EXHIBIT 10.33
INDEMNIFICATION, DIRECTOR AND FOUNDERS AGREEMENT
This Indemnification and Founders Agreement, made and entered into as of
this 8th day of November, 2006 ("Agreement"), by and between Summit Global
Logistics, Inc. (formerly, Aerobic Creation Inc.) , a Delaware corporation (the
"Company"), Maritime Logistics US Holdings Inc., a Delaware corporation ("MLI"),
and Xxxxxx XxXxxxxxx (the "Indemnitee" or "Xx. XxXxxxxxx").
WHEREAS, the Company is or intends to be a third party logistics
provider; and MLI is a logistics company that the Company has acquired as of the
date hereof through its wholly-owned acquisition subsidiary, and MLI and its
founders have raised on behalf of the Company funds sufficient to finance the
acquisition of certain logistics companies, and MLI intends to acquire
additional logistics companies, if and when, such opportunities present
themselves;
WHEREAS, the Indemnitee is a founder of MLI ("Founder"), and as a
condition to the founders, including the Founder, entering into this Agreement,
the Reorganization, Acquisitions, and Financings (each as defined in that
certain private placement memorandum dated October 23, 2006), the Company has
agreed to pay a premium to the founders of MLI in the event of a change in
control (not approved by the Board ) of the Company prior to the fifth year
anniversary of this Agreement;
WHEREAS, highly competent persons are reluctant to serve corporations as
directors, officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation;
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be indemnified to the fullest extent permitted.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement the following terms shall have the meanings
indicated:
1.01 "BOARD" shall mean the Board of Directors of the Company.
1.02 "CORPORATE STATUS" describes the status of a person who is or was a
director, officer, employee, agent, trustee or fiduciary of the Company or of
any other corporation, partnership, joint venture, trust, employee benefit plan
or other Enterprise which such person is or was serving at the request or on
behalf of the Company.
1.03 "COURT" means the Court of Chancery of the State of Delaware, the
court in which the Proceeding in respect of which indemnification is sought by
the Indemnitee shall have been brought or is pending, or another court having
subject matter jurisdiction and personal jurisdiction over the parties.
1.04 "DISINTERESTED DIRECTOR" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
1.05 "ENTERPRISE" shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent, trustee or fiduciary.
1.06 "EQUITY INCENTIVE PLAN" shall mean the Summit Global Logistics, Inc.
2006 Equity Incentive Plan, annexed as Exhibit A hereto.
1.07 "EXPENSES" shall include, without limitation, all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, facsimile transmission
charges, and all other disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating or being or preparing to be a witness in a Proceeding.
1.08 "GOOD FAITH" shall mean Indemnitee having acted in good faith and in
a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, in the case of an Enterprise which is an employee
benefit plan, the best interests of the participants or beneficiaries of said
plan, as the case may be, and, with respect to any Proceeding which is criminal
in nature, having had no reasonable cause to believe Indemnitee's conduct was
unlawful.
1.09 "IMPROPER PERSONAL BENEFIT" shall include, but not be limited to, the
personal gain in fact by reason of a person's Corporate Status of a financial
profit, monies or other advantage not also accruing to the benefit of the
Company or to the stockholders generally and which is unrelated to his usual
compensation including, but not limited to, (i) in exchange for the exercise of
influence over the Company's affairs, (ii) as a result of the diversion of
corporate opportunity, or (iii) pursuant to the use or communication of
confidential or inside information for the purpose of generating a profit from
trading in the Company's securities. Notwithstanding the foregoing, "Improper
Personal Benefit" shall not include any benefit, directly or indirectly, related
to actions taken in order to evaluate, discourage, resist, prevent or negotiate
any transaction with or proposal from any person or entity seeking control of,
or a controlling interest in, the Company.
1.10 "INDEPENDENT COUNSEL" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and may include law firms or
members thereof that are regularly retained by the Company but not any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the standards of professional conduct then prevailing and
applicable to such counsel, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement.
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1.11 "OFFICER" means the president, vice presidents, treasurer, assistant
treasurer(s), secretary, assistant secretary and such other executive officers
as are appointed by the board of directors of the Company or Enterprise, as the
case may be.
1.12 "PROCEEDING" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation (including any internal corporate
investigation), administrative hearing or any other actual, threatened or
completed proceeding, whether civil, criminal, administrative or investigative,
other than one initiated by Indemnitee. For purposes of the foregoing sentence,
a "Proceeding" shall not be deemed to have been initiated by Indemnitee where
Indemnitee seeks, pursuant to Article VIII of this Agreement, to enforce
Indemnitee's rights under this Agreement.
ARTICLE II
TERM OF AGREEMENT
This Agreement shall continue until and terminate upon the later of: (i)
ten (10) years after the date that Indemnitee shall have ceased to serve as a
director, officer, employee, agent, trustee or fiduciary of the Company or of
any other Enterprise; or (ii) the final termination of all pending Proceedings
in respect of which Indemnitee is granted rights of indemnification or
advancement of expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Article VIII of this Agreement relating thereto.
ARTICLE III
SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS
3.01 SERVICES. Indemnitee agrees to serve or continue to serve as a
Director or Officer of the Company for so long as he is duly elected or
appointed. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law).
3.02 NOTICE OF PROCEEDING. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, but the omission so to notify the Company shall not relieve
the Company from its obligations hereunder.
ARTICLE IV
INDEMNIFICATION
4.01 IN GENERAL. To the fullest extent permitted by applicable law, in
connection with any Proceeding, the Company shall indemnify, and advance
Expenses, to Indemnitee as provided in this Agreement.
4.02 PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 4.02 if, by reason of Indemnitee's Corporate Status, Indemnitee is, or
is threatened to be made, a party to or is otherwise involved in any Proceeding,
other than a Proceeding by or in the right of the Company. Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and amounts paid in
settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection with such Proceeding or any claim, issue or matter therein,
if Indemnitee acted in Good Faith and such Indemnitee has not been adjudged
during the course of such
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Proceeding to have derived an Improper Personal Benefit from the transaction or
occurrence forming the basis of such Proceeding.
4.03 PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
(a) Indemnitee shall be entitled to the rights of indemnification provided
in this Section 4.03 if, by reason of Indemnitee's Corporate Status, Indemnitee
is, or is threatened to be made, a party to or is otherwise involved in any
Proceeding brought by or in the right of the Company to procure a judgment in
its favor. Indemnitee shall be indemnified against Expenses, judgments,
penalties, and amounts paid in settlement, actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with such Proceeding if
Indemnitee acted in Good Faith and such Indemnitee has not been adjudged during
the course of such Proceeding to have derived an Improper Personal Benefit from
the transaction or occurrence forming the basis of such Proceeding.
Notwithstanding the foregoing, no such indemnification shall be made in respect
of any claim, issue or matter in such Proceeding as to which Indemnitee shall
have been adjudged to be liable to the Company if applicable law prohibits such
indemnification; provided, however, that, if applicable law so permits,
indemnification shall nevertheless be made by the Company in such event if and
only to the extent that the Court which is considering the matter shall so
determine.
4.04 INDEMNIFICATION OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee's Corporate Status, a party to or is
otherwise involved in and is successful, on the merits or otherwise, in any
Proceeding, Indemnitee shall be indemnified, to the maximum extent permitted by
law, against all Expenses, judgments, penalties, fines, and amounts paid in
settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee, to the maximum extent permitted by law, against all
Expenses, judgments, penalties, fines, and amounts paid in settlement, actually
and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
with each successfully resolved claim, issue or matter. For purposes of this
Section 4.04 and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
4.05 INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a witness in any Proceeding, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee's behalf in connection therewith.
ARTICLE V
ADVANCEMENT OF EXPENSES
Notwithstanding any provision to the contrary in Article VI and to the
fullest extent provided by applicable law, the Company (acting through the Chief
Executive Officer) shall advance all reasonable Expenses which, by reason of
Indemnitee's Corporate Status, were incurred by or on behalf of Indemnitee in
connection with any Proceeding, within thirty (30) days after the receipt by the
Company of a statement or statements from Indemnitee requesting such advance or
advances, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advance and undertakings to repay pursuant to this Article V shall
be unsecured and interest free. Advancement of Expenses pursuant to this Article
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V shall not require approval of the Board of Directors or the stockholders of
the Company, or of any other person or body. The Secretary of the Company shall
promptly advise the Board in writing of the request for advancement of Expenses,
of the amount and other details of the advance and of the undertaking to make
repayment pursuant to this Article V.
ARTICLE VI
PROCEDURES FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION AND DEFENSE OF CLAIMS
6.01 INITIAL REQUEST. To obtain indemnification under this Agreement
(other than advancement of Expenses pursuant to Article V), Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonable necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall promptly advise
the Board in writing that Indemnitee has requested indemnification.
6.02 METHOD OF DETERMINATION. A determination (if required by applicable
law in the specific case) with respect to Indemnitee's entitlement to
indemnification shall be made (a) by the Board by a majority vote of a quorum
consisting of Disinterested Directors, or (b) in the event that a quorum of the
Board consisting of Disinterested Directors is not obtainable or, even if
obtainable, such quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee, or (c) by the holders of a majority of the votes of the outstanding
stock at the time entitled to vote on matters other than the election or removal
of directors, voting as a single class, including the stock of the Indemnitee.
6.03 SELECTION, PAYMENT, DISCHARGE, OF INDEPENDENT COUNSEL. In the event
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6.02 of this Agreement, the Independent Counsel
shall be selected, paid, and discharged in the following manner:
(a) The Independent Counsel shall be selected by the Board, and the
Company shall give written notice to Indemnitee advising Indemnitee
of the identity of the Independent Counsel so selected.
(b) Following the initial selection described in clause (a) of this
Section 6.03, Indemnitee may, within seven (7) days after such
written notice of selection has been given, deliver to the Company a
written objection to such selection. Such objection may be asserted
only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section
1.10 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is made, the
Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is
without merit.
(c) Either the Company or Indemnitee may petition a Court if the
parties have been unable to agree on the selection of Independent
Counsel within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to Section 6.01 of this
Agreement. Such petition may request a determination whether an
objection to the party's selection is without merit and/or seek the
appointment as Independent
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Counsel of a person selected by the Court or by such other person as
the Court shall designate. A person so appointed shall act as
Independent Counsel under Section 6.03 of this Agreement.
(d) The Company shall pay any and all reasonable fees of Independent
Counsel and expenses incurred by such Independent Counsel in
connection with acting pursuant to this Agreement, and the Company
shall pay all reasonable fees and expenses incident to the
procedures of this Section 6.03, regardless of the manner in which
such Independent Counsel was selected or appointed.
(e) Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 8.02 of this Agreement, Independent
Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards
of professional conduct then prevailing).
6.04 COOPERATION. Indemnitee shall cooperate with the person, persons or
entity making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
6.05 DEFENSE OF CLAIM. With respect to any Proceeding to which Indemnitee
shall have requested indemnification in accordance with Section 6.01:
(a) The Company will be entitled to participate in the defense at
its own expense.
(b) Except as otherwise provided below, the Company jointly with any
other indemnifying party will be entitled to assume the defense with
counsel reasonably satisfactory to Indemnitee. After notice from the
Company to the Indemnitee of its election to assume the defense of a
suit, the Company will not be liable to the Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by
the Indemnitee in connection with the defense of the Proceeding
other than reasonable costs of investigation or as otherwise
provided below. The Indemnitee shall have the right to employ his
own counsel in such Proceeding but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of
the defense shall be at the expense of the Indemnitee unless (i) the
employment of counsel by the Indemnitee has been authorized by the
Company, (ii) the Indemnitee shall have concluded reasonably that
there may be a conflict of interest between the Company and the
Indemnitee in the conduct of the defense of such action and such
conclusion is confirmed in writing by the Company's outside counsel
regularly employed by it in connection with corporate matters or
(iii) the Company shall not in fact have employed counsel to assume
the defense of such Proceeding, in each of which cases the fees and
expenses of counsel shall be at the expense of the Company. The
Company shall not be entitled to assume the defense of any
Proceeding brought by or in the right of the Company or as to which
the
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Indemnitee shall have made the conclusion provided for in (ii) above
and such conclusion shall have been so confirmed by the Company's
said outside counsel.
(c) Notwithstanding any provision of this Agreement to the contrary,
the Company shall not be liable to indemnify the Indemnitee under
this Article of any amounts paid in settlement of any Proceeding or
claim effected without its written consent. The Company shall not
settle any Proceeding or claim in any manner which would impose any
penalty, limitation or disqualification of the Indemnitee for any
purpose without the Indemnitee's written consent. Neither the
Company nor the Indemnitee will unreasonably withhold their consent
to any proposed settlement.
6.06 PAYMENT. If it is determined that Indemnitee is entitled to
indemnification not covered by defense of the claim afforded under Section 6.05
above, payment to Indemnitee shall be made within ten (10) days after such
determination.
ARTICLE VII
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
7.01 BURDEN OF PROOF. In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 6.01 of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
by any person, persons or entity of any determination contrary to that
presumption.
7.02 EFFECT OF OTHER PROCEEDINGS. The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of guilty or of NOLO CONTENDERE or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in Good Faith.
7.03 RELIANCE AS SAFE HARBOR. For purposes of any determination of Good
Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the Officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected with reasonable care by the Enterprise. The provisions
of this Section 7.03 shall not be deemed to be exclusive or to limit in any way
the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
7.04 ACTIONS OF OTHERS. The knowledge and/or actions, or failure to act,
of any director, Officer, employee, agent, trustee or fiduciary of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
ARTICLE VIII
REMEDIES OF INDEMNITEE
8.01 APPLICATION. This Article VIII shall apply in the event of a Dispute.
For purposes of this Article, "Dispute", shall mean any of the following events:
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(a) a determination is made pursuant to Article VI of this Agreement
that Indemnitee is not entitled to indemnification under this
Agreement;
(b) advancement of Expenses is not timely made pursuant to Article V
of this Agreement;
(c) the determination of entitlement to be made pursuant to Section
6.02 of this Agreement has not been made within sixty (60) days
after receipt by the Company of the request for indemnification;
(d) payment of indemnification is not made pursuant to Section 4.05
of this Agreement within ten (10) days after receipt by the Company
of a written request therefor; or
(e) notice of election by the Company to assume defense of a claim
as provided for in Section 6.05 or payment of indemnification, as
the case may be, is not given or made within ten (10) days after a
determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made
pursuant to Article VI of this Agreement.
8.02 ADJUDICATION. In the event of a Dispute, Indemnitee shall be entitled
to an adjudication in an appropriate Court of Indemnitee's entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at
Indemnitee's option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within one hundred eighty (180) days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this
Section 8.02. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
8.03 DE NOVO REVIEW. In the event that a determination shall have been
made pursuant to Article VI of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Article VIII shall be conducted in all respects as a DE NOVO trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any such proceeding or arbitration, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
8.04 COMPANY BOUND. If a determination shall have been made or deemed to
have been made pursuant to Article VI of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration absent (i) a misstatement by Indemnitee
of a material fact, or any omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
8.05 PROCEDURES VALID. The Company shall be precluded from asserting in
any judicial proceeding or arbitration commenced pursuant to this Article VIII
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
8.06 EXPENSES OF ADJUDICATION. In the event that Indemnitee, pursuant to
this Article VIII, seeks a judicial adjudication of or an award in arbitration
to enforce Indemnitee's rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to
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recover from the Company, and shall be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 1.07 of this Agreement) actually and reasonably incurred by Indemnitee
in such adjudication or arbitration, but only if Indemnitee prevails therein. If
it shall be determined in such adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
Expenses sought, the expenses incurred by Indemnitee in connection with such
adjudication or arbitration shall be appropriately prorated.
ARTICLE IX
NON-EXCLUSIVITY, INSURANCE, SUBROGATION
9.01 NON-EXCLUSIVITY. The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the By-Laws, any
agreement, a vote of shareholders or a resolution of directors, or otherwise. No
amendment, alteration, rescission or replacement of this Agreement or any
provision hereof shall be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee's Corporate Status prior to
such amendment, alteration, rescission or replacement.
9.02 INSURANCE. The Company may maintain an insurance policy or policies
against liability arising out of this Agreement or otherwise.
9.03 SUBROGATION. In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
9.04 NO DUPLICATIVE PAYMENT. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
ARTICLE X
FOUNDERS AGREEMENT
10.1 FOUNDERS FUNDAMENTAL TRANSACTION PAYMENT. As a condition to the
founders entering into this Agreement, the Reorganization, Acquisitions, and
Financings (each as defined in that certain private placement memorandum dated
October 23, 2006), if a Fundamental Transaction occurs (that has not been
approved by the Board of Directors of the Company) at any time on or prior to
the end of Year 5, and, in connection therewith, the purchase price per share of
Common Stock offered to the holders of the Common Stock (the "Sale Price Per
Share") equals or exceeds Ten United States Dollars (US$10) per share (the
"Initial Share Price"), then the Company shall pay to the Founder, promptly
following the occurrence of the Fundamental Transaction, an amount in
immediately available funds equal to the product of the amount by which the Sale
Price Per Share of the Common Stock in the Fundamental Transaction exceeds the
Initial Share Price multiplied by the number of issued and outstanding shares of
Common Stock owned by the Founder, or the Founder's wholly-owned limited
liability company, that were received as merger consideration as of the date
hereof as set forth in Schedule A hereto (the "Shares"). For purposes of
calculating the Founders Fundamental Transaction Payment, the Sale Price Per
Share of the Common Stock shall be capped at Thirty United Sates Dollars
(US$30). The Company or its successor shall pay the Founder the amount herein no
later than ten (10) days after the closing of the Fundamental
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Transaction. For purposes of this Section 10.1, "Fundamental Transaction" means
that the Company shall, directly or indirectly, in one or more related
transactions effected after the Effective Date consolidate or merge with or into
(whether or not the Company is the surviving corporation) another Person; sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person; 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; 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 of the Company; or
reclassify or change the outstanding shares of common stock of the Company
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination). 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 of the Company. This founder's payment is not conditioned on employment in
the Company.
ARTICLE XI
DIRECTORS AGREEMENT
11.01 APPOINTMENT. The stockholders of the Company and the Company as sole
stockholder of MLI, hereby appoints Xx. XxXxxxxxx as a director of each of the
Company and MLI, and as a member of the acquisitions committee, with the full
power and authority to act on behalf of such board of directors, to the extent
permitted by law. Xx. XxXxxxxxx is appointed the Secretary of the Company, MLI,
AMR Investments, Inc., Summit International Logistics, Inc., TUG USA, Inc.,
AmeRussia Shipping Inc., and SeaMaster Logistics, Inc.
11.02 TERM. This Agreement shall commence as of the date hereof, and shall
continue in effect thereafter until terminated by either party.
11.03 COMPENSATION. As compensation for Xx. XxXxxxxxx'x services
hereunder, the Company shall pay Xx. XxXxxxxxx at the usual and customarily fees
and rates of such other directors that provide services to the Company. The
Company shall reimburse Xx. XxXxxxxxx for all out-of-pocket expenses incurred in
discharging his responsibilities as a director and committee member, and under
this Agreement. On or about the date hereof, or as soon as administratively
practicable thereafter, Director shall receive grants under the Equity Incentive
Plan as follows:
(i) NON-QUALIFIED STOCK OPTIONS. A grant of a Nonqualified Stock Option,
as defined in the Equity Incentive Plan, in respect of 136,000 shares of
Common Stock, pursuant to an option grant agreement annexed as Exhibit B
hereto, in consideration for his services on the acquisition committee.
(ii) STOCK APPRECIATION RIGHTS. A grant of 102,000 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 C hereto. The parties intend that such grant
cover the approximate combined federal and state
-- 10
income tax liability associated with both (i) the number of shares of
Common Stock with respect to which the Nonqualified 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 Director and
the Company. In its discretion, the Committee or Compensation Committee, as
defined in the Equity Incentive Plan, may make additional awards to the Director
from time to time. If the Equity Incentive Plan is terminated for any reason
whatsoever, whether by the Company or any other Person, the Director shall be
entitled to the benefits due to him under Exhibits B and C, 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 Nonqualified Stock Options and Stock Appreciation
rights granted to the Director under Exhibits B and C, respectively, to be fully
vested and exercisable.
11.04 D&O INSURANCE. During the entirety of Term, the Company shall cause
Xx. XxXxxxxxx 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 Xx. XxXxxxxxx 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 six (6) years and for so long as
Xx. XxXxxxxxx shall be subject to personal liability relating to such service.
Attached hereto as EXHIBIT D is a true and accurate copy of the D&O Insurance
Coverage.
11.05 EPLI INSURANCE. During the entirety of the Term, the Company shall
cause Xx. XxXxxxxxx 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 Xx. XxXxxxxxx
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 Xx. XxXxxxxxx shall be subject to personal liability
relating to such service.
11.06 XXXXX XXXXXXX XXXXXXX ISRAELS LLP. The parties acknowledge that
Director is serving on the board as an individual and not as a partner of Xxxxx
Xxxxxxx Berlack Israels LLP. Director, as of the date hereof, does not and will
no longer provide legal representation to the Company. The Company confirms that
it has been advised of the danger that the attorney-client privilege may not
cover some communications, such as business advice. Specifically, N.Y. Op. 589
(1988) requires that a lawyer serving on the board of a client advise the client
of the danger that the privilege may not cover some communications. The Company
acknowledges and consents to Xxxxx Xxxxxxx Xxxxxxx Israels LLP and Director
representing competitors in the Company's industry, or clients who deal with
those competitors. Director will not perform legal
-- 11
work for the Company, be involved in the billing of the Company or supervise
others doing so. Director will recuse himself from Company or board
deliberations concerning the selection of outside counsel and payment of fees to
Xxxxx Xxxxxxx Berlack Israels LLP, litigation being handled by Xxxxx Xxxxxxx
Xxxxxxx Israels LLP, disputes/matters dealing with other clients of Xxxxx
Xxxxxxx Berlack Israels LLP in connection with the Company. The attorney-client
privilege does not extend to actions Director takes as a board member. If
Director is asked to give legal advice during the board meeting, he should not
give it, but seek the opinion of someone who does provide legal representation
to the Company. Xx. XxXxxxxxx'x Founder shares are less than 1% of the Company
on a fully diluted basis. Xxxxx Xxxxxxx Berlack Israels LLP has agreed that Xx.
XxXxxxxxx may purchase $25,000 of Common Stock pursuant to the private placement
memorandum dated October 23, 2006.
ARTICLE XII
GENERAL PROVISIONS
12.01 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's legal representatives, heirs, executors and
administrators.
12.02 SEVERABILITY. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each
portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
12.03 NO ADEQUATE REMEDY. The parties declare that it is impossible to
measure in money the damages which will accrue to either party by reason of a
failure to perform any of the obligations under this Agreement. Therefore, if
either party shall institute any action or proceeding to enforce the provisions
hereof, such party against whom such action or proceeding is brought hereby
waives the claim or defense that the other party has an adequate remedy at law,
and such party shall not urge in any such action or proceeding the claim or
defense that the other party has an adequate remedy at law.
12.04 HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
12.05 MODIFICATION AND WAIVER. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any
-- 12
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
12.06 INTEGRATION. This Agreement, unless otherwise provided herein, shall
form the entire agreement between the parties and shall supersede all prior
agreements, oral discussions, promises and representations, whether in writing
or otherwise.
12.07 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, (ii) sent by prepaid commercial
overnight courier, or (iii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
If to Indemnitee/Founder, to: As shown with Indemnitee's Signature below.
If to the Company, to: Summit Global Logistics, Inc.
000 Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
12.08 GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware without application of the conflict of laws principles
thereof.
12.09 REPRESENTATIONS AND WARRANTIES. In order to induce Indemnitee to
enter into this Agreement, the Company represents and warrants to Indemnitee
that as of the date of this Agreement:
(a) The Company has full power, authority and legal right to
execute, deliver and perform its obligations under this Agreement;
(b) The Company has taken all necessary actions to authorize the
execution, delivery and performance of this Agreement;
(c) This Agreement has been duly executed and delivered on behalf of
the Company;
(d) This Agreement constitutes the legal, valid, and binding
obligation of the Company; and
(e) The Company has authorized, to the fullest extent possible under
existing applicable law, the indemnification provisions herein in favor of
Indemnitee including, without limitation, by appropriate vote, as required
by applicable law or charters and by-laws, of the shareholders and
directors of the Company, and by inclusion in each of the its charter
and/or by-laws, the appropriate provisions.
-- 13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
SUMMIT GLOBAL LOGISTICS, INC.
By: ___________________________
Name:__________________________
Title:
INDEMNITEE
_______________________________
Xxxxxx XxXxxxxxx
00 Xxxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
-- 14
SCHEDULE A
229,658
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.
2
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.
l. "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.
m. "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.
n. "DIRECTOR" shall mean a member of the Board or the board of directors
of a Parent or Subsidiary who is not an Employee.
o. "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.
p. "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.
q. "EFFECTIVE DATE" shall mean the date specified in Section 15c hereof.
r. "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.
s. "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.
t. "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
u. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
v. "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;
3
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.
w. "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.
x. "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.
y. "PERSON" shall mean a person within the meaning of Section 3(a)(9) of
the Exchange Act.
z. "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.
aa. "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.
bb. "RETIREMENT" shall mean the voluntary termination of the Participant
at any time on or after attaining age 65.
cc. "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.
dd. "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.:
4
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
5
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").
6
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
7
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
8
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
9
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.
10
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
11
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
12
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)
13
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
14
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
(2) Other Awards -------------------------
-------------------------
Total
-------------------------
Adopted by the Compensation Committee of the
Board of Directors on: November 8, 2006
-------------------------
Approved by the Stockholders on: November 8, 2006
-------------------------
15
EXHIBIT B
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Unless otherwise defined herein, the terms defined in the Summit Global
Logistics, Inc. 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")
Xxxxxx XxXxxxxxx
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 136,000
SHARES GRANTED
VESTING November 8, 2006 TYPE OF OPTION Incentive Stock
COMMENCEMENT Option
DATE
EXERCISE PRICE PER $10.00 |X| Non-Statutory
SHARE Stock Option
TOTAL EXERCISE PRICE $1,360,000 TERM/EXPIRATION 5 years from Date of
DATE 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
16
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
___________________________________ ________________________________
Xxxxxx XxXxxxxxx Title
00 Xxxxxxx Xxxx Xxxx
Xxxxxx, 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 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 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.
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.
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
EXHIBIT C
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
Name of SAR Holder: Xxxxxx XxXxxxxxx
Address of SAR Holder: 00 Xxxxxxx Xxxx Xxxx
Number of SARs: 102,000, each representing a share of Common Stock
Initial SAR Value: $1,020,000
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
51,000 (51,000) FIRST ANNIVERSARY OF
GRANT DATE -- 50%
51,000 (102,000) 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
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.
SUMMIT GLOBAL LOGISTICS, INC.
By:______________________________
Name:
Title:_______________________
ACKNOWLEDGED AND AGREED BY SAR
HOLDER:
Name:
Signature:___________________
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
EXHIBIT D
