AMENDMENT #1 TO EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 99.1
Reference is made to the Executive Employment Agreement (the “Agreement”) dated July 1, 2005,
by and among Segmentz, Inc., a Delaware corporation (currently known as Express-1 Expedited
Solutions, Inc., the “Company”), and Xxxx Xxxxx (the “Executive”). The Company and the Executive
are referred to collectively herein as the “Parties.” All capitalized terms not otherwise defined
herein shall have the meaning set forth in the Agreement.
1. Term. The Parties hereby agree that Section 4 of the Agreement is hereby deleted
and replaced with the following:
“Term. The Term of employment hereunder will commence on the date as set forth above
and will terminate on July 1, 2011.”
2. Salary. The Parties hereby agree that Section 5(a) of the Agreement is hereby
deleted and replaced with the following:
“a. The Executive shall be paid a base salary (the “Base Salary”) at an annual rate
of $200,000. The Base Salary shall be reviewed annually throughout the Term by the
Company’s Compensation Committee and may be raised in its sole discretion.”
3. Bonus. The Parties hereby agree that Section 5(b) of the Agreement is hereby
deleted and replaced with the following:
“c. Performance Based Bonus. As additional compensation, the Executive
shall be entitled to receive a bonus (“Bonus”) for each year during the Term of the
Executive’s employment by the Company, and based upon the Company’s executive bonus
plan as adopted and amended from time-to-time by the Company’s Board of Directors.
The amount any Bonus shall be determined based upon performance targets set
annually by the Company’s Compensation Committee.”
4. Reimbursement of Club Dues. The Parties hereby agree that the following shall be
added to the Agreement as Section 5(h):
“h. Reimbursement of Club Dues. The Executive will be reimbursed up to $750 per month
towards the cost of country club dues at a country club of the Executive’s choice.
5. Definition of “Cause”. The Parties hereby agree that Section 6(c)(3) of the
Agreement is hereby deleted, and that Section 6(c)(2) of the Agreement is hereby deleted and
replaced with the following:
“(2) “Cause” shall mean:
(A) Executive’s material violation of any of the provisions of this Agreement,
or the rules, policies, and/or procedures of the Company,
or commission of any material act of fraud, misappropriation, breach of
fiduciary duty or theft against or from the Company, if such violation is not cured
as soon as is reasonably practical, and in any event within thirty (30) days after
written notice from the Company, or if Executive commits the same violation within
twelve (12) months of receiving any such notice.
(B) Executive’s violation of any law, rule or regulation of a governmental
authority or regulatory body with jurisdiction over the Company or Executive
relative to the conduct of Executive in connection with the Company’s business or
its securities, if such violation is not cured as soon as is reasonably practical,
and in any event within thirty (30) days after written notice from the Company, or
if Executive commits the same violation within twelve (12) months of receiving any
such notice.
(C) The conviction of Executive of a felony under the laws of the United
States of America or any state therein.”
6. Termination Following a Change of Control. The Parties hereby agree that Section
6(f) of the Agreement is hereby deleted and replaced with the following:
“f. Change in Control. If, within one year after a Change in Control, the Company
terminates Executive’s employment with the Company without Cause, OR Executive voluntarily
terminates such employment with Good Reason, the following provisions will apply:
(1) An amount equal to the sum of (1) Executive’s aggregate Base Salary (at the rate
most recently determined) for a period equal to one year (the “Severance Period”),
and (2) an amount equal to the greater of (A) Executive’s Bonus payments for the year
preceding the date of termination, and (B) the annual average of Executive’s Bonus payments
during the two (2) years immediately preceding the date of termination, shall be paid to,
or in trust for, Executive pursuant to Section 6(f)(7) in a lump sum within 30 days after
the date of termination.
(2) Executive shall receive any and all benefits accrued under any Incentive Plans and
Benefit Plans to the date of his termination, the amount, form and time of payment of such
benefits to be determined by the terms of such Incentive Plans and Benefit Plans, and for
purposes of such plans, Executive’s employment shall be deemed to have terminated by reason
of retirement.
(3) The Company agrees that for purposes of all Incentive Plans and Benefit Plans
Executive shall be given service credit for all purposes for, and shall be deemed to be an
employee of the Company during, the Severance Period, notwithstanding his inability to
render services by reason of death or disability during the Severance Period or the fact
that he is not an employee of the Company during the Severance Period; provided that, if
the terms of any of such
Incentive Plan or Benefit Plan do not permit such credit or deemed employee
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treatment,
the Company will make identical payments and distributions outside of the Plans.
(4) During the Severance Period Executive and his dependents will continue to be
covered by all health, dental, disability, accident and life insurance plans or
arrangements made available by the Company in which he or his dependents were participating
immediately prior to the date of his termination as if he continued to be an employee of
the Company, provided that, if participation in any one or more of such plans and
arrangements is not possible under the terms thereof, the Company will provide
substantially identical benefits. Executive’s right to continuation of coverage under the
health insurance plan of employer pursuant to Section 4980B (or any successor section)
shall commence at the end of the Severance Period.
(5) No payments or benefits payable to or with respect to Executive during the
Severance Period pursuant to this Section 6(f) shall be reduced by any amount Executive or
his dependents, spouse or beneficiary may earn or receive from employment with another
employer or from any other source.
(6) Except as otherwise provided in Section 6(f)(7), upon the death of Executive all
amounts payable hereunder to Executive pursuant to this Section 6(f) shall be paid to his
devisee, legates or other designee, or in the absence of a designee, to his estate.
(7) Amounts payable pursuant to Section 6(f)(1) shall be, at the election of
Executive, set forth in a written instrument delivered to the Company within 15 days after
his termination of employment, be either paid to him in a lump sum or paid to the trustee
of a trust to be established by the Company for the benefit of Executive, with a bank or
trust company selected by Executive as trustee. If Executive elects to have payments made
to the trustee of such trust, the trust agreement shall conform to the provisions of any
applicable model trust set forth in any Internal Revenue Service authority and shall
contain terms and conditions mutually satisfactory to Executive and the Company and that
are not inconsistent with the provisions of any such model trust.
(8) Treatment of Options.
(A) If upon termination of his employment pursuant to Section 6(f)(1)
Executive holds any options (the “Options”) with respect to the common stock (the
“Common Stock”) of the Company, which are not then exercisable, said Options shall
immediately vest upon termination. All such Options shall remain outstanding and
exercisable for the remainder of the full term thereof (i.e. the term of said
Option shall not be shortened as a result of any change in control provisions or
other adjustment provisions contained in the Option agreement or the
plan under which the Options were issued).
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(B) If Executive holds Options and (a) the Company effects any merger or
consolidation of the Company with or into another person, (b) the Company effects
any sale of all or substantially all of its assets in one or a series of related
transactions, (c) any tender offer or exchange offer (whether by the Company or
another person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or property
or (d) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (each a
“Fundamental Transaction”), then, upon any subsequent exercise of the
Options, Executive shall have the right to receive, for each share of Common Stock
underlying the Option that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for which
the Option is exercisable immediately prior to such event. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then Executive shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of the Option following such
Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to Company or surviving entity in such Fundamental
Transaction shall issue to Executive a new option consistent with the foregoing
provisions and evidencing Executive’s right to exercise such option into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this Section 6(f)(8) and insuring
that the Options (or any such replacement security) will be similarly adjusted upon
any subsequent transaction analogous to a Fundamental Transaction.
(9) Expenses. The Company shall pay to Executive all out-of-pocket expenses,
including attorneys’ fees, incurred by Executive in connection with the successful
enforcement of this Section 6(f) by Executive.
(10) Definitions. For purposes of this Agreement:
(A) “Benefit Plans” shall mean any qualified or supplemental defined
benefit retirement plan or defined contribution retirement plan,
currently or hereafter made available by the Company to Executive in which
Executive is eligible to participate, or any private arrangement maintained by the
Company solely for executive.
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(B) “Change in Control” shall be deemed to occur on the earliest of
any of the following events:
(i) The ownership by any entity, person, or group of beneficial
ownership, as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, of more than 50% of the outstanding
capital stock of the Company entitled to vote for’ the election of
directors (“Voting Stock”);
(ii) The effective time of (A) a merger or consolidation of the
Company with one or more other corporations as a result of which the
holders of the outstanding Voting Stock of the Company immediately prior
to such merger hold less than 80% of the Voting Stock of the surviving or
resulting corporation, or (B) a transfer of all or substantially all of
the property of the Company other than to an entity of which the Company
owns at least 80% of the Voting Stock (for example, for purposes hereof,
the sale of the Express-1 Expedited division and the CGL division shall be
deemed to be the transfer or substantially all of the property of the
Company); or
(iii) The election to the Board of Directors of the Company, without
the recommendation or approval of the incumbent Board of Directors of the
Company, of the lesser of (A) three independent directors or (B) directors
constituting a majority of the number of directors of the Company then in
office.
(C) “Good Reason” shall exist if, without Executive’s express written
consent:
(i) The Company shall assign to Executive duties of a non executive
nature or for which Executive is not reasonably equipped by his skills and
experience;
(ii) The Company shall reduce the salary of Executive, or materially
reduce the amount of paid vacations to which he is entitled, or his fringe
benefits and perquisites;
(iii) With respect to an Executive employed at the Company’s St.
Xxxxxx, Michigan office, the Company shall require Executive to relocate
his principal business office or his principal place of residence greater
than fifty miles outside St. Xxxxxx, Michigan (said 50 mile area being
hereinafter referred to as the
“Area”), or assign to Executive duties that would reasonably require
such relocation;
(iv) The Company shall require Executive, or assign duties to
Executive, which would reasonably require him to spend more
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than sixty
normal working days away from the Area during any consecutive twelve month
period;
(v) The Company shall fail to provide office facilities, secretarial
services, and other administrative services to Executive which are
substantially equivalent to the facilities and services provided to
Executive on the date hereof; or
(vi) The Company shall terminate incentive and benefit plans or
arrangements, or reduce or limit Executive’s participation therein
relative to the level of participation of other executives of similar
rank, to such an extent as to materially reduce the aggregate value of
Executive’s incentive compensation and benefits below their aggregate
value as of the date hereof.
(D) “Incentive Plans” shall mean any incentive, bonus, deferred
compensation or similar plan or arrangement currently or hereafter made available
by the Company in which Executive is eligible to participate.”
7. Modification of Stock Options. In 2004 the Company issued to the Executive options
to purchase 500,000 shares of the Company’s common stock, with a term that was initially set to
expire in 2009. The Parties hereby agree that the term of said options is extended until August 9,
2014. All other terms of said options shall remain the same.
8. Deferred Compensation. The Parties hereby agree that Section 5(d) of the Agreement
is hereby deleted and replaced with the following:
“d. The Executive will receive $30,000 per year during the Term as additional compensation to
be contributed by the company to the deferred compensation plan pursuant to the terms of said
deferred compensation plan.”
9. Sole Amendments. The Parties hereby agree that except as modified herein,
the Agreement shall remain in full force and effect.
10. Counterparts. This Amendment #1 to Executive Employment Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all of which together
will constitute one and the same instrument.
11. Governing Law. This Amendment #1 to Executive Employment Agreement shall be
deemed made and entered into in the State of Michigan and shall be governed and construed under and
in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment #1 to Executive
Employment Agreement to be executed as of July 1, 2008.
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| Express-1 Expedited Solutions, Inc | ||||||
| /S/ XXXX XXXXXXXXX | ||||||
| Name: | XXXX XXXXXXXXX | |||||
| Title: | CHAIRMAN, COMPENSATION COMMITTEE | |||||
| The Executive | ||||||
| /s/ XXXX XXXXX | ||||||
| Xxxx Xxxxx | ||||||
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