Exhibit 10.31
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT
AGREEMENT ("Agreement") is made and entered into
this 8th day of November, 2006 by and between Robert O'Neill, residing at 98
Country Village Court,
New Hyde Park, NY
11040 (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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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:
Robert O'Neill
98 Country Village Court
New Hyde Park, NY 11040
If to the Company:
Summit Global Logistics, Inc. and its
Subsidiaries
547 Boulevard
Kenilworth, NJ 07730
Attn: Peter Klaver
with a copy to:
David D. Gammell
Brown Rudnick Berlack Israels LLP
One Financial Center
Boston, MA 02111
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
<PAGE>
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.
<PAGE>
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:
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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:
<PAGE>
(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
