CONSULTING SERVICES AGREEMENT
Exhibit 10.13
CONSULTING SERVICES AGREEMENT (the
“Agreement”), dated as of December 18, 2009, by
and between Landstar System, Inc. (the “Company”), and
Xxxxxxx X. Xxxxx (“Consultant”).
WHEREAS, since April 27, 2004, Consultant has been serving
as the Chairman of the Company’s Board of Directors (the
“Board”) and as a common law employee of the Company
pursuant to the terms of a letter agreement, dated
April 27, 2004, between the Company and Consultant (the
“Letter Agreement”);
WHEREAS, effective as of January 4, 2010 (the
“Retirement Date”), Consultant has determined to
retire from such employment with the Company and to cease to
serve as the Chairman of the Board, but to remain on the Board
as a director at least for the balance of his term ending at the
Annual Meeting of the Company’s Stockholders in 2011;
WHEREAS, as provided for under the Letter Agreement, from and
after the Retirement Date, the Company wishes to continue to
avail itself of Consultant’s knowledge, expertise and
experience for a transition period by appointment of Consultant
as a consultant to provide services that are helpful to the
operation of the business of the Company in accordance with the
terms and conditions set forth below; and
WHEREAS, as provided for under the Letter Agreement, Consultant
is willing to serve as a consultant to the Company upon the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of their mutual promises, the
Company and Consultant agree as follows:
1. Retirement as
Chairman. Effective as of the Retirement
Date, Consultant shall cease to serve as the Chairman of the
Board, but shall remain on the Board as a director at least for
the balance of his term ending at the Annual Meeting of the
Company’s Stockholders in 2011.
2. Consulting Services. Subject to
paragraph 8 hereof, during the period (the “Consulting
Period”) beginning on January 5, 2010, the day
after the Retirement Date, and continuing until
January 5, 2012, the second anniversary thereof,
Consultant shall personally provide to the Chief Executive
Officer of the Company (“CEO”) or the Board such
consulting services as either the CEO or the Board may
reasonably request from time to time. Such consulting services
shall be of a nature and scope that will generally be of a type
consistent with Consultant’s stature and experience.
3. Time, Location and Maximum
Commitment. Consultant shall provide the
consulting services at such time and in such locations as
Consultant shall determine, unless the Company shall otherwise
request a specific time and location upon reasonable advance
notice. Consultant shall honor any such request unless he has a
conflicting business or personal commitment that would preclude
him from performing such services at the time
and/or place
requested by the Company, and in such circumstances the parties
shall make reasonable efforts to arrange a mutually satisfactory
alternative. The Company shall use its reasonable best efforts
not to require the performance of consulting services in any
manner that unreasonably interferes with any other business or
pre-scheduled personal activity of Consultant. It is not
intended and in no event shall Consultant be required to perform
services for the Company hereunder at a level that would require
Consultant to devote to such services twenty percent (20%) or
more of the average level of bona fide services performed by
Consultant while an employee of the Company over the
36 month period immediately preceding the Retirement Date
(the “Maximum Commitment”). The Company and Consultant
acknowledge that they have established the Maximum Commitment so
that Consultant will have incurred a separation from service as
of the Retirement Date pursuant to, and in accordance with, the
regulations promulgated under Section 409A of the Internal
Revenue Code of 1986, as amended, and will act accordingly.
4. Status. Consultant shall not,
by virtue of the consulting services provided hereunder, be
considered to be an officer or employee of the Company or any of
its affiliates, and shall not have the power or authority to
contract in the name of or bind the Company or any such
affiliates. As an independent contractor, Consultant may perform
services for others, provided that in the event Consultant
performs services for a competitor of the Company, the Company
will have the right to terminate Consultant’s services
hereunder in accordance with paragraph 8 hereof. Consultant
shall at all times be treated as an independent contractor and
shall be responsible for the payment of all taxes with respect
to all amounts paid to him hereunder. Consultant understands and
acknowledges that from and after the Retirement Date, Consultant
shall no longer be entitled to participate in any employee
benefits plan or fringe benefit or perquisite program made
available only to employees or officers of the Company and its
subsidiaries, including its health and welfare plans. Nothing in
this Agreement shall be construed to limit the rights of
Consultant to receive any benefits or compensation otherwise
payable to Consultant in respect of his prior services as an
officer and employee of the Company under the express terms and
conditions of any agreement between him and the Company or the
applicable terms and conditions of any employee benefit plan,
program or arrangement.
5. Consulting Fees. In respect of
the services to be performed hereunder during the Consulting
Period, the Company shall pay Consultant at the annual rate of
$250,000 per annum, payable quarterly, in advance; it being
understood and agreed that such amount will be in lieu of any
and all fees and other compensation that might otherwise be
payable to Consultant for services as a director during the
Consulting Period; provided the Company shall pay or reimburse
Consultant for reasonable expenses incurred by Consultant in
connection with services provided as a director during the
Consulting Period subject to the terms and conditions of the
expense reimbursement policies applicable to expenses incurred
by directors of the Company.
6. Expenses. The Company shall pay
or reimburse Consultant for such reasonable expenses incurred by
Consultant in the course or on account of rendering consulting
services hereunder in accordance with, and subject to the terms
and conditions of, the expense reimbursement policy applicable
to expenses incurred by senior officers of the Company, as in
effect on the date hereof.
7. Confidential
Information. Consultant understands and
agrees that in the course of his services hereunder he will
acquire
and/or have
access to confidential information, trade secrets, proprietary
data and/or
non-public information concerning the business, professional
and/or
personal affairs, activities and operations of the Company, the
Company’s subsidiaries and affiliates
and/or the
officers, employees
and/or
representatives of any of them (collectively, the
“Companies”) and the Companies’ plans, methods of
doing business and practices and procedures, as well as
confidential information disclosed to the Companies from time to
time by third parties, any or all of which shall be referred to
herein as the “Confidential Information.” Without the
prior written consent of a duly authorized officer of the
Company, and except to the extent required in connection with
the performance of his duties hereunder, by an order of a court
having competent jurisdiction or under subpoena from an
appropriate government agency, Consultant shall not disclose any
Confidential Information to any third person, unless such
Confidential Information has been previously disclosed to the
public by the Companies or has become public knowledge other
than by Consultant’s breach of this Agreement or any other
agreement with the Company by which he may be bound. The
Consultant’s duties and obligations under this
paragraph 7 are in addition to, and not intended to
supersede, limit, amend or otherwise modify any existing
covenant made by Consultant in favor of the Company in
connection with, as a condition of, or pursuant to the terms of
any agreement entered during the term of, his employment or
directorship with the Company, whether pertaining to the
preservation of confidential information or otherwise.
8. Early Termination of Consulting
Period. Notwithstanding anything in this
Agreement to the contrary, the Consulting Period, and the
Company’s obligations to make any payments to Consultant
hereunder, shall immediately terminate (i) if, in the
event Consultant performs services for a competitor of the
Company, the Company provides Consultant written notice of such
termination or (ii) upon Consultant’s death.
9. Miscellaneous. This Agreement
is for the personal services of Consultant and may not be
subcontracted or assigned by Consultant in any fashion, whether
by operation of law, or by conveyance of any type, without the
prior written consent of the Company, which consent the Company
may withhold in its sole discretion. Effective on the Retirement
Date, the Letter Agreement shall terminate and be of no further
force or effect. This Agreement may be amended only by a written
instrument signed by the Company and Consultant. Except as
otherwise expressly provided hereunder, this Agreement shall
constitute the entire agreement between the Company and
Consultant with respect to the provision of consulting services
by the Consultant to the Company. This Agreement may be executed
in counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
10. Governing Law. This Agreement
shall be governed by the laws of New York, without reference to
the principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day first written above.
LANDSTAR SYSTEM, INC.
/s/ Xxxxx
X. Xxxxxxx
| By: | Xxxxx X. Xxxxxxx |
| Title: | President and Chief Executive Officer |
XXXXXXX X. XXXXX
/s/ Xxxxxxx
X. Xxxxx
