Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (this “Agreement”),
dated as of September 17, 2007, is by and between Target
Logistic Services, Inc., a Delaware corporation (the
“Company”), and Christopher A. Coppersmith
(“Executive”).
In
consideration of Executive’s agreement to supply
services under this Agreement and the mutual agreements set
forth below, the sufficiency of which is hereby acknowledged,
the Company and Executive agree as follows:
1.
Employment .
The Company shall employ Executive, and Executive shall serve in
the employ of the Company, upon the terms and subject to the
conditions set forth in this Agreement.
2.
Term .
This Agreement shall be effective and Executive’s employment
with the Company hereunder shall commence upon the closing, if any,
of the transactions contemplated by the August 9, 2007 Letter of
Understanding between Mainfreight Limited (“Parent”)
and Target Logistics, Inc. (the “Effective Date,” and
such transactions, the “Merger Transactions”) and,
except as otherwise provided in Section 0
of
this Agreement, continue until the date that is
three
years from the Effective Date (such term the “Employment
Period”). The Employment Period shall be renewed for
additional two-year periods (subject to earlier termination
pursuant to Section 0
of
this Agreement) unless either party, not less than 60 days prior to
the expiration of the then-current Employment Period, gives the
other party notice that it does not wish the Employment Period to
be so renewed. For the avoidance of doubt, this Agreement shall not
be effective unless the Merger Transactions have been
consummated.
3.
Position and Duties .
(a)
During
the Employment Period, Executive’s position shall be
President and Chief Executive Officer of the Company.
Executive shall have responsibility for the general
management, direction and control of the business and affairs
of the Company, under the ultimate direction and supervision
of and consistent with annual budgets and strategic plans
submitted by him to, and approved by, the Board of Directors
of the Company (the “Board”). Executive shall have
all of the rights, duties and powers that are commonly
incident to the office of President and Chief Executive
Officer of a subsidiary of a publicly-traded corporation and
shall report to the Managing Director of Parent.
(b)
Executive
agrees to devote all of Executive’s working time,
attention and efforts to the Company and to perform the duties
of Executive’s position in accordance with the
Company’s policies as in effect from time to time.
Executive’s principal place of employment shall be the
Company’s offices located in Carson, California;
provided, however, Executive may be required to travel for
business purposes.
4.
Compensation and Related Matters .
(a)
Salary .
During the Employment Period, the Company shall pay to Executive a
minimum annual base salary of $243,512 (such salary, as it may be
increased from time to time, the “Annual Base Salary”),
payable in accordance with the Company’s regular payroll
practices as in effect from time to time. During the Employment
Period, the Annual Base Salary shall be reviewed by Parent not less
frequently than annually in accordance with the policies of Parent
as then in effect, the first such review to take place during the
month of September 2008.
(b)
EBT Bonus .
(i)
For
the first three fiscal years of TLSI ending during the
Employment Period, the Company shall pay to Executive an
amount (the “EBT Bonus”) equal to the sum of:
(A) 3 percent of the first $1,000,000 of the EBT (as
defined herein); (B) 4 percent of the EBT of TLSI from
$1,000,0001 to $2,000,000; and (C) 5% of the EBT of TLSI
above $2,000,000, which sum shall be reduced by the percentage
shortfall, if any, from TLSI’s goal EBT for such fiscal
year, or portion thereof for the first fiscal year during the
Employment Period. The
EBT Bonus will be paid within 60 days after the end of the
applicable fiscal year.
(ii)
For
purposes of this Section 0
,
EBT for the first fiscal year ending during the Employment
Period shall be limited to EBT attributable to the period
beginning on July 1, 2007 and ending on the last day of the
first fiscal year ending during the Employment
Period.
(iii)
After
the period described in Section 0
,
Executive’s entitlement to any bonus or incentive
compensation shall be determined in accordance with the
policies of Parent as then in effect.
(iv)
“EBT”
shall be the Audited Net Profit Before Income Tax of TLSI, and
shall exclude any transaction costs incurred in connection
with the Merger Transactions that are otherwise allocated to
TLSI.
(c)
Option Award .
If EBT for the third fiscal year ending during the Employment
Period equals or exceeds 200% of the EBT for the last fiscal year
ending prior to the commencement of the Employment Period, then
Parent shall award Executive an option to purchase 100,000 of the
ordinary shares of stock of Parent, such option to vest on the
third anniversary of the grant date in accordance with the terms of
Parent’s stock option plan then in effect.
(d)
Employee Benefits .
Executive shall, to the extent eligible, be entitled to participate
at a level commensurate with his position in all employee benefit
welfare and retirement plans, as well as equity plans, generally
provided by the Company to its senior executives in accordance with
the terms thereof as in effect from time to time.
(e)
Expenses and Auto Allowance .
The Company shall reimburse Executive for all reasonable, necessary
and historically reimbursed expenses incurred by Executive during
the Employment Period in performing services in accordance with
policies and procedures established by the Company. During the
Employment Period, the Company shall reimburse Executive up to a
maximum of $18,000 per year for the cost of an automobile. To the
extent that any reimbursement would be includable in
Executive’s gross income for federal income tax purposes,
Executive shall submit the necessary documentation and shall
receive the reimbursement as historically paid.
(f)
Vacations .
In addition to holidays observed by the Company during which the
Company’s U.S. offices are closed, Executive shall be
entitled to four weeks of paid vacation per fiscal year during the
Employment Period (or portion thereof for the first fiscal year
ended during the Employment Period).
5.
Termination .
(a)
Non-Renewal .
If either party, not less than 60 days prior to the expiration of
the then-current Employment Period, gives the other party notice
that it does not wish the Employment Period to be renewed, the
Employment Period shall terminate upon expiration of the
then-current Employment Period ,
provided that the Company may instead elect to terminate
Executive’s employment prior to the end of such 60-day period
and continue to pay Executive his Annual Base Salary in accordance
with the Company’s normal payroll practices through the
expiration of the 60-day period.
(b)
Death .
If Executive dies during the Employment Period, the Employment
Period shall terminate as of the date of Executive’s
death.
(c)
Disability .
If Executive becomes Disabled during the Employment Period, the
Employment Period shall terminate as of the date Executive becomes
Disabled. For purposes of this Agreement, Executive shall be
Disabled if he (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months or (ii), by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a
period of not less than six months under an accident and health
plan covering the Company’s employees.
(d)
Cause .
The Company shall be permitted to terminate the Employment Period
and all of the obligations of the Company under this Agreement for
Cause. For purposes of this Agreement, the Company shall have
“Cause” to terminate Executive’s employment and
the Employment Period upon:
(i)
The
substantial and continued willful or negligent failure by
Executive to perform his duties hereunder, or a material
breach or imminent breach of this Agreement by Executive,
which failure or breach, if curable, is not cured by Executive
within such time as reasonable, not to exceed 30 days after
written notice of such failure or breach is delivered to
Executive by the Company, unless a longer period of time can
reasonably be shown by Executive to be necessary;
(ii)
Executive’s
conviction of, plea of guilty or
nolo contendere to,
or admission as to the commission of, a felony or other criminal
act involving moral turpitude; or
(iii)
Executive’s
knowingly dishonest act or knowing bad faith or willful
misconduct in the performance of his services for the
Company.
(e)
Voluntary Termination. The
Executive shall be permitted to terminate the Employment Period for
any reason at any time. If the Executive terminates the Employment
Period under this Section 5(e), the Executive shall provide the
Company with written notice thereof 60 days before the date such
termination shall be effective, provided that, upon receipt of such
written notice from the Executive, the Company may instead elect to
terminate Executive’s employment prior to the end of such
60-day period and continue to pay Executive his Annual Base Salary
in accordance with the Company’s normal payroll practices
through the expiration of such 60-day period.
(f)
Good Reason .
Executive shall be permitted to terminate the Employment Period for
Good Reason, provided that Executive must first provide written
notice to the Company of the existence of a condition constituting
Good Reason within 90 days of the initial existence of the
condition, and the Company shall have 30 days following receipt of
such notice during which it may remedy the condition. “Good
Reason” shall mean (i) a material diminution in
Executive’s salary provided under Section 0
,
(ii) a material diminution in Executive’s authority,
duties, or responsibilities; (iii) the Company requiring
Executive to be based at any office or location more than 50 miles
from the office or location to which Executive is currently
assigned, provided, however, that Good Reason shall not be deemed
to exist due to the travel requirements consistent with the
performance of Executive’s services under this
Agreement.
6.
Compensation Upon Termination .
Except
as provided in Section 0
and
subject to the requirements of Section 0
:
(a)
Basic Termination Payment .
If the Employment Period is terminated for any reason, all future
compensation and benefits to which Executive is otherwise entitled
under this Agreement shall cease and terminate as of the date of
such termination. Executive, or his estate, as applicable, shall be
entitled to receive the portion of Executive’s Annual Base
Salary that accrued through the date of such termination and any
bonuses or other amounts accrued or payable to Executive but unpaid
as of the date of such termination; however, to the extent that
Executive had made a valid election to defer these amounts, or the
amounts were subject to an automatic deferral provision, under any
nonqualified deferred compensation plan of the Company, such
amounts shall be payable in accordance with the terms of the
nonqualified deferred compensation plan.
(b)
EBT Bonus .
If Executive’s Employment Period is terminated other than for
Cause during the Company’s fiscal year, the EBT Bonus payable
to Executive for such year, if any, will be calculated pursuant to
Section 0
,
treating the date Executive’s Employment Period terminated as
the last day of the fiscal year, unless such termination occurs
within the last quarter of the fisca
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