicability of Section 162(m)
of the Code to the Individual Award Opportunity(ies) granted thereunder, in
which case the provisions of the individual Award Agreement shall take
precedence over the provisions of the Plan with respect to compliance with such
exception.
II. CERTAIN DEFINITIONS
2.1 "AFFILIATE" shall mean
(a) any Person which directly or indirectly beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by all
outstanding securities of the Company; or
(b) any Person with respect to which the Company beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
2.2 "BASE SALARY" shall mean a Participant's "Base Salary" as such term
is defined in the Employment Agreement.
2.3 "BOARD" shall mean the Board of Directors of the Company.
2.4 "BUSINESS ENTITY" shall mean (i) the Company or (ii) any Parent or
Subsidiary thereof.
2.5 "BUSINESS ENTITY LOCATION" means a Business Entity office consisting
of one or more buildings within 25 miles of each other.
2.6 "CAUSE" shall mean "Cause," as defined in the Participant's
Employment Agreement or Director's Agreement, and in the absence of such
definition, Cause shall mean, as determined by the Committee in its sole
discretion, the Participant's
(a) material act of dishonesty with respect to the Business Entity
that employs the Participant;
(b) conviction for a felony, gross misconduct that is likely to
have a material adverse effect on the business and affairs of
the Business Entity that employs the Participant; or
(c) other misconduct, such as excessive absenteeism or failure to
comply with the rules of the Business Entity that employs the
Participant.
2.7 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.8 "COMMITTEE" shall mean the Compensation Committee of the Board or
such other committee designated by the Board that satisfies any then applicable
requirements of the New York Stock Exchange, NASDAQ, or such other principal
national stock exchange on which the Common Stock is then traded, to constitute
a compensation committee, and which consists of two or more members of the
Board, each of whom may be an "outside director" within the meaning of Section
162(m) of the Code. Notwithstanding the foregoing, in the case of any Individual
Award Opportunity granted to any Participant who is a "covered employee" within
the meaning of Section 162(m) of the Code, the Committee shall consist solely of
two or more members of the Board who are "outside directors" within the meaning
of such Section.
2.9 "COMMON STOCK" shall mean common stock of the Company, par value of
$.001 per share.
2.10 "COMPANY" shall mean Summit Global Logistics, Inc., and any
successor thereto, and shall include any other business venture in which the
Company has a direct or indirect significant interest, as determined by the
Committee in its sole discretion.
2.11 "CONTROL" (including the terms "Controlled by" and "under common
Control with") means the possession, directly or indirectly or as a trustee or
executor, of the power to direct or cause the direction of the management of a
Person, whether through the ownership of stock, as a trustee or executor, by
contract or credit agreement or otherwise.
2.12 "DETERMINATION PERIOD" shall mean, with respect to any Performance
Period, a period commencing on or before the first day of the Performance Period
and ending not later than the earlier of (i) 90 days after the commencement of
the Performance Period and (ii) the
date on which twenty-five percent (25%) of the Performance Period has been
completed. Any action required to be taken within a Determination Period may be
taken at a later date if permissible under Section 162(m) of the Code or
regulations promulgated thereunder, as they may be amended from time to time.
2.13 "DIRECTOR" shall mean a member of the Board or the board of
directors of a Parent or Subsidiary who is not an Employee.
2.14 "DIRECTOR'S AGREEMENT" shall mean the Participant's agreement with
the Company or any Parent or Subsidiary thereof to serve as a non-Employee
director of the Business Entity.
2.15 "DISABILITY" shall mean any physical or mental condition which
renders the Participant incapable of performing his or her essential functions
and duties as an Employee for a continuous period of at least 180 days, as
determined in good faith by a physician appointed by the Business Entity that
employs the Participant.
2.16 "EFFECTIVE DATE" shall mean January 1, 2007.
2.17 "ELIGIBLE EMPLOYEE" shall mean an employee of the Company or any
Parent or Subsidiary thereof, but only if the employee is reported as such in
the payroll records of such Business Entity.
2.18 "ERISA" shall mean the Employee Retirement Income Security Act of
1974 as currently in effect, and as it may be amended from time to time.
2.19 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
2.20 "FISCAL YEAR" shall mean the calendar year.
2.21 "FUNDAMENTAL TRANSACTION" shall mean that the Company shall,
directly or indirectly, in one or more related transactions effected after the
Effective Date:
(a) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person;
(b) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company
to another Person;
(c) be the subject of a purchase, tender or exchange offer by
another Person that is accepted by the holders of more than
50% of the outstanding shares of voting stock of the Company;
or
(d) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme or arrangement) with
another Person whereby such other Person acquires more than
the 50% of the outstanding shares of Common Stock.
In addition, a "Fundamental Transaction" shall occur if, after the Effective
Date, any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) shall become the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of
the aggregate ordinary voting power represented by issued and outstanding Common
Stock.
2.22 "GOOD REASON" shall mean "Good Reason," as defined in the
Participant's Employment Agreement or Director's Agreement, and in the absence
of such definition, shall mean:
(a) without the Participant's prior written consent, any material
diminution in the Participant's authority, duties or
responsibilities, including those pertaining to his or her
status as a director, if applicable, provided, however, that
prior to any termination pursuant to this Section 2.22(a), the
applicable Business Entity must be given notice by the
Participant of his/her objection to such material diminution
and no less than 20 days to cure the same;
(b) any failure by the Business Entity to pay the Participant any
portion of the Base Salary to which the Participant is
entitled under Section 2.2 or any payments to which the
Participant is entitled under his or her Employment Agreement,
if applicable, provided, however, that prior to any
termination on account of the non-payment of Base Salary, the
Business Entity must be given notice by the Participant of
such acts or omissions and no less than 30 days to cure the
same;
(c) without the Participant's prior written consent, the
relocation of the principal place of the Participant's
employment to a location a further distance than the Business
Entity Location where the individual was working immediately
prior to the relocation; or
(d) a material breach by the Business Entity of any of the
material provisions of this Plan, provided, however, that
prior to any termination pursuant to
this Section 2.22(d), the applicable Business Entity must be
given notice by the Participant of such acts or omissions and
no less than 20 days to cure the same.
2.23 "INDIVIDUAL AWARD OPPORTUNITY" shall mean the potential of a
Participant to receive an incentive payment based on the extent to which the
applicable performance or other goals for a Performance Period shall have been
satisfied. An Individual Award Opportunity may be expressed in U.S. dollars or
pursuant to a formula that is consistent with the provisions of the Plan.
2.24 "PARENT" shall mean a "parent corporation," within the meaning of
Section 424(e) of the Code, with respect to the Company or an entity, directly
or indirectly, in Control of the Company.
2.25 "PARTICIPANT" shall mean an Eligible Employee who is designated by
the Company to participate in the Plan for a Performance Period, in accordance
with Article III.
2.26 "PERFORMANCE PERIOD" shall mean a one (1), two (2), three (3), four
(4) or five (5) Fiscal Year period for which performance or other goals are
established pursuant to Article IV.
2.27 "PERSON" shall mean a person within the meaning of Section 3(a)(9)
of the Exchange Act.
2.28 "PLAN" shall mean the Summit Global Logistics, Inc. 2007 Management
Incentive Plan, as set forth herein, as it may be amended from time to time.
2.29 "QUALIFIED SUCCESSOR" shall have the meaning ascribed thereto in the
Employment Agreement or Director's Agreement, as applicable. If such term does
not appear in the Employment Agreement or Director's Agreement, all Plan
provisions in respect of a Qualified Successor shall be null and void with
respect to the affected Participant.
2.30 "RETIREMENT" shall mean the voluntary termination of the Participant
at any time on or after attaining age 65.
2.31 "SUBSIDIARY" shall mean a "subsidiary corporation," within the
meaning of Section 424(f) of the Code, with respect to the Company, or an
entity, directly or indirectly, Controlled by the Company.
III. ADMINISTRATION
3.1 GENERAL. The Plan shall be administered by the Committee, which
shall have the full power and authority to interpret, construe and administer
the Plan and any Individual Award Opportunity granted hereunder (including
reconciling any inconsistencies, correcting any defects and addressing any
omissions).
3.2 POWERS AND RESPONSIBILITIES. The Committee shall have the following
discretionary powers, rights and responsibilities in addition to those described
in Section 3.1.
(a) to designate within the Determination Period the Participants
for a Performance Period;
(b) to establish within the Determination Period the performance
goals and other terms and conditions that are to apply to each
Participant's Individual Award Opportunity;
(c) to determine in writing prior to the payment under any
Individual Award Opportunity that the performance goals for a
Performance Period and other material terms applicable to the
Individual Award Opportunity have been satisfied;
(d) to grant Individual Award Opportunities for Participants who
are not "covered employees" within the meaning of Section
162(m) of the Code based upon the attainment of performance
goals that do not constitute "objective performance goals"
within the meaning of Section 162(m) of the Code;
(e) to adopt, revise, suspend, waive or repeal, when and as
appropriate, in its sole and absolute discretion, such
administrative rules, guidelines and procedures for the Plan
as it deems necessary or advisable to implement the terms and
conditions of the Plan.
3.3 DELEGATION OF POWER. The Committee may delegate some or all of its
power and authority hereunder to the President and Chief Executive Officer of
the Company or other executive officer of the Company or, with respect to a
Subsidiary, the shareholders of such Subsidiary, as the Committee deems
appropriate. Notwithstanding the foregoing, with respect to any person who is a
"covered employee" within the meaning of Section 162(m) of the Code or who, in
the Committee's judgment, is likely to be a covered employee at any time during
the applicable Performance Period, only the Committee shall be permitted to (i)
designate such person to participate in the Plan for such Performance Period,
(ii) establish performance goals and Individual Award Opportunities for such
person, and (iii) certify the achievement of such performance goals. For
purposes of the immediately preceding sentence, "Committee" shall mean two or
more members of the Board who are "outside directors" within the meaning of
Section 162(m) of the Code.
IV. PERFORMANCE GOALS AND OTHER CRITERIA
4.1 ESTABLISHING PERFORMANCE GOALS AND OTHER CRITERIA.
(a) ROLE OF COMMITTEE. The Committee shall establish within the
Determination Period of each Performance Period (i) one or
more objective performance goals for each Participant or for
any group of Participants (or both), provided that the outcome
of each goal is substantially uncertain at the time the
Committee establishes such goal and/or (ii) other criteria,
including, but not limited to, performance criteria that do
not satisfy the requirements of Treasury Regulation Section
1.162-27(e)(2) or time vesting criteria, the satisfaction of
which is required for
the payment of an Individual Award Opportunity.
(b) PERFORMANCE FACTORS. Performance goals shall be based
exclusively on one or more of the following objective Company
(including any division or operating unit thereof) or
individual measures, stated in either absolute terms or
relative terms, such as rates of growth or improvement, the
attainment by a share of Common Stock of a specified fair
market value for a specified period of time, earnings per
share, earnings per share excluding non-recurring, special or
extraordinary items, return to stockholders (including
dividends), return on capital, return on total capital
deployed, return on assets, return on equity, earnings of the
Company before or after taxes and/or interest, revenues,
revenue increase, repeat purchase rate, recurring revenue,
recurring revenue increase, market share, cash flow or cost
reduction goals, cash flow provided by operations, net cash
flow, short-term or long-term cash flow return on investment,
interest expense after taxes, return on investment, return on
investment capital, economic value created, operating margin,
gross profit margin, net profit margin, pre-tax income margin,
net income margin, net income before or after taxes, pretax
earnings before interest, depreciation and amortization,
pre-tax operating earnings after interest expense and before
incentives, and/or extraordinary or special items, operating
earnings, net cash provided by operations, and strategic
business criteria, consisting of one or more objectives based
on meeting specified market penetration, geographic business
expansion goals, cost targets, customer satisfaction,
reductions in errors and omissions, reductions in lost
business, management of employment practices and employee
benefits, supervision of litigation and information
technology, quality and quality audit scores, productivity,
efficiency, and goals relating to acquisitions or
divestitures, or any combination of the foregoing.
(c) PARTICIPANTS WHO ARE COVERED EMPLOYEES. Subject to Section 1.2
hereof, with respect to Participants who are "covered
employees" within the meaning of Section 162(m) of the Code or
who, in the Committee's judgment, are likely to be covered
employees at any time during the applicable Performance
Period, an Individual Award Opportunity may be based only on
performance factors that are compliant with the requirements
of Treasury Regulation Section 1.127-27(e)(2). For this
purpose, the factors listed in Section 4.1(b) shall be deemed
to be compliant with the requirements of such Treasury
Regulation.
(d) PARTICIPANTS WHO ARE NOT COVERED EMPLOYEES. With respect to
Participants who are not "covered employees" within the
meaning of Section 162(m) of the Code and who, in the
Committee's judgment, are not likely to be covered employees
at any time during the applicable Performance Period, the
performance goals established for the Performance Period may
consist of any objective Company (including any division or
operating unit thereof) or individual measures, whether or not
listed in (b) above or whether or not compliant with the
requirements of Treasury Regulation Section 1.162-27(e)(2).
Without in any way limiting the generality of the foregoing,
such performance goals may include subjective goals, the
satisfaction of which shall be determined by the Committee, in
its sole and absolute discretion. Performance goals shall be
subject to such other special rules and conditions as the
Committee may establish at any time within the Determination
Period.
(e) SPECIFIC LEVELS OF PERFORMANCE. Each Individual Award
Opportunity that is based upon performance shall set forth
specific levels of performance required during the applicable
Performance Period in order for the Participant to be eligible
for payment of such amounts.
(f) AWARD AGREEMENTS. Each grant of an Individual Award
Opportunity hereunder shall be made pursuant to an award grant
agreement ("Award Agreement").
4.2 IMPACT OF EXTRAORDINARY ITEMS OR CHANGES IN ACCOUNTING. The measures
utilized in establishing performance goals under the Plan for any given
Performance Period shall be determined in accordance with generally accepted
accounting principles ( "GAAP") and in a manner consistent with the methods used
in the Company's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or restructuring or
impairment charges, as determined by the Company's independent public
accountants in accordance with GAAP or (ii) changes in accounting, unless, in
each case, the Committee decides otherwise within the Determination Period.
V. INDIVIDUAL AWARD OPPORTUNITIES
5.1 TERMS. At the time performance goals are established for a
Performance Period, the Committee also shall establish an Individual Award
Opportunity for each Participant or group of Participants, which shall be based
on the achievement of one or more specified targets of performance goals. The
targets shall be expressed in terms of an objective formula or standard which
may, at the discretion of the Committee, be based upon the Participant's Base
Salary or a multiple thereof. Unless otherwise provided in the applicable Award
Agreement, to the extent that any such award is made to a Covered Employee
within the meaning of Section 162(m) of the Code, such formula or formulas shall
be fixed by the Committee not later than the later of (x) ninety (90) days after
the commencement of the performance period; or (y) the expiration of one-quarter
(1/4) of the performance period.
5.2 INCENTIVE PAYMENTS. Payments under Individual Award Opportunities
shall be in cash and at the time determined by the Committee after the end of
the Performance Period for which the Individual Award Opportunities are payable,
except that, to the extent that such Individual Award Opportunities are based
upon performance criteria that refer to or are dependent upon the Company's
financial statements, no such payment shall be due, and Participants have no
right to payments, unless and until the Committee, based (to the extent
applicable) on the Company's audited financial statements for the Company's
taxable year in which such Performance Period ends (as prepared and reviewed by
the Company's independent public accountants), has certified in writing the
extent to which the applicable performance goals
for such Performance Period have been satisfied. Subject to Sections 5.3 and 5.4
hereof, once this certification is made by the Committee, the Participant's
rights to payment under any and all Individual Award Opportunities with respect
to the Performance Period to which the certification applies shall be fully
vested and non-forfeitable for any reason. Notwithstanding any provision of this
Plan to the contrary, all payments to a Participant under an Individual Award
Opportunity for a given Performance Period must be made to the Participant no
later than (i) the 15th day of the third month following the Participant's first
taxable year in which the Individual Award Opportunity is no longer subject to a
"substantial risk for forfeiture " (within the meaning of Section 409A of the
Code) or (ii) the 15th day of the third month following the end of the Company's
fiscal year in which the Incentive Award Opportunity is no longer subject to a
"substantial risk of forfeiture" (within the meaning of Section 409A of the
Code).
5.3 PAYMENTS OF ANNUAL INDIVIDUAL AWARD OPPORTUNITIES IN THE EVENT OF
DEATH, DISABILITY, TERMINATION FOR CAUSE, TERMINATION OTHER THAN FOR CAUSE,
TERMINATION FOR GOOD REASON, TERMINATION OTHER THAN FOR GOOD REASON OR
RETIREMENT. Notwithstanding any provision of this Plan to the contrary, payments
in the event of the occurrence of any of the following events during an
applicable one-Fiscal Year Performance Period shall be made as follows:
(a) DEATH. In the event of a Participant's death during an
applicable one-Fiscal Year Performance Period, the Individual
Award Opportunity payable to the Participant with respect to
such one-Fiscal Year Performance Period shall be forfeited in
full.
(b) DISABILITY. In the event of a Participant's Disability during
an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity payable to the Participant with
respect to such one-Fiscal Year Performance Period shall be
the maximum amount payable under the Incentive Award
Opportunity for that one-Fiscal Year Performance Period, as
determined by the Committee as of the end of the one-Fiscal
Year Performance Period, multiplied by a fraction, the
numerator of which is the number of full consecutive months of
the Participant's employment during the one-Fiscal Year
Performance Period prior to his or her Disability, and the
denominator of which is 12. Whether the Participant has
sustained a Disability shall be determined by the Committee in
its sole discretion, but in good faith. For this purpose, the
Committee may require the Participant to submit medical
evidence of Disability; provided, however, that any such
requirement shall comply with the applicable requirements of
the Health Insurance Portability and Accountability Act of
1996, as amended. Payment of any Individual Award Opportunity
on account of the Participant's Disability shall be made in a
single lump sum.
(c) TERMINATION FOR CAUSE. In the event of the Participant's
termination of employment by a Business Entity for Cause
during an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity granted to the Participant with
respect to such one-Fiscal Year Performance Period shall be
immediately forfeited in full. Whether a Participant has
committed an act or omitted an action that constitutes
grounds for a termination for Cause shall be determined by the
Committee in its sole discretion, but in good faith.
(d) TERMINATION OTHER THAN FOR CAUSE. In the event of the
Participant's termination of employment by a Business Entity
other than for Cause during an applicable one-Fiscal Year
Performance Period, the Individual Award Opportunity payable
to the Participant with respect to such one-Fiscal Year
Performance Period shall be the maximum amount payable under
the Individual Award Opportunity for that one-Fiscal Year
Performance Period, as determined by the Committee as of the
end of the one-Fiscal Year Performance Period, multiplied by a
fraction, the numerator of which is the number of full
consecutive months of the Participant's employment during the
one-Fiscal Year Performance Period prior to his or her
termination other than for Cause, and the denominator of which
is 12. Any Individual Award Opportunity that becomes payable
on account of the termination of a Business Entity's
termination of the Participant's employment other than for
Cause shall be payable only after the Committee certifies that
the applicable performance objective(s) or other criteria with
respect to the Individual Award Opportunity have been
satisfied. Payment of any Individual Award Opportunity on
account of the Participant's termination of employment by a
Business Entity other than for Cause shall be made in a single
lump sum.
(e) TERMINATION BY PARTICIPANT FOR GOOD REASON. In the event of
the Participant's termination of employment for Good Reason
during an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity payable to the Participant with
respect to such one-Fiscal Year Performance Period shall be
the maximum amount payable under the Individual Award
Opportunity for that one-Fiscal Year Performance Period, as
determined by the Committee as of the end of the one-Fiscal
Year Performance Period, multiplied by a fraction, the
numerator of which is the number of full consecutive months of
the Participant's employment during the one-Fiscal Year
Performance Period prior to his or her termination for Good
Reason, and the denominator of which is 12. Whether the
Participant has sustained a Good Reason event shall be
determined by the Committee in its sole discretion, but in
good faith. Any Individual Award Opportunity that becomes
payable on account of the termination of employment for Good
Reason shall be payable only after the Committee certifies
that the applicable performance objective(s) or other criteria
with respect to the Individual Award Opportunity have been
satisfied. Payment of any Individual Award Opportunity on
account of the Participant's termination of employment for
Good Reason shall be made in a single lump sum.
(f) TERMINATION BY PARTICIPANT OTHER THAN FOR GOOD REASON. Subject
to Section 5.3(g) of the Plan, in the event of the
Participant's voluntary termination of employment other than
for Good Reason during an applicable one-Fiscal Year
Performance Period, the Individual Award Opportunity granted
to the Participant with respect to such one-Fiscal
Year Performance Period shall be immediately forfeited in
full.
(g) RETIREMENT. If the event of a Participant's Retirement during
an applicable Performance Period, the Individual Award
Opportunity payable to the Participant with respect to such
Performance Period shall be the maximum amount payable for
that Performance Period, as determined by the Committee as of
the end of the Performance Period, multiplied by a fraction,
the numerator of which is the number of full consecutive
months of the Participant's employment during the Performance
Period prior to his or her termination on account of
Retirement, and the denominator of which is 12. Any Individual
Award Opportunity that becomes payable on account of the
Participant's Retirement shall be payable only after the
Committee certifies that the applicable performance
objective(s) or other criteria with respect to the Individual
Award Opportunity have been satisfied. Payment of any
Individual Award Opportunity on account of the Participant's
Retirement shall be made in a single lump sum.
5.4 SPECIAL MULTI-YEAR PERFORMANCE PERIOD PAYMENT RULES.
(a) IN GENERAL. Except as provided in Section 5.4 (b) or (c)
hereof, if the Participant's employment terminates for any
reason whatsoever during a Performance Period equaling or
exceeding two (2) years and prior to the time payment with
respect to the applicable Individual Award Opportunity
otherwise would be made, the Individual Award Opportunity
payable to the Participant with respect to such multi-year
Performance Period shall be forfeited in full.
(b) DISABILITY. Section 5.4(a) shall not apply if the
Participant's termination of employment occurs on account of
his or her Disability on or after October 1 of the last Fiscal
Year comprising a Performance Period equaling or exceeding two
(2) years.
(c) OCCURRENCE OF FUNDAMENTAL TRANSACTION. In the event of a
Fundamental Transaction, the Individual Award Opportunity
payable to the Participant with respect to the Performance
Period within which the Fundamental Transaction occurs shall
fully vest and be payable to the Participant in accordance
with the terms of the applicable Award Agreement; provided,
however, that the payment shall be made in immediately
available funds, from the proceeds of the sale giving rise to
the Fundamental Transaction (by the Company in the case of a
Fundamental Transaction occurring )in a single lump sum, no
later than ten (10) days following the consummation of all
events contemplated by the Fundamental Transaction.
5.5 PAYMENTS AND PARACHUTE AWARDS. Notwithstanding any provision of this
Plan to the contrary, but subject to any conflicting provisions in any
Participant's Employment Agreement, if, in connection with a Fundamental
Transaction, a tax under Section 4999 of the Code would be imposed on the
Participant (after taking into account the exceptions set forth in Sections
280G(b)(4) and 280G(b)(5) of the Code), then the Company shall pay the
Participant an amount equal to the tax under Section 4999.
VI. GENERAL
6.1 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall be effective for
Performance Periods beginning on or after the later of the date it is adopted by
the Committee or the date it is approved by the Company's stockholders of the
Company (the "Effective Date"). This Plan shall terminate as of the tenth
anniversary of the Effective Date, unless terminated earlier by the Committee.
In the event that this Plan is not approved by the stockholders of the Company,
this Plan shall be null and void.
6.2 AMENDMENT OR TERMINATION OF PLAN. The Committee may amend or
terminate this Plan as it shall deem advisable, subject to any requirement of
stockholder approval required by applicable law, rule or regulation, including
Section 162(m) of the Code. Notwithstanding any provision of this Plan to the
contrary, if a Business Entity has executed a definitive acquisition or similar
agreement pursuant to which a Fundamental Transaction will occur upon the
closing of the transaction(s) contemplated thereby, the Committee, in its sole
discretion, may treat the execution of such agreement itself as triggering a
Fundamental Transaction.
6.3 NON-TRANSFERABILITY OF AWARDS. No award under the Plan shall be
transferable other than by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company. Except
to the extent permitted by the foregoing sentence, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.
6.4 TAX WITHHOLDING AND DEDUCTIONS. The Company shall have the right to
require, prior to the payment of any amount pursuant to an award made hereunder,
payment by the Participant of any Federal, state, local, foreign or other taxes
which may be required to be withheld or paid in connection with such award. It
is intended that the Company's contributions under the Plan will be deductible
to the Company when benefits are received by the Participant under Section
404(a)(5) of the Code, and the Participant shall be taxed on the benefits upon
actual receipt of payments under Section 61 of the Code.
6.5 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any
right to participate in this Plan. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company or any Parent or Subsidiary thereof Company, or affect in any manner the
right of the Company, or any Parent or Subsidiary thereof to terminate the
employment of any person at any time without liability hereunder.
6.6 ARBITRATION OF DISPUTES. Both parties agree that all controversies
or claims that may arise between the Participant and the Company in connection
with this Plan shall be settled by arbitration. The parties further agree that
the arbitration shall be held in the State of New Jersey, and administered by
the American Arbitration Association under its Commercial Arbitration Rules,
applying New Jersey law, except to the extent such law is preempted by ERISA.
(a) QUALIFICATIONS OF ARBITRATOR. The arbitration shall be
submitted to a single
arbitrator chosen in the manner provided under the rules of the American
Arbitration Association. The arbitrator shall be disinterested and shall
not have any significant business relationship with either party, and
shall not have served as an arbitrator for any disputes involving the
Company or any of its Affiliates more than twice in the thirty-six (36)
month period immediately preceding his or her date of appointment. The
arbitrator shall be a person who is experienced and knowledgeable in
employment and executive compensation law and shall be an attorney duly
licensed to practice law in one or more states.
(b) POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of
this Plan and shall not have the authority to award punitive or exemplary
or damages under any circumstances. The parties shall equally share the
expense of the arbitrator selected and of any stenographer present at the
arbitration. The remaining costs of the arbitrator proceedings shall be
allocated by the arbitrator, except that the arbitrator shall not have the
power to award attorney's fees.
(c) EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render
its decision within thirty (30) days after termination of the arbitration
proceeding, which decision shall be in writing, stating the reasons
therefor and including a brief description of each element of any damages
awarded. The decision of the arbitrator shall be final and binding.
Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
6.7 GOVERNING LAW. This Plan and each award hereunder, and all
determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the laws of the United States, shall be governed by the
laws of the State of New Jersey and construed in accordance therewith without
giving effect to principles of conflicts of laws.
6.8 OTHER PLANS. Neither the adoption of the Plan nor the submission of
the Plan to the Company's stockholders for their approval shall be construed as
limiting the power of the Board or the Committee to adopt such other incentive
arrangements as it may otherwise deem appropriate.
6.9 BINDING EFFECT. The Plan shall be binding upon the Company and its
successors and assigns and the Participants and their Beneficiaries, personal
representatives and heirs. If the Company becomes a party to any merger,
consolidation or reorganization, then the Plan shall remain in full force and
effect as an obligation of the Company or its successors in interest, unless the
Plan is amended or terminated pursuant to Section 6.2.
6.10 NO TRUST OR ERISA PLAN CREATED. Nothing contained herein shall be
deemed to create a trust of any kind or create any fiduciary relationship. Funds
invested hereunder shall continue for all purposes to be a part of the general
funds of the Company and no person, other than the Company, shall by virtue of
the provisions of this Plan, have any interest in such funds. To the extent that
any person acquires a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company. Further, no provision of this Plan shall be construed
as subjecting the Plan, or any
portion thereof, to any provisions of ERISA, it being the express intention of
the Company that this Plan be so construed.
APPROVALS
2007 MANAGEMENT INCENTIVE PLAN
Adopted by the Compensation Committee of
the Board of Directors on: November 8, 2006
Approved by the Stockholders on: November 8, 2006
EXHIBIT C
ANNUAL BONUS GRANT AGREEMENT
THIS ANNUAL BONUS GRANT AGREEMENT ("Agreement") is made and entered into
this __ day of __________, 2007, (the "Effective Date") by and between Xxxxxxx
Xxxxxx (the "Executive") and Summit Global Logistics, Inc., a Delaware
corporation (the "Company").
BACKGROUND
WHEREAS, Section 3.2.2 of that certain Employment Agreement made and
entered into the 8th day of November, 2006 by and between the Executive and the
Company (the "Employment Agreement") requires the Company, pursuant to the terms
of the Management Incentive Plan, as defined in the Employment Agreement, to
make annual bonus payments to the Executive for each Year of Service, as defined
in the Employment Agreement;
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in the Employment Agreement,
the receipt and sufficiency of which are hereby acknowledged, the Executive and
the Company agree as follows:
1. DEFINITIONS. The following terms, when used in this Agreement,
shall have the following meanings, unless the context clearly requires otherwise
(such definitions to be equally applicable to both the singular and plural of
the defined terms):
1.1 "BASE SALARY" shall have the meaning ascribed thereto in
the Management Incentive Plan.
1.2 "BONUS" means the annual incentive bonus to be paid
hereunder with respect to a given Fiscal Year.
1.3 "EBITDA" means the Company's earnings before income tax,
plus depreciation and amortization, as computed in accordance with
United States GAAP and in a manner consistent with the methods used
in the Company's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or
restructuring or impairment charges, as determined by the Company's
independent public accountants in accordance with GAAP or (ii)
changes in accounting, unless, in each case, the Committee, as
defined in the Management Incentive Plan, decides otherwise within
the Determination Period, as defined in the Management Incentive
Plan.
1.4 "EBITDA TARGET" means the Company's EBITDA for Fiscal
Year 2007, 2008, 2009 or 2010, as applicable.
1.5 "FISCAL YEAR" means the calendar year.
1.6 "GAAP" means generally accepted accounting principles.
1.7 "PERFORMANCE PERIOD" shall have the meaning ascribed
thereto in the Management Incentive Plan.
2. EBITDA TARGETS.
2.1 The EBITDA Target for Fiscal Year 2007 shall be
$__________.
2.2 The EBITDA Target for Fiscal Year 2008 shall be
$__________.
2.3 The EBITDA Target for Fiscal Year 2009 shall be
$__________.
2.4 The EBITDA Target for Fiscal Year 2010 shall be
$__________.
3. ANNUAL INCENTIVE BONUSES.
3.1 The Bonus for each of Fiscal Year 2007, Fiscal Year
2008, Fiscal Year 2009 and Fiscal Year 2010 shall be as follows:
3.1.1 If at least 80% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 35% of his
Base Salary for the Performance Period beginning with or
within such Fiscal Year.
3.1.1.2 If at least 90% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 52.50% of
his Base Salary for the Performance Period beginning
with or within such Fiscal Year.
3.1.1.3 If at least 100% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 70% of his
Base Salary for the Performance Period beginning with or
within such Fiscal Year.
3.1.1.4 For each percentage point, up to 50 percentage
points by which the EBITDA Target for the applicable
Fiscal Year is exceeded, the Executive shall receive an
additional Bonus equal to 2.10% of his Base Salary.
3.1.1.5 For each percentage point over 50 percentage
points, up to 50 additional points, by which the EBITDA
Target for the applicable Fiscal Year is exceeded, the
Executive shall receive an additional Bonus equal to
2.80% of his Base Salary.
3.2 Except as otherwise provided herein, bonus amounts shall
be payable to the Executive in accordance with the terms and
conditions of the Management Incentive Plan.
4. MANAGEMENT INCENTIVE PLAN. The terms and conditions of the
Management Incentive Plan are hereby incorporated herein by reference, and the
Executive and
the Company shall comply with all of the terms thereof applicable to annual
incentive awards. In the event of any conflict between the terms of this
Agreement and the terms of the Management Incentive Plan, the terms of the
Management Incentive Plan shall govern.
5. AMENDMENT AND TERMINATION. The Company may not amend or
terminate this Agreement without the written consent of the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE
__________________________________
Xxxxxxx Xxxxxx
SUMMIT GLOBAL LOGISTICS, INC.
By: ______________________________
Name
Title:
EXHIBIT D
MULTI-YEAR BONUS GRANT AGREEMENT
THIS MULTI-YEAR BONUS GRANT AGREEMENT ("Agreement") is made and entered into
this __ day of __________, 2007, (the "Effective Date") by and between Xxxxxxx
Xxxxxx (the "Executive") and Summit Global Logistics, Inc., a Delaware
corporation (the "Company").
BACKGROUND
WHEREAS, Section 3.2.2 of that certain Employment Agreement made and
entered into the 8th day of November, 2006 by and between the Executive and the
Company (the "Employment Agreement") requires the Company, pursuant to the terms
of the Management Incentive Plan, as defined in the Employment Agreement, to
make a multi-year bonus payment to the Executive if certain performance targets
of the Company are satisfied as of the end of the Employment Term, as defined in
the Employment Agreement;
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in the Employment Agreement,
the receipt and sufficiency of which are hereby acknowledged, the Executive and
the Company agree as follows:
1. DEFINITIONS. The following terms, when used in this Agreement,
shall have the following meanings, unless the context clearly requires otherwise
(such definitions to be equally applicable to both the singular and plural of
the defined terms):
1.1 "BASE SALARY" shall have the meaning ascribed thereto in
the Management Incentive Plan.
1.2 "BONUS" means the multi-year incentive bonus to be paid
hereunder with respect to the Employment Term.
1.3 "DELTA ONE" means the excess, if any, of EBITDA for
Fiscal Year 2009 over the EBITDA Target for Fiscal Year 2007.
1.4 "DELTA TWO" means the excess, if any, of EBITDA for
Fiscal Year 2010 over the EBITDA Target for Fiscal Year 2008.
1.5 "EBITDA" means the Company's earnings before income tax,
plus depreciation and amortization, as computed in accordance with
United States GAAP and in a manner consistent with the methods used
in the Company's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or
restructuring or impairment charges, as determined by the Company's
independent public accountants in accordance with GAAP or (ii)
changes in accounting, unless, in each case, the Committee, as
defined in the Management Incentive Plan, decides otherwise within
the Determination Period, as defined in the Management Incentive
Plan.
1.6 "EBITDA TARGET" means
1.6.1 For Fiscal Year 2007, $__________.
1.6.2 For Fiscal Year 2008, $__________.
1.7 "FIRST PERFORMANCE PERIOD" means the three-consecutive
Fiscal Year period beginning on the first day of Fiscal Year 2007
and ending on the last day of Fiscal Year 2009.
1.8 "FISCAL YEAR" means the calendar year.
1.9 "FUNDAMENTAL TRANSACTION" has the meaning as defined in
the Management Incentive Plan.
1.10 "GAAP" means generally accepted accounting principles.
1.11 "PERFORMANCE PERIOD" means the First Performance Period
or the Second Performance Period, as applicable.
1.12 "SECOND PERFORMANCE PERIOD" means the three-consecutive
Fiscal Year period beginning on the first day of Fiscal Year 2008
and ending on the last day of Fiscal Year 2010.
2. MULTI-YEAR BONUS.
2.1 FIRST PERFORMANCE PERIOD. If, with respect to the First
Performance Period, Delta One, expressed as a percentage of the
EBITDA Target for Fiscal Year 2007, equals or exceeds 33%, the
Executive shall be paid a Bonus in Fiscal Year 2010 equal to one and
one half (1.5) times his Base Salary for Fiscal Year 2007.
2.2 SECOND PERFORMANCE PERIOD. If, with respect to the
Second Performance Period, Delta Two, expressed as a percentage of
the EBITDA Target for Fiscal Year 2008, equals or exceeds 33%, the
Executive shall be paid a Bonus in Fiscal Year 2011 equal to one and
one half (1.5) times his Base Salary for Fiscal Year 2008.
3. PAYMENT UPON OCCURRENCE OF FUNDAMENTAL TRANSACTION. If a
Fundamental Transaction occurs at any time both (i) prior to the payment of any
amount pursuant to Section 2 hereof and (ii) on or prior to December 31, 2010,
then, in lieu of making any payment to the Executive pursuant to Section 2
hereof, the Company shall pay to the Executive, promptly following the
occurrence of the Fundamental Transaction, an amount in immediately available
funds, equal to one and one half (1.5) times his Base Salary. For this purpose,
Base Salary shall mean Base Salary for Fiscal Year 2007, if the Fundamental
Transaction occurs on or prior to the last day of Fiscal Year 2009, and Base
Salary for 2008, if the Fundamental Transaction occurs during Fiscal Year 2010.
Payment shall be made in the form of a single lump sum from the sales proceeds
received by the Company pursuant to the terms of the Fundamental Transaction.
4. PAYMENT OF BONUS AMOUNTS. Except as otherwise provided herein,
bonus amounts shall be payable to the Executive in accordance with the terms and
conditions of the Management Incentive Plan.
5. MANAGEMENT INCENTIVE PLAN. The terms and conditions of the
Management Incentive Plan are hereby incorporated herein by reference, and the
Executive and the Company shall comply with all of the terms thereof applicable
to annual incentive awards. In the event of any conflict between the terms of
this Agreement and the terms of the Management Incentive Plan, the terms of the
Management Incentive Plan shall govern.
6. AMENDMENT AND TERMINATION. The Company may not amend or
terminate this Agreement without the written consent of the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE
__________________________________
Xxxxxxx Xxxxxx
SUMMIT GLOBAL LOGISTICS, INC.
By: ______________________________
Name
Title:
EXHIBIT E
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Unless otherwise defined herein, the terms defined in the 2006 Equity
Incentive Plan (the "Plan") shall have the same defined meanings in this Notice
of Stock Option Award and the attached Stock Option Award Terms, which are
incorporated herein by reference (together, the "AWARD AGREEMENT"). Terms not
defined herein shall have their respective meanings under the Plan.
PARTICIPANT (the "PARTICIPANT")
Xxxxxxx Xxxxxx
XXXXX
The undersigned Participant has been granted an Option to purchase Common Stock
of Summit Global Logistics, Inc. (the "COMPANY"), subject to the terms and
conditions of the Plan and this Award Agreement, as follows:
DATE OF GRANT November 8, 2006 TOTAL NUMBER OF SHARES
GRANTED 126,000
VESTING COMMENCEMENT DATE November 8, 2006 TYPE OF OPTION [X] Incentive Stock Option
EXERCISE PRICE PER SHARE $10.00 Non-Statutory Stock Option
TOTAL EXERCISE PRICE $1,260,000 TERM/EXPIRATION DATE 5 years from Date of Grant
VESTING SCHEDULE:
This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
ANNIVERSARY OF GRANT DATE % OF GRANT (OR # OF SHARES) VESTED
One-Year Anniversary of Grant Date 50%
Two-Year Anniversary of Grant Date 100%
The Option shall vest in full upon the earliest to occur of a Change in Control,
the Participant's death, the Participant's Disability, the Participant's
Retirement, the Company's (or any parent's or subsidiary's thereof) termination
of the Participant's employment without Cause or the Participant's termination
of his employment with the Company (or any parent or subsidiary thereof) for
Good Reason.
Upon the execution by the Company of a definitive acquisition, merger or similar
agreement ("TRANSACTION AGREEMENT") pursuant to which, upon closing, a Change in
Control would occur, the Committee, in its sole discretion, and notwithstanding
any provision of the Transaction Agreement or the Plan, including, but not
limited to, Section 13f.i. thereof, to the contrary, shall (i) require the
acquiring or surviving entity (if not the Company) to assume this Option in
accordance with its terms or (ii) pay the Participant, for each Share not
previously exercised, the greater of (A) the transaction consideration per Share
or (B) the Exercise Price per Share. Such assumption or payment shall take
effect or be made, as applicable, as of the closing date of the transaction(s)
contemplated by the Transaction Agreement. In the event that the closing does
not occur, this paragraph shall be null and void.
Vesting of this Option shall cease, and unvested Option Shares shall be
forfeited, upon the Company's (or any parent's or subsidiary's thereof)
termination of the Participant's employment for Cause or the Participant's
termination of his employment with the Company (or any parent or subsidiary
thereof) other than for Good Reason.
PARTICIPANT SUMMIT GLOBAL LOGISTICS, INC.
_________________________________ __________________________________
Signature By
________________________________ __________________________________
Xxxxxxx Xxxxxx Title
000000Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
2
SUMMIT GLOBAL LOGISTICS, INC.
STOCK OPTION
AWARD TERMS
1. GRANT OF OPTION. The Committee hereby grants to the Participant
named in the Notice of Stock Option Grant an option (the "OPTION")
to purchase the number of Shares set forth in the Notice of Stock
Option Award, at the exercise price per Share set forth in the
Notice of Stock Option Grant (the "EXERCISE PRICE"), and subject to
the terms and conditions of the 2006 Equity Incentive Plan (the
"PLAN"), which is incorporated herein by reference. In the event of
a conflict between the terms and conditions of the Plan and this
Stock Option Award Agreement, the terms and conditions of the Plan
shall prevail.
If designated in the Notice of Stock Option Grant as an Incentive
Stock Option ("ISO"), this Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 limitation
rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").
2. EXERCISE OF OPTION.
i. RIGHT TO EXERCISE. This Option may be exercised during its
term in accordance with the Vesting Schedule set out in the
Notice of Stock Option Award and with the applicable
provisions of the Plan and this Award Agreement.
ii. METHOD OF EXERCISE. This Option shall be exercisable by
delivery of an exercise notice in the form attached as Exhibit
A (the "EXERCISE NOTICE") which shall state the election to
exercise the Option, the number of Shares with respect to
which the Option is being exercised (the "EXERCISED SHARES")
and the Participant's agreement to be subject to such other
representations and agreements as may be required by the
Company. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice
accompanied by payment of the aggregate Exercise Price in
accordance with the cashless exercise provisions of Section 6g
of the Plan.
3. TERMINATION. This Option shall be exercisable for three months after
the Participant ceases to be an Employee; provided, however, if the
relationship is terminated by the Company for Cause, or voluntarily
by the Participant other than for Good Reason, the Option shall
terminate immediately. Upon the Participant's death or Disability,
this Option may be exercised for twelve (12) months after the
termination of employment. In no event may Participant exercise this
Option after the Term/Expiration Date as provided above.
4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the
Company, or if the method of payment of consideration for such
shares would constitute a violation of any applicable law.
5. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Participant
only by Participant. The terms of the Plan and this Award Agreement
shall be binding upon the executors, Committees, heirs, successors
and assigns of the Participant.
6. TERM OF OPTION. This Option may be exercised only within the Term
set out in the Notice of Stock Option Award which Term may not
exceed ten (10) years from the Date of Grant, and may be exercised
during such Term only in accordance with the Plan and the terms of
this Award Agreement.
7. UNITED STATES TAX CONSEQUENCES. Set forth below is a brief summary
as of the date of this Option of some of the United States federal
tax consequences of exercise of this Option and disposition of the
Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD CONSULT A
TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
i. EXERCISE OF ISO. If this Option qualifies as an Incentive
Stock Option, there will be no regular federal income tax
liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the
date of exercise over the Exercise Price will be treated as an
adjustment to the alternative minimum tax for federal tax
purposes and may subject the Participant to the alternative
minimum tax in the year of exercise.
ii. EXERCISE OF NONSTATUTORY STOCK OPTION. There may be a regular
federal income tax liability upon the exercise of a
Nonstatutory Stock Option. The Participant will be treated as
having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the
Exercise Price. If the Participant is an Employee or a former
Employee, the Company will be required to withhold from the
Participant's compensation or collect from the Participant and
pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time
of exercise, and may refuse to honor the exercise if such
withholding amounts are not delivered at the time of exercise.
iii. NOTICE OF DISQUALIFYING DISPOSITION OF INCENTIVE STOCK OPTION
SHARES. If this Option is an Incentive Stock Option, and if
the Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the Incentive
2
Stock Option, including through a cashless exercise, on or
before the later of (1) the date two years after the Date of
Grant, or (2) the date one year after the date of exercise,
the Participant shall immediately notify the Company in
writing of such disposition. The Participant agrees that the
Participant may be subject to income tax withholding by the
Company on the compensation income recognized by the
Participant.
iv. WITHHOLDING. Pursuant to applicable federal, state, local or
foreign laws, the Company may be required to collect income or
other taxes on the grant of this Option, the exercise of this
Option, the lapse of a restriction placed on this Option, or
at other times. The Company may require, at such time as it
considers appropriate, that the Participant pay the Company
the amount of any taxes which the Company may determine is
required to be withheld or collected, and the Participant
shall comply with the requirement or demand of the Company. In
its discretion, the Company may withhold Shares to be received
upon exercise of this Option or offset against any amount owed
by the Company to the Participant, including compensation
amounts, if in its sole discretion it deems this to be an
appropriate method for withholding or collecting taxes.
Currently, neither federal income nor federal employment tax
withholding is required with respect to an Incentive Stock
Option.
8. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan and this Award Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and
agreements of the Company and Participant with respect to the
subject matter hereof, and may not be modified (except as provided
herein and in the Plan) adversely to the Participant's interest
except by means of a writing signed by the Company and Participant.
This agreement is governed by the internal substantive laws but not
the choice of law rules of the State of New Jersey.
9. NO GUARANTEE OF CONTINUED SERVICE. PARTICIPANT ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING IN THE EMPLOYMENT AT THE WILL OF
THE COMPANY (NOT THROUGH THE ACT OF BEING ENGAGED, BEING GRANTED
THIS OPTION OR ACQUIRING SHARES HEREUNDER). PARTICIPANT FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE THE RELATIONSHIP AT ANY TIME.
Participant acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and
3
provisions thereof. Participant has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Plan or this Option. Participant further agrees to notify the Company upon
any change in the residence address indicated below
4
EXHIBIT A
2006 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
Company Name
Address
City, State, Zip Code
Attention: President
1. EXERCISE OF OPTION. Effective as of today, ______________, 200__,
the undersigned ("PARTICIPANT") hereby elects to exercise
Participant's option to purchase _________ shares of the Common
Stock (the "SHARES") of_________ (the "COMPANY") under and pursuant
to the 2006 Equity Incentive Plan (the "PLAN") and the Stock Option
Award Agreement dated ____________, 200__ (the "AWARD AGREEMENT").
2. DELIVERY OF PAYMENT. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Award
Agreement, and pursuant to the cashless exercise provisions of
Section 6g of the Plan.
3. REPRESENTATIONS OF PARTICIPANT. Participant acknowledges that
Participant has received, read and understood the Plan and the Award
Agreement and agrees to abide by and be bound by their terms and
conditions.
4. RIGHTS AS STOCKHOLDER. The Participant shall not have any rights of
a stockholder upon exercise of the Option, which shall be settled
solely in cash.
5. TAX CONSULTATION. Participant understands that Participant may
suffer adverse tax consequences as a result of Participant's
purchase or disposition of the Shares. Participant represents that
Participant has consulted with any tax consultants Participant deems
advisable in connection with the purchase or disposition of the
Shares and that Participant is not relying on the Company for any
tax advice.
6. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this
Agreement shall inure to the benefit of the successors and assigns
of the Company. Subject to the restrictions on transfer herein set
forth, this Agreement shall be binding upon Participant and his or
her heirs, executors, Committees, successors and assigns.
7. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or by the Company
forthwith to the Committee which shall review such dispute at its
next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.
5
8. GOVERNING LAW. This Exercise Notice is governed by the internal
substantive laws but not the choice of law rules of the State of New
Jersey.
9. ENTIRE AGREEMENT. The Plan and Award Agreement are incorporated
herein by reference. This Agreement, the Plan, the Award Agreement
(including all exhibits) and the Investment Representation Statement
constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with
respect to the subject matter hereof, and may not be modified
adversely to the Participant's interest except by means of a writing
signed by the Company and Participant.
Submitted by: Accepted by:
PARTICIPANT SUMMIT GLOBAL LOGISTICS, INC.
______________________________________ ______________________________________
Signature By
______________________________________ ______________________________________
Print Name Title
ADDRESS: ADDRESS:
Type in address
______________________________________
City, State, Zip code
______________________________________
______________________________________
Date Received
6
EXHIBIT F
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
Name of SAR Holder: Xxxxxxx Xxxxxx
Address of SAR Holder: 000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Number of SARs: 94,500, each representing a share of Common Stock
Initial SAR Value: $945,000
Grant Date: November 8, 2006
Pursuant to and in accordance with the Summit Global Logistics, Inc. 2006
Equity Incentive Plan, as amended from time to time (the "Plan"), this Stock
Appreciation Rights Agreement (the "SAR Agreement") evidences the issuance to
the person named above (the "SAR Holder") by Summit Global Logistics, Inc. (the
"Company"), effective as of the date set forth above (the "Grant Date"), of a
number of stock appreciation rights set forth above (the "SARs"). The SARs will
be valued in accordance with, and are subject to the terms, definitions and
provisions of, the Plan, which are incorporated herein by reference. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Plan.
Subject to the terms and conditions of the Plan, and subject to the
determination of the Compensation Committee in its sole discretion to accelerate
the vesting schedule hereunder, the SARs issued hereunder shall vest and become
vested SARs on the respective dates indicated below:
Incremental (Aggregate Number)
of SARs to be Vested SARs Vesting Date/Percent
47,250 (47,250) FIRST ANNIVERSARY OF GRANT
DATE -- 50%
47,250 (94,500) SECOND ANNIVERSARY OF GRANT
DATE -- 100%
All SARs granted hereunder shall be vested in full upon the earliest to
occur of a Change in Control or the death, Disability, Retirement or voluntary
termination for Good Reason of the SAR Holder. Vested SARs may be exercised at
any time within five (5) years following the Grant Date.
Upon the execution by the Company of a definitive acquisition, merger or
similar agreement ("TRANSACTION AGREEMENT") pursuant to which, upon closing, a
Change in Control
7
would occur, the Committee, in its sole discretion, and notwithstanding any
provision of the Transaction Agreement or the Plan, including, but not limited
to, Section 13.f.i. thereof, to the contrary, shall (i) require the acquiring or
surviving entity (if not the Company) to assume the SARs in accordance with
their terms or (ii) pay the Participant, for each share of Common Stock
underlying each SAR not previously exercised, the greater of (A) the transaction
consideration per share of Common Stock underlying each SAR or (B) the Initial
SAR Value per share of Common Stock. Such assumption or payment shall take
effect or be made, as applicable, as of the closing date of the transaction(s)
contemplated by the Transaction Agreement. In the event that the closing does
not occur, this paragraph shall be null and void.
Vesting of the SARs shall cease, and unvested SARs shall be terminated,
upon termination of employment of the SAR Holder with the Business Entity that
employs him or her for Cause or other than for Good Reason.
The SAR Holder shall have no rights as a stockholder of the Company by
virtue of having been issued the SARs and shall have only the rights
specifically provided in the Plan.
By executing this SAR Agreement, the SAR Holder acknowledges receipt of
the Plan (a copy of which is attached hereto) and represents that he or she has
read and the terms and provisions of the Plan and accepts the issuance of the
SARs subject to all of such terms and provisions.
8
SUMMIT GLOBAL LOGISTICS, INC.
By: __________________________________
Name:
Title: ___________________________
ACKNOWLEDGED AND AGREED BY SAR HOLDER:
Name:
Signature: _______________________
9
2006 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHT
EXERCISE NOTICE
Pursuant to the provisions of the Summit Global Logistics, Inc. 2006
Equity Incentive Plan (the "Plan") and that certain Stock Appreciation Rights
Agreement by and between Summit Global Logistics, Inc. (the "Company") and
____________ (the "Grantee") as of _______________ __, 20__, I, the Grantee,
hereby exercise the Stock Appreciation Rights granted under the terms of the
Plan to the extent of __________ shares of the Common Stock of the Company (the
"SARs"). If applicable, I deliver to the Company herewith payment for tax
withholding with respect to the exercise of the SARs in the amount of
$__________.
TO BE COMPLETED BY THE GRANTEE
A. Number of SARs: ______________
B. Initial SAR Value $_____________
C. Total Initial SAR Value of
Shares (A x B): $_____________
TO BE COMPLETED BY THE COMPANY
D. Value per share of Common
Stock, as of __________,
times the number of shares
being exercised (A): $_____________
E. TOTAL PAYMENT
DUE (D - C): $_____________
Date: __________________________________ ______________________________________
Grantee
______________________________________
Address
______________________________________
Social Security Number
10
EXHIBIT G
SUMMIT GLOBAL LOGISTICS, INC.
2007 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
EFFECTIVE AS OF JANUARY 1, 2007
THE SUMMIT GLOBAL LOGISTICS, INC.
2007 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I - PURPOSE; EFFECTIVE DATE
1.1 PURPOSE. The purpose of this SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(hereinafter, the "Plan") is to permit a select group of management or highly
compensated employees of Summit Global Logistics, Inc. (and its selected
subsidiaries and/or affiliates) to defer the receipt of income which otherwise
would become payable to them. It is intended that this Plan, by providing these
eligible employees an opportunity to defer the receipt of income, will assist
the Company (as hereinafter defined) in retaining and attracting individuals of
exceptional ability by providing them with an additional opportunity to save for
retirement beyond Code (as hereinafter defined) limitations imposed on qualified
retirement plans. This Plan is intended to be "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
1.2 EFFECTIVE DATE. This Plan shall be effective as of January 1, 2007.
It is the intent that all of the amounts deferred and benefits provided under
this Plan will comply with the terms of Section 409A of the Code and
interpretive guidance issued thereunder.
1.3 UNFUNDED PLAN. This plan is an unfunded top-hat plan maintained
primarily to provide deferred compensation benefits for a "select group of
management or highly-compensated employees" within the meaning of Sections 201,
301, and 401 of ERISA, and therefore is exempt from the provisions of Parts 2, 3
and 4 of Title I of ERISA.
ARTICLE II - DEFINITIONS
For the purpose of this Plan, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:
2.1 ACCOUNT(S). "Account(s)" means the notional account or accounts
maintained on the books of the Company used solely to calculate the amount
payable to each Participant under this Plan and shall not constitute a separate
fund of assets. Account(s) shall be deemed to exist from the time amounts are
first credited to such Account(s) until such time that the entire Account
balance has been distributed in accordance with this Plan. The Accounts
available for each Participant shall be identified as:
a Deferral Account;
b In-Service Account; and,
c Retention Account.
2.2 BENEFICIARY. "Beneficiary" means the person, persons or entity as
designated by the Participant, entitled under Article VI to receive any Plan
benefits payable after the Participant's death.
2.3 BOARD. "Board" means the Board of Directors of the Company.
2.4 CHANGE OF CONTROL. "Change of Control" means:
(a) a change in the ownership or effective control of the Company,
or in the ownership of a substantial portion of the assets of the Company, as
defined and determined under Section 409A(a)(2)(A)(v) of the Code (or its
successor provisions), Treasury Notice 2005-1 and Proposed Treasury Regulation
1.409A-1 and any further interpretive guidance issued thereunder. Without in any
way limiting the scope of the preceding sentence, a Change of Control shall be
deemed to occur on the date upon which one of the following events occurs:
i. any one person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or more than one person acting as a group (as determined under applicable
Treasury regulations), acquires ownership of stock of the Company that, together
with stock held by such person or group, constitutes more than 50% of either the
total fair market value or total voting power of the stock of the Company
(except that the acquisition of additional control of the Company by the same
person or persons during such 12-month period is not considered to cause a
change in control of the Company); or
ii. any one person (as such term is used in the Exchange
Act), or more than one person acting as a group (as determined under applicable
Treasury regulations), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing 35% or more of the total voting
power of the Company (except that the acquisition of additional control of the
Company by the same person or persons during such 12-month period is not
considered to cause a change in control of the Company); or
iii. a majority of members of the Board is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of the appointment
or election; or
iv. any one person (as such term is used in the Exchange
Act), or more than one person acting as a group (as determined under applicable
Treasury regulations), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Company that have a total gross fair market value equal to or
more than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions.
2.5 CODE. "Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto.
2.6 COMMITTEE. "Compensation Committee" means the Compensation Committee
appointed by the Board to administer the Plan pursuant to Article VII.
2.7 COMPANY. "Company" means Summit Global Logistics, Inc., a New Jersey
corporation or any successor to the business thereof; provided, however, that
for purposes of eligibility to participate in the Plan and employment status,
Company shall include any directly or indirectly affiliated subsidiary
corporations, any other affiliate designated by the Board.
2.8 COMPENSATION. "Compensation" means the base salary payable to
Participant and bonus or incentive compensation earned by a Participant with
respect to employment services performed for the Company by the Participant and
considered to be "wages" for purposes of federal income tax withholding. For
purposes of this Plan only, Compensation shall be calculated before reduction
for any amounts deferred by the Participant pursuant to the Company's tax
qualified plans which may be maintained under Section 401(k) or Section 125 of
the Code but shall exclude "wages" associated with the exercise of stock options
by the Participant or income arising from other equity instruments (e.g., stock
units, restricted stock units or restricted stock) awarded to a Participant.
Inclusion of any other forms of compensation, including commissions payable, is
subject to Committee approval.
2.9 DEFERRAL ELECTION. "Deferral Election" means an irrevocable written
commitment made by a Participant to defer a portion of his/her Compensation as
set forth in Article III, and as permitted by the Committee in its sole
discretion. The Deferral Election shall apply to each payment of salary and/or
bonus payable to a Participant, and shall specify the Account or Accounts to
which the Compensation deferred shall be credited. Such designation shall be
made in the form of a whole percentage or an exact stated dollar amount. Such
Deferral Election shall be made on an Election Form and at a time deemed
acceptable to the Committee. A Deferral Election with respect to any bonus or
incentive compensation which is based on services performed over a period of at
least twelve (12) months shall be made no later than six (6) months prior to the
end of such performance period.
2.10 DEFERRAL PERIOD. "Deferral Period" means each calendar year, except
that if a Participant first becomes eligible after the beginning of a calendar
year, the initial Deferral Period shall be the date the Participant first
becomes eligible to participate in this Plan through and including December 31st
of that calendar year. For purposes of deferrals related to Participant's annual
bonus or other incentive based compensation, "Deferral Period" shall mean the
Company's Fiscal Year.
2.11 DETERMINATION DATE. "Determination Date" means each business day.
2.12 DISABILITY. "Disability" means the Participant is: (i) unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
or other disability benefits for a period of not less than 3 months under an
accident and health plan covering employees of the participant's employer.
2.13 DISTRIBUTION ELECTION. "Distribution Election" means the form
of payment for benefits payable from each Account under this Plan, as elected by
the Participant on an Enrollment Form prescribed by the Committee.
2.14 FINANCIAL HARDSHIP. "Financial Hardship" means a severe financial
hardship to the Participant resulting from an illness or accident of the
Participant, the Participant's spouse, or a dependent (as defined in Section
152(a) of the Code) of the Participant, loss of the Participant's property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the participant, provided,
that such financial hardship may not be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the Participant's
assets, to the extent the liquidation of such assets would not cause severe
financial hardship, or by cessation of deferrals under the Plan. The
determination of whether a Financial Hardship exists shall be subject to and
determined in accordance with relevant tax guidance issued under Section 409A of
the Code.
2.15 INTEREST. "Interest" means the amount credited to or charged against
a Participant's Account(s) on each Determination Date, which shall be based on
the Valuation Funds chosen by the Participant as provided in Section 2.21, below
and in a manner consistent with Section 4.3, below. Such credits or charges to a
Participant's Account may be either positive or negative to reflect the increase
or decrease in value of the Account in accordance with the provisions of this
Plan.
2.16 PARTICIPANT. "Participant" means any individual who is eligible,
pursuant to Section 3.1, below, to participate in this Plan, and who either, has
elected to defer Compensation under this Plan in accordance with Article III,
below, or who is determined by the Committee in its sole discretion as being
eligible to receive a Retention Contribution under this Plan. Such its
individual shall remain a Participant in this Plan for the period of deferral,
or credit, and until such time as all benefits payable under this Plan have been
paid in accordance with the provisions hereof.
2.17 PLAN. "Plan" means this Supplemental Executive Retirement Plan as
amended from time to time.
2.18 QUALIFIED PLAN. "Qualified Plan" means the defined contribution or
401(k) plan in which the Participant participates.
2.19 RETENTION CONTRIBUTION. "Retention Contribution" means the annual
discretionary contribution, if any, made by the Company to the Participant's
Retention Account under Section 4.5, below.
2.20 RETIREMENT. "Retirement" means the termination of a Participant's
employment with the Company, for reasons other than death or Disability, on or
after the earlier of: (a) attainment of age 55 with at least ten (10) years of
continuous service with the Company; or (b) attainment of age sixty-five (65).
2.21 SPECIFIED EMPLOYEES. "Specified Employees" means key employees, as
defined in Section 416(i) of the Code without regard to paragraph (5) thereof,
of the Company.
2.22 VALUATION FUNDS. "Valuation Funds" means one or more of the
hypothetical investment funds or indices managed by an investment manager that
are selected by the Committee. These Valuation Funds are used solely to
calculate the Interest that is credited to each Participant's Account(s) in
accordance with Article IV, below, and not represent, nor should they be
interpreted to convey any beneficial interest or ownership on the part of the
Participant in any asset or other property of the Company. Participants may
allocate their Account(s) between Valuation Funds.
Exhibit A attached hereto sets forth the available Valuation Funds which may be
amended from time to time in the sole and absolute discretion of the Committee.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY AND PARTICIPATION.
(a) ELIGIBILITY. Eligibility to participate in the Plan shall be
limited to those senior management employees of the Company who have annual
compensation equal to or in excess of $220,000 or who are designated as eligible
to participate by the Committee from time to time.
(b) PARTICIPATION. An individual's participation in the Plan shall
be effective upon notification to the individual by the Committee or its
designee of his/her eligibility to participate, and the earlier of a
contribution under this Plan being made on behalf of the Participant by the
Company or the completion and submission of an Enrollment Form, Allocation Form,
and a Distribution Election to the Committee no later than fifteen (15) days
prior to the beginning of the Deferral Period.
(c) FIRST-YEAR PARTICIPATION. When an individual first becomes
eligible to participate in this Plan, a Deferral Election may be submitted to
the Committee within thirty (30) days after the Committee notifies the
individual of eligibility to participate. Such Deferral Election will be
effective only with regard to Compensation earned and payable following
submission of the Deferral Election to the Committee.
3.2 FORM OF DEFERRAL ELECTION. A Participant may irrevocably elect to
make a Deferral Election no later than fifteen (15) days prior to the beginning
of the Deferral Period by submitting the Enrollment Form permitted by the
Committee. The Deferral Election shall specify the following:
(a) DEFERRAL AMOUNTS; ACCOUNTS. A Deferral Election shall be made
with respect to each payment of Compensation payable by the Company to a
Participant during the Deferral Period, and shall designate the portion of each
deferral that shall be allocated among either the Deferral or In-Service
Accounts. In addition, no amounts shall be deferred into an In-Service Account
once payments have commenced under the terms of this Plan and until such time as
the entire Account Balance has been completely distributed. The Participant
shall set forth the amount of his salary to be deferred as a whole percentage
amount of Compensation, and with respect to the deferral of bonus Compensation,
a stated dollar amount or a whole percentage amount above a stated dollar
amount.
(b) ALLOCATION TO VALUATION FUNDS. The Participant shall specify
in a separate form (known as the "Allocation Form") filed with the Committee,
the Participant's initial allocation of the amounts deferred into each Account
among the various available Valuation Funds.
(c) MAXIMUM DEFERRAL. The maximum amount of Compensation that may
be deferred shall be no more than seventy-five percent (75%) of base salary and
one hundred percent (100%) of annual bonus or incentive compensation.
3.3 PERIOD OF COMMITMENT. Any Deferral Election made by a Participant
with respect to Compensation shall remain in effect for the next succeeding
Deferral Period, and shall remain in effect for all future Deferral Periods
unless revoked or amended in writing by the Participant and delivered to the
Committee no later than fifteen (15) days prior to the beginning of a subsequent
Deferral Period, except that if a Participant suffers a Disability or terminates
employment with Company prior to the end of the Deferral Period, the Deferral
Period shall end as of the date of Disability or termination.
3.4 MODIFICATION OF DEFERRAL ELECTION. Except as provided in Sections
3.3, above, and 5.5 below, a Deferral Election shall be irrevocable by the
Participant during a Deferral Period.
3.5 CHANGE IN STATUS. If the Committee determines that a Participant's
employment performance is no longer at a level that warrants reward through
participation in this Plan, but does not terminate the Participant's employment
with Company, the Participant's existing Deferral Election shall terminate at
the end of the Deferral Period, and no new Deferral Election may be made by such
Participant after notice of such determination is given by the Committee, unless
the Participant later satisfies the requirements of Section 3.1. If the
Committee, in its sole discretion, determines that the Participant no longer
qualifies as a member of a select group of management or highly compensated
employees, as determined in accordance with the ERISA, and interpretive guidance
issued thereunder the Committee may, in its sole discretion terminate any
Deferral Election for that year, and prohibit the Participant from making any
future Deferral Elections.
3.6 DEFAULTS IN EVENT OF INCOMPLETE OR INACCURATE DEFERRAL ELECTIONS. In
the event that a Participant submits a Deferral Election to the Committee that
contains information necessary to the efficient operation of this Plan which, in
the sole discretion of the Committee, is incomplete or inaccurate, the Committee
shall be authorized to treat the incomplete or inaccurate Deferral Election as
if the following elections had been made by the Participant, and such
information shall be communicated to the Participant:
(a) If no Account is listed - treat as if the Deferral Account was
elected;
(b) If Accounts listed equal less than 100% - treat as if the
balance was deferred into Deferral Account;
(c) If Accounts listed equal more than 100% -proportionately
reduce each Account to equal 100%;
(d) If In-Service Account is listed, but no deferrals can be made
into that Account due to the fact that benefits are being paid from that
In-Service Account, then the amounts elected to be deferred shall be credited to
the Deferral Account during such period of payment, after which time the balance
of the amounts elected to be deferred shall be credited to a subsequent
In-Service Account with a distribution date as elected or as provided in sub-
section (i), below;
(e) If no Valuation Fund is selected - treat as if the Money
Market Fund was elected;
(f) If Valuation Fund(s) selected equal less than 100% - treat as
if the Money Market Fund was elected for remaining balance;
(g) If Valuation Fund(s) selected equal more than 100% -
proportionately reduce each Valuation Fund to equal 100%;
(h) If no Distribution Election is chosen -treat as if lump sum
was elected for In-Service Account and treat as if three (3) year was elected
for Deferral Account; and,
(i) If no time of payment is chosen for In-Service Account -treat
as if the earliest possible date available under the provisions of Section 5.3,
below was elected.
ARTICLE IV - DEFERRED COMPENSATION ACCOUNT
4.1 ACCOUNTS. The Compensation deferred by a Participant under the Plan,
and Interest shall be credited to the Participant's Account(s) as selected by
the Participant; any Retention Contributions and Interest thereon shall be
credited to the Participant's Retention Account. Separate accounts may be
maintained on the books of the Company to reflect the different Accounts chosen
by the Participant, and the Participant shall designate the portion of each
deferral that will be credited to each Account as set forth in Section 3.2(a),
above. These Accounts shall be used solely to calculate the amount payable to
each Participant under this Plan and shall not constitute a separate fund of
assets.
4.2 TIMING OF CREDITS; WITHHOLDING. A Participant's deferred
Compensation shall be credited to each Account designated by the Participant as
soon as administratively practical after the date the Compensation deferred
would have otherwise been payable to the Participant. Any Retention
Contributions shall be credited to the Retention Account as set forth in Section
4.5, below. Any withholding of taxes or other amounts with respect to deferred
Compensation or other amounts credited under this Plan that is required by
local, state or federal law shall be withheld from the Participant's
corresponding non-deferred portion of the Compensation to the maximum extent
possible, and any remaining amount shall reduce the amount credited to the
Participant's Account in a manner specified by the Committee.
4.3 VALUATION FUNDS. A Participant shall designate, at a time and in a
manner acceptable to the Committee, one or more Valuation Funds for each Account
for the sole purpose of determining the amount of Interest to be credited or
debited to such Account. Such election shall designate the portion of each
deferral of Compensation made into each Account that shall be allocated among
the available Valuation Fund(s), and such election shall apply to each
succeeding deferral of Compensation until such time as the Participant shall
file a new election with the Committee. Upon notice to the Committee,
Participants shall also be permitted to reallocate the balance in each Valuation
Fund among the other available Valuation Funds as determined by the Committee.
The manner in which such elections shall be made and the frequency with which
such elections may be changed and the manner in which such elections shall
become effective shall be determined in accordance with the procedures to be
adopted by the Committee or its delegates from
time to time. As of the Effective Date, such elections may be made on a daily
basis electronically, and such elections shall become effective on the date made
or the next available Determination Date.
4.4 RETENTION CONTRIBUTIONS. Company may make a discretionary
contribution to each eligible Participant's Retention Account as soon as is
practical after the close of the Company's fiscal year, but in no event later
than sixty (60) days following the close of such fiscal year. The amount of the
credit shall be determined by the Committee in its sole discretion, and each
year, the Committee shall have the discretion to increase or decrease the
Retention Contribution from prior years, or to eliminate the contribution
totally for any given year.
4.5 DETERMINATION OF ACCOUNTS. Each Participant's Account as of each
Determination Date shall consist of the balance of the Account as of the
immediately preceding Determination Date, adjusted as follows:
(a) NEW DEFERRALS. Each Account shall be increased by any deferred
Compensation credited since such prior Determination Date in the proportion
chosen by the Participant, except that no amount of new deferrals shall be
credited to an Account at the same time that a distribution is to be made from
that Account.
(b) COMPANY CONTRIBUTIONS. Each Account shall be increased by any
Retention Contributions credited since such prior Determination as set forth
above in sections 4.4 or as otherwise directed by the Committee.
(c) DISTRIBUTIONS. Each Account shall be reduced by the amount of
each benefit payment made from that Account since the prior Determination Date.
Distributions shall be deemed to have been made proportionally from each of the
Valuation Funds maintained within such Account based on the proportion that such
Valuation Fund bears to the sum of all Valuation Funds maintained within such
Account for that Participant as of the Determination Date immediately preceding
the date of payment.
(d) INTEREST. Each Account shall be increased or decreased by the
Interest credited to such Account since such Determination Date as though the
balance of that Account as of the beginning of the current month had been
invested in the applicable Valuation Funds chosen by the Participant.
4.6 VESTING OF ACCOUNTS. Each Participant shall be vested in the amounts
credited to such Participant's Account and Interest thereon as follows:
(a) AMOUNTS DEFERRED. A Participant shall be one hundred percent
(100%) vested at all times in the amount of Compensation elected to be deferred
under this Plan to the Deferral Account and In-Service Account, if any,
including any Interest thereon.
(b) RETENTION CONTRIBUTIONS. Each separate Retention Contribution,
if any, to a Participant's Retention Account, including any Interest thereon,
shall be 33.33% vested on the last day of the fiscal year immediately following
the fiscal year to which the Retention Contribution is attributable, provided,
that the Participant remains employed by the Company on such date, and vested in
an additional 33.33% of such Retention Contribution on the last day of
the second and third fiscal years, respectively, following the fiscal year to
which the Retention Contribution is attributable, provided, that the Participant
remains employed by the Company on each such date. If the Participant fails to
remain employed with the Company through the vesting dates and the Retention
Contribution is not otherwise vested as providing in the following sentence,
then the unvested portion of the Retention Contribution and any Interest thereon
shall be forfeited and returned to the Company. Notwithstanding the previous
sentence or anything else herein to the contrary, a Participant's Retention
Account shall (i) be one hundred percent (100%) vested upon the death or
Disability of the Participant or a Change of Control or (ii) be one hundred
percent (100%) vested as otherwise provided by the Committee in its sole
discretion.
(c) STATEMENT OF ACCOUNTS. The Committee shall direct the Plan's
third-party administrator to provide to each Participant a statement showing the
balances in the Participant's Account on a quarterly basis.
ARTICLE V - PLAN BENEFITS
5.1 DEFERRAL ACCOUNT. The vested portion of a Participant's Deferral
Account shall be distributed to the Participant upon the termination of
employment with the Company.
(a) TIMING OF PAYMENT. Subject to Section 5.7, benefits payable
from the Deferral Account shall commence on or about the January 15th
immediately following the date of the Participant's termination of employment,
or if later forty-five (45) days following the Participant's termination of
employment, and subsequent payments, if the form of payment selected provides
for subsequent payments, shall be made on or about each succeeding January 15th.
(b) FORM OF PAYMENT. The form of benefit payment from the Deferral
Account shall be that form selected by the Participant in the first Deferral
Election which designated a portion of the Compensation deferred be allocated to
the Deferral Account, and as permitted pursuant to Section 5.8 below, except
that if the Participant terminates employment prior to Retirement, in which
event, the Deferral Account shall be paid in the form of a lump sum payment.
5.2 RETENTION ACCOUNT. The vested portion of the Participant's Retention
Account shall be distributed to the Participant upon the termination of
employment with the Company.
(a) TIMING OF PAYMENT. Subject to Section 5.7, benefits payable
from the Retention Account shall commence on or about the January 15th
immediately following the date of the Participant's termination, or if later
forty-five (45) days following the Participant's termination, and subsequent
payments, if the Form of Payment selected provides for subsequent payments,
shall be made on or about each succeeding January 15th.
(b) FORM OF PAYMENT. The form of benefit payment from the
Retention Account shall be made in that form selected by the Participant in the
Distribution Election set forth in the Enrollment Form filed with the Committee
coincident with the initial crediting of amounts to the Retention Account, and
as permitted pursuant to Section 5.8 below, except that if
the Participant terminates employment prior to Retirement, in which event, the
Retention Account shall be paid in the form of a lump sum payment.
5.3 IN-SERVICE ACCOUNT. The vested portion of a Participant's In-Service
Account shall generally be distributed to the Participant upon the date chosen
by the Participant.
(a) TIMING OF PAYMENT. Subject to Section 5.7, benefits under this
section shall be payable on or about January 15th of the year specified in the
first Deferral Election which designated a portion of the Compensation deferred
be allocated to the In-Service Account and subsequent payments. In no event
shall the date selected be earlier than the first day of the sixth calendar year
following the initial filing of the Deferral Election with respect to that
In-Service Account. In the event that the Participant terminates employment with
the Company prior to the date so specified, the benefits under this section
shall commence as soon as administratively practical after termination of
employment.
(b) FORM OF PAYMENT. The form of benefit payment from the
In-Service Account shall be that form selected by the Participant pursuant to
Section 5.8, below, except that if the Participant terminates employment with
the Company prior to the date so specified, then the In-Service Account shall be
paid in the form of a lump sum payment. If the Form of Payment selected provides
for subsequent payments, subsequent payments shall be made on or about each
succeeding January 15th.
(c) CHANGE OF TIME AND/OR FORM OF PAYMENT. The Participant may,
subsequently amend the form of payment or the intended date of payment to a date
later than that date initially chosen, by filing such amendment with the
Committee no later than twelve (12) months prior to the current date of payment.
The Participant may file this amendment, provided that each amendment must
provide for a payout under this paragraph at a date no earlier than five (5)
years after the date of payment in force immediately prior to the filing of such
request, and the amendment may not take effect for twelve (12) months after the
request is made.
5.4 DEATH BENEFIT. Upon the death of a Participant prior to the
commencement of benefits under this Plan from any particular Account, the
Company shall pay to the Participant's Beneficiary an amount equal to the vested
Account balance in that Account in the form of a lump sum payment. In the event
of the death of the Participant after the commencement of benefits under this
Plan from any Account, the benefits from that Account(s) shall be paid to the
Participant's designated Beneficiary from that Account at the same time and in
the same manner as if the Participant had survived.
5.5 HARDSHIP DISTRIBUTIONS. Upon a finding that a Participant has
suffered a Financial Hardship, the Committee shall terminate the existing
Deferral Election, and/or make distributions from any or all of the
Participant's Accounts. The amount of such distribution shall be limited to the
amount reasonably necessary to meet the Participant's needs resulting from the
Financial Hardship plus amounts necessary to pay taxes reasonably anticipated as
a result of the distribution, after taking into account the extent to which such
Financial Hardship is or may be relieved through the reimbursement or
compensation by insurance, or otherwise or by liquidation of the Participant's
assets (to the extent that liquidation of such assets would not itself cause
severe financial hardship). The amount of such distribution will not exceed the
Participant's vested Account balances. If payment is made due to Financial
Hardship, the Participant's deferrals under this Plan shall cease for
the period of the Financial Hardship and for twelve (12) months thereafter. If
the Participant is again eligible to participate, any resumption of the
Participant's deferrals under the Plan after such twelve (12) month period shall
be made only at the election of the Participant in accordance with Article III
herein.
5.6 CHANGE OF CONTROL DISTRIBUTIONS. Upon the occurrence of a Change of
Control, Benefits payable from the Deferral and Retention Accounts shall be
distributed to the Participant within forty-five (45) days following the Change
of Control.
5.7 DISABILITY DISTRIBUTIONS. Upon a finding that a Participant has
suffered a Disability, the Committee may make distributions from any or all of
the Participant's Accounts. The amount of such distribution shall be limited to
the amount reasonably necessary to meet the Participant's needs resulting from
the Disability.
5.8 PAYMENT TO SPECIFIED EMPLOYEES. Payments of benefits from the
Deferral Account, Retention Account and benefits payable from an In-Service
Account caused by the termination of employment of a Participant who is
determined to meet the definition of Specified Employee shall be payable as
otherwise provided, except that the initial payment shall be made no earlier
than the six (6) months following the termination of employment with the
Company.
5.9 FORM OF PAYMENT. Unless otherwise specified in this Article, the
benefits payable from any Account under this Plan shall be paid in the form of
benefit as provided below, and specified by the Participant in the Distribution
Election applicable to that Account at the time of the initial deferral or
credit to that Account. The permitted forms of benefit payments are:
(a) A lump sum amount which is equal to the vested Account
balance; and
(b) Annual installments for a period of up to fifteen (15) years
(or in the event of payment of the In-Service Account, a maximum of five (5)
years) where the annual payment shall be equal to the balance of the Account
immediately prior to the payment, multiplied by a fraction, the numerator of
which is one (1) and the denominator of which commences at the number of annual
payment initially chosen and is reduced by one (1) in each succeeding year.
Interest on the unpaid balance shall be based on the most recent allocation
among the available Valuation Funds chosen by the Participant, made in
accordance with Section 4.3, above.
5.10 SMALL ACCOUNT. If the total of a Participant's vested, unpaid
Account balance as of the time the payments are to commence from the
Participant's Account is less than the minimum prescribed, the remaining unpaid,
vested Account shall be paid in a lump sum, notwithstanding any election by the
Participant to the contrary. Such minimums shall be $5,000 for any In-Service
Account and $10,000 for any Deferral or Retention Account.
5.11 WITHHOLDING; PAYROLL TAXES. Company shall withhold from any payment
made pursuant to this Plan any taxes required to be withheld from such payments
under local, state or federal law. A Beneficiary, however, may elect not to have
withholding of federal income tax pursuant to Section 3405(a)(2) of the Code, or
any successor provision thereto.
5.12 PAYMENT TO GUARDIAN. If a Plan benefit is payable to a minor or a
person declared incompetent or to a person incapable of handling the disposition
of the property, the Committee
may direct payment to the guardian, legal representative or person having the
care and custody of such minor, incompetent or person. The Committee may require
proof of incompetency, minority, incapacity or guardianship as it may deem
appropriate prior to distribution. Such distribution shall completely discharge
the Committee and Company from all liability with respect to such benefit.
5.13 EFFECT OF PAYMENT. The full payment of the applicable benefit under
this Article V shall completely discharge all obligations on the part of the
Company to the Participant (and the Participant's Beneficiary) with respect to
the operation of this Plan, and the Participant's (and Participant's
Beneficiary's) rights under this Plan shall terminate.
5.14 FORFEITURE. In the event a Participant is terminated for "cause",
then his Retention Account shall be immediately forfeited without regard to
whether or not he is vested or unvested in such Retention Account. For purposes
of this Plan, "cause" shall mean (i) the Participant's material dishonesty
including, without limitation, theft, fraud, embezzlement, financial
misrepresentation or other similar behavior or action, in his dealings with or
with respect to the Company or any affiliate thereof or entity with which the
Company, or any parent or subsidiary of the Company, shall be engaged in or
attempting to engage in commerce; (ii) the conviction of the Participant for, or
the Participant's entry of a plea of guilty or nolo contendere to, the
commission of a felony other than driving while intoxicated by, or driving while
under the influence of, alcohol; or (iii) the material breach of any provision
of this Agreement which is not cured to the extent possible, by the Participant
within thirty (30) calendar days after written notice thereof from the Company
to the Participant setting forth with reasonable specificity the nature of such
breach. Notwithstanding anything in the Plan to the contrary, forfeiture for
cause may not occur following a Change of Control.
ARTICLE VI - BENEFICIARY DESIGNATION
6.1 BENEFICIARY DESIGNATION. Each Participant shall have the right, at
any time, to designate one (1) or more persons or entity as Beneficiary (both
primary as well as secondary) to whom benefits under this Plan shall be paid in
the event of Participant's death prior to complete distribution of the
Participant's vested Account balance. Each Beneficiary designation shall be in a
written form prescribed by the Committee and shall be effective only when filed
with the Committee during the Participant's lifetime.
6.2 CHANGING BENEFICIARY. Any Beneficiary designation may be changed by
a Participant without the consent of the previously named Beneficiary by the
filing of a new Beneficiary designation with the Committee.
6.3 NO BENEFICIARY DESIGNATION. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or if the
Beneficiary designated by a deceased Participant dies before the Participant or
before complete distribution of the Participant's benefits, the Participant's
Beneficiary shall be the person in the first of the following classes in which
there is a survivor:
(a) The Participant's surviving spouse;
(b) The Participant's children in equal shares, except that if any
of the children predeceases the Participant but leaves surviving issue, then
such issue shall take by right of representation the share the deceased child
would have taken if living; or
(c) The Participant's estate.
6.4 EFFECT OF PAYMENT. Payment to the Beneficiary shall completely
discharge the Company's obligations under this Plan.
ARTICLE VII - ADMINISTRATION
7.1 COMMITTEE; DUTIES. This Plan shall be administered by the
Compensation Committee, or the Senior Vice President of Human Resources acting
as the Plan Administrator. References to the "Compensation Committee" in the
Plan shall include the Senior Vice President of Human Resources acting in his
capacity as Plan Administrator. The Committee or its designee shall have the
authority to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve any and all
questions, including interpretations of the Plan, as they may arise in such
administration. A majority vote of the Committee members shall control any
decision.
7.2 AGENTS. The Committee may, from time to time, employ agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Company.
7.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final, conclusive and binding upon
all persons having any interest in the Plan.
7.4 INDEMNITY OF COMMITTEE. To the fullest extent permitted by the
Company's Articles of Incorporation and By-Laws, the Company shall indemnify and
hold harmless the members of the Compensation Committee or the Senior Vice
President of Human Resources acting as the Plan Administrator against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to this Plan on account of such member's service on
the Committee, except in the case of gross negligence or willful misconduct.
ARTICLE VIII - CLAIMS PROCEDURE
8.1 CLAIM. Any person or entity claiming a benefit, requesting an
interpretation or ruling under the Plan (hereinafter referred to as "Claimant"),
or requesting information under the Plan shall present the request in writing to
the Committee, which shall respond in writing as soon as practical, but in no
event later than ninety (90) days after receiving the initial claim (or no later
than forty-five (45) days after receiving the initial claim regarding a
Disability under this Plan).
8.2 DENIAL OF CLAIM. If the claim or request is denied, the written
notice of denial shall state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based;
(b) A description of any additional material or information
required and an explanation of why it is necessary, in which event the time
frames listed in section 8.1 shall be one hundred and eighty (180) and
seventy-five (75) days from the date of the initial claim respectively; and
(c) An explanation of the Plan's claim review procedure.
8.3 REVIEW OF CLAIM. Any Claimant whose claim or request is denied or
who has not received a response within sixty (60) days (or one hundred and
eighty (180) days in the event of a claim regarding a Disability) may request a
review by notice given in writing to the Committee. Such request must be made
within sixty (60) days (or one hundred and eighty (180) days in the event of a
claim regarding a Disability) after receipt by the Claimant of the written
notice of denial, or in the event Claimant has not received a response sixty
(60) days (or one hundred and eighty (180) days in the event of a claim
regarding a Disability) after receipt by the Committee of Claimant's claim or
request. The claim or request shall be reviewed by the Committee which may, but
shall not be required to, grant the Claimant a hearing. On review, the claimant
may have representation, examine pertinent documents, and submit issues and
comments in writing.
8.4 FINAL DECISION. The decision on review shall normally be made within
sixty (60) days (or forty-five (45) days in the event of a claim regarding a
Disability) after the Committee's receipt of claimant's claim or request. If an
extension of time is required for a hearing or other special circumstances, the
Claimant shall be notified and the time limit shall be one hundred twenty (120)
days (or ninety (90) days in the event of a claim regarding a Disability). The
decision shall be in writing and shall state the reasons and the relevant Plan
provisions. All decisions on review shall be final and bind all parties
concerned.
ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN
9.1 AMENDMENT. The Board may at any time amend the Plan by written
instrument, notice of which is given to all Participants and to Beneficiary
receiving installment payments, except that no amendment shall reduce or
otherwise adversely affect the amount accrued in any Account as of the date the
amendment is adopted.
9.2 COMPANY'S RIGHT TO TERMINATE. The Board may at any time terminate
the Plan provided that such termination of the Plan is not treated as an
"acceleration of benefits" as described in Section 409A(a)(3) of the Code and
appropriate Treasury regulations or other guidance issued by the Internal
Revenue Service or Treasury. Upon a permitted partial or complete termination,
the Board may cease all future Deferral Elections, all current Deferral
Elections, and or, in its sole discretion, pay out Accounts over a period of up
to five (5) years, provided such action is not treated as an "acceleration of
benefits" as described in Section 409A(a)(3) of the Code and appropriate
Treasury regulations or other guidance issued by the Internal Revenue Service or
Treasury without the action.
ARTICLE X - MISCELLANEOUS
10.1 UNSECURED GENERAL CREDITOR. Notwithstanding any other provision of
this Plan, Participants and Participants' Beneficiary shall be unsecured general
creditors, with no secured or preferential rights to any assets of Company or
any other party for payment of benefits under this Plan. Any property held by
Company for the purpose of generating the cash flow for benefit payments shall
remain its general, unpledged and unrestricted assets. Company's obligation
under the Plan shall be an unfunded and unsecured promise to pay money in the
future.
10.2 TRUST FUND. Company shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, Company may establish one
(1) or more rabbi trusts, with such trustees as the Board may approve, for the
purpose of assisting in the payment of such benefits. The assets of any such
trust shall be held for payment of all Company's general creditors in the event
of insolvency. To the extent any benefits provided under the Plan are paid from
any such trust, Company shall have no further obligation to pay them. If not
paid from the trust, such benefits shall remain the obligation of Company.
10.3 NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
10.4 NOT A CONTRACT OF EMPLOYMENT. This Plan shall not constitute an
employment contract or a contract for services of any kind between the Company
and the Participant. Nothing in this Plan shall confer on the Participant the
right to be retained by Company or otherwise be retained in the service of the
Company or to interfere with the right of the Company to terminate its
relationship with a Participant at any time.
10.5 PROTECTIVE PROVISIONS. A Participant will cooperate with Company by
furnishing any and all information requested by Company, in order to facilitate
the payment of benefits hereunder, and by taking such physical examinations as
Company may deem necessary and taking such other action as may be requested by
Company.
10.6 ARBITRATION OF DISPUTES. All controversies or claims that may arise
between the Executive and the Company in connection with this Agreement shall be
settled by arbitration. The parties further agree that the arbitration shall be
held in the State of New Jersey, and administered by the American Arbitration
Association under its Commercial Arbitration Rules, applying New Jersey law,
except to the extent such law is preempted by ERISA.
(a) QUALIFICATIONS OF ARBITRATOR. The arbitration shall be
submitted to a single arbitrator chosen in the manner provided under the rules
of the American Arbitration Association. The arbitrator shall be disinterested
and shall not have any significant business relationship with either party, and
shall not have served as an arbitrator for any disputes involving the Company or
any of its Affiliates more than twice in the thirty-six (36) month
period immediately preceding his or her date of appointment. The arbitrator
shall be a person who is experienced and knowledgeable in employment and
executive compensation law and shall be an attorney duly licensed to practice
law in one or more states.
(b) POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of this Plan
and shall not have the authority to award punitive or exemplary or damages under
any circumstances. The parties shall equally share the expense of the arbitrator
selected and of any stenographer present at the arbitration. The remaining costs
of the arbitrator proceedings shall be allocated by the arbitrator, except that
the arbitrator shall not have the power to award attorney's fees.
(c) EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render
its decision within thirty (30) days after termination of the arbitration
proceeding, which decision shall be in writing, stating the reasons therefor and
including a brief description of each element of any damages awarded. The
decision of the arbitrator shall be final and binding. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
10.7 GOVERNING LAW. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of New Jersey, except to the
extent as preempted by federal law.
10.8 VALIDITY. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
10.9 NOTICE. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified
mail. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Mailed notice to the Committee shall be
directed to the company's address. Mailed notice to a Participant or Beneficiary
shall be directed to the individual's last known address in company's records.
10.10 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of Company and its successors and assigns. The term successors as used
herein shall include any corporate or other business entity which shall, whether
by merger, consolidation, purchase or otherwise acquire all or substantially all
of the business and assets of Company, and successors of any such corporation or
other business entity
10.11 409A. Notwithstanding anything herein to the contrary, in the event
that the Company, upon the advice of its counsel, determines in its sole and
absolute discretion that a delay in payment of a benefit hereunder or other
modification is necessary to comply with Section 409A of the Code and
interpretive guidance thereunder, then such delay in payment or other
modification shall be made.
APPROVALS
2007 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Adopted by the Compensation Committee of
the Board of Directors on: November 8, 2006
Approved by the Stockholders on: November 8, 2006
EXHIBIT H
SUMMIT GLOBAL LOGISTICS, INC.
SEVERANCE BENEFIT PLAN
AND
SUMMARY PLAN DESCRIPTION
EFFECTIVE AS OF DECEMBER 1, 2006
I. INTRODUCTION
1.1 PURPOSE
The purpose of this severance plan, to be known as the Summit Global Logistics,
Inc. Severance Benefit Plan (the "Plan"), effective as of the "Effective Date,"
as defined herein, is to assist Eligible Employees of Summit Global Logistics,
Inc. ("Summit") and its subsidiaries (the "Company"), whose employment is
involuntarily terminated due to circumstances that (i) are described in Section
2.1.b of this Plan, and (ii) are anticipated to result in such individuals
experiencing a period of unemployment. This Plan supersedes and replaces any
previous plan, program, policy, practice or arrangement by which Company may
have provided severance benefits. All prior Company severance plans, practices
or programs, whether informal or formal, are hereby terminated. This document
constitutes both the Plan text and the Summary Plan Description for the Plan.
The Company is pleased to provide this Plan to Eligible Employees, and wants
you, as a potentially Eligible Employee, to know about and understand it. This
description of the Plan has been prepared to let you know how the Plan works and
how it may benefit you. You should read all parts of this description carefully
so that you will understand not only the ways in which the Plan may benefit you,
but also certain exclusions from coverage and limitations on payments which may
apply to you. If you have any questions about the Plan, you should contact the
Administrator.
THE SUMMIT GLOBAL LOGISTICS, INC. SEVERANCE BENEFIT PLAN ("PLAN") IS AN EMPLOYEE
WELFARE PLAN AS DEFINED IN SECTION 3(1) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 ("ERISA"). IT IS NOT A FUNDED PLAN; ANY BENEFITS OWED UNDER
THE PLAN WILL BE PAID FROM THE GENERAL ASSETS OF THE COMPANY IF AND WHEN SUCH
BENEFITS ARE OWED. EMPLOYEES HAVE NO RIGHTS TO OR INTEREST IN ANY SPECIFIC
ASSETS OR ACCOUNTS OF THE COMPANY EVEN IF AMOUNTS ARE CREDITED TO ACCOUNTS
DESIGNATED TO BE USED FOR THE PAYMENT OF PLAN BENEFITS.
II. YOUR PARTICIPATION IN THE PLAN
2.1 HOW DO I BECOME ELIGIBLE TO RECEIVE BENEFITS UNDER THE PLAN?
Only Eligible Employees (also referred to herein as "Participants") are eligible
to receive benefits under this Plan. An Eligible Employee for these purposes is
an Employee (i) who is NOT ineligible for benefits under Section 2.2 of the
Plan, and (ii) who first satisfies each of the following three requirements:
a. The Employee is a full-time employee of the Company as of the
Effective Date or is hired by the Company within six months
following as of the Effective Date, and if neither is the case, has
worked as a full-time employee of the Company for at least one (1)
year; AND
b. The Employee's employment with the Company is terminated because of:
(i) A permanent reduction in force by the Company;
(ii) The Employee declining a transfer to another Company, as
defined in Plan Section 7.6, that is deemed suitable by the
Company that employs the Employee;
(iii) The elimination of a job or employment classification by the
Company;
(iv) A Change in Control of Summit;
(v) The consolidation of certain administrative and operational
functions of Summit;
(vi) The permanent or temporary shutdown of a portion of Summit's
operations that includes the Employee's position; and/or
(vii) The sale of a business unit by the Company or other corporate
divestiture with respect to Summit; AND
c. The Employee has executed no earlier than the Employee's Termination
Date and on or before the sixtieth (60th) day immediately following
the Employee's Termination Date, a settlement agreement and release
("Release"). If the Employee fails to execute the Release within the
prescribed time period, the Employee shall fail to qualify as a
Participant under the Plan. The Employee shall be deemed to have
executed the Release within the prescribed time period if the
Company fails to provide the Employee with the Release for execution
within thirty (30) days after the Employee's Termination Date.
2.2 IN WHAT CIRCUMSTANCES WILL I BE INELIGIBLE FOR BENEFITS UNDER THE PLAN?
Subject to Section 4.2, an Employee shall be ineligible for benefits under this
Plan if the individual:
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a. Is terminated for "Good Cause," as defined in this Section 2.2;
b. Voluntarily quits;
c. Fails to work through his or her Termination Date, or such earlier
date specified by the Company;
d. Is receiving long-term disability benefits;
e. After the Termination Date, performs services (i) for a division,
subdivision, branch, location, or other identifiable part of the
Company's business that is sold or otherwise transferred to an owner
other than the Company, regardless of whether the new owner offers
continued or comparable employment to the Employee, or (ii) for any
entity with which the Company has a continuing relationship, and in
which the Company is or has been a significant contributor or
investor, regardless of whether such entity offers continued or
comparable employment to the employee;
f. Dies prior to his or her Termination Date; or
g. Is on any leave of absence, short-term layoff, or absent for any
reason (other than approved vacation, approved family medical leave,
or medically certified sick leave) immediately prior to the
Participant's Termination Date.
For purposes of this Section 2.2, "Good Cause" for termination shall include,
but is not limited to, poor performance, dishonesty or other misconduct, such as
excessive absenteeism or failure to comply with the business rules of the
Company.
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III. SEVERANCE PLAN BENEFITS
3.1 WHAT BENEFITS DO PARTICIPANTS RECEIVE?
An Eligible Employee of the Company who remains employed through his or her
Termination Date, or such earlier date selected by Company in writing, and who
executes, prior to any payment, the Release, will receive a severance benefit
under this Plan in an amount determined pursuant to the formula set forth on
Exhibit A hereto.
This Plan is designed to provide different benefits for separate categories of
Employees, which have been established by Company solely for purposes of this
Plan. Each Employee covered by this Plan will receive an Exhibit A bearing that
Employee's name, which describes the benefits for that Employee's category. An
Exhibit A is valid for purposes of this Plan only if it bears the name of the
Employee claiming benefits hereunder. Employees who have not received, or have
misplaced, their Exhibit A may obtain a replacement Exhibit A from the
Administrator. The Company may amend Exhibit A with respect to an Employee at
any time prior to the earlier of the date it notifies such Employee that it is
terminating his or her employment or a Change in Control.
For purposes of this Section 3.1 and Exhibit A hereto:
a. A Year of Service means a completed 12-consecutive month period
commencing with the Employee's date of hire or an anniversary
thereof. Partial years of service will be credited as one (1) Year
of Service if an Employee has worked at least 1,000 hours during a
year, calculated from an anniversary of the date of hire. No credit
for partial years of service will be given to Employees who work
less than one year in total. In computing months or years of service
for purposes of this Plan, only continuous service accrued as a
regular, full-time Company Employee will count. Service earned as a
temporary Employee, independent contractor, or consultant to Company
shall not be counted for purposes of determining length of service
under this Plan, even if all or a portion of such service
subsequently is determined by the Internal Revenue Service or any
other governmental agency to have constituted employment.
b. A Week's Base Salary is calculated by dividing the Employee's rate
of Annual Base Salary as of the Termination Date by 52 weeks; a
Month's Base Salary is calculated by dividing the Employee's rate of
Annual Base Salary as of the Termination Date by 12. Annual Base
Salary, for these purposes, shall mean total compensation (and, in
the case of salespersons, total compensation for the immediately
prior month multiplied by 12), but shall not include any bonus pay,
commissions (other than sales commissions), incentives, overtime,
awards, employee benefits, shift differentials, or other incidental
compensation.
3.2 HOW WILL MY SEVERANCE BENEFITS UNDER THIS PLAN BE PAID?
Severance Plan Benefits will be paid as salary continuation on the Company's
regular paydays.
3.3 WHAT BENEFITS DO EMPLOYEES RECEIVE IF THEY CHOOSE NOT TO EXECUTE A
RELEASE?
4
If an Employee chooses not to execute a Release, the Employee shall NOT receive
any Severance Plan Benefits.
3.4 WHAT IS THE PURPOSE OF THE RELEASE?
An Employee who executes a Release agrees not to assert a claim concerning his
or her employment with the Company.
3.5 WILL I RECEIVE ANY ADDITIONAL "PLANT CLOSING" TYPE BENEFITS?
No. The Severance Plan Benefits provided in this Plan are the maximum benefits
that Company will pay. To the extent that any federal, state or local law,
including, without limitation, any so-called "plant closing" law, requires the
Company to give advance notice or make a payment of any kind to an Eligible
Employee because of that Employee's involuntary termination due to a layoff,
reduction in force, plant or facility closing, sale of business, change in
control, or any other similar event or reason, the benefits provided under this
Plan shall either be reduced or eliminated. The benefits provided under this
Plan are intended to satisfy and exceed any and all statutory obligations that
may arise out of an Eligible Employee's involuntary termination for the
foregoing reasons and the Administrator shall so construe and implement the
terms of the Plan.
3.6 WHAT EFFECT WILL SEVERANCE PLAN BENEFITS HAVE ON OTHER COMPANY BENEFITS?
Benefits payable under this Plan are independent of any benefits to which an
Employee might be entitled under any other employee benefit plan maintained by
Company. You should carefully review the terms of any such other benefit plans
to determine whether your rights thereunder are affected by a termination of
your employment with Company.
5
IV. GENERAL PROVISIONS
4.1 ADMINISTRATOR.
The Plan shall be administered by the Compensation Committee of Summit's Board
of Directors. In such capacity, the Compensation Committee shall oversee the
operation of the Plan shall serve as the Administrator. Subject to Section
4.2.b, the Administrator will have full power and right to administer the Plan
and in all of its details. For this purpose, the Administrator's power and
rights include, but will not be limited to the following:
a. to make and enforce such rules and regulations as it deems necessary
or proper for the efficient administration of the Plan or required
to comply with applicable law;
b. to interpret the Plan, its interpretation thereof in good faith to
be final and conclusive on any Employee, former Employee,
Participant, former Participant and Beneficiary;
c. to decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan and to make all factual
determinations;
d. to compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with
the provisions of the Plan, and to determine the person or persons
to whom such benefits will be paid;
e. to authorize the payment of benefits;
f. to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required
under the Code and applicable regulations, or under state or local
law and regulations;
g. to appoint such agents, counsel, accountants and consultants as may
be required to assist in administering the Plan; and
h. by written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA.
4.2 RIGHT TO AMEND OR TERMINATE.
a. Subject to Section 4.2.b, the Compensation Committee reserves the
power and right to modify, amend, or terminate (in whole or in part)
any or all of the provisions of the Plan at any time for any reason.
Any Plan amendment shall be adopted by action of the Company's
Compensation Committee and executed by a Corporate Officer
authorized to act on behalf of the Company.
b. Notwithstanding anything herein to the contrary, in the event of a
Change in Control, this Plan shall no longer be subject to amendment
or termination with respect to Affected Individuals who are
Employees of the Company as of the date of the Change in Control,
but, as applied to such Affected Individuals with respect
6
to all rights hereby conferred as a result of that Change in
Control, (i) the terms and conditions hereof shall become fixed,
(ii) the benefits promised hereunder shall become fully vested
contract rights, (iii) the Annual Base Salary used to determine an
Affected Individual's benefits hereunder shall be such individual's
highest rate of Annual Base Salary (in the case of a salesperson,
highest earning month multiplied by 12) during the period commencing
on the first day of the Plan Year prior to the Plan Year in which
the Change in Control occurs and ending on the date of the Affected
Individual's Termination Date and (iv) the requirements of Section
2.1.b shall be deemed satisfied.
c. For purposes of this Plan, a Change in Control shall occur when the
first step is taken (e.g., commencement of negotiations) in a
process that results in any one of the following events:
i. The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) (the "Act") of beneficial
ownership (within the meaning of Rule 13d-3 of the Act) of 20%
or more of the (A) then outstanding voting stock of Summit; or
(B) the combined voting power of the then outstanding
securities of Summit entitled to vote; or
ii. An ownership change in which the shareholders of Summit before
such ownership change do not retain, directly or indirectly,
at least a majority of the beneficial interest in the voting
stock of Summit after such transaction, or in which Summit is
not the surviving company; or
iii. The direct or indirect sale or exchange by the beneficial
owners (directly or indirectly) of Summit of all or
substantially all of the stock of Summit; or
iv. The composition of the Board changes so that the Board is not
under the control of the current shareholders or their
representatives; or
v. A reorganization, merger or consolidation in which Summit is a
party;
vi. The sale, exchange, or transfer of all or substantially all of
the assets of Summit; or
vii. The bankruptcy, liquidation or dissolution of Summit; or
viii. Any transaction involving Summit whereby Summit acquires an
ownership interest of any percentage in, enters into a joint
venture, partnership, alliance or similar arrangement with, or
becomes owned in any percentage by, any other entity that is
engaged in a business similar to the business engaged in by
the Company and that has operations in North America
immediately before such transaction or within one year
thereafter.
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d. For purposes of this Plan, an Affected Individual is an individual
who satisfies at least one of the following criteria:
(i) The individual's employment with the Company is terminated by
the Company for any reason other than the individual's long
term disability within the period commencing on the date of
the Change in Control and ending on last day of the second
Plan Year ending after the closing date for the transaction
effecting the Change in Control (the "Change in Control
Period"), or
(ii) The individual terminates employment with the Company during
the Change in Control Period for Good Reason. For these
purposes, the term "Good Reason" shall mean:
A. Without the individual's prior written consent, any
material diminution in the individual's authority,
duties or responsibilities; or
B. Any failure by the Company to pay the individual an
Annual Base Salary which is equal to or greater than the
annual rate in effect during the immediately preceding
Plan Year; or
C. Without the individual's prior written consent, the
relocation of the principal place of the individual's
employment to a location more than 30 miles from the
Company. Location where the individual was working
immediately prior to the relocation; or
D. A material breach by the Company of any of the material
provisions of its Employment Agreement with the
individual (if any), provided, however, that prior to
any such termination pursuant to this subparagraph D,
the Company's Compensation Committee must be given
notice by the individual of such acts or omissions and
no less than 20 days to cure the same.
4.3 EFFECT OF AMENDMENT OR TERMINATION.
Any amendment, discontinuance, or termination of the Plan shall be effective as
of such date as the Compensation Committee shall determine.
4.4 ARBITRATION OF DISPUTES.
All controversies or claims that may arise between the Employee and the Company
in connection with this Agreement shall be settled by arbitration. The parties
(Summit, on behalf of the Company) further agree that the arbitration shall be
held in the State of New Jersey, and administered by the American Arbitration
Association under its Commercial Arbitration Rules, applying New Jersey law,
except to the extent such law is preempted by ERISA.
a. QUALIFICATIONS OF ARBITRATOR. The arbitration shall be submitted to
a single arbitrator chosen in the manner provided under the rules of
the American
8
Arbitration Association. The arbitrator shall be disinterested and
shall not have any significant business relationship with either
party, and shall not have served as an arbitrator for any disputes
involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her
date of appointment. The arbitrator shall be a person who is
experienced and knowledgeable in employment and executive
compensation law and shall be an attorney duly licensed to practice
law in one or more states.
x. XXXXXX OF ARBITRATOR. The arbitrator shall not have the authority to
grant any remedy which contravenes or changes any term of this Plan
and shall not have the authority to award punitive or exemplary or
damages under any circumstances. The parties shall equally share the
expense of the arbitrator selected and of any stenographer present
at the arbitration. The remaining costs of the arbitrator
proceedings shall be allocated by the arbitrator, except that the
arbitrator shall not have the power to award attorney's fees.
c. EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render its
decision within thirty (30) days after termination of the
arbitration proceeding, which decision shall be in writing, stating
the reasons therefor and including a brief description of each
element of any damages awarded. The decision of the arbitrator shall
be final and binding. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
4.5 GOVERNING LAW.
Except as may be otherwise provided in the contracts incorporated by reference
into the Plan, the provisions of the Plan shall be construed, administered and
enforced according to ERISA and, to the extent not preempted, by the laws of the
State of New Jersey.
4.6 ADDRESSES, NOTICE, WAIVER OF NOTICE.
Each Participant must file with the Administrator, in writing, his or her
current mailing address. Any communications, statement or notice addressed to
such a person at his or her last mailing address as filed with the Administrator
will be binding upon such person for all purposes of the Plan.
4.7 SEVERABILITY.
If any provision of the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if such illegal and
invalid provisions had never been set forth in the Plan.
4.8 SECTION 409A COMPLIANCE.
Notwithstanding anything herein to the contrary, to the extent a delay or
acceleration of the payments called for under any provision of this Plan is
determined to be necessary in the opinion of Company's tax advisors to prevent
imposition of an additional tax to a Participant under Section 409A(a)(1)(B) of
the Internal Revenue Code of 1986, as amended (the "Code"), then the timing of
such payment shall be accelerated to the extent necessary to comply with the
"short-term deferral" rule or shall not be made, as applicable, until the first
date on which such
9
payment is permitted in compliance with Section 409A and the Treasury
Regulations or other interpretative guidance issued thereunder.
10
V. CLAIMS PROCEDURE
5.1 INITIAL CLAIM FOR BENEFITS.
a. MAKING A CLAIM. You may claim a specific benefit under the Plan or
request a specific interpretation or ruling under the Plan regarding
entitlement to future benefits by submitting a written claim for
benefits to the Administrator.
b. DENIAL OF CLAIM. If your claim is denied, in whole or in part, the
Administrator shall provide you with written notification of such
adverse benefit determination within 90 days after the receipt of
the claim. Such 90-day period may be extended by the Administrator
for a period of up to 90 days, but only if the Administrator
determines that special circumstances require such an extension. If
the Administrator determines that such an extension is required, you
will receive written notice of the reasons for such extension and
the date on which the Administrator expects to render a benefit
determination on your claim. The Administrator will send you this
notice prior to the expiration of the initial 90-day period.
c. CONTENT OF INITIAL NOTICE OF ADVERSE BENEFIT DETERMINATION. Any
written notice of adverse benefit determination will include the
following: (i) the reasons for denial, with specific reference to
the Plan provisions on which the denial is based; (ii) a description
of any additional material or information required and an
explanation of why it is necessary; (iii) an explanation of the
Plan's claim review procedure; (iv) a statement that any appeal must
be made by giving the Administrator, within 60 days of the notice of
adverse benefit determination, unless extended by the Administrator
for good cause shown, written notice of such appeal, which shall
include a full description of the pertinent issues and the basis for
the claim; and (v) a statement of your right to bring a civil action
under Section 501(a) of ERISA following an adverse benefit
determination on review.
d. EFFECT OF FAILURE OF ADMINISTRATOR TO RENDER TIMELY DECISION. If the
decision of the Administrator is not rendered within the initial
90-day or extended 90-day period, as applicable, you should consider
your claim to have been denied.
5.2 APPEAL OF DENIED CLAIM.
a. REQUEST FOR REVIEW. If your claim is denied or you have not received
a response within the initial or extended 90-day determination
period, you may request a review by notice given in writing to the
Administrator. Such request must be made within 60 days after your
receipt of the written notice of adverse benefit determination, or
in the event that you have not received a response with the initial
90-day or extended 90-day period, within 60 days after the
expiration of the applicable 90-day period, unless extended by the
Administrator for good cause shown.
11
b. REVIEW OF APPEAL. The claim or request will be reviewed by the
Administrator, which may, but shall not be required to, convene a
hearing. On review, you may have representation, examine relevant
documents (free of charge), and submit issues and comments in
writing.
5.3 FINAL DECISION.
a. TIME FRAME. The Administrator normally will make the decision on
review of an appealed claim within 60 days after receiving a
claimant's request for review. If an extension of time is required
for a hearing or because of other special circumstances, the
Administrator will send you a written notice of extension,
explaining the reason for the extension, and the expected date of
its decision before the expiration of the initial 60 day period. In
no event will the extension exceed an additional 60 days.
b. EXPLANATION OF DECISION. The final decision of the Administrator
will be delivered to you in written form and, if adverse, contain
the following information: (i) the reasons for the adverse
determination; (ii) specific references to the relevant Plan
provisions upon with the determination is based; (iii) a statement
that you are entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and
other information relevant to your claim for benefits; and (iv) a
statement of your right to bring action under Section 501(a) of
ERISA.
c. EFFECT OF FAILURE OF ADMINISTRATOR TO RENDER TIMELY DECISION. If the
decision of the Administrator is not rendered within the initial
60-day or extended 60-day period, you should consider your claim on
review to have been denied. Subject to your right to bring action
under Section 501(a) of ERISA, all decisions on review shall be
final and bind all parties concerned.
12
VI. STATEMENT OF ERISA RIGHTS
As a Participant in the Plan you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan Participants shall be entitled to:
RECEIVE INFORMATION ABOUT YOUR PLAN AND BENEFITS
a. Examine, without charge, at the Administrator's office, all Plan
documents, including this document, and a copy of the latest annual
report (Form 5500 Series) filed by the Plan with the U.S. Department
of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration.
b. Obtain copies of these documents and other Plan information upon
written request to the Administrator. The Administrator may make a
reasonable charge for the copies.
PRUDENT ACTIONS BY PLAN FIDUCIARIES
In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people who
operate the Plan, called "fiduciaries," have a duty to do so prudently and in
the interest of you and other Plan Participants and Beneficiaries.
Neither the Company nor any other person may fire you or otherwise discriminate
against you in any way to prevent you from obtaining benefits under the Plan or
exercising your rights under ERISA.
ENFORCE YOUR RIGHTS
If a claim for benefits under the Plan is denied or ignored, in whole or in
part, you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal Court. In such a case, the Court may require the Administrator to
provide the materials and pay you up to $110 a day until you receive them,
unless they were not sent because of reasons beyond the Administrator's control.
If you have a claim for benefits which is denied or not processed, in whole or
in part, you may file suit in a State or Federal Court. If it should happen that
the Plan's fiduciaries misuse the Plan's money (if any), or you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal Court. The Court
will decide who should pay the court costs and legal fees. If you are
successful, the Court may order the person you have sued to pay these costs and
fees. If you lose, the Court may order you to pay these costs and fees if, for
example, it finds your claim to be frivolous.
ASSISTANCE WITH YOUR QUESTIONS
If you have any questions about your Plan. Your should contact the
Administrator. If you have any questions about this Statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
Administrator, you should contact the nearest office of the
13
Employee Benefits Security Administration, U.S. Department of Labor, listed in
your telephone directory or the Division of Technical Assistance Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration.
ADDITIONAL INFORMATION.
If there are any provisions of this Plan and/or Summary Plan Description which
are not entirely clear to you, please ask for a clarification from the
Administrator. If you submit a written request for information or for a more
detailed explanation of any provision of the Plan, the Administrator will
respond to you in writing. Only the Administrator is authorized to interpret the
Plan and you should not rely upon interpretations of the Plan from any other
source.
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VII. DEFINITIONS
The following words and phrases are used quite frequently in this Summary Plan
Description and have special meanings of which you should take note.
7.1 The ADMINISTRATOR is the person or persons designated by the Company's
Compensation Committee to administer and oversee the operation of the
Plan.
7.2 An AFFILIATE is any Person (i) which, with respect to the Company,
directly or indirectly beneficially owns (within the meaning of Rule 13d-3
promulgated under the Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of directors
(or similar governing body) represented by all outstanding securities of
the Company or (ii) with respect to which the Company beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Act securities or
other equity interests possessing more than 50% of the aggregate voting
power in the election of directors (or similar governing body) represented
by, or more than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
7.3 A BENEFICIARY is a person or persons entitled to receive benefits under
the Plan upon the death of a Participant.
7.4 The BOARD OF DIRECTORS means the Board of Directors of Summit.
7.5 The COMPANY is Summit Global Logistics, Inc. and its subsidiaries.
7.6 The COMPANY LOCATION means a Company office consisting of one or more
buildings within 30 miles of each other.
7.7 CORPORATE OFFICER means any person who has been duly appointed a corporate
officer of the Company.
7.8 The EFFECTIVE DATE for purposes of this Plan is December 1, 2006.
7.9 An ELIGIBLE EMPLOYEE is an Employee of the Company who meets the
eligibility requirements set forth in Article II.
7.10 An EMPLOYEE is an individual who (i) contracts directly with the Company
(rather than through a third party, such as an employee-leasing firm),
(ii) performs services for the Company and (iii) is treated as an employee
of the Company for federal employment-tax purposes.
7.11 An EMPLOYMENT AGREEMENT is a written agreement by and between the Employee
and the Company setting forth the terms and conditions of the Employee's
employment with the Company.
7.12 ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and includes regulations promulgated thereunder by the Secretary
of Labor.
15
7.13 The COMPENSATION COMMITTEE means a Committee established by the Board of
Directors that is authorized to, among other things, establish and
maintain the Plan.
7.14 A FIDUCIARY means any person who exercises any discretionary authority or
responsibility in the management or administration of the Plan or the
disposition of Plan assets; or who renders investment advice for a fee or
other compensation with respect to any property of the Plan.
7.15 The NAMED FIDUCIARY for the Plan is Summit.
7.16 PARTICIPANTS are Eligible Employees, as defined in Section 7.9.
7.17 PERQUISITEs means the following employee benefits to the extent an
Employee is a participant in a Company plan or program providing such
benefits: (i) life insurance, (ii) accidental death and dismemberment
insurance, (iii) long term disability insurance and (iv) travel and
accident insurance.
7.18 PERSON means a person within the meaning of Section 3(a)(9) of the Act.
7.19 The PLAN is the Summit Global Logistics, Inc., Severance Benefit Plan
described in this booklet.
7.20 The PLAN YEAR is the 12-month period commencing on December 1 and ending
on the immediately following November 30.
7.21 SEPARATION DATE OR TERMINATION DATE means a Participant's last day of
active service with the Company as designated by the Company.
7.22 SEVERANCE PLAN BENEFIT means amounts payable under the Plan to a
Participant on account of termination of his or her employment under the
conditions described in Article III.
VIII. PLAN IDENTIFICATION DATA
Under this heading, the names and addresses of certain individuals who have
various responsibilities with respect to this Plan are shown. Also, certain
identification information with respect to the Plan itself is set out in case
that information would be of use to you.
o EMPLOYER: Summit Global Logistics, Inc.
o IDENTIFICATION NUMBER: The Employer's IRS identification number is
____________.
o PLAN IDENTIFICATION NUMBER: ___
o NAMED FIDUCIARY AND ADMINISTRATOR: Summit is Summit Global Logistics, Inc.
000 Xxxxxxxxx, Xxxxxxxxxxx, XX 00000.
o BASIS ON WHICH PLAN RECORDS ARE KEPT: Plan Year
o TYPE OF PLAN: Unfunded welfare benefit plan providing severance benefits.
16
o AGENT FOR SERVICE OF LEGAL PROCESS Summit is Summit Global Logistics, Inc.
000 Xxxxxxxxx, Xxxxxxxxxxx, XX 00000.
17
APPROVALS
SEVERANCE BENEFIT PLAN
Adopted by the Compensation Committee of
The Board of Directors on: November 8, 2006
Approved by the Stockholders on: November 8, 2006
18
APPENDIX A
(HIGH LEVEL EXECUTIVES)
Twenty-four (24) Months' Base Salary. Payments shall be made on a monthly basis.
In addition, the Company shall pay the individual's premiums for COBRA
continuation coverage (individual, individual plus one or family coverage, as
applicable) for a period of eighteen (18) months following termination of
employment. At the expiration of this eighteen (18)-month period, the Company
will pay the individual, in a single lump sum, the cash value of six (6)
additional months of premium payments for the type of coverage elected under
COBRA under a substantially similar health plan. The amount to be paid under the
immediately preceding sentence shall not exceed $25,000.
If the individual's employment is terminated in connection with a Change in
Control, as such term is defined in Plan Section 4.2.b, the twenty-four (24)
Months' Base Salary described above shall be paid to the individual in a single
lump sum, the COBRA and health care benefits shall be provided as described
above, and the Company also will provide the individual with outplacement
benefits of an amount commensurate with the individual's position with the
Company, the value of such benefits not to exceed $10,500. The Company will also
continue to maintain the identical level of Perquisites and benefits enjoyed by
the individual prior to the Change in Control for a period of two (2) years
following his or her last day of employment. For these purposes, a termination
of the individual's employment shall conclusively be deemed to be in connection
with a Change in Control if such termination occurs during the time period
commencing on the date of the Change in Control and ending on the second
anniversary of the closing date for the transaction effecting the Change in
Control
This Exhibit A confirms that, solely for purposes of the Summit Global
Logistics, Inc. Severance Benefit Plan, Xxxxxxx Xxxxxx is within category
described above.
19
