Exhibit 10.31
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
this 8th day of November, 2006 by and between Xxxxxx X'Xxxxx, residing at 00
Xxxxxxx Xxxxxxx Xxxxx, Xxx Xxxx Xxxx, XX 00000 (the "Executive"), and Summit
Global Logistics, Inc., a Delaware corporation ("Summit"), and its subsidiaries
(the "Company").
BACKGROUND
WHEREAS, the Executive is expected to make a major contribution to
the growth, profitability and financial strength of the Company; and
WHEREAS, the Company desires to retain the services of the
Executive, and the Executive desires to be retained by the Company, on the terms
and conditions set forth below.
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in this Agreement, the receipt
and sufficiency of which are hereby acknowledged, the Company and Executive
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. The following terms, when used in this Agreement, shall
have the following meanings, unless the context clearly requires otherwise (such
definitions to be equally applicable to both the singular and plural of the
defined terms):
1.1.1 "AFFILIATE" means, (a) with respect to the Executive, any
other Person directly or indirectly Controlling, Controlled by, or under
common Control with the Executive and (b) with respect to the Company, (i)
any Person which directly or indirectly beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) securities or
other equity interests possessing more than 50% of the aggregate voting
power in the election of directors (or similar governing body) represented
by all outstanding securities of the Company or (ii) any Person with
respect to which the Company beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) securities or other equity
interests possessing more than 50% of the aggregate voting power in the
election of directors (or similar governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities or other
equity interests of such Person.
1.1.2 "BASE SALARY" shall have the meaning set forth in section 3.1.
1.1.3 "BOARD" means the Board of Directors of Summit.
1.1.4 "CHANGE IN CONTROL" means the occurrence of any of the
following:
1.1.4.1 the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended)
(the "Act") of beneficial ownership (within the
meaning of Rule 13d-3 of the Act) of more than 50%
of the (A) then outstanding voting stock of Summit;
or (B) the combined voting power of the then
outstanding securities of Summit entitled to vote;
1.1.4.2 an ownership change in which the shareholders of
Summit before such ownership change do not retain,
directly or indirectly, at least a majority of the
beneficial or legal interest in the voting stock of
Summit after such transaction, or in which Summit is
not the surviving company;
1.1.4.3 the direct or indirect sale or exchange by the
beneficial owners (directly or indirectly) of Summit
of all or substantially all of the assets of Summit;
or
1.1.4.4 the bankruptcy of Summit.
1.1.5 "CAUSE" means, as determined by the Company in its sole
discretion, the Executive's
1.1.5.1 material act of dishonesty with respect to the
Company;
1.1.5.2 conviction for a felony, gross misconduct that is
likely to have a material adverse effect on the
Company's business and affairs; or
1.1.5.3 other misconduct, such as excessive absenteeism or
material failure to comply with Company rules.
1.1.6 "CODE" means the Internal Revenue Code of 1986, as amended.
1.1.7 "COMMON STOCK" means the common stock of Summit.
1.1.8 "COMPANY LOCATION" means a Company office consisting of one or
more buildings within 25 miles of each other.
1.1.9 "COMPENSATION COMMITTEE" means the Compensation Committee of
the Board or such other committee designated by the Board that satisfies
any then applicable requirements of the New York Stock Exchange, Nasdaq,
or such other principal national stock exchange on which the Common Stock
is then traded, and which consists of two or
more members of the Board, each of whom shall be an outside director
within the meaning of Section 162(m) of the Code.
1.1.10 "CONFIDENTIAL INFORMATION" means:
1.1.10.1 proprietary information, trade secrets and know-how
of the Company and/or its Affiliates;
1.1.10.2 confidential information relating to the business,
operations, systems, networks, services, data bases,
customer lists, pricing policies, business plans,
marketing plans, product development plans,
strategies, inventions and research of the Company
and/or its Affiliates; and
1.1.10.3 confidential information relating to the financial
affairs and results of operations and forecasts or
projections of the Company and/or its Affiliates;
provided that information shall not constitute Confidential
Information if such information: (i) is generally known or
reasonably knowable by Persons other than the Company or its
Affiliates or Persons employed by, in control of or otherwise
affiliated with the Company or its Affiliates, (ii) is known or
reasonably knowable by Persons other than the Company or its
Affiliates or Persons employed by, in control of or otherwise
affiliated with the Company or its Affiliates, by reason of the
action of such Person or Persons other than the Executive or any
Person acting at the Executive's direction or with the Executive's
prior consent, (iii) was known or reasonably knowable by the
Executive, by lawful means, prior to the date of the Executive's
employment with the Company or (iv) is compelled to be disclosed by
law, regulation or legal process.
1.1.11 "CONTROL" (including the terms "Controlled by" and "under
common Control with") means the possession, directly or indirectly or as a
trustee or executor, of the power to direct or cause the direction of the
management of a Person (including the direction of any Person related to
the Executive), whether through the ownership of stock, as a trustee or
executor, by contract or credit agreement or otherwise.
1.1.12 "DISABILITY" means any physical or mental condition which
renders Executive incapable of performing his essential functions and
duties hereunder for at continuous period of at least 180 days, as
determined in good faith by a physician appointed by the Company.
1.1.13 "EFFECTIVE DATE" means the date of the Closing as defined in
the Purchase Agreement.
1.1.14 "EMPLOYMENT TERM" shall have the meaning set forth in section
2.2.
1.1.15 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
1.1.16 "FISCAL YEAR" means the calendar year.
1.1.17 "GOOD REASON" means the occurrence of any of the following:
1.1.17.1 without the Executive's prior written consent, any
material diminution in the Executive's authority,
duties or responsibilities, including those
pertaining to his status as a director of the Board,
if applicable; provided, however, that prior to any
termination pursuant to this Section 1.1.17.1, the
Company must be given notice by the Executive of
his/her objection to such material diminution and no
less than 20 days to cure the same;
1.1.17.2 any failure by the Company to pay the Executive any
portion of the Base Salary or other payments to
which the Executive is entitled, provided, however,
that prior to any termination pursuant to this
Section 1.1.17.2 on account of the non-payment of
Base Salary, the Company must be given notice by the
Executive of such acts and omissions and no less
than 30 days to cure the same;
1.1.17.3 without the Executive's prior written consent, the
relocation of the principal place of the Executive's
employment to a location a further distance than the
Company Location where the individual was working
immediately prior to the relocation; or
1.1.17.4 a material breach by the Company of any of the
material provisions of this Agreement, provided,
however, that prior to any such termination pursuant
to this Section 1.1.17.4, the Company must be given
notice by the Executive of such acts or omissions
and no less than 20 days to cure the same.
1.1.18 "MANAGEMENT INCENTIVE PLAN" means the Summit Global
Logistics, Inc. 2007 Management Incentive Plan, attached as Exhibit A
hereto.
1.1.19 "PERSON" means an individual, corporation, partnership,
association, limited liability company or partnership, trust, government,
governmental agency or body, or any other group or entity, no matter how
organized and whether or not for profit.
1.1.20 "PURCHASE AGREEMENT" means that certain Equity Purchase
Agreement by and between Maritime Logistics US Holdings Inc., FMI Holdco
I, LLC, FMI Blocker, Inc. and each of the Sellers set forth in Schedule A
thereto, dated as of October 23, 2006.
1.1.21 "TERMINATION DATE" means the date on which the Executive's
employment with the Company terminates for any reason.
1.1.22 "YEAR OF SERVICE" means the completion by the Executive of
Year One, Year Two, Year Three, Year Four or Year Five, or any additional
one-year period under Section 2.2 hereof, as applicable. For purposes of
Section 3.3 hereof, and only for such purposes, partial years of service
will be credited as one (1) Year of Service if the Executive has worked at
least 1,000 hours during the applicable year.
1.1.23 "YEAR ONE" means the 12-consecutive-month period beginning on
the Effective Date and ending on the day immediately prior to the first
day of Year Two.
1.1.24 "YEAR TWO" means the 12-consecutive-month period beginning on
the first anniversary of the Effective Date and ending on the day
immediately prior to the first day of Year Three.
1.1.25 "YEAR THREE" means the 12-consecutive-month period beginning
on the second anniversary of the Effective Date and ending on the day
immediately prior to the first day of Year Four.
1.1.26 "YEAR FOUR" means the 12-consecutive-month period beginning
on the third anniversary of the Effective Date and ending on the day
immediately prior to the first day of Year Five.
1.1.27 "YEAR FIVE" means the 12-consecutive-month period beginning
on the fourth anniversary of the Effective Date and ending on the day
immediately prior to the fifth anniversary of the Effective Date.
ARTICLE 2
EMPLOYMENT AND TERM
2.1 EMPLOYMENT. The Company employs Executive and the Executive hereby
agrees to such employment by the Company during the Employment Term to serve as
Division President of FMI Holdco I, LLC, with the customary duties, authorities
and responsibilities of an officer of a corporation and such other duties,
authorities and responsibilities relative to the Company or its Affiliates that
have been agreed upon in writing by the Company and Executive. This Agreement
supersedes any and all prior agreements between the Executive and the Company or
the Company's predecessors in interest with respect to the Executive's
employment, and any such prior agreements shall be void and of no further force
and effect as of the Effective Date.
2.2 EMPLOYMENT TERM. The "Employment Term" of this Agreement shall
commence on the Effective Date, and unless sooner terminated as provided in
Article 4, shall terminate upon the fifth (5th) anniversary of such date.
Thereafter, and unless sooner terminated
as provided in Article 4, the Employment Term shall automatically be renewed on
each anniversary date of the expiration of the initial Employment Term for a
period of one (1) year, unless and until either the Company or the Executive
terminates such automatic renewal upon sixty (60) days' advance written notice
to the other of an intention not to renew (that is, upon written notice of an
intention not to renew delivered to the other at least sixty (60) days prior to
the beginning of the next one-year period); provided, however, that in no event
shall the Employment Term exceed a period of ten (10) continuous years beginning
with the Effective Date.
2.3 FULL WORKING TIME. During the Employment Term, the Executive shall
devote substantially all of his ability and attention, all of his skill and
experience and efforts during normal business hours and at such other times as
reasonably required for the proper performance of his duties hereunder and to
the business and affairs of the Company. During the Employment Term, the
Executive shall not, either directly or indirectly, actively participate in any
other business or accept any employment or business office whatsoever from any
other Person; provided, however, that the foregoing shall not preclude the
Executive, subject to Article 5, from: (i) serving as a director of any
non-profit or charitable organization, or any company not in competition with
the Company, or (ii) making an investment in any other business, so long as in
any such case, the Executive does not actively participate in such other
business or organization and such activity does not interfere with the
Executive's ability to perform his duties hereunder and does not constitute a
conflict of interest with the Company.
ARTICLE 3
COMPENSATION AND BENEFITS
3.1 BASE SALARY. During the Employment Term, as compensation for services
hereunder and in consideration for the protective covenants set forth in Article
5 of this Agreement, the Executive shall be paid a base salary of Three Hundred
Thousand United Stated Dollars (U.S. $300,000) for Year One, with an annual cost
of living increase of 3% for each of Year Two, Year Three, Year Four and Year
Five, and, if applicable under Section 2.2 hereof, for each additional one-year
period of the Employment Term thereafter, or such greater amount as may from
time to time be approved by the Compensation Committee (the "Base Salary").
Cost-of-living increases shall be effective as of the commencement of Year Two,
Year Three, Year Four and Year Five, respectively, and, if applicable under
Section 2.2 hereof, as of the first day of each additional one-year period of
the Employment Term thereafter, and shall be cumulative. Base Salary shall be
paid to the Executive in accordance with the Company's normal payroll practices.
3.2 BONUSES. The Executive shall receive an annual bonus in accordance
with the terms of a grant agreement made pursuant to the terms of the Management
Incentive Plan (the "Annual Bonus Grant Agreement"). The Executive also shall
receive a multi-year bonus, pursuant to the terms of the Management Incentive
Plan, if certain performance targets are met as of the end of the Employment
Term (the "Multi-Year Bonus Grant Agreement"). The Annual Bonus Grant Agreement
and Multi-Year Bonus Grant Agreement are attached as Exhibits B and C,
respectively, hereto. If the Management Incentive Plan is terminated for any
reason
whatsoever, whether by the Company or any other Person, the Executive shall be
paid the annual bonus and multi-year bonus that otherwise would be payable to
him with respect to the Performance Period within which the termination of such
Plan occurs, notwithstanding the termination of such Plan. For purposes of the
immediately preceding sentence, the Executive's annual bonus and multi-year
bonus that otherwise would be payable to him with respect to the Performance
Period within which the termination of the Management Incentive Plan occurs
shall be identical to that set forth in Exhibits B and C, respectively, hereto,
and shall be fully vested, subject to the satisfaction of the conditions set
forth in Section 5.2 of such Plan.
3.3 RETIREMENT, WELFARE AND FRINGE BENEFITS. To the maximum extent that he
is eligible under the terms of the applicable plan or program, the Executive
shall participate in the current or future plans or programs maintained by the
Company for its employees and/or senior executives that provide insurance,
medical benefits, retirement benefits, or similar fringe benefits, as well as
any additional plans or programs that may be adopted that are generally
applicable to senior executives; provided, however, that if within the
Employment Term, the Executive leaves the employment of the Company and is
eligible for severance benefits, then $7,500 per Year of Service shall be added
to the severance amount in lieu of any forfeited (non-vested) qualified plan
amount. In addition, the Executive shall be entitled to a minimum of twenty (20)
vacation days for each calendar year beginning with or within a Year of Service,
which must be taken in accordance with the Company's vacation policy then in
effect. The Executive shall also be entitled at least six (6) days of sick day
leave, seven (7) personal days leave and seven (7) fixed holidays for each
calendar year beginning with or within a Year of Service, which must be taken in
accordance with the Company's applicable policies then in effect. Unused
vacation days, sick days or personal days shall not carry forward into the
subsequent year. In the event that the Company establishes a more favorable
vacation, sick leave or personal day policy generally applicable to senior
executives, the Executive shall be entitled to any such additional benefits.
During the Employment Term, the Company shall pay the Executive an automobile
allowance, which shall not exceed $1,250 per month, plus an annual inflation
adjustment reflecting market conditions. The Executive is responsible for the
tax consequences of the personal usage of the automobile. The Executive shall be
entitled to a $5,000 per year golf, health, country and/or other recreational
club membership allowance for each Year of Service, to be allocated among the
foregoing as the Executive sees fit. The Executive is responsible for the tax
consequences of the personal usage of the golf, health, country and/or other
recreational club membership. In addition, or in lieu of the Company policy for
executives with respect to annual physical examinations, during each Year of
Service, the Executive shall be reimbursed up to $1000 for an annual physical
examination conducted by a physician designated by the Executive.
3.4 INDEMNIFICATION AND INSURANCE.
3.4.1 D&O INSURANCE. During the entirety of the Employment Term, the
Company shall cause the Executive to be covered by and named as an insured
or as a member of a class of insured under any policy or contract of
insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as an
officer or director of the Company or service in other capacities at its
request ("D&O Insurance Coverage"). The D&O Insurance Coverage
provided to the Executive pursuant to this Section 3.4.1 shall be of the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Company and shall continue
for so long as the Executive shall be subject to personal liability
relating to such service.
3.4.2 EPLI INSURANCE. During the entirety of the Employment Term,
the Company shall cause the Executive to be covered by and named as an
insured or as a member of a class of insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as a
director or officer of the Company, where such personal liability could
arise under or in connection with, or be attributable to, the Company's
employment practices and procedures "EPLI Insurance Coverage"). The EPLI
Insurance Coverage provided to the Executive pursuant to this Section
3.4.2 shall be of the same scope and on the same terms and conditions as
the coverage (if any) provided to other officers or directors of the
Company and shall continue for so long as the Executive shall be subject
to personal liability relating to such service.
3.4.3 INDEMNIFICATION. To the maximum extent permitted under
applicable law, and provided that the Executive has acted within the scope
of his authority hereunder, the Company shall indemnify the Executive
against and hold him harmless from any costs, liabilities, losses and
exposures (each, a "Cost," and collectively, "Costs") to the fullest
extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the Company or
any subsidiary or Affiliate thereof and shall survive the termination of
this Agreement and continue for so long as the Executive shall be subject
to personal liability relating to such service; provided, however, that
the Company shall not indemnify and hold harmless the Executive from a
Cost to the extent that such Cost is attributable to the Executive's (i)
willful misconduct or gross negligence in the performance of his duties or
exercise of his authority hereunder or (ii) material breach of any of the
provisions of this Agreement.
3.5 EXPENSES. The Company shall pay or reimburse the Executive for
reasonable business expenses actually incurred or paid by the Executive during
the Employment Term, in the performance of his services hereunder; provided,
however, that such expenses are consistent with the Company's policy. Such
payment or reimbursement is expressly conditioned upon presentation of expense
statements or vouchers or other supporting documentation by the Executive in a
manner that is acceptable to the Company and otherwise in accordance with the
Company's policy then in effect.
3.6 DEDUCTIONS. The Company shall deduct from all compensation or benefits
payable pursuant to this Agreement such payroll, withholding and other taxes and
medical, pension and other benefits in accordance with the Company's benefit
programs and the Executive's selections and as may in the reasonable opinion of
the Company be required by law and any such additional amounts requested in
writing by the Executive.
ARTICLE 4
TERMINATION
4.1 GENERAL. The Company shall have the right to terminate the employment
of the Executive at any time with or without Cause and the Executive shall be
paid the Standard Termination Entitlements (as defined in Section 4.3.1).
4.2 TERMINATION UNDER CERTAIN CIRCUMSTANCES.
4.2.1 TERMINATION WITHOUT SEVERANCE BENEFITS. In the event the
Executive's employment with the Company is terminated prior to the
expiration of the Employment Term by reason of (i) the Executive's
resignation without Good Reason, (ii) the Executive's death or (iii) the
Executive's discharge by the Company for Cause prior to the occurrence of
a Change in Control, this Agreement shall terminate including, without
limitation, the Company's obligations to provide any compensation,
benefits or severance to the Executive under Article 3 of this Agreement
or otherwise, other than the Standard Termination Entitlements (as defined
in section 4.3.1).
4.2.2 DISABILITY. The Company may terminate the Executive's
employment upon the Executive's Disability. In such event, in addition to
the Standard Termination Entitlements (as defined in section 4.3.1), the
Company shall continue to pay the Executive his Base Salary in accordance
with the Company's normal payroll practices, at the annual rate in effect
for him immediately prior to the termination of his employment, during a
period ending on the earliest of: (a) the date on which long-term
disability insurance benefits are first payable to him under any long-term
disability insurance plan covering employees of the Company; and (b) the
date of his death. A termination of employment due to Disability under
this Section 4.2.2 shall be effected by notice of termination given to the
Executive by the Company and shall take effect on the later of the
effective date of termination specified in such notice or the date on
which the notice of termination is deemed given to the Executive.
4.2.3 TERMINATION WITH SEVERANCE BENEFITS. In the event that the
Executive's employment with the Company is terminated by the Executive
prior to the expiration of the Employment Term for Good Reason or by the
Company prior to the expiration of the Employment Term other than for
Cause or Disability, the Company shall pay the Standard Termination
Entitlements (as defined in section 4.3.1) and the Severance Benefits (as
defined in section 4.3.2); provided, however, that any payment required by
this section 4.2.3 is expressly conditioned upon:
4.2.3.1 The Executive's continued material compliance with
the terms of this Agreement, including, without
limitation, Article 5; and
4.2.3.2 The Executive's resignation from any and all
positions which he holds as an officer, director or
committee member with respect to the Company or any
Affiliate thereof.
4.3 STANDARD TERMINATION ENTITLEMENTS; SEVERANCE BENEFITS.
4.3.1 STANDARD TERMINATION ENTITLEMENTS. For all purposes of this
Agreement, the Executive's "Standard Termination Entitlements" shall mean
and include:
4.3.1.1 the Executive's earned but unpaid compensation as of
the date of his termination of employment. This
payment shall be made at the time and in the manner
prescribed by law applicable to the payment of wages
including, specifically, payment for accrued, but
unused vacation days;
4.3.1.2 reimbursement for reasonable business expenses and
authorized travel expenses incurred but still
outstanding; and
4.3.1.3 the benefits, if any, due to the Executive, and the
Executive's estate, surviving dependents or his
designated beneficiaries under the employee benefit
plans and programs and compensation plans and
programs maintained for the benefit of, or covering,
the officers, executives and employees of the
Company, including, but not limited to, the
Management Incentive Plan. The time and manner of
payment or other delivery of these benefits and the
recipients of such benefits shall be determined
according to the terms and conditions of the
applicable plans and programs.
4.3.2 SEVERANCE BENEFIT. For all purposes of this Agreement, the
Executive's "Severance Benefit" shall mean the benefit set forth in
Schedule A attached hereto.
ARTICLE 5
RESTRICTIVE COVENANTS
5.1 PROPRIETARY INFORMATION.
5.1.1 DISCLOSURE DURING THE EMPLOYMENT TERM. Subject to Section 5.4
hereof, the Executive shall promptly disclose to the Company in such form
and manner as the Company may reasonably require (a) all operations,
systems, services, methods, developments, inventions, improvements and
other information or data pertaining to the business or activities of the
Company and its Affiliates as are conceived, originated, discovered or
developed by the Executive during the Employment Term and (b) such
information and data pertaining to the business, operations, personnel,
activities, financial affairs, and other information relating to the
Company and its Affiliates and their respective customers, suppliers,
employees and other persons having business dealings with the Company and
its Affiliates as may be reasonably required for the Company to operate
its business. It is understood that such information is proprietary in
nature and shall (as between the Company and Executive) be for the
exclusive use and benefit of the
Company and shall be and remain the property of the Company both during
the Employment Term and thereafter.
5.1.2 DISCLOSURE AFTER EMPLOYMENT. In the event that the Executive
leaves the employ of the Company for any reason, including, without
limitation, the expiration of the Employment Term, the Executive shall
deliver to the Company any and all devices (including any lap top,
personal hand-held devices or mobile telephone), records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, materials, equipment, other documents or property
belonging to the Company or any Affiliate thereof or any of their
respective successors or assigns.
5.2 NON-COMPETITION.
5.2.1 PROHIBITION AGAINST COMPETITION. The Executive acknowledges
that during the Employment Term he will become familiar with the Company's
trade secrets and with other confidential information concerning the
Company and that his services have been and will be of special, unique and
extraordinary value to the Company. The Executive agrees that, in
consideration of the payments made to the Executive hereunder, during the
Employment Term and for one year following the Employment Term and/or for
two years following the early termination of the Employment Period for any
reason provided for by Section 4.2 (the "Noncompete Period"), he shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in the provision of logistics
services, including, but not limited to, (a) air and ocean freight
forwarding worldwide, and (b) transloading, warehousing, distribution,
value-added and local and long distance trucking services (the "Business")
throughout North America, anywhere in the United States or, in the case of
the freight forwarding portion of the Business, anywhere in the world.
Nothing herein shall prohibit the Executive from being a passive owner of
not more than 5% of the stock of a publicly held corporation whose stock
is traded on a national securities exchange or in the over-the-counter
market. In the event of a breach of this Section 5.2, the term of the
Noncompete Period shall be extended by a period equal to the length of
such breach. The Executive agrees that these provisions are necessary for
the protection of the Company from unfair competition and that the
national and/or world wide scope of these restrictions is appropriate
given the nature of the Company's business and the position held by the
Executive.
5.2.2 NON-SOLICITATION OF BUSINESS. During the Noncompete Period,
the Executive shall not directly or indirectly solicit or attempt to
solicit business from any person or entity who was a customer of the
Company during the Employment Term. The Executive also agrees that, during
the Noncompete Period, she shall not induce or attempt to induce any
person or entity who was a customer of the Company during the Executive's
Employment Term to end its relationship or cease doing business with the
Company.
5.2.3 NON-SOLICITATION OF EMPLOYEES, OFFICERS, ETC. During the
Noncompete Period, the Executive shall not directly or indirectly induce
or attempt to induce any
officer, employee or consultant of the Company or any Affiliate or
subsidiary of the Company to leave the employ of the Company or such
Affiliate or subsidiary, or in any way interfere with the relationship
between the Company or any such Affiliate or subsidiary and any employee
thereof.
5.3 NON-DISCLOSURE. Except with the prior written consent of the Company
in each instance or as may be reasonably necessary to perform the Executive's
services hereunder, the Executive shall not disclose, use, publish, or in any
other manner reveal, directly or indirectly, at any time during or after the
Employment Term, any Confidential Information relating to the Company or any
Affiliate thereof acquired by him prior to, during the course of, or incident
to, his employment hereunder; provided, however, that necessary or appropriate
disclosures may be made to the Executive's legal counsel.
5.4 OWNERSHIP OF INTELLECTUAL PROPERTY. Subject to applicable law, the
Executive acknowledges and agrees that all work performed, and all ideas,
concepts, materials, products, software; documentation, designs, architectures,
specifications, flow charts, test data, programmer's notes, deliverables,
improvements, discoveries, methods, processes, or inventions, trade secrets or
other subject matter related to the Company's business (collectively,
"Materials") conceived, developed or prepared by the Executive alone, or with
others, during the period of Executive's employment by the Company in written,
oral, electronic, photographic, optical or any other form are the property of
the Company and its successors or assigns, and all rights, title and interest
therein shall vest in the Company and its successors or assigns, and all
Materials shall be deemed to be works made for hire and made in the course of
the Executive's employment by the Company. To the extent that title to any
Materials has not or may not, by operation of law, vest in the Company and its
successors or assigns, or such Materials may not be considered works made for
hire. Notwithstanding the foregoing, the parties acknowledge and understand that
Executive may previously have developed and may continue to develop certain
ideas, concepts and designs which are unrelated to the business of the Company
and may continue to do so provided that such activities do not interfere with
his duties under this Agreement.
5.5 REASONABLE LIMITATIONS. Executive acknowledges that given the nature
of the Company's business, the covenants contained in this Article 5 contain
reasonable limitations as to time, geographical area and scope of activity to be
restrained, and do not impose a greater restraint than is necessary to protect
and preserve the Company's business and to protect the Company's legitimate
business interests. If, however, this Article 5 is determined by any arbitrator
to be unenforceable by reason of its extending for too long a period of time or
over too large a geographic area or by reason of its being too extensive in any
other respect, or for any other reason, it will be interpreted to extend only
over the longest period of time for which it may be enforceable and/or over the
largest geographical area as to which it may be enforceable and/or to the
maximum extent in all other aspects as to which it may be enforceable, all as
determined by such court or arbitrator in such action.
5.6 SURVIVAL OF PROTECTIVE COVENANTS. Each covenant on the part of
Executive contained in this Article 5 shall be construed as an agreement
independent of any other provision
of this Agreement, unless otherwise indicated herein, and shall survive the
termination of Executive's employment under this Agreement.
ARTICLE 6
DISPUTE RESOLUTION
6.1 ARBITRATION OF DISPUTES. Both parties agree that all controversies or
claims that may arise between the Executive and the Company in connection with
this Agreement shall be settled by arbitration. The parties further agree that
the arbitration shall be held in the State of New Jersey, and administered by
the American Arbitration Association under its Commercial Arbitration Rules,
applying New Jersey law.
6.1.1 QUALIFICATIONS OF ARBITRATOR. The arbitration shall be
submitted to a single arbitrator chosen in the manner provided under the
rules of the American Arbitration Association. The arbitrator shall be
disinterested and shall not have any significant business relationship
with either party, and shall not have served as an arbitrator for any
disputes involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her date of
appointment. The arbitrator shall be a person who is experienced and
knowledgeable in employment and executive compensation law and shall be an
attorney duly licensed to practice law in one or more states.
6.1.2 POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of
this Agreement and shall not have the authority to award punitive or
exemplary or damages under any circumstances. The parties shall equally
share the expense of the arbitrator selected and of any stenographer
present at the arbitration. The remaining costs of the arbitrator
proceedings shall be allocated by the arbitrator, except that the
arbitrator shall not have the power to award attorney's fees.
6.1.3 EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render
its decision within thirty (30) days after termination of the arbitration
proceeding, which decision shall be in writing, stating the reasons
therefor and including a brief description of each element of any damages
awarded. The decision of the arbitrator shall be final and binding.
Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
6.2 SERVICE OF PROCESS. The parties agree that service of process may be
made on it by personal service of a copy of the summons and complaint or other
legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to its address specified in Section 7.1 (or
applicable forwarding address), or by any other method of service provided for
under the applicable laws in effect in the applicable jurisdiction.
ARTICLE 7
GENERAL PROVISIONS
7.1 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to the Executive: Xxxxxx X'Xxxxx
00 Xxxxxxx Xxxxxxx Xxxxx
Xxx Xxxx Xxxx, XX 00000
If to the Company: Summit Global Logistics, Inc. and its
Subsidiaries
000 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
with a copy to: Xxxxx X. Xxxxxxx
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
or to such other address as the party to whom notice is given may have
previously furnished to the other parties hereto in writing in the manner set
forth above.
7.2 ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement
between the Executive and the Company with respect to the Company's employment
of the Executive and supersedes any and all prior agreements and understandings,
written or oral, with respect thereto.
7.3 AMENDMENTS AND WAIVERS. Any term of this Agreement or any Schedule,
Exhibit or attachment hereto may be amended only by (a) an instrument in writing
and signed by the party against whom such amendment is sought to be enforced,
and (b) in the case of the Company, such amendment also must be duly authorized
by an appropriate resolution of the Company. In addition, any obligation of this
Agreement or any Schedule, Exhibit or attachment hereto may be waived by the
party against whom the obligation runs by an instrument in writing signed by
that party and delivered to the Company as reasonable time prior to the
effective date of the waiver.
7.4 SUCCESSORS AND ASSIGNS. The Company shall have the right to assign
this Agreement, subject to the Executive's consent which shall not be
unreasonably withheld and subject to. This Agreement shall inure to the benefit
of, and be binding upon (a) the parties
hereto, (b) the heirs, administrators, executors and personal representatives of
the Executive and (c) the successors and assigns of the Company as provided
herein.
7.5 GOVERNING LAW. This Agreement, including the validity hereof and the
rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey without
giving effect to any conflicts of law provisions or rule, that would cause the
application of the laws of any other jurisdiction.
7.6 SEVERABILITY. If any provisions of this Agreement as applied to any
part or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances or the
validity or enforceability of this Agreement.
7.7 NO CONFLICTS. The Executive represents to the Company that the
execution, delivery and performance by the Executive of this Agreement does not
and will not conflict with or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default under any contract,
agreement or understanding, whether oral or written, to which the Executive is
or was a party or of which the Executive is or should be aware.
7.8 SURVIVAL. The rights and obligations of the Company and Executive
pursuant to Articles 4, 5 and 6 shall survive the termination of the Executive's
employment with the Company and the expiration of the Employment Term.
7.9 CAPTIONS. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
7.10 COUNTERPARTS. This Agreement be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
EXECUTIVE
___________________________________
SUMMIT GLOBAL LOGISTICS, INC. AND
ITS SUBSIDIARIES
By:________________________________
Name
Title:
SCHEDULE A
SEVERANCE BENEFIT
The Executive shall be entitled to a severance benefit equal to the
greater of the following two amounts:
o two (2) times his Base Salary as in effect as of the Termination
Date, paid in equal installments on a biweekly basis for two
(2)-year period commencing on the day immediately following the
Termination Date; or
o the benefit payable to him under the Summit Global Logistics, Inc.
Severance Benefit Plan, attached as Exhibit D hereto (each, a
"Severance Benefit"), in accordance with the terms if such Plan.
The Severance Benefit shall be paid in cash, net any and all applicable
withholdings for taxes or otherwise. Payment of any portion of the Severance
Benefit shall be conditioned upon the Executive's execution of a general release
of claims he may have against the Company.
EXHIBIT A
SUMMIT GLOBAL LOGISTICS, INC.
2007 MANAGEMENT INCENTIVE PLAN
I. PURPOSES
1.1 GENERAL. The purposes of the Summit Global Logistics, Inc. 2007
Management Incentive Plan (the "PLAN") are to retain and motivate the Eligible
Employees and Directors of Summit Global Logistics, Inc. (the "COMPANY") or any
Parent or Subsidiary thereof who have been designated by the Committee to
participate in the Plan for a specified Performance Period by providing them
with the opportunity to earn incentive payments based upon the extent to which
specified performance or other goals have been achieved or exceeded for an
applicable Performance Period. Additional definitions are contained in Article
II and certain other Sections of the Plan.
1.2 STATUS OF COMPENSATION FOR "COVERED EMPLOYEES" AS QUALIFIED
PERFORMANCE-BASED COMPENSATION. It is intended that all amounts payable to
Participants who are "covered employees" within the meaning of Section 162(m) of
the Code will constitute "qualified performance-based compensation" within the
meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and
the terms of any awards hereunder to such Participants shall be so interpreted
and construed to the maximum extent possible. Notwithstanding any provision of
the Plan to the contrary, however, an individual Award Agreement, as defined in
Section 4.1(f) hereof, may contain terms that do not comply with the "qualified
performance-based compensation" exception to the applicability of Section 162(m)
of the Code to the Individual Award Opportunity(ies) granted thereunder, in
which case the provisions of the individual Award Agreement shall take
precedence over the provisions of the Plan with respect to compliance with such
exception.
II. CERTAIN DEFINITIONS
2.1 "AFFILIATE" shall mean
(a) any Person which directly or indirectly beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by all
outstanding securities of the Company; or
(b) any Person with respect to which the Company beneficially owns
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
2.2 "BASE SALARY" shall mean a Participant's "Base Salary" as such term is
defined in the Employment Agreement.
2.3 "BOARD" shall mean the Board of Directors of the Company.
2.4 "BUSINESS ENTITY" shall mean (i) the Company or (ii) any Parent or
Subsidiary thereof.
2.5 "BUSINESS ENTITY LOCATION" means a Business Entity office consisting
of one or more buildings within 25 miles of each other.
2.6 "CAUSE" shall mean "Cause," as defined in the Participant's Employment
Agreement or Director's Agreement, and in the absence of such definition, Cause
shall mean, as determined by the Committee in its sole discretion, the
Participant's
(a) material act of dishonesty with respect to the Business Entity
that employs the Participant;
(b) conviction for a felony, gross misconduct that is likely to
have a material adverse effect on the business and affairs of
the Business Entity that employs the Participant; or
(c) other misconduct, such as excessive absenteeism or failure to
comply with the rules of the Business Entity that employs the
Participant.
2.7 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.8 "COMMITTEE" shall mean the Compensation Committee of the Board or such
other committee designated by the Board that satisfies any then applicable
requirements of the New York Stock Exchange, NASDAQ, or such other principal
national stock exchange on which the Common Stock is then traded, to constitute
a compensation committee, and which consists of two or more members of the
Board, each of whom may be an "outside director" within the meaning of Section
162(m) of the Code. Notwithstanding the foregoing, in the case of any Individual
Award Opportunity granted to any Participant who is a "covered employee" within
the meaning of Section 162(m) of the Code, the Committee shall consist solely of
two or more members of the Board who are "outside directors" within the meaning
of such Section.
2.9 "COMMON STOCK" shall mean common stock of the Company, par value of
$.001 per share.
2.10 "COMPANY" shall mean Summit Global Logistics, Inc., and any successor
thereto, and shall include any other business venture in which the Company has a
direct or indirect significant interest, as determined by the Committee in its
sole discretion.
2.11 "CONTROL" (including the terms "Controlled by" and "under common
Control with") means the possession, directly or indirectly or as a trustee or
executor, of the power to direct or cause the direction of the management of a
Person, whether through the ownership of stock, as a trustee or executor, by
contract or credit agreement or otherwise.
2.12 "DETERMINATION PERIOD" shall mean, with respect to any Performance
Period, a period commencing on or before the first day of the Performance Period
and ending not later than the earlier of (i) 90 days after the commencement of
the Performance Period and (ii) the
date on which twenty-five percent (25%) of the Performance Period has been
completed. Any action required to be taken within a Determination Period may be
taken at a later date if permissible under Section 162(m) of the Code or
regulations promulgated thereunder, as they may be amended from time to time.
2.13 "DIRECTOR" shall mean a member of the Board or the board of directors
of a Parent or Subsidiary who is not an Employee.
2.14 "DIRECTOR'S AGREEMENT" shall mean the Participant's agreement with
the Company or any Parent or Subsidiary thereof to serve as a non-Employee
director of the Business Entity.
2.15 "DISABILITY" shall mean any physical or mental condition which
renders the Participant incapable of performing his or her essential functions
and duties as an Employee for a continuous period of at least 180 days, as
determined in good faith by a physician appointed by the Business Entity that
employs the Participant.
2.16 "EFFECTIVE DATE" shall mean January 1, 2007.
2.17 "ELIGIBLE EMPLOYEE" shall mean an employee of the Company or any
Parent or Subsidiary thereof, but only if the employee is reported as such in
the payroll records of such Business Entity.
2.18 "ERISA" shall mean the Employee Retirement Income Security Act of
1974 as currently in effect, and as it may be amended from time to time.
2.19 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
2.20 "FISCAL YEAR" shall mean the calendar year.
2.21 "FUNDAMENTAL TRANSACTION" shall mean that the Company shall, directly
or indirectly, in one or more related transactions effected after the Effective
Date:
(a) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person;
(b) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company
to another Person;
(c) be the subject of a purchase, tender or exchange offer by
another Person that is accepted by the holders of more than
50% of the outstanding shares of voting stock of the Company;
or
(d) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme or arrangement) with
another Person whereby such other Person acquires more than
the 50% of the outstanding shares of Common Stock.
In addition, a "Fundamental Transaction" shall occur if, after the Effective
Date, any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) shall become the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of
the aggregate ordinary voting power represented by issued and outstanding Common
Stock.
2.22 "GOOD REASON" shall mean "Good Reason," as defined in the
Participant's Employment Agreement or Director's Agreement, and in the absence
of such definition, shall mean:
(a) without the Participant's prior written consent, any material
diminution in the Participant's authority, duties or
responsibilities, including those pertaining to his or her
status as a director, if applicable, provided, however, that
prior to any termination pursuant to this Section 2.22(a), the
applicable Business Entity must be given notice by the
Participant of his/her objection to such material diminution
and no less than 20 days to cure the same;
(b) any failure by the Business Entity to pay the Participant any
portion of the Base Salary to which the Participant is
entitled under Section 2.2 or any payments to which the
Participant is entitled under his or her Employment Agreement,
if applicable, provided, however, that prior to any
termination on account of the non-payment of Base Salary, the
Business Entity must be given notice by the Participant of
such acts or omissions and no less than 30 days to cure the
same;
(c) without the Participant's prior written consent, the
relocation of the principal place of the Participant's
employment to a location a further distance than the Business
Entity Location where the individual was working immediately
prior to the relocation; or
(d) a material breach by the Business Entity of any of the
material provisions of this Plan, provided, however, that
prior to any termination pursuant to
this Section 2.22(d), the applicable Business Entity must be
given notice by the Participant of such acts or omissions and
no less than 20 days to cure the same.
2.23 "INDIVIDUAL AWARD OPPORTUNITY" shall mean the potential of a
Participant to receive an incentive payment based on the extent to which the
applicable performance or other goals for a Performance Period shall have been
satisfied. An Individual Award Opportunity may be expressed in U.S. dollars or
pursuant to a formula that is consistent with the provisions of the Plan.
2.24 "PARENT" shall mean a "parent corporation," within the meaning of
Section 424(e) of the Code, with respect to the Company or an entity, directly
or indirectly, in Control of the Company.
2.25 "PARTICIPANT" shall mean an Eligible Employee who is designated by
the Company to participate in the Plan for a Performance Period, in accordance
with Article III.
2.26 "PERFORMANCE PERIOD" shall mean a one (1), two (2), three (3), four
(4) or five (5) Fiscal Year period for which performance or other goals are
established pursuant to Article IV.
2.27 "PERSON" shall mean a person within the meaning of Section 3(a)(9) of
the Exchange Act.
2.28 "PLAN" shall mean the Summit Global Logistics, Inc. 2007 Management
Incentive Plan, as set forth herein, as it may be amended from time to time.
2.29 "QUALIFIED SUCCESSOR" shall have the meaning ascribed thereto in the
Employment Agreement or Director's Agreement, as applicable. If such term does
not appear in the Employment Agreement or Director's Agreement, all Plan
provisions in respect of a Qualified Successor shall be null and void with
respect to the affected Participant.
2.30 "RETIREMENT" shall mean the voluntary termination of the Participant
at any time on or after attaining age 65.
2.31 "SUBSIDIARY" shall mean a "subsidiary corporation," within the
meaning of Section 424(f) of the Code, with respect to the Company, or an
entity, directly or indirectly, Controlled by the Company.
III. ADMINISTRATION
3.1 GENERAL. The Plan shall be administered by the Committee, which shall
have the full power and authority to interpret, construe and administer the Plan
and any Individual Award Opportunity granted hereunder (including reconciling
any inconsistencies, correcting any defects and addressing any omissions).
3.2 POWERS AND RESPONSIBILITIES. The Committee shall have the following
discretionary powers, rights and responsibilities in addition to those described
in Section 3.1.
(a) to designate within the Determination Period the Participants
for a Performance Period;
(b) to establish within the Determination Period the performance
goals and other terms and conditions that are to apply to each
Participant's Individual Award Opportunity;
(c) to determine in writing prior to the payment under any
Individual Award Opportunity that the performance goals for a
Performance Period and other material terms applicable to the
Individual Award Opportunity have been satisfied;
(d) to grant Individual Award Opportunities for Participants who
are not "covered employees" within the meaning of Section
162(m) of the Code based upon the attainment of performance
goals that do not constitute "objective performance goals"
within the meaning of Section 162(m) of the Code;
(e) to adopt, revise, suspend, waive or repeal, when and as
appropriate, in its sole and absolute discretion, such
administrative rules, guidelines and procedures for the Plan
as it deems necessary or advisable to implement the terms and
conditions of the Plan.
3.3 DELEGATION OF POWER. The Committee may delegate some or all of its
power and authority hereunder to the President and Chief Executive Officer of
the Company or other executive officer of the Company or, with respect to a
Subsidiary, the shareholders of such Subsidiary, as the Committee deems
appropriate. Notwithstanding the foregoing, with respect to any person who is a
"covered employee" within the meaning of Section 162(m) of the Code or who, in
the Committee's judgment, is likely to be a covered employee at any time during
the applicable Performance Period, only the Committee shall be permitted to (i)
designate such person to participate in the Plan for such Performance Period,
(ii) establish performance goals and Individual Award Opportunities for such
person, and (iii) certify the achievement of such performance goals. For
purposes of the immediately preceding sentence, "Committee" shall mean two or
more members of the Board who are "outside directors" within the meaning of
Section 162(m) of the Code.
IV. PERFORMANCE GOALS AND OTHER CRITERIA
4.1 ESTABLISHING PERFORMANCE GOALS AND OTHER CRITERIA.
(a) ROLE OF COMMITTEE. The Committee shall establish within the
Determination Period of each Performance Period (i) one or
more objective performance goals for each Participant or for
any group of Participants (or both), provided that the outcome
of each goal is substantially uncertain at the time the
Committee establishes such goal and/or (ii) other criteria,
including, but not limited to, performance criteria that do
not satisfy the requirements of Treasury Regulation Section
1.162-
27(e)(2) or time vesting criteria, the satisfaction of which
is required for the payment of an Individual Award
Opportunity.
(b) PERFORMANCE FACTORS. Performance goals shall be based
exclusively on one or more of the following objective Company
(including any division or operating unit thereof) or
individual measures, stated in either absolute terms or
relative terms, such as rates of growth or improvement, the
attainment by a share of Common Stock of a specified fair
market value for a specified period of time, earnings per
share, earnings per share excluding non-recurring, special or
extraordinary items, return to stockholders (including
dividends), return on capital, return on total capital
deployed, return on assets, return on equity, earnings of the
Company before or after taxes and/or interest, revenues,
revenue increase, repeat purchase rate, recurring revenue,
recurring revenue increase, market share, cash flow or cost
reduction goals, cash flow provided by operations, net cash
flow, short-term or long-term cash flow return on investment,
interest expense after taxes, return on investment, return on
investment capital, economic value created, operating margin,
gross profit margin, net profit margin, pre-tax income margin,
net income margin, net income before or after taxes, pretax
earnings before interest, depreciation and amortization,
pre-tax operating earnings after interest expense and before
incentives, and/or extraordinary or special items, operating
earnings, net cash provided by operations, and strategic
business criteria, consisting of one or more objectives based
on meeting specified market penetration, geographic business
expansion goals, cost targets, customer satisfaction,
reductions in errors and omissions, reductions in lost
business, management of employment practices and employee
benefits, supervision of litigation and information
technology, quality and quality audit scores, productivity,
efficiency, and goals relating to acquisitions or
divestitures, or any combination of the foregoing.
(c) PARTICIPANTS WHO ARE COVERED EMPLOYEES. Subject to Section 1.2
hereof, with respect to Participants who are "covered
employees" within the meaning of Section 162(m) of the Code or
who, in the Committee's judgment, are likely to be covered
employees at any time during the applicable Performance
Period, an Individual Award Opportunity may be based only on
performance factors that are compliant with the requirements
of Treasury Regulation Section 1.127-27(e)(2). For this
purpose, the factors listed in Section 4.1(b) shall be deemed
to be compliant with the requirements of such Treasury
Regulation.
(d) PARTICIPANTS WHO ARE NOT COVERED EMPLOYEES. With respect to
Participants who are not "covered employees" within the
meaning of Section 162(m) of the Code and who, in the
Committee's judgment, are not likely to be covered employees
at any time during the applicable Performance Period, the
performance goals established for the Performance Period may
consist of any objective Company (including any
division or operating unit thereof) or individual measures,
whether or not listed in (b) above or whether or not compliant
with the requirements of Treasury Regulation Section
1.162-27(e)(2). Without in any way limiting the generality of
the foregoing, such performance goals may include subjective
goals, the satisfaction of which shall be determined by the
Committee, in its sole and absolute discretion. Performance
goals shall be subject to such other special rules and
conditions as the Committee may establish at any time within
the Determination Period.
(e) SPECIFIC LEVELS OF PERFORMANCE. Each Individual Award
Opportunity that is based upon performance shall set forth
specific levels of performance required during the applicable
Performance Period in order for the Participant to be eligible
for payment of such amounts.
(f) AWARD AGREEMENTS. Each grant of an Individual Award
Opportunity hereunder shall be made pursuant to an award grant
agreement ("Award Agreement").
4.2 IMPACT OF EXTRAORDINARY ITEMS OR CHANGES IN ACCOUNTING. The measures
utilized in establishing performance goals under the Plan for any given
Performance Period shall be determined in accordance with generally accepted
accounting principles ( "GAAP") and in a manner consistent with the methods used
in the Company's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or restructuring or
impairment charges, as determined by the Company's independent public
accountants in accordance with GAAP or (ii) changes in accounting, unless, in
each case, the Committee decides otherwise within the Determination Period.
V. INDIVIDUAL AWARD OPPORTUNITIES
5.1 TERMS. At the time performance goals are established for a Performance
Period, the Committee also shall establish an Individual Award Opportunity for
each Participant or group of Participants, which shall be based on the
achievement of one or more specified targets of performance goals. The targets
shall be expressed in terms of an objective formula or standard which may, at
the discretion of the Committee, be based upon the Participant's Base Salary or
a multiple thereof. Unless otherwise provided in the applicable Award Agreement,
to the extent that any such award is made to a Covered Employee within the
meaning of Section 162(m) of the Code, such formula or formulas shall be fixed
by the Committee not later than the later of (x) ninety (90) days after the
commencement of the performance period; or (y) the expiration of one-quarter
(1/4) of the performance period.
5.2 INCENTIVE PAYMENTS. Payments under Individual Award Opportunities
shall be in cash and at the time determined by the Committee after the end of
the Performance Period for which the Individual Award Opportunities are payable,
except that, to the extent that such Individual Award Opportunities are based
upon performance criteria that refer to or are dependent upon the Company's
financial statements, no such payment shall be due, and Participants have no
right to payments, unless and until the Committee, based (to the extent
applicable) on the Company's audited financial statements for the Company's
taxable year in which such Performance Period ends (as prepared and reviewed by
the Company's independent
public accountants), has certified in writing the extent to which the applicable
performance goals for such Performance Period have been satisfied. Subject to
Sections 5.3 and 5.4 hereof, once this certification is made by the Committee,
the Participant's rights to payment under any and all Individual Award
Opportunities with respect to the Performance Period to which the certification
applies shall be fully vested and non-forfeitable for any reason.
Notwithstanding any provision of this Plan to the contrary, all payments to a
Participant under an Individual Award Opportunity for a given Performance Period
must be made to the Participant no later than (i) the 15th day of the third
month following the Participant's first taxable year in which the Individual
Award Opportunity is no longer subject to a "substantial risk for forfeiture "
(within the meaning of Section 409A of the Code) or (ii) the 15th day of the
third month following the end of the Company's fiscal year in which the
Incentive Award Opportunity is no longer subject to a "substantial risk of
forfeiture" (within the meaning of Section 409A of the Code).
5.3 PAYMENTS OF ANNUAL INDIVIDUAL AWARD OPPORTUNITIES IN THE EVENT OF
DEATH, DISABILITY, TERMINATION FOR CAUSE, TERMINATION OTHER THAN FOR CAUSE,
TERMINATION FOR GOOD REASON, TERMINATION OTHER THAN FOR GOOD REASON OR
RETIREMENT. Notwithstanding any provision of this Plan to the contrary, payments
in the event of the occurrence of any of the following events during an
applicable one-Fiscal Year Performance Period shall be made as follows:
(a) DEATH. In the event of a Participant's death during an
applicable one-Fiscal Year Performance Period, the Individual
Award Opportunity payable to the Participant with respect to
such one-Fiscal Year Performance Period shall be forfeited in
full.
(b) DISABILITY. In the event of a Participant's Disability during
an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity payable to the Participant with
respect to such one-Fiscal Year Performance Period shall be
the maximum amount payable under the Incentive Award
Opportunity for that one-Fiscal Year Performance Period, as
determined by the Committee as of the end of the one-Fiscal
Year Performance Period, multiplied by a fraction, the
numerator of which is the number of full consecutive months of
the Participant's employment during the one-Fiscal Year
Performance Period prior to his or her Disability, and the
denominator of which is 12. Whether the Participant has
sustained a Disability shall be determined by the Committee in
its sole discretion, but in good faith. For this purpose, the
Committee may require the Participant to submit medical
evidence of Disability; provided, however, that any such
requirement shall comply with the applicable requirements of
the Health Insurance Portability and Accountability Act of
1996, as amended. Payment of any Individual Award Opportunity
on account of the Participant's Disability shall be made in a
single lump sum.
(c) TERMINATION FOR CAUSE. In the event of the Participant's
termination of employment by a Business Entity for Cause
during an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity granted to the Participant with
respect to such one-Fiscal Year Performance Period shall be
immediately forfeited in full. Whether a
Participant has committed an act or omitted an action that
constitutes grounds for a termination for Cause shall be
determined by the Committee in its sole discretion, but in
good faith.
(d) TERMINATION OTHER THAN FOR CAUSE. In the event of the
Participant's termination of employment by a Business Entity
other than for Cause during an applicable one-Fiscal Year
Performance Period, the Individual Award Opportunity payable
to the Participant with respect to such one-Fiscal Year
Performance Period shall be the maximum amount payable under
the Individual Award Opportunity for that one-Fiscal Year
Performance Period, as determined by the Committee as of the
end of the one-Fiscal Year Performance Period, multiplied by a
fraction, the numerator of which is the number of full
consecutive months of the Participant's employment during the
one-Fiscal Year Performance Period prior to his or her
termination other than for Cause, and the denominator of which
is 12. Any Individual Award Opportunity that becomes payable
on account of the termination of a Business Entity's
termination of the Participant's employment other than for
Cause shall be payable only after the Committee certifies that
the applicable performance objective(s) or other criteria with
respect to the Individual Award Opportunity have been
satisfied. Payment of any Individual Award Opportunity on
account of the Participant's termination of employment by a
Business Entity other than for Cause shall be made in a single
lump sum.
(e) TERMINATION BY PARTICIPANT FOR GOOD REASON. In the event of
the Participant's termination of employment for Good Reason
during an applicable one-Fiscal Year Performance Period, the
Individual Award Opportunity payable to the Participant with
respect to such one-Fiscal Year Performance Period shall be
the maximum amount payable under the Individual Award
Opportunity for that one-Fiscal Year Performance Period, as
determined by the Committee as of the end of the one-Fiscal
Year Performance Period, multiplied by a fraction, the
numerator of which is the number of full consecutive months of
the Participant's employment during the one-Fiscal Year
Performance Period prior to his or her termination for Good
Reason, and the denominator of which is 12. Whether the
Participant has sustained a Good Reason event shall be
determined by the Committee in its sole discretion, but in
good faith. Any Individual Award Opportunity that becomes
payable on account of the termination of employment for Good
Reason shall be payable only after the Committee certifies
that the applicable performance objective(s) or other criteria
with respect to the Individual Award Opportunity have been
satisfied. Payment of any Individual Award Opportunity on
account of the Participant's termination of employment for
Good Reason shall be made in a single lump sum.
(f) TERMINATION BY PARTICIPANT OTHER THAN FOR GOOD REASON. Subject
to Section 5.3(g) of the Plan, in the event of the
Participant's voluntary termination of employment other than
for Good Reason during an applicable one-Fiscal Year
Performance Period, the Individual Award
Opportunity granted to the Participant with respect to such
one-Fiscal Year Performance Period shall be immediately
forfeited in full.
(g) RETIREMENT. If the event of a Participant's Retirement during
an applicable Performance Period, the Individual Award
Opportunity payable to the Participant with respect to such
Performance Period shall be the maximum amount payable for
that Performance Period, as determined by the Committee as of
the end of the Performance Period, multiplied by a fraction,
the numerator of which is the number of full consecutive
months of the Participant's employment during the Performance
Period prior to his or her termination on account of
Retirement, and the denominator of which is 12. Any Individual
Award Opportunity that becomes payable on account of the
Participant's Retirement shall be payable only after the
Committee certifies that the applicable performance
objective(s) or other criteria with respect to the Individual
Award Opportunity have been satisfied. Payment of any
Individual Award Opportunity on account of the Participant's
Retirement shall be made in a single lump sum.
5.4 SPECIAL MULTI-YEAR PERFORMANCE PERIOD PAYMENT RULES.
(a) IN GENERAL. Except as provided in Section 5.4 (b) or (c)
hereof, if the Participant's employment terminates for any
reason whatsoever during a Performance Period equaling or
exceeding two (2) years and prior to the time payment with
respect to the applicable Individual Award Opportunity
otherwise would be made, the Individual Award Opportunity
payable to the Participant with respect to such multi-year
Performance Period shall be forfeited in full.
(b) DISABILITY. Section 5.4(a) shall not apply if the
Participant's termination of employment occurs on account of
his or her Disability on or after October 1 of the last Fiscal
Year comprising a Performance Period equaling or exceeding two
(2) years.
(c) OCCURRENCE OF FUNDAMENTAL TRANSACTION. In the event of a
Fundamental Transaction, the Individual Award Opportunity
payable to the Participant with respect to the Performance
Period within which the Fundamental Transaction occurs shall
fully vest and be payable to the Participant in accordance
with the terms of the applicable Award Agreement; provided,
however, that the payment shall be made in immediately
available funds, from the proceeds of the sale giving rise to
the Fundamental Transaction (by the Company in the case of a
Fundamental Transaction occurring )in a single lump sum, no
later than ten (10) days following the consummation of all
events contemplated by the Fundamental Transaction.
5.5 PAYMENTS AND PARACHUTE AWARDS. Notwithstanding any provision of this
Plan to the contrary, but subject to any conflicting provisions in any
Participant's Employment Agreement, if, in connection with a Fundamental
Transaction, a tax under Section 4999 of the Code would be imposed on the
Participant (after taking into account the exceptions set forth in Sections
280G(b)(4) and 280G(b)(5) of the Code), then the Company shall pay the
Participant an amount equal to the tax under Section 4999.
VI. GENERAL
6.1 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall be effective for
Performance Periods beginning on or after the later of the date it is adopted by
the Committee or the date it is approved by the Company's stockholders of the
Company (the "Effective Date"). This Plan shall terminate as of the tenth
anniversary of the Effective Date, unless terminated earlier by the Committee.
In the event that this Plan is not approved by the stockholders of the Company,
this Plan shall be null and void.
6.2 AMENDMENT OR TERMINATION OF PLAN. The Committee may amend or terminate
this Plan as it shall deem advisable, subject to any requirement of stockholder
approval required by applicable law, rule or regulation, including Section
162(m) of the Code. Notwithstanding any provision of this Plan to the contrary,
if a Business Entity has executed a definitive acquisition or similar agreement
pursuant to which a Fundamental Transaction will occur upon the closing of the
transaction(s) contemplated thereby, the Committee, in its sole discretion, may
treat the execution of such agreement itself as triggering a Fundamental
Transaction.
6.3 NON-TRANSFERABILITY OF AWARDS. No award under the Plan shall be
transferable other than by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company. Except
to the extent permitted by the foregoing sentence, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.
6.4 TAX WITHHOLDING AND DEDUCTIONS. The Company shall have the right to
require, prior to the payment of any amount pursuant to an award made hereunder,
payment by the Participant of any Federal, state, local, foreign or other taxes
which may be required to be withheld or paid in connection with such award. It
is intended that the Company's contributions under the Plan will be deductible
to the Company when benefits are received by the Participant under Section
404(a)(5) of the Code, and the Participant shall be taxed on the benefits upon
actual receipt of payments under Section 61 of the Code.
6.5 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any
right to participate in this Plan. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company or any Parent or Subsidiary thereof Company, or affect in any manner the
right of the Company, or any Parent or Subsidiary thereof to terminate the
employment of any person at any time without liability hereunder.
6.6 ARBITRATION OF DISPUTES. Both parties agree that all controversies or
claims that may arise between the Participant and the Company in connection with
this Plan shall be settled by arbitration. The parties further agree that the
arbitration shall be held in the State of New Jersey, and administered by the
American Arbitration Association under its Commercial Arbitration Rules,
applying New Jersey law, except to the extent such law is preempted by ERISA.
(a) QUALIFICATIONS OF ARBITRATOR. The arbitration shall be submitted
to a single arbitrator chosen in the manner provided under the rules of
the American Arbitration Association. The arbitrator shall be
disinterested and shall not have any significant business relationship
with either party, and shall not have served as an arbitrator for any
disputes involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her date of
appointment. The arbitrator shall be a person who is experienced and
knowledgeable in employment and executive compensation law and shall be an
attorney duly licensed to practice law in one or more states.
(b) POWERS OF ARBITRATOR. The arbitrator shall not have the
authority to grant any remedy which contravenes or changes any term of
this Plan and shall not have the authority to award punitive or exemplary
or damages under any circumstances. The parties shall equally share the
expense of the arbitrator selected and of any stenographer present at the
arbitration. The remaining costs of the arbitrator proceedings shall be
allocated by the arbitrator, except that the arbitrator shall not have the
power to award attorney's fees.
(c) EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render its
decision within thirty (30) days after termination of the arbitration
proceeding, which decision shall be in writing, stating the reasons
therefor and including a brief description of each element of any damages
awarded. The decision of the arbitrator shall be final and binding.
Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
6.7 GOVERNING LAW. This Plan and each award hereunder, and all
determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the laws of the United States, shall be governed by the
laws of the State of New Jersey and construed in accordance therewith without
giving effect to principles of conflicts of laws.
6.8 OTHER PLANS. Neither the adoption of the Plan nor the submission of
the Plan to the Company's stockholders for their approval shall be construed as
limiting the power of the Board or the Committee to adopt such other incentive
arrangements as it may otherwise deem appropriate.
6.9 BINDING EFFECT. The Plan shall be binding upon the Company and its
successors and assigns and the Participants and their Beneficiaries, personal
representatives and heirs. If the Company becomes a party to any merger,
consolidation or reorganization, then the Plan shall remain in full force and
effect as an obligation of the Company or its successors in interest, unless the
Plan is amended or terminated pursuant to Section 6.2.
6.10 NO TRUST OR ERISA PLAN CREATED. Nothing contained herein shall be
deemed to create a trust of any kind or create any fiduciary relationship. Funds
invested hereunder shall continue for all purposes to be a part of the general
funds of the Company and no person, other than the Company, shall by virtue of
the provisions of this Plan, have any interest in such funds. To the extent that
any person acquires a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the
Company. Further, no provision of this Plan shall be construed as subjecting the
Plan, or any portion thereof, to any provisions of ERISA, it being the express
intention of the Company that this Plan be so construed.
APPROVALS
2007 MANAGEMENT INCENTIVE PLAN:
Adopted by the Compensation Committee of
the Board of Directors on: November 8, 2006
-------------------------
Approved by the Stockholders on: November 8, 2006
-------------------------
EXHIBIT B
ANNUAL BONUS GRANT AGREEMENT
THIS ANNUAL BONUS GRANT AGREEMENT ("Agreement") is made and entered into
this __ day of __________, 2007, (the "Effective Date") by and between Xxxxxx
X'Xxxxx (the "Executive") and Summit Global Logistics, Inc., a Delaware
corporation, and its subsidiaries (the "Company").
BACKGROUND
WHEREAS, Section 3.2 of that certain Employment Agreement made and
entered into the 8th day of November, 2006 by and between the Executive and the
Company (the "Employment Agreement") requires the Company, pursuant to the terms
of the Management Incentive Plan, as defined in the Employment Agreement, to
make annual bonus payments to the Executive for each Year of Service, as defined
in the Employment Agreement;
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in the Employment Agreement,
the receipt and sufficiency of which are hereby acknowledged, the Executive and
the Company agree as follows:
1. DEFINITIONS. The following terms, when used in this Agreement,
shall have the following meanings, unless the context clearly requires otherwise
(such definitions to be equally applicable to both the singular and plural of
the defined terms):
1.1 "BASE SALARY" shall have the meaning ascribed thereto in
the Management Incentive Plan.
1.2 "BONUS" means the annual incentive bonus to be paid
hereunder with respect to a given Fiscal Year.
1.3 "EBITDA" means FMI's earnings before income tax, plus
depreciation and amortization, as computed in accordance with United
States GAAP and in a manner consistent with the methods used in
FMI's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or
restructuring or impairment charges, as determined by FMI's
independent public accountants in accordance with GAAP or (ii)
changes in accounting, unless, in each case, the Committee, as
defined in the Management Incentive Plan, decides otherwise within
the Determination Period, as defined in the Management Incentive
Plan.
1.4 "EBITDA TARGET" means FMI's EBITDA for Fiscal Year 2007,
2008, 2009 or 2010, as applicable.
1.5 "FISCAL YEAR" means the calendar year.
1.6 "FMI" means FMI Holdco I, LLC.
1.7 "GAAP" means generally accepted accounting principles.
1.8 "PERFORMANCE PERIOD" shall have the meaning ascribed
thereto in the Management Incentive Plan.
2. EBITDA TARGETS.
2.1 The EBITDA Target for Fiscal Year 2007 shall be
$__________.
2.2 The EBITDA Target for Fiscal Year 2008 shall be
$__________.
2.3 The EBITDA Target for Fiscal Year 2009 shall be
$__________.
2.4 The EBITDA Target for Fiscal Year 2010 shall be
$__________.
3. ANNUAL INCENTIVE BONUSES.
3.1 The Bonus for each of Fiscal Year 2007, Fiscal Year 2008,
Fiscal Year 2009 and Fiscal Year 2010 shall be as follows:
3.1.1 If at least 80% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 45% of his
Base Salary for the Performance Period beginning with or
within such Fiscal Year.
3.1.1.2 If at least 90% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 67.5% of
his Base Salary for the Performance Period beginning
with or within such Fiscal Year.
3.1.1.3 If at least 100% of the EBITDA Target for the
applicable Fiscal Year is achieved, the Executive shall
receive a Bonus for such Fiscal Year equal to 90% of his
Base Salary for the Performance Period beginning with or
within such Fiscal Year.
3.1.1.4 For each percentage point, up to 50 percentage
points by which the EBITDA Target for the applicable
Fiscal Year is exceeded, the Executive shall receive an
additional Bonus equal to 2.7% of his Base Salary.
3.1.1.5 For each percentage point over 50 percentage
points, up to 50 additional points, by which the EBITDA
Target for the applicable Fiscal Year is exceeded, the
Executive shall receive an additional Bonus equal to
3.6% of his Base Salary.
3.2 Except as otherwise provided herein, bonus amounts shall
be payable to the Executive in accordance with the terms and
conditions of the Management Incentive Plan.
4. MANAGEMENT INCENTIVE PLAN. The terms and conditions of the
Management Incentive Plan are hereby incorporated herein by reference, and the
Executive and the Company shall comply with all of the terms thereof applicable
to annual incentive awards. In the event of any conflict between the terms of
this Agreement and the terms of the Management Incentive Plan, the terms of the
Management Incentive Plan shall govern.
5. AMENDMENT AND TERMINATION. The Company may not amend or terminate
this Agreement without the written consent of the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE
__________________________________
SUMMIT GLOBAL LOGISTICS, INC. AND
ITS SUBSIDIARIES
By:_______________________________
Name
Title:
EXHIBIT C
MULTI-YEAR BONUS GRANT AGREEMENT
THIS MULTI-YEAR BONUS GRANT AGREEMENT ("Agreement") is made and entered into
this __ day of __________, 2007, (the "Effective Date") by and between Xxxxxx
X'Xxxxx (the "Executive") and Summit Global Logistics, Inc., a Delaware
corporation, and its subsidiaries (the "Company").
BACKGROUND
WHEREAS, Section 3.2 of that certain Employment Agreement made and
entered into the 8th day of November, 2006 by and between the Executive and the
Company (the "Employment Agreement") requires the Company, pursuant to the terms
of the Management Incentive Plan, as defined in the Employment Agreement, to
make a multi-year bonus payment to the Executive if certain performance targets
of the Company are satisfied as of the end of the Employment Term, as defined in
the Employment Agreement;
NOW, THEREFORE, intending to be legally bound, and in consideration
of the premises and the mutual promises set forth in the Employment Agreement,
the receipt and sufficiency of which are hereby acknowledged, the Executive and
the Company agree as follows:
1. DEFINITIONS. The following terms, when used in this Agreement,
shall have the following meanings, unless the context clearly requires otherwise
(such definitions to be equally applicable to both the singular and plural of
the defined terms):
1.1 "BASE SALARY" shall have the meaning ascribed thereto in
the Management Incentive Plan.
1.2 "BONUS" means the multi-year incentive bonus to be paid
hereunder with respect to the Employment Term.
1.3 "DELTA ONE" means the excess, if any, of EBITDA for Fiscal
Year 2009 over the EBITDA Target for Fiscal Year 2007.
1.4 "DELTA TWO" means the excess, if any, of EBITDA for Fiscal
Year 2010 over the EBITDA Target for Fiscal Year 2008.
1.5 "EBITDA" means FMI's earnings before income tax, plus
depreciation and amortization, as computed in accordance with United
States GAAP and in a manner consistent with the methods used in
FMI's audited financial statements, without regard to (i)
extraordinary or other nonrecurring or unusual items, or
restructuring or impairment charges, as determined by FMI's
independent public accountants in accordance with GAAP or (ii)
changes in accounting, unless, in each case, the Committee, as
defined in the Management Incentive Plan, decides otherwise within
the Determination Period, as defined in the Management Incentive
Plan.
1.6 "EBITDA TARGET" means
1.6.1 For Fiscal Year 2007, $__________.
1.6.2 For Fiscal Year 2008, $__________.
1.7 "FIRST PERFORMANCE PERIOD" means the three-consecutive
Fiscal Year period beginning on the first day of Fiscal Year 2007
and ending on the last day of Fiscal Year 2009.
1.8 "FISCAL YEAR" means the calendar year.
1.9 "FMI" means FMI Holdco I, LLC.
1.10 "FUNDAMENTAL TRANSACTION" has the meaning as defined in
the Management Incentive Plan.
1.11 "GAAP" means generally accepted accounting principles.
1.12 "PERFORMANCE PERIOD" means the First Performance Period
or the Second Performance Period, as applicable.
1.13 "SECOND PERFORMANCE PERIOD" means the three-consecutive
Fiscal Year period beginning on the first day of Fiscal Year 2008
and ending on the last day of Fiscal Year 2010.
2. MULTI-YEAR BONUS.
2.1 FIRST PERFORMANCE PERIOD. If, with respect to the First
Performance Period, Delta One, expressed as a percentage of the
EBITDA Target for Fiscal Year 2007, equals or exceeds 33%, the
Executive shall be paid a Bonus in Fiscal Year 2010 equal to one and
one half (1.5) times his Base Salary for Fiscal Year 2007.
2.2 SECOND PERFORMANCE PERIOD. If, with respect to the Second
Performance Period, Delta Two, expressed as a percentage of the
EBITDA Target for Fiscal Year 2008, equals or exceeds 33%, the
Executive shall be paid a Bonus in Fiscal Year 2011 equal to one and
one half (1.5) times his Base Salary for Fiscal Year 2008.
3. PAYMENT UPON OCCURRENCE OF FUNDAMENTAL TRANSACTION. If a
Fundamental Transaction occurs at any time both (i) prior to the payment of any
amount pursuant to Section 2 hereof and (ii) on or prior to December 31, 2010,
then, in lieu of making any payment to the Executive pursuant to Section 2
hereof, the Company shall pay to the Executive, promptly following the
occurrence of the Fundamental Transaction, an amount in immediately available
funds, equal to one and one half (1.5) times his Base Salary. For this purpose,
Base Salary shall mean Base Salary for Fiscal Year 2007, if the Fundamental
Transaction occurs on or prior to the last day of Fiscal Year 2009, and Base
Salary for 2008, if the Fundamental Transaction occurs
during Fiscal Year 2010. Payment shall be made in the form of a single lump sum
from the sales proceeds received by the Company pursuant to the terms of the
Fundamental Transaction.
4. PAYMENT OF BONUS AMOUNTS. Except as otherwise provided herein,
bonus amounts shall be payable to the Executive in accordance with the terms and
conditions of the Management Incentive Plan.
5. MANAGEMENT INCENTIVE PLAN. The terms and conditions of the
Management Incentive Plan are hereby incorporated herein by reference, and the
Executive and the Company shall comply with all of the terms thereof applicable
to annual incentive awards. In the event of any conflict between the terms of
this Agreement and the terms of the Management Incentive Plan, the terms of the
Management Incentive Plan shall govern.
6. AMENDMENT AND TERMINATION. The Company may not amend or terminate
this Agreement without the written consent of the Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE
__________________________________
SUMMIT GLOBAL LOGISTICS, INC. AND
ITS SUBSIDIARIES
By:_______________________________
Name
Title:
EXHIBIT D
SUMMIT GLOBAL LOGISTICS, INC.
SEVERANCE BENEFIT PLAN
AND
SUMMARY PLAN DESCRIPTION
EFFECTIVE AS OF DECEMBER 1, 2006
I. INTRODUCTION
1.1 PURPOSE
The purpose of this severance plan, to be known as the Summit Global Logistics,
Inc. Severance Benefit Plan (the "Plan"), effective as of the "Effective Date,"
as defined herein, is to assist Eligible Employees of Summit Global Logistics,
Inc. ("Summit") and its subsidiaries (the "Company"), whose employment is
involuntarily terminated due to circumstances that (i) are described in Section
2.1.b of this Plan, and (ii) are anticipated to result in such individuals
experiencing a period of unemployment. This Plan supersedes and replaces any
previous plan, program, policy, practice or arrangement by which Company may
have provided severance benefits. All prior Company severance plans, practices
or programs, whether informal or formal, are hereby terminated. This document
constitutes both the Plan text and the Summary Plan Description for the Plan.
The Company is pleased to provide this Plan to Eligible Employees, and wants
you, as a potentially Eligible Employee, to know about and understand it. This
description of the Plan has been prepared to let you know how the Plan works and
how it may benefit you. You should read all parts of this description carefully
so that you will understand not only the ways in which the Plan may benefit you,
but also certain exclusions from coverage and limitations on payments which may
apply to you. If you have any questions about the Plan, you should contact the
Administrator.
THE SUMMIT GLOBAL LOGISTICS, INC. SEVERANCE BENEFIT PLAN ("PLAN") IS AN EMPLOYEE
WELFARE PLAN AS DEFINED IN SECTION 3(1) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 ("ERISA"). IT IS NOT A FUNDED PLAN; ANY BENEFITS OWED UNDER
THE PLAN WILL BE PAID FROM THE GENERAL ASSETS OF THE COMPANY IF AND WHEN SUCH
BENEFITS ARE OWED. EMPLOYEES HAVE NO RIGHTS TO OR INTEREST IN ANY SPECIFIC
ASSETS OR ACCOUNTS OF THE COMPANY EVEN IF AMOUNTS ARE CREDITED TO ACCOUNTS
DESIGNATED TO BE USED FOR THE PAYMENT OF PLAN BENEFITS.
II. YOUR PARTICIPATION IN THE PLAN
2.1 HOW DO I BECOME ELIGIBLE TO RECEIVE BENEFITS UNDER THE PLAN?
Only Eligible Employees (also referred to herein as "Participants") are eligible
to receive benefits under this Plan. An Eligible Employee for these purposes is
an Employee (i) who is NOT ineligible for benefits under Section 2.2 of the
Plan, and (ii) who first satisfies each of the following three requirements:
a. The Employee is a full-time employee of the Company as of the
Effective Date or is hired by the Company within six months
following as of the Effective Date, and if neither is the case, has
worked as a full-time employee of the Company for at least one (1)
year; AND
b. The Employee's employment with the Company is terminated because of:
(i) A permanent reduction in force by the Company;
(ii) The Employee declining a transfer to another Company, as
defined in Plan Section 7.6, that is deemed suitable by the
Company that employs the Employee;
(iii) The elimination of a job or employment classification by the
Company;
(iv) A Change in Control of Summit;
(v) The consolidation of certain administrative and operational
functions of Summit;
(vi) The permanent or temporary shutdown of a portion of Summit's
operations that includes the Employee's position; and/or
(vii) The sale of a business unit by the Company or other corporate
divestiture with respect to Summit; AND
c. The Employee has executed no earlier than the Employee's Termination
Date and on or before the sixtieth (60th) day immediately following
the Employee's Termination Date, a settlement agreement and release
("Release"). If the Employee fails to execute the Release within the
prescribed time period, the Employee shall fail to qualify as a
Participant under the Plan. The Employee shall be deemed to have
executed the Release within the prescribed time period if the
Company fails to provide the Employee with the Release for execution
within thirty (30) days after the Employee's Termination Date.
2.2 IN WHAT CIRCUMSTANCES WILL I BE INELIGIBLE FOR BENEFITS UNDER THE PLAN?
Subject to Section 4.2, an Employee shall be ineligible for benefits under this
Plan if the individual:
2
a. Is terminated for "Good Cause," as defined in this Section 2.2;
b. Voluntarily quits;
c. Fails to work through his or her Termination Date, or such earlier
date specified by the Company;
d. Is receiving long-term disability benefits;
e. After the Termination Date, performs services (i) for a division,
subdivision, branch, location, or other identifiable part of the
Company's business that is sold or otherwise transferred to an owner
other than the Company, regardless of whether the new owner offers
continued or comparable employment to the Employee, or (ii) for any
entity with which the Company has a continuing relationship, and in
which the Company is or has been a significant contributor or
investor, regardless of whether such entity offers continued or
comparable employment to the employee;
f. Dies prior to his or her Termination Date; or
g. Is on any leave of absence, short-term layoff, or absent for any
reason (other than approved vacation, approved family medical leave,
or medically certified sick leave) immediately prior to the
Participant's Termination Date.
For purposes of this Section 2.2, "Good Cause" for termination shall include,
but is not limited to, poor performance, dishonesty or other misconduct, such as
excessive absenteeism or failure to comply with the business rules of the
Company.
3
III. SEVERANCE PLAN BENEFITS
3.1 WHAT BENEFITS DO PARTICIPANTS RECEIVE?
An Eligible Employee of the Company who remains employed through his or her
Termination Date, or such earlier date selected by Company in writing, and who
executes, prior to any payment, the Release, will receive a severance benefit
under this Plan in an amount determined pursuant to the formula set forth on
Exhibit A hereto.
This Plan is designed to provide different benefits for separate categories of
Employees, which have been established by Company solely for purposes of this
Plan. Each Employee covered by this Plan will receive an Exhibit A bearing that
Employee's name, which describes the benefits for that Employee's category. An
Exhibit A is valid for purposes of this Plan only if it bears the name of the
Employee claiming benefits hereunder. Employees who have not received, or have
misplaced, their Exhibit A may obtain a replacement Exhibit A from the
Administrator. The Company may amend Exhibit A with respect to an Employee at
any time prior to the earlier of the date it notifies such Employee that it is
terminating his or her employment or a Change in Control.
For purposes of this Section 3.1 and Exhibit A hereto:
a. A Year of Service means a completed 12-consecutive month period
commencing with the Employee's date of hire or an anniversary
thereof. Partial years of service will be credited as one (1) Year
of Service if an Employee has worked at least 1,000 hours during a
year, calculated from an anniversary of the date of hire. No credit
for partial years of service will be given to Employees who work
less than one year in total. In computing months or years of service
for purposes of this Plan, only continuous service accrued as a
regular, full-time Company Employee will count. Service earned as a
temporary Employee, independent contractor, or consultant to Company
shall not be counted for purposes of determining length of service
under this Plan, even if all or a portion of such service
subsequently is determined by the Internal Revenue Service or any
other governmental agency to have constituted employment.
b. A Week's Base Salary is calculated by dividing the Employee's rate
of Annual Base Salary as of the Termination Date by 52 weeks; a
Month's Base Salary is calculated by dividing the Employee's rate of
Annual Base Salary as of the Termination Date by 12. Annual Base
Salary, for these purposes, shall mean total compensation (and, in
the case of salespersons, total compensation for the immediately
prior month multiplied by 12), but shall not include any bonus pay,
commissions (other than sales commissions), incentives, overtime,
awards, employee benefits, shift differentials, or other incidental
compensation.
3.2 HOW WILL MY SEVERANCE BENEFITS UNDER THIS PLAN BE PAID?
Severance Plan Benefits will be paid as salary continuation on the Company's
regular paydays.
4
3.3 WHAT BENEFITS DO EMPLOYEES RECEIVE IF THEY CHOOSE NOT TO EXECUTE A
RELEASE?
If an Employee chooses not to execute a Release, the Employee shall NOT receive
any Severance Plan Benefits.
3.4 WHAT IS THE PURPOSE OF THE RELEASE?
An Employee who executes a Release agrees not to assert a claim concerning his
or her employment with the Company.
3.5 WILL I RECEIVE ANY ADDITIONAL "PLANT CLOSING" TYPE BENEFITS?
No. The Severance Plan Benefits provided in this Plan are the maximum benefits
that Company will pay. To the extent that any federal, state or local law,
including, without limitation, any so-called "plant closing" law, requires the
Company to give advance notice or make a payment of any kind to an Eligible
Employee because of that Employee's involuntary termination due to a layoff,
reduction in force, plant or facility closing, sale of business, change in
control, or any other similar event or reason, the benefits provided under this
Plan shall either be reduced or eliminated. The benefits provided under this
Plan are intended to satisfy and exceed any and all statutory obligations that
may arise out of an Eligible Employee's involuntary termination for the
foregoing reasons and the Administrator shall so construe and implement the
terms of the Plan.
3.6 WHAT EFFECT WILL SEVERANCE PLAN BENEFITS HAVE ON OTHER COMPANY BENEFITS?
Benefits payable under this Plan are independent of any benefits to which an
Employee might be entitled under any other employee benefit plan maintained by
Company. You should carefully review the terms of any such other benefit plans
to determine whether your rights thereunder are affected by a termination of
your employment with Company.
5
IV. GENERAL PROVISIONS
4.1 ADMINISTRATOR.
The Plan shall be administered by the Compensation Committee of Summit's Board
of Directors. In such capacity, the Compensation Committee shall oversee the
operation of the Plan shall serve as the Administrator. Subject to Section
4.2.b, the Administrator will have full power and right to administer the Plan
and in all of its details. For this purpose, the Administrator's power and
rights include, but will not be limited to the following:
a. to make and enforce such rules and regulations as it deems necessary
or proper for the efficient administration of the Plan or required
to comply with applicable law;
b. to interpret the Plan, its interpretation thereof in good faith to
be final and conclusive on any Employee, former Employee,
Participant, former Participant and Beneficiary;
c. to decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan and to make all factual
determinations;
d. to compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with
the provisions of the Plan, and to determine the person or persons
to whom such benefits will be paid;
e. to authorize the payment of benefits;
f. to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required
under the Code and applicable regulations, or under state or local
law and regulations;
g. to appoint such agents, counsel, accountants and consultants as may
be required to assist in administering the Plan; and
h. by written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA.
4.2 RIGHT TO AMEND OR TERMINATE.
a. Subject to Section 4.2.b, the Compensation Committee reserves the
power and right to modify, amend, or terminate (in whole or in part)
any or all of the provisions of the Plan at any time for any reason.
Any Plan amendment shall be adopted by action of the Company's
Compensation Committee and executed by a Corporate Officer
authorized to act on behalf of the Company.
b. Notwithstanding anything herein to the contrary, in the event of a
Change in Control, this Plan shall no longer be subject to amendment
or termination with respect to Affected Individuals who are
Employees of the Company as of the date of the Change in Control,
but, as applied to such Affected Individuals with respect
6
to all rights hereby conferred as a result of that Change in
Control, (i) the terms and conditions hereof shall become fixed,
(ii) the benefits promised hereunder shall become fully vested
contract rights, (iii) the Annual Base Salary used to determine an
Affected Individual's benefits hereunder shall be such individual's
highest rate of Annual Base Salary (in the case of a salesperson,
highest earning month multiplied by 12) during the period commencing
on the first day of the Plan Year prior to the Plan Year in which
the Change in Control occurs and ending on the date of the Affected
Individual's Termination Date and (iv) the requirements of Section
2.1.b shall be deemed satisfied.
c. For purposes of this Plan, a Change in Control shall occur when the
first step is taken (E.G., commencement of negotiations) in a
process that results in any one of the following events:
i. The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) (the "Act") of beneficial
ownership (within the meaning of Rule 13d-3 of the Act) of 20%
or more of the (A) then outstanding voting stock of Summit; or
(B) the combined voting power of the then outstanding
securities of Summit entitled to vote; or
ii. An ownership change in which the shareholders of Summit before
such ownership change do not retain, directly or indirectly,
at least a majority of the beneficial interest in the voting
stock of Summit after such transaction, or in which Summit is
not the surviving company; or
iii. The direct or indirect sale or exchange by the beneficial
owners (directly or indirectly) of Summit of all or
substantially all of the stock of Summit; or
iv. The composition of the Board changes so that the Board is not
under the control of the current shareholders or their
representatives; or
v. A reorganization, merger or consolidation in which Summit is a
party;
vi. The sale, exchange, or transfer of all or substantially all of
the assets of Summit; or
vii. The bankruptcy, liquidation or dissolution of Summit; or
viii. Any transaction involving Summit whereby Summit acquires an
ownership interest of any percentage in, enters into a joint
venture, partnership, alliance or similar arrangement with, or
becomes owned in any percentage by, any other entity that is
engaged in a business similar to the business engaged in by
the Company and that has operations in North America
immediately before such transaction or within one year
thereafter.
7
d. For purposes of this Plan, an Affected Individual is an individual
who satisfies at least one of the following criteria:
(i) The individual's employment with the Company is terminated by
the Company for any reason other than the individual's long
term disability within the period commencing on the date of
the Change in Control and ending on last day of the second
Plan Year ending after the closing date for the transaction
effecting the Change in Control (the "Change in Control
Period"), or
(ii) The individual terminates employment with the Company during
the Change in Control Period for Good Reason. For these
purposes, the term "Good Reason" shall mean:
A. Without the individual's prior written consent, any
material diminution in the individual's authority,
duties or responsibilities; or
B. Any failure by the Company to pay the individual an
Annual Base Salary which is equal to or greater than the
annual rate in effect during the immediately preceding
Plan Year; or
C. Without the individual's prior written consent, the
relocation of the principal place of the individual's
employment to a location more than 30 miles from the
Company. Location where the individual was working
immediately prior to the relocation; or
D. A material breach by the Company of any of the material
provisions of its Employment Agreement with the
individual (if any), provided, however, that prior to
any such termination pursuant to this subparagraph D,
the Company's Compensation Committee must be given
notice by the individual of such acts or omissions and
no less than 20 days to cure the same.
4.3 EFFECT OF AMENDMENT OR TERMINATION.
Any amendment, discontinuance, or termination of the Plan shall be effective as
of such date as the Compensation Committee shall determine.
4.4 ARBITRATION OF DISPUTES.
All controversies or claims that may arise between the Employee and the Company
in connection with this Agreement shall be settled by arbitration. The parties
(Summit, on behalf of the Company) further agree that the arbitration shall be
held in the State of New Jersey, and administered by the American Arbitration
Association under its Commercial Arbitration Rules, applying New Jersey law,
except to the extent such law is preempted by ERISA.
a. QUALIFICATIONS OF ARBITRATOR. The arbitration shall be submitted to
a single arbitrator chosen in the manner provided under the rules of
the American
8
Arbitration Association. The arbitrator shall be disinterested and
shall not have any significant business relationship with either
party, and shall not have served as an arbitrator for any disputes
involving the Company or any of its Affiliates more than twice in
the thirty-six (36) month period immediately preceding his or her
date of appointment. The arbitrator shall be a person who is
experienced and knowledgeable in employment and executive
compensation law and shall be an attorney duly licensed to practice
law in one or more states.
x. XXXXXX OF ARBITRATOR. The arbitrator shall not have the authority to
grant any remedy which contravenes or changes any term of this Plan
and shall not have the authority to award punitive or exemplary or
damages under any circumstances. The parties shall equally share the
expense of the arbitrator selected and of any stenographer present
at the arbitration. The remaining costs of the arbitrator
proceedings shall be allocated by the arbitrator, except that the
arbitrator shall not have the power to award attorney's fees.
c. EFFECT OF ARBITRATOR'S DECISION. The arbitrator shall render its
decision within thirty (30) days after termination of the
arbitration proceeding, which decision shall be in writing, stating
the reasons therefor and including a brief description of each
element of any damages awarded. The decision of the arbitrator shall
be final and binding. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
4.5 GOVERNING LAW.
Except as may be otherwise provided in the contracts incorporated by reference
into the Plan, the provisions of the Plan shall be construed, administered and
enforced according to ERISA and, to the extent not preempted, by the laws of the
State of New Jersey.
4.6 ADDRESSES, NOTICE, WAIVER OF NOTICE.
Each Participant must file with the Administrator, in writing, his or her
current mailing address. Any communications, statement or notice addressed to
such a person at his or her last mailing address as filed with the Administrator
will be binding upon such person for all purposes of the Plan.
4.7 SEVERABILITY.
If any provision of the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if such illegal and
invalid provisions had never been set forth in the Plan.
4.8 SECTION 409A COMPLIANCE.
Notwithstanding anything herein to the contrary, to the extent a delay or
acceleration of the payments called for under any provision of this Plan is
determined to be necessary in the opinion of Company's tax advisors to prevent
imposition of an additional tax to a Participant under Section 409A(a)(1)(B) of
the Internal Revenue Code of 1986, as amended (the "Code"), then the timing of
such payment shall be accelerated to the extent necessary to comply with the
"short-term deferral" rule or shall not be made, as applicable, until the first
date on which such
9
payment is permitted in compliance with Section 409A and the Treasury
Regulations or other interpretative guidance issued thereunder.
10
V. CLAIMS PROCEDURE
5.1 INITIAL CLAIM FOR BENEFITS.
a. MAKING A CLAIM. You may claim a specific benefit under the Plan or
request a specific interpretation or ruling under the Plan regarding
entitlement to future benefits by submitting a written claim for
benefits to the Administrator.
b. DENIAL OF CLAIM. If your claim is denied, in whole or in part, the
Administrator shall provide you with written notification of such
adverse benefit determination within 90 days after the receipt of
the claim. Such 90-day period may be extended by the Administrator
for a period of up to 90 days, but only if the Administrator
determines that special circumstances require such an extension. If
the Administrator determines that such an extension is required, you
will receive written notice of the reasons for such extension and
the date on which the Administrator expects to render a benefit
determination on your claim. The Administrator will send you this
notice prior to the expiration of the initial 90-day period.
c. CONTENT OF INITIAL NOTICE OF ADVERSE BENEFIT DETERMINATION. Any
written notice of adverse benefit determination will include the
following: (i) the reasons for denial, with specific reference to
the Plan provisions on which the denial is based; (ii) a description
of any additional material or information required and an
explanation of why it is necessary; (iii) an explanation of the
Plan's claim review procedure; (iv) a statement that any appeal must
be made by giving the Administrator, within 60 days of the notice of
adverse benefit determination, unless extended by the Administrator
for good cause shown, written notice of such appeal, which shall
include a full description of the pertinent issues and the basis for
the claim; and (v) a statement of your right to bring a civil action
under Section 501(a) of ERISA following an adverse benefit
determination on review.
d. EFFECT OF FAILURE OF ADMINISTRATOR TO RENDER TIMELY DECISION. If the
decision of the Administrator is not rendered within the initial
90-day or extended 90-day period, as applicable, you should consider
your claim to have been denied.
5.2 APPEAL OF DENIED CLAIM. a. REQUEST FOR REVIEW. If your claim is denied or
you have not received a response within the initial or extended 90-day
determination period, you may request a review by notice given in writing
to the Administrator. Such request must be made within 60 days after your
receipt of the written notice of adverse benefit determination, or in the
event that you have not received a response with the initial 90-day or
extended 90-day period, within 60 days after the expiration of the
applicable 90-day period, unless extended by the Administrator for good
cause shown.
11
b. REVIEW OF APPEAL. The claim or request will be reviewed by the
Administrator, which may, but shall not be required to, convene a
hearing. On review, you may have representation, examine relevant
documents (free of charge), and submit issues and comments in
writing.
5.3 FINAL DECISION.
a. TIME FRAME. The Administrator normally will make the decision on
review of an appealed claim within 60 days after receiving a
claimant's request for review. If an extension of time is required
for a hearing or because of other special circumstances, the
Administrator will send you a written notice of extension,
explaining the reason for the extension, and the expected date of
its decision before the expiration of the initial 60 day period. In
no event will the extension exceed an additional 60 days.
b. EXPLANATION OF DECISION. The final decision of the Administrator
will be delivered to you in written form and, if adverse, contain
the following information: (i) the reasons for the adverse
determination; (ii) specific references to the relevant Plan
provisions upon with the determination is based; (iii) a statement
that you are entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and
other information relevant to your claim for benefits; and (iv) a
statement of your right to bring action under Section 501(a) of
ERISA.
c. EFFECT OF FAILURE OF ADMINISTRATOR TO RENDER TIMELY DECISION. If the
decision of the Administrator is not rendered within the initial
60-day or extended 60-day period, you should consider your claim on
review to have been denied. Subject to your right to bring action
under Section 501(a) of ERISA, all decisions on review shall be
final and bind all parties concerned.
12
VI. STATEMENT OF ERISA RIGHTS
As a Participant in the Plan you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan Participants shall be entitled to:
RECEIVE INFORMATION ABOUT YOUR PLAN AND BENEFITS
a. Examine, without charge, at the Administrator's office, all Plan
documents, including this document, and a copy of the latest annual
report (Form 5500 Series) filed by the Plan with the U.S. Department
of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration.
b. Obtain copies of these documents and other Plan information upon
written request to the Administrator. The Administrator may make a
reasonable charge for the copies.
PRUDENT ACTIONS BY PLAN FIDUCIARIES
In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people who
operate the Plan, called "fiduciaries," have a duty to do so prudently and in
the interest of you and other Plan Participants and Beneficiaries.
Neither the Company nor any other person may fire you or otherwise discriminate
against you in any way to prevent you from obtaining benefits under the Plan or
exercising your rights under ERISA.
ENFORCE YOUR RIGHTS
If a claim for benefits under the Plan is denied or ignored, in whole or in
part, you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal Court. In such a case, the Court may require the Administrator to
provide the materials and pay you up to $110 a day until you receive them,
unless they were not sent because of reasons beyond the Administrator's control.
If you have a claim for benefits which is denied or not processed, in whole or
in part, you may file suit in a State or Federal Court. If it should happen that
the Plan's fiduciaries misuse the Plan's money (if any), or you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal Court. The Court
will decide who should pay the court costs and legal fees. If you are
successful, the Court may order the person you have sued to pay these costs and
fees. If you lose, the Court may order you to pay these costs and fees if, for
example, it finds your claim to be frivolous.
13
ASSISTANCE WITH YOUR QUESTIONS
If you have any questions about your Plan. Your should contact the
Administrator. If you have any questions about this Statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
Administrator, you should contact the nearest office of the Employee Benefits
Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance Inquiries, Employee Benefits
Security Administration, U.S. Department of Labor, 000 Xxxxxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000. You may also obtain certain publications about
your rights and responsibilities under ERISA by calling the publications hotline
of the Employee Benefits Security Administration.
ADDITIONAL INFORMATION.
If there are any provisions of this Plan and/or Summary Plan Description which
are not entirely clear to you, please ask for a clarification from the
Administrator. If you submit a written request for information or for a more
detailed explanation of any provision of the Plan, the Administrator will
respond to you in writing. Only the Administrator is authorized to interpret the
Plan and you should not rely upon interpretations of the Plan from any other
source.
14
VII. DEFINITIONS
The following words and phrases are used quite frequently in this Summary Plan
Description and have special meanings of which you should take note.
7.1 The ADMINISTRATOR is the person or persons designated by the Company's
Compensation Committee to administer and oversee the operation of the
Plan.
7.2 An AFFILIATE is any Person (i) which, with respect to the Company,
directly or indirectly beneficially owns (within the meaning of Rule 13d-3
promulgated under the Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of directors
(or similar governing body) represented by all outstanding securities of
the Company or (ii) with respect to which the Company beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Act securities or
other equity interests possessing more than 50% of the aggregate voting
power in the election of directors (or similar governing body) represented
by, or more than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
7.3 A BENEFICIARY is a person or persons entitled to receive benefits under
the Plan upon the death of a Participant.
7.4 The BOARD OF DIRECTORS means the Board of Directors of Summit.
7.5 The COMPANY is Summit Global Logistics, Inc. and its subsidiaries.
7.6 The COMPANY LOCATION means a Company office consisting of one or more
buildings within 30 miles of each other.
7.7 CORPORATE OFFICER means any person who has been duly appointed a corporate
officer of the Company.
7.8 The EFFECTIVE DATE for purposes of this Plan is December 1, 2006.
7.9 An ELIGIBLE EMPLOYEE is an Employee of the Company who meets the
eligibility requirements set forth in Article II.
7.10 An EMPLOYEE is an individual who (i) contracts directly with the Company
(rather than through a third party, such as an employee-leasing firm),
(ii) performs services for the Company and (iii) is treated as an employee
of the Company for federal employment-tax purposes.
7.11 An EMPLOYMENT AGREEMENT is a written agreement by and between the Employee
and the Company setting forth the terms and conditions of the Employee's
employment with the Company.
7.12 ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and includes regulations promulgated thereunder by the Secretary
of Labor.
15
7.13 The COMPENSATION COMMITTEE means a Committee established by the Board of
Directors that is authorized to, among other things, establish and
maintain the Plan.
7.14 A FIDUCIARY means any person who exercises any discretionary authority or
responsibility in the management or administration of the Plan or the
disposition of Plan assets; or who renders investment advice for a fee or
other compensation with respect to any property of the Plan.
7.15 The NAMED FIDUCIARY for the Plan is Summit.
7.16 PARTICIPANTS are Eligible Employees, as defined in Section 7.9.
7.17 PERQUISITEs means the following employee benefits to the extent an
Employee is a participant in a Company plan or program providing such
benefits: (i) life insurance, (ii) accidental death and dismemberment
insurance, (iii) long term disability insurance and (iv) travel and
accident insurance.
7.18 PERSON means a person within the meaning of Section 3(a)(9) of the Act.
7.19 The PLAN is the Summit Global Logistics, Inc., Severance Benefit Plan
described in this booklet.
7.20 The PLAN YEAR is the 12-month period commencing on December 1 and ending
on the immediately following November 30.
7.21 SEPARATION DATE OR TERMINATION DATE means a Participant's last day of
active service with the Company as designated by the Company.
7.22 SEVERANCE PLAN BENEFIT means amounts payable under the Plan to a
Participant on account of termination of his or her employment under the
conditions described in Article III.
16
VIII. PLAN IDENTIFICATION DATA
Under this heading, the names and addresses of certain individuals who have
various responsibilities with respect to this Plan are shown. Also, certain
identification information with respect to the Plan itself is set out in case
that information would be of use to you.
o EMPLOYER: Summit Global Logistics, Inc.
o IDENTIFICATION NUMBER: The Employer's IRS identification number is
__________.
o PLAN IDENTIFICATION NUMBER: ______
o NAMED FIDUCIARY AND ADMINISTRATOR: Summit is Summit Global Logistics, Inc.
000 Xxxxxxxxx, Xxxxxxxxxxx, XX 00000.
o BASIS ON WHICH PLAN RECORDS ARE KEPT: Plan Year
o TYPE OF PLAN: Unfunded welfare benefit plan providing severance benefits.
o AGENT FOR SERVICE OF LEGAL PROCESS Summit is Summit Global Logistics, Inc.
000 Xxxxxxxxx, Xxxxxxxxxxx, XX 00000.
APPROVALS
SEVERANCE BENEFIT PLAN
Approved by the Compensation Committee
of the Board of Directors on: November 8, 2006
-------------------------
Approved by the Stockholders on: November 8, 2006
-------------------------
17
APPENDIX A
(HIGH LEVEL EXECUTIVES)
Twenty-four (24) Months' Base Salary. Payments shall be made on a monthly basis.
In addition, the Company shall pay the individual's premiums for COBRA
continuation coverage (individual, individual plus one or family coverage, as
applicable) for a period of eighteen (18) months following termination of
employment. At the expiration of this eighteen (18)-month period, the Company
will pay the individual, in a single lump sum, the cash value of six (6)
additional months of premium payments for the type of coverage elected under
COBRA under a substantially similar health plan. The amount to be paid under the
immediately preceding sentence shall not exceed $25,000.
If the individual's employment is terminated in connection with a Change in
Control, as such term is defined in Plan Section 4.2.b, the twenty-four (24)
Months' Base Salary described above shall be paid to the individual in a single
lump sum, the COBRA and health care benefits shall be provided as described
above, and the Company also will provide the individual with outplacement
benefits of an amount commensurate with the individual's position with the
Company, the value of such benefits not to exceed $10,500. The Company will also
continue to maintain the identical level of Perquisites and benefits enjoyed by
the individual prior to the Change in Control for a period of two (2) years
following his or her last day of employment. For these purposes, a termination
of the individual's employment shall conclusively be deemed to be in connection
with a Change in Control if such termination occurs during the time period
commencing on the date of the Change in Control and ending on the second
anniversary of the closing date for the transaction effecting the Change in
Control
This Exhibit A confirms that, solely for purposes of the Summit Global
Logistics, Inc.
Severance Benefit Plan, Xxxxxx X'Xxxxx is within category described above.
18
