EMPLOYMENT AGREEMENT
Exhibit 10.4
This Employment Agreement (“Agreement”) is entered into on May 18, 2007 by and between Xxxx
Xxxxx, a natural person (“Executive”), and The Xxxxx Group, Inc., a Delaware corporation (the
“Company”).
RECITALS
Concurrently herewith, Global Logistics Acquisition Corporation (“GLAC”) has agreed to acquire
all the outstanding capital stock of the Company pursuant to an agreement (the “Purchase
Agreement”) dated the date hereof among GLAC, the Company and the stockholders of the Company.
Executive has served as an executive of The Xxxxx Group, Inc. or one or more of its
subsidiaries and the Company desires to continue the employment of Executive effective upon the
closing the transactions contemplated by the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set
forth below, the parties hereto agree as follows:
1. Employment and Term
(a) Full Time and Best Efforts. Subject to the terms set forth herein, the Company
agrees to employ Executive and Executive hereby accepts such employment. During the term of his
employment, Executive will devote his full time, best efforts and attention to the performance of
his duties hereunder and to the business and affairs of the Company.
(b) Duties. Executive shall serve in the executive capacity set forth on Exhibit A
hereto and shall perform such duties as are customarily associated with such position, consistent
with the Bylaws of the Company and as required by the Company’s Board of Directors (the “Board”).
Such duties shall include, without limitation, implementing strategic and operating plans,
directing the day-to-day management of the Company, maintaining and solidifying relationships with
the Company’s key employees and customers, and supporting the growth and efficiency of the Company.
(c) Company Policies. The employment relationship between the parties shall be
governed by the general employment policies and practices of the Company, including but not limited
to those relating to protection of confidential information and assignment of inventions, except
that when the terms of this Agreement differ from or are in conflict with such employment policies
and practices, this Agreement shall control.
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(d) Term. The initial term of employment of Executive under this Agreement shall begin
on the date of the closing of the transactions contemplated by the Purchase Agreement and end three
(3) years thereafter, subject to the provisions for termination contained in Section 5. Prior to
the Closing Date, the terms of Executive’s employment shall be governed by the terms and conditions
of the employment agreement between Executive and the Company dated January 1, 1998, as the same
may be amended. If the Purchase Agreement is terminated prior to the closing of the transactions
contemplated thereby, this Agreement shall thereupon be null, void and of no further effect.
2. Compensation and Benefits
(a) Salary. Executive shall receive for services to be rendered hereunder the annual
base salary shown on Exhibit B, payable on the Company’s regular payroll dates, subject to increase
at the sole discretion of the Board, and subject to standard withholdings for taxes and social
security and the like. The Board shall review Executive’s salary on an annual basis and may, in its
sole discretion, increase Executive’s salary.
(b) Participation in Benefit Plans. During the term hereof, Executive shall be
entitled to participate in any group insurance, hospitalization, medical, dental, health and
disability benefit plans sponsored by the Company for which, and to the extent, he is eligible
under the general provisions thereof. The Company, may, in its sole discretion and from time to
time, establish additional senior management benefit programs as it deems appropriate. Executive
understands that any such plans may be modified or eliminated in the Company’s discretion in
accordance with applicable law; provided however, the Company shall strive to maintain for
Executive, to the extent permitted by law, the existing benefits and, in any event, no less
favorable to Executive than benefits provided to similarly situated executives of other entities
under common control with the Company. A listing of Executive’s current benefits provided by the
Company not otherwise described in the Company’s employee handbook is shown on Exhibit B attached
hereto.
3. Incentive Compensation.
(a) Cash Bonus
The Executive shall be eligible to participate in the executive incentive bonus plan. The
incentive bonus pool will be established by the compensation committee and will be distributed
based on achieving agreed performance metrics. Bonus opportunity to be consistent with historic
level and with the parameters outlined in Exhibit B.
(b) Equity Award Plan
The Executive shall be eligible to participate in the Company’s stock compensation plan. The
stock compensation plan will be established and administered by the compensation committee. Awards
will be distributed based on achieving agreed performance metrics. Equity award will be in line
with the parameters outlined in Exhibit B.
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4. Reasonable Business Expenses and Support. Executive shall be reimbursed for
documented and reasonable business expenses incurred in connection with the performance of his
duties hereunder subject to company policies and procedures.
5. Termination of Employment. The date on which Executive’s employment by the Company
ceases, under any of the following circumstances, shall be defined herein as the “Termination
Date.”
(a) Termination for Cause.
(i) Termination: Payment of Accrued Salary and Vacation. The Board may terminate Executive’s
employment with the Company at any time for cause, immediately upon written notice to Executive of
the circumstances leading to such termination for cause. If Executive’s employment is terminated
for cause, Executive shall receive payment for all accrued salary and vacation time through the
Termination Date, which in this event shall be the date upon which notice of termination is given.
The Company shall have no obligation to pay severance of any kind nor to make any payment in lieu
of notice if Executive is terminated for cause.
(ii) Definition of Cause. “Cause” means the occurrence or existence of any of the following
with respect to Executive, as reasonably determined by the Board: (A) the repeated failure to obey
a lawful directive of the Board or President relating to the business of the Company after at least
one written notice of such failure has been given; (B) a material breach by Executive of his duty
not to engage in any transaction that represents, directly or indirectly, self-dealing with the
Company which has not been approved by the Board, or a material breach by Executive of the terms of
his employment, if in any such case such material breach remains uncured after the lapse of 30 days
following the date that the Company has given Executive written notice thereof; (C) any act of
dishonesty, misappropriation, embezzlement, intentional fraud or similar conduct involving the
Company; (D) the conviction or the plea of nolo contendere or the equivalent in respect of a felony
involving moral turpitude (but in no event relating to any violation of any obscenity laws with
respect to publications carried by the Company); (E) any intentional damage of a material nature to
any property of the Company; or (F) the repeated non-prescription use of any controlled substance
or the repeated use of alcohol or any other non-controlled substance which, in the reasonable
determination of the Board renders Executive unfit to serve in his capacity as an officer or
employee of the Company.
(b) Voluntary Termination. Executive may voluntarily terminate his employment with the
Company at any time upon 180 days’ prior written notice. On the Termination Date, Executive shall
receive payment for all accrued salary through the Termination Date, after which no further
compensation of any kind or severance payment will be payable under this Agreement.
(c) Termination upon Disability. The Company may terminate Executive’s employment in
the event Executive suffers a disability that renders Executive unable to perform the essential
functions of his position, even with reasonable accommodation in compliance with the Americans with
Disabilities Act, for six consecutive months within any twelve month period.
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After the Termination Date, which in this event shall be the date upon which notice of termination
is given, no further compensation will be payable under this Agreement.
(d) Termination Without Cause. The Company may terminate Executive’s employment
without “cause” (as defined above) at any time upon 30 days’ prior written notice. On the
Termination Date, Executive shall receive payment for all accrued salary through the Termination
Date and thereafter the Company shall pay Executive severance for twelve months or through the term
of this Agreement, whichever is longer, at the rate Executive is then being compensated. Standard
withholdings for taxes and social security and the like shall be deducted from the severance
payment. The severance shall be payable in equal installments on each of the Company’s regular
payroll dates during the severance period commencing on the first such payroll date following the
Termination Date. In addition, medical, dental, prescription and life insurance benefits shall
continue to be provided, at the cost of the Company, during the period of severance payments or
though the remaining term of this Agreement, whichever is greater. Any cash bonuses or other
payments that would have been earned in the fiscal year in which Executive is terminated will be
paid to Executive on a pro rata basis at the same time as other executives receive such bonuses or
payments.
(e) Fundamental Changes. If the Company (i) materially diminishes Executive’s duties,
authority, or responsibility, (ii) reduces Executive’s compensation, or (iii) breaches this
Agreement in any material respect, Executive may terminate his employment provided that the
Executive has given the Company 15 days’ written notice prior to such termination and the Company
has not cured such diminution or breach, as the case may be, by the end of such 15-day period. If
the Company relocates its corporate offices outside a triangular area formed by Princeton, New
Jersey, Doylestown, Pennsylvania, and Langhorne, Pennsylvania, then after one year Executive may
terminate his employment provided that the Executive has given the Company 90 days’ written notice
prior to such termination. A termination under the circumstances set forth in this subsection (e)
shall be treated as a Company termination without cause, and Executive shall be entitled to the
severance payments provided in Section 5(d).
6. Proprietary Information Obligations. Executive will execute, or has executed and
hereby ratifies and affirms his obligations under, the Company’s standard form non-disclosure
agreement in the form attached hereto as Exhibit C.
7. Noninterference. While employed by the Company and for the period of two years
thereafter, Executive agrees not to interfere with the business of the Company by directly or
indirectly soliciting, attempting to solicit, inducing, or otherwise causing any employee who is an
employee of the Company at the time of such solicitation to terminate his or her employment in
order to become an employee, consultant or independent contractor to or for any other employer.
8. Noncompetition. Executive acknowledges that his employment pursuant to this
Agreement will give him the opportunity to maintain the business relationships with book and
magazine printers and publishers located in the United States and Canada that he developed prior to
the sale of The Xxxxx Group, Inc., as a result of which Executive will be able to adversely affect
the goodwill of the Company’s business if he competes against it after the end of his
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employment, even though such competition may not occur for several years after the date hereof.
Accordingly, Executive covenants and agrees that, during the term of this Agreement (including any
renewals thereof) and for a period of two (2) years after the last payment that Executive receives
hereunder as a result of termination for cause as defined in Section 5(a) or the voluntary
termination of his employment by Executive pursuant to Section 5(b) and for a period of one (1)
year after the last payment that Executive receives hereunder as a result of termination without
cause pursuant to Section 5(d) or a fundamental change pursuant to Section 5(e), Executive will
not, in the United States and Canada, either directly or indirectly, on his own behalf or as a
proprietor, partner, agent, broker, consultant, lender, guarantor, shareholder (other than
ownership of less than one percent (1%) of the stock of a publicly-owned corporation whose shares
are listed and traded on a national securities exchange), director, officer or in any other
capacity or manner whatsoever, without the prior written consent of the Company, engage in any
activity in which the Company is engaged prior to or at the time of, as applicable, the termination
of Executive’s employment with the Company.
9. Remedies. Executive acknowledges that a breach or threatened breach by Executive of
any of the provisions of Sections 6, 7, or 8 will result in the Company suffering irreparable harm
that cannot be calculated or fully or adequately compensated by recovery of damages alone.
Accordingly, Executive agrees that the Company shall be entitled to interim, interlocutory and
permanent injunctive relief, specific performance and other equitable remedies, in addition to any
other relief to which the Company may become entitled should there be such a breach or threatened
breach.
10. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in writing, shall be effective
when delivered, and may be delivered by hand or by overnight courier (such as Express Mail, Federal
Express, etc.) or other means which provides written evidence of delivery, and addressed as
follows:
To the Company:
Xxxxx Xxxxxxx, Chairman of the Board
c/o Global Logistics Acquisition Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
c/o Global Logistics Acquisition Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
To Executive:
Xxxx Xxxxx
or to such other address or to the attention of such other person as the recipient party will have
specified by prior written notice to the sending party.
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(b) Severability. If any term or provision (or any portion thereof) of this Agreement
is determined by a court to be invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions (or other portions thereof) of this Agreement
shall nevertheless remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such determination that any term or provision (or any portion thereof), is invalid, illegal or
incapable of being enforced, this Agreement shall be deemed to be modified so as to effect the
original intent of the parties as closely as possible to the end that the transactions contemplated
hereby and the terms and provisions hereof are fulfilled to the greatest extent possible.
(c) Entire Agreement. This document constitutes the final, complete, and exclusive
embodiment of the entire agreement and understanding between the parties related to the subject
matter hereof and supersedes all prior or contemporaneous understandings, agreements, or
representations by or between the parties, written or oral. Without limiting the generality of the
foregoing, except as provided in this Agreement, all understandings and agreements, written or
oral, relating to the employment of Executive by the Company or the payment of nay compensation or
the provision of any benefit in connection therewith or otherwise, are hereby terminated and shall
be of no further force and effect.
(d) Counterparts. This Agreement may be executed on separate counterparts, any one of
which need not contain signatures of more than one party, but all of which taken together will
constitute one and the same agreement.
(e) Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive and the Company, and their respective successors and
assigns, except that Executive may not assign any of his duties hereunder and he may not assign any
of his rights hereunder without the prior written consent of the Company.
(f) Attorneys’ Fees. If any legal proceeding is necessary to enforce or interpret the
terms of this Agreement, or to recover damages for breach therefore, the prevailing party shall be
entitled to reasonable attorney’s fees, as well as costs and disbursements, in addition to any
other relief to which he or it may be entitled.
(g) Amendments: No Waivers. Any provisions of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by
all parties hereto, or in the case of a waiver, by the party against whom the waiver is to be
effective. No waiver by a party of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent occurrence. No failure or delay by a party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
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(h) Governing Law. This Agreement shall be construed in accordance with and governed
by the internal laws (without reference to choice or conflict of laws) of the State in which the
Company is incorporated.
(i) Construction. The captions herein are included for convenience of reference only
and shall be ignored in the construction or interpretation hereof. Neither party hereto, nor its
respective counsel, shall be deemed the drafter of this Agreement, and all provisions of this
Agreement shall be construed in accordance with their fair meaning, and not strictly for or against
either party hereto.
(j) Arbitration. All disputes between the Company and Executive hereunder shall be
settled exclusively by arbitration before one arbitrator pursuant to the rules of the American
Arbitration Association. The arbitration will be held in Trenton, New Jersey. The arbitrator shall
be selected by agreement of the Company and Executive, but if they do not so agree within 20 days
after the date of request for arbitration, the selection shall be made pursuant to the rules of
such Association. The award rendered by the arbitrator must follow applicable law and shall be
conclusive and binding upon the parties hereto and judgment on any such award may be entered in any
court having jurisdiction over the parties to and the subject matter of the controversy. Each party
shall pay his or its own expenses of arbitration and the expenses of the arbitrator shall be
equally shared; provided, however, that the arbitrator may assess, as part of the award, all or any
part of the arbitration expenses (including reasonable attorneys’ fees and other legal expenses) of
the prevailing party or parties against the losing party or parties. Nothing herein set forth shall
prevent the parties hereto from settling any dispute by mutual agreement at any time. In any
arbitration proceeding, the parties shall have the right to depose officers, directors, employees
and agents of each other by subpoena or subpoena duces tecum issued by the attorney for the
deposing party, subject to any restriction placed on such deposition discovery by the arbitrator a
the request of any other party. The fact of and the content of any arbitration proceeding shall be
confidential, and neither party shall disclose the same to anyone without the consent of all
parties to the arbitration, except that a judgment on the arbitrator’s award may be filed as
otherwise provided herein.
IN WITNESS WHEREOF, the parties have executed this Agreement effectives as of the date first
written above.
| EXECUTIVE: | COMPANY: | |||||||
| THE XXXXX GROUP, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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EXHIBIT “A”
| Xxxx Xxxxx: | President & COO Xxxxx Worldwide Transportation, Inc. |
DUTIES & RESPONSIBILITES:
| § | Ensure service and profit levels; | ||
| § | Be responsive to and implement directives of the Board of Directors and the CEO and President of The Xxxxx Group, Inc. | ||
| § | Prepare and initial, and communicate and implement the final Business Plan and Operating Budget; | ||
| § | Assist in the creation and direction of service, sales and marketing efforts; | ||
| § | Oversee the key sales and operating executives; | ||
| § | Handle primary sales functions for several key accounts; | ||
| § | Maintain visibility in the international distribution industry and participate in industry functions; | ||
| § | Create and maintain credit policies; | ||
| § | Ensure proper programs are in place to maintain compliance with FMC regulations; and | ||
| § | Perform necessary international travel as required. |
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EXHIBIT “B”
Xxxx Xxxxx
Base Compensation
$212,330 Annually
$9,330, annual automobile allowance. The executive may choose to have the company directly pay an
automobile lease payment and/or other operating expenses in lieu of receiving the above. The total
monthly payments shall not exceed $777.50
Bonuses
Incentive Cash Bonus:
|
Each year, the executive bonus pool will equal 8% of annual EBIT before executive bonuses. Each individual participant will have a pre-determined share of this pool. 75% of this pool (6% of pre-bonus EBIT) will be distributed to participants based on their share of the pool. Up to 25% of the pool (2% of pre-bonus EBIT) will be distributed to participants based on the extent to which each participant achieves specific pre-determined objectives as communicated by the compensation committee. If all individual objectives are met, the individual will receive 25% of his/her share. | |
| For the 2008 calendar year, your share will be 22%. Future share of the bonus pool will be determined by the executive committee and compensation committee. |
Initial equity grant:
|
Upon the completion of audited 2007 results, the company shall grant 42,000 10-year options at fair market value. Options shall vest in increments of 1/3 following each anniversary of the grant | |
Annual Equity Award Plan:
|
Executive shall be eligible for annual equity incentives up to 40% of base salary as determined by the compensation committee based on the achievement of individual objectives and corporate benchmarks. |
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Benefits:
| Type | Company Plan: | |
Life & AD&D Insurance
|
One time annual salary up to $50,000, coverage provided by UNUM. | |
Health Care Insurance Including Major Medical |
Coverage provided by Capital Blue Cross/Pennsylvania Blue Shield | |
Dental Insurance
|
Coverage self-insured by company, managed through Benefit Concepts | |
Prescription Coverage
|
$6.00 co-pay — Coverage self-insured by company, managed through Benefit Concepts | |
Short Term Disability
|
Up to 26 weeks in accordance with company policies and procedures | |
Vacation Holiday & Illness Benefits |
In accordance with company policies and procedures | |
Long Term Disability
|
The company maintains one (1) long term disability policy that provides $4,866/month disability income (subject to an inflation based escalator) to X. Xxxxx after a 180 day exclusion period. |
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THE XXXXX GROUP, INC.
CONFIDENTIALITY AGREEMENT
As an officer and/or management employee of The Xxxxx Group, Inc. or any of its subsidiaries
or affiliates (the “Company”), I recognize and acknowledge that the Company engages in highly
competitive businesses and the protection of confidential business information and trade secrets is
vital to the interest and success of this organization. I, Xxxx Xxxxx, intending to be legally
bound hereby, agree to the following:
1. Confidential Information. Except as required in the conduct of the Company’s
business or as authorized in writing by the Company, during my employment with the Company or at
any time thereafter, I will not use, publish, disclose, appropriate or communicate, directly or
indirectly, any of the following information which I have acquired or may acquire during, or by
reason of, my employment with the Company:
(A) Customer lists; internal rate schedules; rate quotations to customers and from vendors;
the names, addresses, credit terms and nature of services provided to customers of the company; the
identity of suppliers, distributors and shippers; pricing information; pricing strategies; business
plans and methods; proprietary computer software programs; pending projects; operating and
financial data; and any other information or materials which might adversely affect the Company’s
operations and competitive position if disclosed or revealed.
(B) Trade secrets used in the Company’s business which enable it to obtain a competitive
advantage over competitors or others with whom it does business.
2. Company Property & Written Materials. At any time upon the Company’s request and,
in any event, upon termination of my employment with the Company, I will immediately return all
property and deliver all manuals, lists, notes, writings, computer software programs and all other
documents or tangible materials whatsoever, including all copies or duplicates, concerning any part
of the Company’s activities or any part of my activities as a Company employee. All such documents
and tangible materials, and copies or duplicates thereof, including my own working papers, files
and notes, are acknowledged by me to be the Company’s property and entrusted to me on a temporary
basis. Schedule “A” attached to this Agreement sets forth a complete and accurate list of equipment
and other property belonging to the Company which it had furnished for my use while I am employed
with the Company. Schedule “B: attached to this Agreement is a comprehensive list of the computer
files I currently maintain, use or am able to access. I will update the list of computer filed from
time-to-time when requested to do so by the Company.
3. Work Product. All ideas, designs, inventions, computer programs and other creative
works, whether or not patentable or copyrightable, conceived, developed or made by me, either
solely or jointly with others, which are capable of being used or adapted for use in the business
of the Company, or which are developed with the use of the Company’s time, material or facilities
(“work product”) are and shall be the sole property of the Company. I will promptly disclose to the
Company my conception or development of any such work product.
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4. Legal Remedies/Employee Reimbursement. I recognize that the restrictive covenants
contained in this document are essential to protect the business interests and goals of the
Company, and that violation of the restrictions will cause serious and irreparable harm to the
Company. Accordingly, I understand that in the event of a violation or threatened violation by me
of any provision of this Agreement, the Company shall be entitled to seek any and all legal
remedies available to protect its interests and business. I further acknowledge and agree that the
Company shall be entitled to seek and obtain reimbursement from me for all costs, expenses or
damages which it incurs as a result of any violation by me of any provision of this Agreement as
determined by a court of competent jurisdiction. This obligation shall include court costs,
litigation expenses and actual, reasonable attorney’s fees.
5. Entire Agreement. This agreement may not be waived, changed, modified, abandoned or
terminated, in whole or in part, except in a writing signed by me and an officer of the Company.
This Agreement applies regardless of whether there are any changes in my job duties, job title, the
location of my place of work, or division assignment. Nothing in this Agreement gives, or shall be
deemed to give, me any right to continued employment for any length of time.
Date: |
||||
| Employee’s Signature | ||||
| Employee Name | ||||
STATE OF |
||||
COUNTY OF |
On , 2007 before me personally came known
to me or
satisfactorily proven to be the person whose name is subscribed to the within Confidentiality
Agreement, and acknowledged that he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
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