UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 7, 2013
ECHO GLOBAL LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) |
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001-34470 (Commission File Number) |
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20-5001120 (I.R.S. Employer Identification No.) |
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600 West Chicago Avenue Suite 725 Chicago, Illinois (Address of principal executive offices) |
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60654 (Zip Code) |
(800) 354-7993
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) (e) On October 7, 2013, Echo Global Logistics, Inc. (the Company) issued a press release announcing that, effective October 7, 2013, David B. Menzel, age 51, was appointed as the Companys Chief Operating Officer. From April 2008 until his appointment as Chief Operating Officer, Mr. Menzel served as the Companys Chief Financial Officer. Mr. Menzel holds a bachelors degree in Accounting and a Masters of Accountancy from Florida State University and is a C.P.A.
In connection with Mr. Menzels appointment as Chief Operating Officer, Mr. Menzel entered into an Amended and Restated Employment Agreement (the Menzel Employment Agreement) with the Company, which may be terminated by Mr. Menzel or the Company at any time, with or without cause. Under the Menzel Employment Agreement, Mr. Menzel will receive an initial base salary of $500,000 per annum. The Menzel Employment Agreement also provides that Mr. Menzel will be eligible for an annual performance bonus. Mr. Menzels annual target bonus amount will initially be equal to $300,000. In addition, the Company has agreed to grant Mr. Menzel a one-time equity award with a grant date value of $500,000, consisting of restricted shares of common stock which vest ratably over a four-year period. These awards will be subject to the Companys standard terms and conditions for restricted stock grants. If Mr. Menzels employment is terminated under certain circumstances, he is entitled to two (2) times the sum of (A) his base salary as in effect on the date of termination, and (B) the average of the three most recent annual performance bonuses received by him preceding the date of his termination (the Severance Amount), payable in equal installments over a twenty-four (24) month period following his termination. If the qualifying termination event occurs during the period beginning three (3) months prior to the public announcement of a change in control of the Company and ending on the twelve (12) month anniversary of such change in control, then the Severance Amount shall be payable in a lump sum to the extent permitted under Section 409A of the Internal Revenue Code of 1986, as amended. Mr. Menzel would also be entitled to accelerated vesting of certain equity awards and payments designed to offset COBRA benefit continuation premiums for up to twenty-four (24) months following his termination upon his termination of employment under certain circumstances. The foregoing description of the Menzel Employment Agreement is qualified in its entirety by reference to the actual terms of the Menzel Employment Agreement, attached hereto as Exhibit 10.1 and incorporated by reference herein. A copy of the press release announcing the appointment of Mr. Menzel is attached hereto as Exhibit 99.1.
In connection with Mr. Menzels transition from Chief Financial Officer to Chief Operating Officer, the Company also announced the appointment of Kyle Sauers, age 42, as the Companys Chief Financial Officer, effective October 7, 2013. Mr. Sauers previously served, from January 2011 until his appointment as Chief Financial Officer, as the Companys Senior Vice President Finance and Controller. Prior to joining the Company, Mr. Sauers served from 2008 through 2011 as General Manager at Varian Medical Systems, an NYSE-listed company. Mr. Sauers holds a bachelors degree in Accounting from the University of Illinois and is a C.P.A.
In connection with Mr. Sauers appointment as Chief Financial Officer, Mr. Sauers entered into an Amended and Restated Employment Agreement (the Sauers Employment Agreement) with the Company, which may be terminated by Mr. Sauers or the Company at any time, with or without cause. Under the Sauers Employment Agreement, Mr. Sauers will receive an initial base salary of $325,000 per annum. The Sauers Employment Agreement also provides that Mr. Sauers will be eligible for an annual performance bonus. Mr. Sauers annual target bonus amount will initially be equal to $195,000. In addition, the Company has agreed to grant Mr. Sauers a one-time equity award with a grant date value of $1,000,000, consisting of restricted shares of common stock which vest ratably over a four-year period. These awards will be subject to the Companys standard terms and conditions for restricted stock grants. If Mr. Sauers employment is terminated under certain circumstances, he is entitled to the sum of (A) his base salary as in effect on the date of termination, and (B) the average of the three most recent annual performance bonuses received by him preceding the date of his termination (the Severance
Amount), payable in equal installments over a twelve (12) month period following his termination. If the qualifying termination event occurs during the period beginning three (3) months prior to the public announcement of a change in control of the Company and ending on the twelve (12) month anniversary of such change in control, then the Severance Amount shall be payable in a lump sum to the extent permitted under Section 409A of the Internal Revenue Code of 1986, as amended. Mr. Sauers would also be entitled to accelerated vesting of certain equity awards and payments designed to offset COBRA benefit continuation premiums for up to twelve (12) months following his termination upon his termination of employment under certain circumstances. The foregoing description of the Sauers Employment Agreement is qualified in its entirety by reference to the actual terms of the Sauers Employment Agreement, attached hereto as Exhibit 10.2 and incorporated by reference herein. A copy of the press release announcing the appointment of Mr. Sauers is attached hereto as Exhibit 99.1.
Also announced in the Companys press release was the appointment of Evan Schumacher, age 44, as the Companys Chief Commercial Officer, effective October 7, 2013. Mr. Schumacher previously served, from March 2013 until his appointment as Chief Commercial Officer, as the Companys Senior Vice President Truckload National Accounts. Prior to joining the Company, Mr. Schumacher founded Open Mile, Inc., a truckload brokerage headquartered in Boston, Massachusetts, and served as its Chief Executive Officer from December 2009 until Open Mile was acquired by the Company in March 2013. Prior to founding Open Mile, Inc., Mr. Schumacher served as Chief Executive Officer at Going.com, a social media website that was acquired by AOL in 2009. Mr. Schumacher holds a bachelors degree from Northeastern University and earned his Masters in Business Administration from Northwestern University.
In connection with Mr. Schumachers appointment as Chief Commercial Officer, Mr. Schumacher entered into an Amended and Restated Employment Agreement (the Schumacher Employment Agreement) with the Company, which may be terminated by Mr. Schumacher or the Company at any time, with or without cause. Under the Schumacher Employment Agreement, Mr. Schumacher will receive an initial base salary of $325,000 per annum. The Schumacher Employment Agreement also provides that Mr. Schumacher will be eligible for an annual performance bonus. Mr. Schumachers annual target bonus amount will initially be equal to $150,000. In addition, the Company has agreed to grant Mr. Schumacher a one-time equity award with a grant date value of $1,000,000, consisting of restricted shares of common stock which vest ratably over a four-year period. These awards will be subject to the Companys standard terms and conditions for restricted stock grants. If Mr. Schumachers employment is terminated under certain circumstances, he is entitled to the sum of (A) his base salary as in effect on the date of termination, and (B) the average of the three most recent annual performance bonuses received by him preceding the date of his termination (the Severance Amount), payable in equal installments over a twelve (12) month period following his termination. If the qualifying termination event occurs during the period beginning three (3) months prior to the public announcement of a change in control of the Company and ending on the twelve (12) month anniversary of such change in control, then the Severance Amount shall be payable in a lump sum to the extent permitted under Section 409A of the Internal Revenue Code of 1986, as amended. Mr. Schumacher would also be entitled to accelerated vesting of certain equity awards and payments designed to offset COBRA benefit continuation premiums for up to twelve (12) months following his termination upon his termination of employment under certain circumstances. The foregoing description of the Schumacher Employment Agreement is qualified in its entirety by reference to the actual terms of the Schumacher Employment Agreement, attached hereto as Exhibit 10.3 and incorporated by reference herein. A copy of the press release announcing the appointment of Mr. Schumacher is attached hereto as Exhibit 99.1.
The Company also entered into an Amended and Restated Employment Agreement (the Waggoner Employment Agreement) with Douglas R. Waggoner, the Companys Chief Executive Officer, which may be terminated by Mr. Waggoner or the Company at any time, with or without cause. The amendments to Mr. Waggoners prior employment agreement primarily relate to the non-compete and non-solicitation covenants and the timing of severance payments in the event of his termination or employment in connection with a change in control. All other material terms of Mr. Waggoners prior employment agreement have remained unchanged. The foregoing description of the Waggoner
Employment Agreement is qualified in its entirety by reference to the actual terms of the Waggoner Employment Agreement, attached hereto as Exhibit 10.4 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. |
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Description |
10.1 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, David B. Menzel and Echo Global Logistics, Inc. |
10.2 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Kyle Sauers and Echo Global Logistics, Inc. |
10.3 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Evan Schumacher and Echo Global Logistics, Inc. |
10.4 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Douglas R. Waggoner and Echo Global Logistics, Inc. |
99.1 |
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Press Release dated October 7, 2013. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ECHO GLOBAL LOGISTICS, INC. | |
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Dated: October 7, 2013 |
By: |
/s/ Douglas R. Waggoner |
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Name: Douglas R. Waggoner | |
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Title: Chief Executive Officer |
Exhibit Index
Exhibit No. |
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Description |
10.1 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, David B. Menzel and Echo Global Logistics, Inc. |
10.2 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Kyle Sauers and Echo Global Logistics, Inc. |
10.3 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Evan Schumacher and Echo Global Logistics, Inc. |
10.4 |
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Amended and Restated Employment Agreement, dated October 7, 2013, by and between, Douglas R. Waggoner and Echo Global Logistics, Inc. |
99.1 |
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Press Release dated October 7, 2013. |
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) is made and entered into as of October 7, 2013 and effective as of October 7, 2013 (the Effective Date), by and between Echo Global Logistics, Inc., a Delaware corporation (the Company), and David B. Menzel (Menzel).
WHEREAS, the Company has employed Menzel, most recently as Chief Financial Officer of the Company;
WHEREAS, the Company and Menzel were parties to an employment agreement dated March 21, 2012 (the Prior Agreement); and
WHEREAS, the parties desire to enter into a new employment agreement reflecting the terms of Menzels continuing employment as Chief Operating Officer of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
1. Employment; Position and Duties. The Company agrees to continue to employ Menzel, and Menzel agrees to continue to be employed by the Company, upon the terms and conditions of this Agreement. Menzel shall be employed by the Company as the Companys Chief Operating Officer reporting to the Chief Executive Officer of the Company (the CEO) and to the Board of Directors of the Company (the Board). In this capacity, Menzel agrees to devote his full time, energy and skill to the faithful performance of his duties herein, and shall perform the duties and carry out the responsibilities assigned to him to the best of his ability and in a diligent, businesslike and efficient manner. Menzels duties shall include all those duties customarily performed by a Chief Operating Officer, as well as those additional duties commensurate with his position as Chief Operating Officer that may be reasonably assigned by the CEO and the Board. Menzel shall comply with any policies and procedures established for Company employees, including, without limitation, those policies and procedures contained in the Companys employee handbook previously delivered to Menzel. To the extent there is any conflict between those policies and this Agreement, this Agreement shall govern.
2. Board Meetings. At the invitation of the Board, Menzel shall be entitled to attend all meetings of the Board; provided, that the Board may exclude Menzel from all or any portion of a meeting if the Board believes in good faith that such exclusion is reasonably necessary for the effective conduct of business by the Board or management of the Company or to preserve the confidentiality or privileged nature of certain information.
3. Term of Employment. This Agreement shall become effective, and the Prior Agreement shall terminate, upon the Effective Date. The terms of this Agreement shall supersede the terms of the Prior Agreement in their entirety. The term of Menzels employment under this Agreement shall commence on the Effective Date and shall expire on December 31, 2016, unless earlier terminated by either party, in accordance with the terms of this Agreement and/or the following sentence. This Agreement may be terminated by Menzel or by the Company, at any time, with or without Cause (as defined below). Upon the termination of Menzels employment with the Company for any reason,
neither party shall have any further obligation or liability under this Agreement to the other party, except as set forth in Sections 5, 7, 8, 9, 10, 11, and 12 of this Agreement.
4. Compensation. Menzel shall be compensated by the Company for his services as follows:
(a) Base Salary. Menzel shall be paid an initial base salary of $500,000 per year in accordance with the Companys normal payroll procedures. Increases in Menzels base salary, if any, shall be as approved by the Board or its compensation committee.
(b) Benefits. During the term of this Agreement, Menzel shall have the right, on the same basis as other members of senior management of the Company, to participate in and to receive benefits under the Companys executive and employee benefit plans, insurance programs and/or indemnification agreements, as may be in effect from time to time, subject to any applicable waiting periods and other restrictions. In addition, Menzel shall be entitled to the benefits afforded to other members of senior management under the Companys vacation, holiday and business expense reimbursement policies. Menzels vacation benefits shall accrue at a rate not less than four (4) weeks per year. Menzel shall also be eligible to participate in the Companys equity incentive plans, as approved from time to time by the Board or its compensation committee, including the Amended and Restated Echo Global Logistics, Inc. 2008 Stock Incentive Plan, as amended, and any successor plan (the 2008 Plan).
(c) Performance Bonus. In addition to the base salary, Menzel shall be eligible to receive an annual performance bonus (Performance Bonus) to be approved from time to time by the Board or its compensation committee. The Performance Bonus shall be paid within the two-and-one-half-month period ending on the 15th day of the third month following the end of the Companys fiscal year.
(d) Equity Award. On or following the Effective Date, the Company shall grant Menzel a one-time equity award under the 2008 Plan with a grant date value of approximately $500,000 (the Equity Award). The Equity Award is expected to be in the form of restricted stock and will be subject to the terms of the 2008 Plan, the award agreement entered into thereunder and any other documentation related to the Equity Award.
(e) Expenses. In addition to reimbursement for business expenses incurred by Menzel in the normal and ordinary course of his employment by the Company pursuant to the Companys standard business expense reimbursement policies and procedures, the Company shall reimburse Menzel for the full amount of his medical insurance costs should he elect to participate in the Companys medical insurance program(s).
(f) Automobile Allowance and Other Insurance Costs. The Company also agrees to pay, in an amount not to exceed $19,000 in the aggregate annually, a monthly automobile allowance and premiums for a life insurance policy. Upon the termination of his employment with the Company, the responsibility for payment of premiums shall revert to Menzel. Menzel reserves the right at all times to designate the beneficiary of the policy.
5. Benefits Upon Termination.
(a) Termination for Cause; Termination for Other than Good Reason; Termination Upon Death or Disability. In the event of the termination of Menzels employment by the Company for Cause (as defined below), the termination of Menzels employment by Menzel for any reason other than Good
Reason (as defined below), or the termination of Menzels employment by reason of his death or Disability (as defined below,) Menzel shall be entitled to no further compensation or benefits from the Company other than those earned and/or vested under Sections 4(a), 4(b), and 4(c) through the date of termination. All unvested equity awards issued under the 2008 Plan on or following the Effective Date shall be terminated immediately as of the date of termination. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Menzel as of the date of termination shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
For purposes of this Agreement, a termination for Cause occurs if Menzels employment is terminated by the Company for any of the following reasons:
(i) his material breach of any provision of this Agreement, provided that in those instances in which his material breach is capable of being cured, Menzel has failed to cure within a thirty (30) day period after notice from the Company;
(ii) theft, dishonesty, or falsification of any employment or Company records by Menzel;
(iii) the reasonable determination by the Board that Menzel has committed an act or acts constituting a felony or any act involving moral turpitude; or
(iv) the reasonable determination by the Board that Menzel has engaged in willful misconduct or gross negligence that has had a material adverse effect on the Companys reputation or business.
For purposes of this Agreement, a termination for Good Reason occurs if Menzel terminates his employment for any of the following reasons:
(i) the Company materially reduces Menzels duties or responsibilities below what is customary for a Chief Operating Officer of a business that is similar to the Company without Menzels consent;
(ii) the Company requires Menzel to relocate his office more than 50 miles from the current office of the Company without his consent; or
(iii) the Company has materially breached the terms of this Agreement.
If one or more of the above conditions exist, Menzel must provide notice to the Company within a period not to exceed ninety (90) days of the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition.
For purposes of this Agreement, a termination for Disability occurs if Menzels employment is terminated due to Disability as defined under the 2008 Plan.
(b) Termination Without Cause or Termination for Good Reason. If Menzels employment is terminated by the Company without Cause, or if Menzels employment is terminated by Menzel for Good Reason, Menzel shall be entitled to:
(i) receive an amount equal to the product of two (2) times the sum of (A) Menzels base salary as in effect on the date of termination, and (B) the average of the three most recent annual Performance Bonuses received by Menzel preceding the date of his termination, payable in equal installments over a twenty-four (24) month period following the termination of Menzels employment in accordance with the Companys normal payroll procedures, provided, however, that for purposes of this Section 5(b)(i), Menzel shall be considered to have received a Performance Bonus of $0 for any year in which a Performance Bonus is not actually paid;
(ii) immediate vesting of such portion of outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date, as would have vested had Menzel remained employed for an additional twelve (12) months following the date of termination, unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a termination described in this Section 5(b), in which case the terms of the applicable award agreement shall apply and supersede this Section 5(b)(ii); and
(iii) if Menzel qualifies for and elects COBRA continuation coverage with respect to health benefits for Menzel and his dependents, Menzel shall receive cash payments equal to the amount of such COBRA premiums for the period ending on the earlier of: (A) twenty-four (24) months following the termination, (B) the date Menzel has secured comparable benefits through another organizations benefits program or (C) the date Menzel otherwise becomes ineligible for continuation coverage pursuant to COBRA. Notwithstanding the foregoing, this Section 5(b)(iii) shall cease to apply as of the effective date of any regulation or other guidance under which payment of such component would be deemed to violate any nondiscrimination requirements under the Patient Protection and Affordable Care Act.
For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Menzel as of the date of termination (including awards that vested upon Menzels termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
Notwithstanding anything to the contrary herein, no payments shall be due under this Section 5(b) unless and until Menzel shall have executed a general release and waiver of claims against the Company (the Release), in a form reasonably satisfactory to the Company, and the execution of such Release shall be a condition to Menzels rights under this Section 5(b). Such Release shall be delivered to Menzel within ten (10) business days of Menzels termination of employment, and no payments pursuant to Section 5(b) shall be made prior to the date that both (i) Menzel has delivered an original, signed Release to the Company and (ii) the revocability period (if any) has elapsed; provided however, that any payments that would otherwise have been made prior to such date but for the fact that Menzel had not yet delivered an original, signed Release (or the revocability period had not yet elapsed) shall be made as soon as administratively practicable but not later than the seventy-fourth (74th) day following Menzels termination of employment. Menzel must deliver an original, signed Release to the Company within ten (10) business days (or such longer period if required by law) after receipt of the same from the Company as a condition to receiving any payments or benefits described in Section 5(b).
6. Section 409A.
(a) To the extent that an amount is payable to Menzel hereunder upon termination of his employment, and to the extent that such amount is considered to be deferred compensation subject to Section 409A, (i) such termination of employment under this Agreement shall be construed to mean a separation from service as defined in Section 409A, and (ii) except to the extent earlier payment is permitted by Section 409A, if it is determined that Menzel is a specified employee as defined in Section 409A, the Company shall delay the payment of such amount for six (6) months after the termination of his employment (or until his death, if earlier) or for such other amount of time as may be necessary to comply with the requirements of Section 409A.
(b) This Agreement is intended to comply and shall be administered in a manner that is intended to comply with Section 409A, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions. This Agreement shall be construed and interpreted in accordance with such intent. Each payment made under this Agreement shall be designated as a separate payment within the meaning of Section 409A. The parties agree to make such other amendments to this Agreement as are necessary to comply with the requirements of Section 409A.
7. Change of Control.
(a) If, during the three (3) months prior to the public announcement of a proposed Change of Control, or at any time within twelve (12) months following a Change of Control, Menzels employment is terminated by the Company for any reason other than Cause, or terminated by Menzel for Good Reason, Menzel shall be entitled to (i) the compensation and benefits outlined under Section 5(b) above, except that (A) the amount payable under Section 5(b)(i) shall be paid, to the extent such amount is not subject to Section 409A, in a lump sum as soon as administratively practicable following the date the Release becomes nonrevocable in accordance with Section 5(b) but not later than the seventy-fourth (74th) day following Menzels termination of employment (the Exempt Amount) and (B) any amount payable under Section 5(b)(i) other than the Exempt Amount shall be paid in installments in accordance with Section 5(b) and (ii) immediate vesting of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date. For purposes of the preceding sentence, the portion of the Exempt Amount resulting from application of the two times/two year exemption in Treas. Reg. 1.409A-1(b)(9)(iii) shall be allocated to scheduled installments under Section 5(b)(i) in reverse chronological order (beginning with the 24th month) until such exemption amount is exhausted. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Menzel as of the date of termination (including awards that vested upon Menzels termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan. For purposes of this Agreement, a Change of Control shall have the same meaning as the term Change of Control set forth in the 2008 Plan.
(b) In the event of a Change of Control, Menzel shall be entitled to immediate vesting of fifty percent (50%) of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date (which percentage shall be applied proportionally to each tranche of unvested equity awards scheduled to vest following the date of such Change of Control), unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a Change of Control, in which case the terms of the applicable award agreement shall apply and supersede this Section 7(b). For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Menzel as of the date of a Change of Control (including
awards that vested upon a Change of Control pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
8. Employee Inventions and Proprietary Rights Assignment Agreement. Menzel agrees to abide by the terms and conditions of the Companys standard Employee Inventions and Proprietary Rights Assignment Agreement previously executed by Menzel.
9. Covenants Not to Compete or Solicit. During Menzels employment and for a period of (i) twenty-four (24) months following the termination of Menzels employment if Menzels employment terminates pursuant to Sections 5(b) or 7(a) hereof or (ii) twelve (12) months following the termination of Menzels employment if Menzels employment terminates for any reason other than pursuant to Sections 5(b) or 7(a) hereof, Menzel shall not, anywhere in the Geographic Area (as defined below), other than on behalf of the Company or with the prior written consent of the Company, directly or indirectly:
(a) perform services for (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director or otherwise), have any ownership interest in (except for passive ownership of one percent (1%) or less of any entity whose securities have been registered under the Securities Act or Section 12 of the Securities Exchange Act of 1934, as amended), or participate in the financing, operation, management or control of, any firm, partnership, corporation, entity or business that engages or participates in a competing business purpose (as defined below);
(b) induce or attempt to induce any customer, potential customer, supplier, licensee, licensor or business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any customer, potential customer, supplier, licensee, licensor or business relation of the Company or solicit the business of any customer or potential customer of the Company, whether or not Menzel had personal contact with such entity; and
(c) solicit, encourage, hire or take any other action which is intended to induce or encourage, or has the effect of inducing or encouraging, any employee or independent contractor of the Company or any subsidiary of the Company to terminate his employment or relationship with the Company or any subsidiary of the Company, other than in the discharge of his duties as an officer of the Company.
In the event that Menzel receives a waiver of the non-competition provision from the Company, which the Company may or may not grant in its sole discretion, Menzel agrees that he will waive any further claim for severance and insurance benefits beginning on the date of his employment with a new organization, provided that such new employment is comparable to Menzels employment with the Company in terms of salary and benefits.
For the purpose of this Agreement, the term competing business purpose shall mean the sale or provision of any transportation or logistics-related services that are competitive with in any manner the services sold or offered by the Company during the term of this Agreement. The term Geographic Area shall mean the United States of America.
The covenants contained in this Section 9 shall be construed as a series of separate covenants, one for each county, city, state, or any similar subdivision in any Geographic Area. Except for
geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of this Section 9 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.
10. Equitable Remedies. Menzel acknowledges and agrees that the agreements and covenants set forth in Sections 8 and 9 are reasonable and necessary for the protection of the Companys business interests, that irreparable injury will result to the Company if Menzel breaches any of the terms of such covenants, and that in the event of Menzels actual or threatened breach of any such covenants, the Company will have no adequate remedy at law. Menzel accordingly agrees that, in the event of any actual or threatened breach by Menzel of any of such covenants, the Company will be entitled to seek immediate injunctive and other equitable relief, without posting any bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.
11. Dispute Resolution. In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Menzel and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Chicago, Illinois in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect (and not as they may be modified in the future). Menzel acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute. Notwithstanding the foregoing, this arbitration provision shall not apply to any disputes or claims relating to or arising out of the misuse or misappropriation of trade secrets or proprietary information.
12. Attorneys Fees. Menzel shall be entitled to recover from the Company his reasonable attorneys fees and costs if he prevails in an action to enforce any right arising out of this Agreement. Such payment will be made as soon as practicable but no later than the fifteenth (15th) day of the third month of the year following the year in which the action to enforce his rights is finalized.
13. Governing Law. This Agreement has been executed in the State of Illinois, and Menzel and the Company agree that this Agreement shall be interpreted in accordance with and governed by the laws of the State of Illinois, without regard to its conflicts of laws principles.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that successor or assignee is the successor to substantially all of the assets of the Company, or a majority of its then outstanding Shares, and that such successor or assignee assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. In view of the personal nature of the services to be performed under this Agreement by Menzel, he shall not have the right to assign or transfer any of his rights, obligations or benefits under this Agreement, except as otherwise noted herein.
15. Entire Agreement. This Agreement, including its attached Exhibits, constitutes the entire employment agreement between Menzel and the Company regarding the terms and conditions of
his employment, with the exception of those provisions of the 2008 Plan (and any predecessor plan) and related award agreements incorporated by reference pursuant to Sections 5 and 7. This Agreement supersedes all prior negotiations, representations or agreements between Menzel and the Company, whether written or oral, concerning Menzels employment.
16. No Conflict. Menzel represents and warrants to the Company that neither his entry into this Agreement nor his performance of his obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation to which Menzel is a party or by which Menzel is bound, including without limitation, any non-competition or confidentiality agreement previously entered into by Menzel.
17. Validity. Except as otherwise provided in Section 9, above, if any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.
18. Modification. This Agreement may not be modified or amended except by a written agreement signed by Menzel and the Company.
19. Withholding. All payments made to Menzel pursuant to this Agreement shall be subject to applicable withholding taxes, if any, and any amount so withheld shall be deemed to have been paid to Menzel for purposes of amounts due to Menzel under this Agreement.
20. Adjustments Due to Excise Tax.
(a) If it is determined that any amount or benefit to be paid or payable to Menzel under this Agreement or otherwise in conjunction with his employment (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in conjunction with his employment) would give rise to liability of Menzel for the excise tax imposed by Section 4999 of the Internal Revenue Code, as amended from time to time, or any successor provision (the Excise Tax), then the amount or benefits payable to Menzel (the total value of such amounts or benefits, the Payments) shall be reduced by the Company to the extent necessary so that no portion of the Payments to Menzel is subject to the Excise Tax. Such reduction shall only be made if the net amount of the Payments, as so reduced (and after deduction of applicable federal, state, and local income and payroll taxes on such reduced Payments other than the Excise Tax (collectively, the Deductions)) is greater than the excess of (i) the net amount of the Payments, without reduction (but after making the Deductions), over (ii) the amount of Excise Tax to which Menzel would be subject in respect of such Payments. In the event Payments are required to be reduced pursuant to this Section 20(a), Menzel shall designate the order in which such amounts or benefits shall be reduced in a manner consistent with Section 409A.
(b) The independent public accounting firm serving as the Companys auditing firm, or such other accounting firm, law firm or professional consulting services provider of national reputation and experience reasonably acceptable to the Company and Menzel (the Accountants), shall prepare all calculations and make all determinations under this Section 20, including the assumptions to be used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 20, the Accountants and each other party may make reasonable assumptions and approximations concerning the application of Section 280G and Section 4999 of the Internal Revenue Code. The Company and Menzel shall furnish to the Accountants and each other such information and documents as the Accountants and each other may reasonably request to make the calculations and determinations
under this Section 20. The Company shall bear all costs the Accountants incur in connection with any calculations contemplated hereby.
Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) is made and entered into as of October 7, 2013 and effective as of October 7, 2013 (the Effective Date), by and between Echo Global Logistics, Inc., a Delaware corporation (the Company), and Kyle Sauers (Sauers).
WHEREAS, the Company has employed Sauers, most recently as SVP of Finance of the Company;
WHEREAS, the Company and Sauers were parties to an employment agreement dated January 10, 2011 (the Prior Agreement); and
WHEREAS, the parties desire to enter into a new employment agreement reflecting the terms of Sauers continuing employment as Chief Financial Officer of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
1. Employment; Position and Duties. The Company agrees to continue to employ Sauers, and Sauers agrees to continue to be employed by the Company, upon the terms and conditions of this Agreement. Sauers shall be employed by the Company as the Companys Chief Financial Officer reporting to the Chief Executive Officer of the Company (the CEO) and to the Board of Directors of the Company (the Board). In this capacity, Sauers agrees to devote his full time, energy and skill to the faithful performance of his duties herein, and shall perform the duties and carry out the responsibilities assigned to him to the best of his ability and in a diligent, businesslike and efficient manner. Sauers duties shall include all those duties customarily performed by a Chief Financial Officer, as well as those additional duties commensurate with his position as Chief Financial Officer that may be reasonably assigned by the CEO and the Board. Sauers shall comply with any policies and procedures established for Company employees, including, without limitation, those policies and procedures contained in the Companys employee handbook previously delivered to Sauers. To the extent there is any conflict between those policies and this Agreement, this Agreement shall govern.
2. Board Meetings. At the invitation of the Board, Sauers shall be entitled to attend all meetings of the Board; provided, that the Board may exclude Sauers from all or any portion of a meeting if the Board believes in good faith that such exclusion is reasonably necessary for the effective conduct of business by the Board or management of the Company or to preserve the confidentiality or privileged nature of certain information.
3. Term of Employment. This Agreement shall become effective, and the Prior Agreement shall terminate, upon the Effective Date. The terms of this Agreement shall supersede the terms of the Prior Agreement in their entirety. The term of Sauers employment under this Agreement shall commence on the Effective Date and shall expire on December 31, 2016, unless earlier terminated by either party, in accordance with the terms of this Agreement and/or the following sentence. This Agreement may be terminated by Sauers or by the Company, at any time, with or without Cause (as defined below). Upon the termination of Sauers employment with the Company for any reason, neither
party shall have any further obligation or liability under this Agreement to the other party, except as set forth in Sections 5, 7, 8, 9, 10, 11, and 12 of this Agreement.
4. Compensation. Sauers shall be compensated by the Company for his services as follows:
(a) Base Salary. Sauers shall be paid an initial base salary of $325,000 per year in accordance with the Companys normal payroll procedures. Increases in Sauers base salary, if any, shall be as approved by the Board or its compensation committee.
(b) Benefits. During the term of this Agreement, Sauers shall have the right, on the same basis as other members of senior management of the Company, to participate in and to receive benefits under the Companys executive and employee benefit plans, insurance programs and/or indemnification agreements, as may be in effect from time to time, subject to any applicable waiting periods and other restrictions. In addition, Sauers shall be entitled to the benefits afforded to other members of senior management under the Companys vacation, holiday and business expense reimbursement policies. Sauers vacation benefits shall accrue at a rate not less than four (4) weeks per year. Sauers shall also be eligible to participate in the Companys equity incentive plans, as approved from time to time by the Board or its compensation committee, including the Amended and Restated Echo Global Logistics, Inc. 2008 Stock Incentive Plan, as amended, and any successor plan (the 2008 Plan).
(c) Performance Bonus. In addition to the base salary, Sauers shall be eligible to receive an annual performance bonus (Performance Bonus) to be approved from time to time by the Board or its compensation committee. The Performance Bonus shall be paid within the two-and-one-half-month period ending on the 15th day of the third month following the end of the Companys fiscal year.
(d) Equity Award. On or following the Effective Date, the Company shall grant Sauers a one-time equity award under the 2008 Plan with a grant date value of approximately $1,000,000 (the Equity Award). The Equity Award is expected to be in the form of restricted stock and will be subject to the terms of the 2008 Plan, the award agreement entered into thereunder and any other documentation related to the Equity Award.
(e) Expenses. In addition to reimbursement for business expenses incurred by Sauers in the normal and ordinary course of his employment by the Company pursuant to the Companys standard business expense reimbursement policies and procedures, the Company shall reimburse Sauers for the full amount of his medical insurance costs should he elect to participate in the Companys medical insurance program(s).
(f) Automobile Allowance and Other Insurance Costs. The Company also agrees to pay, in an amount not to exceed $12,000 in the aggregate annually, a monthly automobile allowance and premiums for a life insurance policy. Upon the termination of his employment with the Company, the responsibility for payment of premiums shall revert to Sauers. Sauers reserves the right at all times to designate the beneficiary of the policy.
5. Benefits Upon Termination.
(a) Termination for Cause; Termination for Other than Good Reason; Termination Upon Death or Disability. In the event of the termination of Sauers employment by the Company for Cause (as defined below), the termination of Sauers employment by Sauers for any reason other than Good
Reason (as defined below), or the termination of Sauers employment by reason of his death or Disability (as defined below,) Sauers shall be entitled to no further compensation or benefits from the Company other than those earned and/or vested under Sections 4(a), 4(b), and 4(c) through the date of termination. All unvested equity awards issued under the 2008 Plan on or following the Effective Date shall be terminated immediately as of the date of termination. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Sauers as of the date of termination shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
For purposes of this Agreement, a termination for Cause occurs if Sauers employment is terminated by the Company for any of the following reasons:
(i) his material breach of any provision of this Agreement, provided that in those instances in which his material breach is capable of being cured, Sauers has failed to cure within a thirty (30) day period after notice from the Company;
(ii) theft, dishonesty, or falsification of any employment or Company records by Sauers;
(iii) the reasonable determination by the Board that Sauers has committed an act or acts constituting a felony or any act involving moral turpitude; or
(iv) the reasonable determination by the Board that Sauers has engaged in willful misconduct or gross negligence that has had a material adverse effect on the Companys reputation or business.
For purposes of this Agreement, a termination for Good Reason occurs if Sauers terminates his employment for any of the following reasons:
(i) the Company materially reduces Sauers duties or responsibilities below what is customary for a Chief Financial Officer of a business that is similar to the Company without Sauers consent;
(ii) the Company requires Sauers to relocate his office more than 50 miles from the current office of the Company without his consent; or
(iii) the Company has materially breached the terms of this Agreement.
If one or more of the above conditions exist, Sauers must provide notice to the Company within a period not to exceed ninety (90) days of the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition.
For purposes of this Agreement, a termination for Disability occurs if Sauers employment is terminated due to Disability as defined under the 2008 Plan.
(b) Termination Without Cause or Termination for Good Reason. If Sauers employment is terminated by the Company without Cause, or if Sauers employment is terminated by Sauers for Good Reason, Sauers shall be entitled to:
(i) receive an amount equal to the sum of (A) Sauers base salary as in effect on the date of termination, and (B) the average of the three most recent annual Performance Bonuses received by Sauers preceding the date of his termination, payable in equal installments over a twelve (12) month period following the termination of Sauers employment in accordance with the Companys normal payroll procedures, provided, however, that for purposes of this Section 5(b)(i), Sauers shall be considered to have received a Performance Bonus of $0 for any year in which a Performance Bonus is not actually paid;
(ii) immediate vesting of such portion of outstanding unvested equity awards as would have vested had Sauers remained employed for an additional twelve (12) months following the date of termination, unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a termination described in this Section 5(b), in which case the terms of the applicable award agreement shall apply and supersede this Section 5(b)(ii); and
(iii) if Sauers qualifies for and elects COBRA continuation coverage with respect to health benefits for Sauers and his dependents, Sauers shall receive cash payments equal to the amount of such COBRA premiums for the period ending on the earlier of: (A) twelve (12) months following the termination, (B) the date Sauers has secured comparable benefits through another organizations benefits program or (C) the date Sauers otherwise becomes ineligible for continuation coverage pursuant to COBRA. Notwithstanding the foregoing, this Section 5(b)(iii) shall cease to apply as of the effective date of any regulation or other guidance under which payment of such component would be deemed to violate any nondiscrimination requirements under the Patient Protection and Affordable Care Act.
For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Sauers as of the date of termination (including awards that vested upon Sauers termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
Notwithstanding anything to the contrary herein, no payments shall be due under this Section 5(b) unless and until Sauers shall have executed a general release and waiver of claims against the Company (the Release), in a form reasonably satisfactory to the Company, and the execution of such Release shall be a condition to Sauers rights under this Section 5(b). Such Release shall be delivered to Sauers within ten (10) business days of Sauers termination of employment, and no payments pursuant to Section 5(b) shall be made prior to the date that both (i) Sauers has delivered an original, signed Release to the Company and (ii) the revocability period (if any) has elapsed; provided however, that any payments that would otherwise have been made prior to such date but for the fact that Sauers had not yet delivered an original, signed Release (or the revocability period had not yet elapsed) shall be made as soon as administratively practicable but not later than the seventy-fourth (74th) day following Sauers termination of employment. Sauers must deliver an original, signed Release to the Company within ten (10) business days (or such longer period if required by law) after receipt of the same from the Company as a condition to receiving any payments or benefits described in Section 5(b).
6. Section 409A.
(a) To the extent that an amount is payable to Sauers hereunder upon termination of his employment, and to the extent that such amount is considered to be deferred compensation subject to Section 409A, (i) such termination of employment under this Agreement shall be construed to mean a
separation from service as defined in Section 409A, and (ii) except to the extent earlier payment is permitted by Section 409A, if it is determined that Sauers is a specified employee as defined in Section 409A, the Company shall delay the payment of such amount for six (6) months after the termination of his employment (or until his death, if earlier) or for such other amount of time as may be necessary to comply with the requirements of Section 409A.
(b) This Agreement is intended to comply and shall be administered in a manner that is intended to comply with Section 409A, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions. This Agreement shall be construed and interpreted in accordance with such intent. Each payment made under this Agreement shall be designated as a separate payment within the meaning of Section 409A. The parties agree to make such other amendments to this Agreement as are necessary to comply with the requirements of Section 409A.
7. Change of Control.
(a) If, during the three (3) months prior to the public announcement of a proposed Change of Control, or at any time within twelve (12) months following a Change of Control, Sauers employment is terminated by the Company for any reason other than Cause, or terminated by Sauers for Good Reason, Sauers shall be entitled to (i) the compensation and benefits outlined under Section 5(b) above, except that the amount payable under Section 5(b)(i) shall be paid in a lump sum as soon as administratively practicable following the date the Release becomes nonrevocable in accordance with Section 5(b) but not later than the seventy-fourth (74th) day following Sauers termination of employment and (ii) immediate vesting of all outstanding unvested equity awards. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Sauers as of the date of termination (including awards that vested upon Sauers termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan. For purposes of this Agreement, a Change of Control shall have the same meaning as the term Change of Control set forth in the 2008 Plan.
(b) In the event of a Change of Control, Sauers shall be entitled to immediate vesting of fifty percent (50%) of all outstanding unvested equity awards (which percentage shall be applied proportionally to each tranche of unvested equity awards scheduled to vest following the date of such Change of Control), unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a Change of Control, in which case the terms of the applicable award agreement shall apply and supersede this Section 7(b). For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Sauers as of the date of a Change of Control (including awards that vested upon a Change of Control pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
8. Employee Inventions and Proprietary Rights Assignment Agreement. Sauers agrees to abide by the terms and conditions of the Companys standard Employee Inventions and Proprietary Rights Assignment Agreement previously executed by Sauers.
9. Covenants Not to Compete or Solicit. During Sauers employment and for a period of twelve (12) months following the termination of Sauers employment, Sauers shall not, anywhere in the Geographic Area (as defined below), other than on behalf of the Company or with the prior written consent of the Company, directly or indirectly:
(a) perform services for (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director or otherwise), have any ownership interest in (except for passive ownership of one percent (1%) or less of any entity whose securities have been registered under the Securities Act or Section 12 of the Securities Exchange Act of 1934, as amended), or participate in the financing, operation, management or control of, any firm, partnership, corporation, entity or business that engages or participates in a competing business purpose (as defined below);
(b) induce or attempt to induce any customer, potential customer, supplier, licensee, licensor or business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any customer, potential customer, supplier, licensee, licensor or business relation of the Company or solicit the business of any customer or potential customer of the Company, whether or not Sauers had personal contact with such entity; and
(c) solicit, encourage, hire or take any other action which is intended to induce or encourage, or has the effect of inducing or encouraging, any employee or independent contractor of the Company or any subsidiary of the Company to terminate his employment or relationship with the Company or any subsidiary of the Company, other than in the discharge of his duties as an officer of the Company.
In the event that Sauers receives a waiver of the non-competition provision from the Company, which the Company may or may not grant in its sole discretion, Sauers agrees that he will waive any further claim for severance and insurance benefits beginning on the date of his employment with a new organization, provided that such new employment is comparable to Sauers employment with the Company in terms of salary and benefits.
For the purpose of this Agreement, the term competing business purpose shall mean the sale or provision of any transportation or logistics-related services that are competitive with in any manner the services sold or offered by the Company during the term of this Agreement. The term Geographic Area shall mean the United States of America.
The covenants contained in this Section 9 shall be construed as a series of separate covenants, one for each county, city, state, or any similar subdivision in any Geographic Area. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of this Section 9 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.
10. Equitable Remedies. Sauers acknowledges and agrees that the agreements and covenants set forth in Sections 8 and 9 are reasonable and necessary for the protection of the Companys business interests, that irreparable injury will result to the Company if Sauers breaches any of the terms
of such covenants, and that in the event of Sauers actual or threatened breach of any such covenants, the Company will have no adequate remedy at law. Sauers accordingly agrees that, in the event of any actual or threatened breach by Sauers of any of such covenants, the Company will be entitled to seek immediate injunctive and other equitable relief, without posting any bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.
11. Dispute Resolution. In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Sauers and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Chicago, Illinois in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect (and not as they may be modified in the future). Sauers acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute. Notwithstanding the foregoing, this arbitration provision shall not apply to any disputes or claims relating to or arising out of the misuse or misappropriation of trade secrets or proprietary information.
12. Attorneys Fees. Sauers shall be entitled to recover from the Company his reasonable attorneys fees and costs if he prevails in an action to enforce any right arising out of this Agreement. Such payment will be made as soon as practicable but no later than the fifteenth (15th) day of the third month of the year following the year in which the action to enforce his rights is finalized.
13. Governing Law. This Agreement has been executed in the State of Illinois, and Sauers and the Company agree that this Agreement shall be interpreted in accordance with and governed by the laws of the State of Illinois, without regard to its conflicts of laws principles.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that successor or assignee is the successor to substantially all of the assets of the Company, or a majority of its then outstanding Shares, and that such successor or assignee assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. In view of the personal nature of the services to be performed under this Agreement by Sauers, he shall not have the right to assign or transfer any of his rights, obligations or benefits under this Agreement, except as otherwise noted herein.
15. Entire Agreement. This Agreement, including its attached Exhibits, constitutes the entire employment agreement between Sauers and the Company regarding the terms and conditions of his employment, with the exception of those provisions of the 2008 Plan (and any predecessor plan) and related award agreements incorporated by reference pursuant to Sections 5 and 7. This Agreement supersedes all prior negotiations, representations or agreements between Sauers and the Company, whether written or oral, concerning Sauers employment.
16. No Conflict. Sauers represents and warrants to the Company that neither his entry into this Agreement nor his performance of his obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation to which Sauers is a party or by which Sauers is bound, including without limitation, any non-competition or confidentiality agreement previously entered into by Sauers.
17. Validity. Except as otherwise provided in Section 9, above, if any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.
18. Modification. This Agreement may not be modified or amended except by a written agreement signed by Sauers and the Company.
19. Withholding. All payments made to Sauers pursuant to this Agreement shall be subject to applicable withholding taxes, if any, and any amount so withheld shall be deemed to have been paid to Sauers for purposes of amounts due to Sauers under this Agreement.
20. Adjustments Due to Excise Tax.
(a) If it is determined that any amount or benefit to be paid or payable to Sauers under this Agreement or otherwise in conjunction with his employment (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in conjunction with his employment) would give rise to liability of Sauers for the excise tax imposed by Section 4999 of the Internal Revenue Code, as amended from time to time, or any successor provision (the Excise Tax), then the amount or benefits payable to Sauers (the total value of such amounts or benefits, the Payments) shall be reduced by the Company to the extent necessary so that no portion of the Payments to Sauers is subject to the Excise Tax. Such reduction shall only be made if the net amount of the Payments, as so reduced (and after deduction of applicable federal, state, and local income and payroll taxes on such reduced Payments other than the Excise Tax (collectively, the Deductions)) is greater than the excess of (i) the net amount of the Payments, without reduction (but after making the Deductions), over (ii) the amount of Excise Tax to which Sauers would be subject in respect of such Payments. In the event Payments are required to be reduced pursuant to this Section 20(a), Sauers shall designate the order in which such amounts or benefits shall be reduced in a manner consistent with Section 409A.
(b) The independent public accounting firm serving as the Companys auditing firm, or such other accounting firm, law firm or professional consulting services provider of national reputation and experience reasonably acceptable to the Company and Sauers (the Accountants), shall prepare all calculations and make all determinations under this Section 20, including the assumptions to be used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 20, the Accountants and each other party may make reasonable assumptions and approximations concerning the application of Section 280G and Section 4999 of the Internal Revenue Code. The Company and Sauers shall furnish to the Accountants and each other such information and documents as the Accountants and each other may reasonably request to make the calculations and determinations under this Section 20. The Company shall bear all costs the Accountants incur in connection with any calculations contemplated hereby.
Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) is made and entered into as of October 7, 2013 and effective as of October 7, 2013 (the Effective Date), by and between Echo Global Logistics, Inc., a Delaware corporation (the Company), and Evan Schumacher (Schumacher).
WHEREAS, the Company has employed Schumacher, most recently as SVP TL National Accounts of the Company;
WHEREAS, the Company and Schumacher were parties to an employment agreement dated March 11, 2013 (the Prior Agreement); and
WHEREAS, the parties desire to enter into a new employment agreement reflecting the terms of Schumachers continuing employment as Chief Commercial Officer of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
1. Employment; Position and Duties. The Company agrees to continue to employ Schumacher, and Schumacher agrees to continue to be employed by the Company, upon the terms and conditions of this Agreement. Schumacher shall be employed by the Company as the Companys Chief Commercial Officer reporting to the Chief Executive Officer of the Company (the CEO) and to the Board of Directors of the Company (the Board). In this capacity, Schumacher agrees to devote his full time, energy and skill to the faithful performance of his duties herein, and shall perform the duties and carry out the responsibilities assigned to him to the best of his ability and in a diligent, businesslike and efficient manner. Schumachers duties shall include all those duties customarily performed by a Chief Commercial Officer, as well as those additional duties commensurate with his position as Chief Commercial Officer that may be reasonably assigned by the CEO and the Board. Schumacher shall comply with any policies and procedures established for Company employees, including, without limitation, those policies and procedures contained in the Companys employee handbook previously delivered to Schumacher. To the extent there is any conflict between those policies and this Agreement, this Agreement shall govern.
2. Board Meetings. At the invitation of the Board, Schumacher shall be entitled to attend all meetings of the Board; provided, that the Board may exclude Schumacher from all or any portion of a meeting if the Board believes in good faith that such exclusion is reasonably necessary for the effective conduct of business by the Board or management of the Company or to preserve the confidentiality or privileged nature of certain information.
3. Term of Employment. This Agreement shall become effective, and the Prior Agreement shall terminate, upon the Effective Date. The terms of this Agreement shall supersede the terms of the Prior Agreement in their entirety. The term of Schumachers employment under this Agreement shall commence on the Effective Date and shall expire on December 31, 2016, unless earlier terminated by either party, in accordance with the terms of this Agreement and/or the following sentence. This Agreement may be terminated by Schumacher or by the Company, at any time, with or without Cause (as defined below). Upon the termination of Schumachers employment with the Company for any
reason, neither party shall have any further obligation or liability under this Agreement to the other party, except as set forth in Sections 5, 7, 8, 9, 10, 11, and 12 of this Agreement.
4. Compensation. Schumacher shall be compensated by the Company for his services as follows:
(a) Base Salary. Schumacher shall be paid an initial base salary of $325,000 per year in accordance with the Companys normal payroll procedures. Increases in Schumachers base salary, if any, shall be as approved by the Board or its compensation committee.
(b) Benefits. During the term of this Agreement, Schumacher shall have the right, on the same basis as other members of senior management of the Company, to participate in and to receive benefits under the Companys executive and employee benefit plans, insurance programs and/or indemnification agreements, as may be in effect from time to time, subject to any applicable waiting periods and other restrictions. In addition, Schumacher shall be entitled to the benefits afforded to other members of senior management under the Companys vacation, holiday and business expense reimbursement policies. Schumachers vacation benefits shall accrue at a rate not less than four (4) weeks per year. Schumacher shall also be eligible to participate in the Companys equity incentive plans, as approved from time to time by the Board or its compensation committee, including the Amended and Restated Echo Global Logistics, Inc. 2008 Stock Incentive Plan, as amended, and any successor plan (the 2008 Plan).
(c) Performance Bonus. In addition to the base salary, Schumacher shall be eligible to receive an annual performance bonus (Performance Bonus) to be approved from time to time by the Board or its compensation committee. The Performance Bonus shall be paid within the two-and-one-half-month period ending on the 15th day of the third month following the end of the Companys fiscal year.
(d) Equity Award. On or following the Effective Date, the Company shall grant Schumacher a one-time equity award under the 2008 Plan with a grant date value of approximately $1,000,000 (the Equity Award). The Equity Award is expected to be in the form of restricted stock and will be subject to the terms of the 2008 Plan, the award agreement entered into thereunder and any other documentation related to the Equity Award.
(e) Expenses. In addition to reimbursement for business expenses incurred by Schumacher in the normal and ordinary course of his employment by the Company pursuant to the Companys standard business expense reimbursement policies and procedures, the Company shall reimburse Schumacher for the full amount of his medical insurance costs should he elect to participate in the Companys medical insurance program(s).
(f) Automobile Allowance and Other Insurance Costs. The Company also agrees to pay, in an amount not to exceed $12,000 in the aggregate annually, a monthly automobile allowance and premiums for a life insurance policy. Upon the termination of his employment with the Company, the responsibility for payment of premiums shall revert to Schumacher. Schumacher reserves the right at all times to designate the beneficiary of the policy.
5. Benefits Upon Termination.
(a) Termination for Cause; Termination for Other than Good Reason; Termination Upon Death or Disability. In the event of the termination of Schumachers employment by the Company for Cause (as defined below), the termination of Schumachers employment by Schumacher for any reason other than Good Reason (as defined below), or the termination of Schumachers employment by reason of his death or Disability (as defined below,) Schumacher shall be entitled to no further compensation or benefits from the Company other than those earned and/or vested under Sections 4(a), 4(b), and 4(c) through the date of termination. All unvested equity awards issued under the 2008 Plan on or following the Effective Date shall be terminated immediately as of the date of termination. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Schumacher as of the date of termination shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
For purposes of this Agreement, a termination for Cause occurs if Schumachers employment is terminated by the Company for any of the following reasons:
(i) his material breach of any provision of this Agreement, provided that in those instances in which his material breach is capable of being cured, Schumacher has failed to cure within a thirty (30) day period after notice from the Company;
(ii) theft, dishonesty, or falsification of any employment or Company records by Schumacher;
(iii) the reasonable determination by the Board that Schumacher has committed an act or acts constituting a felony or any act involving moral turpitude; or
(iv) the reasonable determination by the Board that Schumacher has engaged in willful misconduct or gross negligence that has had a material adverse effect on the Companys reputation or business.
For purposes of this Agreement, a termination for Good Reason occurs if Schumacher terminates his employment for any of the following reasons:
(i) the Company materially reduces Schumachers duties or responsibilities below what is customary for a Chief Commercial Officer of a business that is similar to the Company without Schumachers consent;
(ii) the Company requires Schumacher to relocate his office more than 50 miles from the current office of the Company without his consent; or
(iii) the Company has materially breached the terms of this Agreement.
If one or more of the above conditions exist, Schumacher must provide notice to the Company within a period not to exceed ninety (90) days of the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition.
For purposes of this Agreement, a termination for Disability occurs if Schumachers employment is terminated due to Disability as defined under the 2008 Plan.
(b) Termination Without Cause or Termination for Good Reason. If Schumachers employment is terminated by the Company without Cause, or if Schumachers employment is terminated by Schumacher for Good Reason, Schumacher shall be entitled to:
(i) receive an amount equal to the sum of (A) Schumachers base salary as in effect on the date of termination, and (B) the average of the three most recent annual Performance Bonuses received by Schumacher preceding the date of his termination, payable in equal installments over a twelve (12) month period following the termination of Schumachers employment in accordance with the Companys normal payroll procedures, provided, however, that for purposes of this Section 5(b)(i), Schumacher shall be considered to have received a Performance Bonus of $0 for any year in which a Performance Bonus is not actually paid;
(ii) immediate vesting of such portion of outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date, as would have vested had Schumacher remained employed for an additional twelve (12) months following the date of termination, unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a termination described in this Section 5(b), in which case the terms of the applicable award agreement shall apply and supersede this Section 5(b)(ii); and
(iii) if Schumacher qualifies for and elects COBRA continuation coverage with respect to health benefits for Schumacher and his dependents, Schumacher shall receive cash payments equal to the amount of such COBRA premiums for the period ending on the earlier of: (A) twelve (12) months following the termination, (B) the date Schumacher has secured comparable benefits through another organizations benefits program or (C) the date Schumacher otherwise becomes ineligible for continuation coverage pursuant to COBRA. Notwithstanding the foregoing, this Section 5(b)(iii) shall cease to apply as of the effective date of any regulation or other guidance under which payment of such component would be deemed to violate any nondiscrimination requirements under the Patient Protection and Affordable Care Act.
For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Schumacher as of the date of termination (including awards that vested upon Schumachers termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
Notwithstanding anything to the contrary herein, no payments shall be due under this Section 5(b) unless and until Schumacher shall have executed a general release and waiver of claims against the Company (the Release), in a form reasonably satisfactory to the Company, and the execution of such Release shall be a condition to Schumachers rights under this Section 5(b). Such Release shall be delivered to Schumacher within ten (10) business days of Schumachers termination of employment, and no payments pursuant to Section 5(b) shall be made prior to the date that both (i) Schumacher has delivered an original, signed Release to the Company and (ii) the revocability period (if any) has elapsed; provided however, that any payments that would otherwise have been made prior to such date but for the fact that Schumacher had not yet delivered an original, signed Release (or the revocability period had not yet elapsed) shall be made as soon as administratively practicable but not later than the seventy-fourth (74th) day following Schumachers termination of employment. Schumacher must deliver an original, signed Release to the Company within ten (10) business days (or such longer period
if required by law) after receipt of the same from the Company as a condition to receiving any payments or benefits described in Section 5(b).
6. Section 409A.
(a) To the extent that an amount is payable to Schumacher hereunder upon termination of his employment, and to the extent that such amount is considered to be deferred compensation subject to Section 409A, (i) such termination of employment under this Agreement shall be construed to mean a separation from service as defined in Section 409A, and (ii) except to the extent earlier payment is permitted by Section 409A, if it is determined that Schumacher is a specified employee as defined in Section 409A, the Company shall delay the payment of such amount for six (6) months after the termination of his employment (or until his death, if earlier) or for such other amount of time as may be necessary to comply with the requirements of Section 409A.
(b) This Agreement is intended to comply and shall be administered in a manner that is intended to comply with Section 409A, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions. This Agreement shall be construed and interpreted in accordance with such intent. Each payment made under this Agreement shall be designated as a separate payment within the meaning of Section 409A. The parties agree to make such other amendments to this Agreement as are necessary to comply with the requirements of Section 409A.
7. Change of Control.
(a) If, during the three (3) months prior to the public announcement of a proposed Change of Control, or at any time within twelve (12) months following a Change of Control, Schumachers employment is terminated by the Company for any reason other than Cause, or terminated by Schumacher for Good Reason, Schumacher shall be entitled to (i) the compensation and benefits outlined under Section 5(b) above, except that the amount payable under Section 5(b)(i) shall be paid in a lump sum as soon as administratively practicable following the date the Release becomes nonrevocable in accordance with Section 5(b) but not later than the seventy-fourth (74th) day following Schumachers termination of employment and (ii) immediate vesting of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Schumacher as of the date of termination (including awards that vested upon Schumachers termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan. For purposes of this Agreement, a Change of Control shall have the same meaning as the term Change of Control set forth in the 2008 Plan.
(b) In the event of a Change of Control, Schumacher shall be entitled to immediate vesting of fifty percent (50%) of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date (which percentage shall be applied proportionally to each tranche of unvested equity awards scheduled to vest following the date of such Change of Control), unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a Change of Control, in which case the terms of the applicable award agreement shall apply and supersede this Section 7(b). For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Schumacher as of the date of a Change of Control (including
awards that vested upon a Change of Control pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
8. Employee Inventions and Proprietary Rights Assignment Agreement. Schumacher agrees to abide by the terms and conditions of the Companys standard Employee Inventions and Proprietary Rights Assignment Agreement previously executed by Schumacher.
9. Covenants Not to Compete or Solicit. During Schumachers employment and for a period of twelve (12) months following the termination of Schumachers employment, Schumacher shall not, anywhere in the Geographic Area (as defined below), other than on behalf of the Company or with the prior written consent of the Company, directly or indirectly:
(a) perform services for (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director or otherwise), have any ownership interest in (except for passive ownership of one percent (1%) or less of any entity whose securities have been registered under the Securities Act or Section 12 of the Securities Exchange Act of 1934, as amended), or participate in the financing, operation, management or control of, any firm, partnership, corporation, entity or business that engages or participates in a competing business purpose (as defined below);
(b) induce or attempt to induce any customer, potential customer, supplier, licensee, licensor or business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any customer, potential customer, supplier, licensee, licensor or business relation of the Company or solicit the business of any customer or potential customer of the Company, whether or not Schumacher had personal contact with such entity; and
(c) solicit, encourage, hire or take any other action which is intended to induce or encourage, or has the effect of inducing or encouraging, any employee or independent contractor of the Company or any subsidiary of the Company to terminate his employment or relationship with the Company or any subsidiary of the Company, other than in the discharge of his duties as an officer of the Company.
In the event that Schumacher receives a waiver of the non-competition provision from the Company, which the Company may or may not grant in its sole discretion, Schumacher agrees that he will waive any further claim for severance and insurance benefits beginning on the date of his employment with a new organization, provided that such new employment is comparable to Schumachers employment with the Company in terms of salary and benefits.
For the purpose of this Agreement, the term competing business purpose shall mean the sale or provision of any transportation or logistics-related services that are competitive with in any manner the services sold or offered by the Company during the term of this Agreement. The term Geographic Area shall mean the United States of America.
The covenants contained in this Section 9 shall be construed as a series of separate covenants, one for each county, city, state, or any similar subdivision in any Geographic Area. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of this Section 9 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.
10. Equitable Remedies. Schumacher acknowledges and agrees that the agreements and covenants set forth in Sections 8 and 9 are reasonable and necessary for the protection of the Companys business interests, that irreparable injury will result to the Company if Schumacher breaches any of the terms of such covenants, and that in the event of Schumachers actual or threatened breach of any such covenants, the Company will have no adequate remedy at law. Schumacher accordingly agrees that, in the event of any actual or threatened breach by Schumacher of any of such covenants, the Company will be entitled to seek immediate injunctive and other equitable relief, without posting any bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.
11. Dispute Resolution. In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Schumacher and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Chicago, Illinois in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect (and not as they may be modified in the future). Schumacher acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute. Notwithstanding the foregoing, this arbitration provision shall not apply to any disputes or claims relating to or arising out of the misuse or misappropriation of trade secrets or proprietary information.
12. Attorneys Fees. Schumacher shall be entitled to recover from the Company his reasonable attorneys fees and costs if he prevails in an action to enforce any right arising out of this Agreement. Such payment will be made as soon as practicable but no later than the fifteenth (15th) day of the third month of the year following the year in which the action to enforce his rights is finalized.
13. Governing Law. This Agreement has been executed in the State of Illinois, and Schumacher and the Company agree that this Agreement shall be interpreted in accordance with and governed by the laws of the State of Illinois, without regard to its conflicts of laws principles.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that successor or assignee is the successor to substantially all of the assets of the Company, or a majority of its then outstanding Shares, and that such successor or assignee assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. In view of the personal nature of the services to be performed under this Agreement by Schumacher, he shall not have the right to assign or transfer any of his rights, obligations or benefits under this Agreement, except as otherwise noted herein.
15. Entire Agreement. This Agreement, including its attached Exhibits, constitutes the entire employment agreement between Schumacher and the Company regarding the terms and conditions of his employment, with the exception of those provisions of the 2008 Plan (and any predecessor plan) and related award agreements incorporated by reference pursuant to Sections 5 and 7.
This Agreement supersedes all prior negotiations, representations or agreements between Schumacher and the Company, whether written or oral, concerning Schumachers employment.
16. No Conflict. Schumacher represents and warrants to the Company that neither his entry into this Agreement nor his performance of his obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation to which Schumacher is a party or by which Schumacher is bound, including without limitation, any non-competition or confidentiality agreement previously entered into by Schumacher.
17. Validity. Except as otherwise provided in Section 9, above, if any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.
18. Modification. This Agreement may not be modified or amended except by a written agreement signed by Schumacher and the Company.
19. Withholding. All payments made to Schumacher pursuant to this Agreement shall be subject to applicable withholding taxes, if any, and any amount so withheld shall be deemed to have been paid to Schumacher for purposes of amounts due to Schumacher under this Agreement.
20. Adjustments Due to Excise Tax.
(a) If it is determined that any amount or benefit to be paid or payable to Schumacher under this Agreement or otherwise in conjunction with his employment (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in conjunction with his employment) would give rise to liability of Schumacher for the excise tax imposed by Section 4999 of the Internal Revenue Code, as amended from time to time, or any successor provision (the Excise Tax), then the amount or benefits payable to Schumacher (the total value of such amounts or benefits, the Payments) shall be reduced by the Company to the extent necessary so that no portion of the Payments to Schumacher is subject to the Excise Tax. Such reduction shall only be made if the net amount of the Payments, as so reduced (and after deduction of applicable federal, state, and local income and payroll taxes on such reduced Payments other than the Excise Tax (collectively, the Deductions)) is greater than the excess of (i) the net amount of the Payments, without reduction (but after making the Deductions), over (ii) the amount of Excise Tax to which Schumacher would be subject in respect of such Payments. In the event Payments are required to be reduced pursuant to this Section 20(a), Schumacher shall designate the order in which such amounts or benefits shall be reduced in a manner consistent with Section 409A.
(b) The independent public accounting firm serving as the Companys auditing firm, or such other accounting firm, law firm or professional consulting services provider of national reputation and experience reasonably acceptable to the Company and Schumacher (the Accountants), shall prepare all calculations and make all determinations under this Section 20, including the assumptions to be used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 20, the Accountants and each other party may make reasonable assumptions and approximations concerning the application of Section 280G and Section 4999 of the Internal Revenue Code. The Company and Schumacher shall furnish to the Accountants and each other such information and documents as the Accountants and each other may reasonably request to make the calculations and
determinations under this Section 20. The Company shall bear all costs the Accountants incur in connection with any calculations contemplated hereby.
Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) is made and entered into as of October 7, 2013 and effective as of October 7, 2013 (the Effective Date), by and between Echo Global Logistics, Inc., a Delaware corporation (the Company), and Douglas R. Waggoner (Waggoner).
WHEREAS, the Company has employed Waggoner, most recently as Chief Executive Officer of the Company;
WHEREAS, the Company and Waggoner were parties to an employment agreement dated March 21, 2012 (the Prior Agreement); and
WHEREAS, the parties desire to enter into a new employment agreement reflecting the terms of Waggoners continuing employment.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
1. Employment; Position and Duties. The Company agrees to continue to employ Waggoner, and Waggoner agrees to continue to be employed by the Company, upon the terms and conditions of this Agreement. Waggoner shall be employed by the Company as the Companys Chief Executive Officer reporting to the Board of Directors of the Company (the Board). In this capacity, Waggoner agrees to devote his full time, energy and skill to the faithful performance of his duties herein, and shall perform the duties and carry out the responsibilities assigned to him to the best of his ability and in a diligent, businesslike and efficient manner. Waggoners duties shall include all those duties customarily performed by the Chief Executive Officer, as well as those additional duties commensurate with his position as Chief Executive Officer that may be reasonably assigned by the Board. Waggoner shall comply with any policies and procedures established for Company employees, including, without limitation, those policies and procedures contained in the Companys employee handbook previously delivered to Waggoner.
2. Board Meetings. Waggoner shall be entitled to attend all meetings of the Board; provided, that the Board may exclude Waggoner from all or any portion of a meeting if the Board believes in good faith that such exclusion is reasonably necessary for the effective conduct of business by the Board or management of the Company or to preserve the confidentiality or privileged nature of certain information.
3. Term of Employment. This Agreement shall become effective, and the Prior Agreement shall have terminated in accordance with its terms, upon the Effective Date. The terms of this Agreement shall supersede the terms of the Prior Agreement in their entirety. The term of Waggoners employment under this Agreement shall commence on the Effective Date and shall expire on December 31, 2016, unless earlier terminated by either party, in accordance with the terms of this Agreement and/or the following sentence. This Agreement may be terminated by Waggoner or by the Company through a majority vote of the Board, at any time, with or without Cause (as defined below). Upon the termination of Waggoners employment with the Company for any reason, neither party shall have any further obligation or liability under this Agreement to the other party, except as set forth in Sections 5, 7, 8, 9, 10, 11, and 12 of this Agreement.
4. Compensation. Waggoner shall be compensated by the Company for his services as follows:
(a) Base Salary. Waggoner shall be paid an initial base salary of $650,000 per year in accordance with the Companys normal payroll procedures. Increases in Waggoners base salary, if any, shall be as approved by the Board or its compensation committee.
(b) Benefits. During the term of this Agreement, Waggoner shall have the right, on the same basis as other members of senior management of the Company, to participate in and to receive benefits under the Companys executive and employee benefit plans, insurance programs and/or indemnification agreements, as may be in effect from time to time, subject to any applicable waiting periods and other restrictions. In addition, Waggoner shall be entitled to the benefits afforded to other members of senior management under the Companys vacation, holiday and business expense reimbursement policies. Waggoner shall also be eligible to participate in the Companys equity incentive plans, as approved from time to time by the Board or its compensation committee, including the Amended and Restated Echo Global Logistics, Inc. 2008 Stock Incentive Plan, as amended, and any successor plan (the 2008 Plan).
(c) Performance Bonus. In addition to the base salary, Waggoner shall be eligible to receive an annual performance bonus (Performance Bonus) to be approved from time to time by the Board or its compensation committee. The Performance Bonus shall be paid within the two-and-one-half month period ending on the 15th day of the third month following the end of the Companys fiscal year.
(d) Expenses. In addition to reimbursement for business expenses incurred by Waggoner in the normal and ordinary course of his employment by the Company pursuant to the Companys standard business expense reimbursement policies and procedures, the Company shall reimburse Waggoner for the full amount of his medical insurance costs should he elect to participate in the Companys medical insurance program(s).
(e) Automobile Allowance and Insurance Costs. The Company also agrees to pay, in an amount not to exceed $31,500 in the aggregate annually, a monthly automobile allowance and premiums for a life insurance policy in effect prior to the Effective Date. Upon the termination of his employment with the Company, the responsibility for payment of premiums shall revert to Waggoner. Waggoner reserves the right at all times to designate the beneficiary of the policy.
5. Benefits Upon Termination.
(a) Termination for Cause; Termination for Other than Good Reason; Termination Upon Death or Disability. In the event of the termination of Waggoners employment by the Company for Cause (as defined below), the termination of Waggoners employment by Waggoner for any reason other than Good Reason (as defined below), or the termination of Waggoners employment by reason of his death or Disability (as defined below), Waggoner shall be entitled to no further compensation or benefits from the Company other than those earned and/or vested under Sections 4(a), 4(b), and 4(c) through the date of termination. All unvested equity awards issued under the 2008 Plan on or following the Effective Date shall be terminated immediately as of the date of termination. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Waggoner as of the date of termination shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued
under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
For purposes of this Agreement, a termination for Cause occurs if Waggoners employment is terminated by the Company for any of the following reasons:
(i) his material breach of any provision of this Agreement, provided that in those instances in which his material breach is capable of being cured, Waggoner has failed to cure within a thirty (30) day period after notice from the Company;
(ii) theft, dishonesty, or falsification of any employment or Company records by Waggoner;
(iii) the reasonable determination by the Board that Waggoner has committed an act or acts constituting a felony or any act involving moral turpitude; or
(iv) the reasonable determination by the Board that Waggoner has engaged in willful misconduct or gross negligence that has had a material adverse effect on the Companys reputation or business.
For purposes of this Agreement, a termination for Good Reason occurs if Waggoner terminates his employment for any of the following reasons and within two years of the initial existence of such reason:
(i) the Company materially reduces Waggoners duties or responsibilities below what is customary for a Chief Executive Officer or President of a business that is similar to the Company without Waggoners consent, including a requirement that Waggoner report to a corporate officer or employee instead of reporting directly to the Board;
(ii) the Company requires Waggoner to relocate his office more than one hundred (100) miles from the current office of the Company without his consent; or
(iii) the Company has materially breached the terms of this Agreement.
If one or more of the above conditions exist, Waggoner must provide notice to the Company within a period not to exceed ninety (90) days of the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition.
For purposes of this Agreement, a termination for Disability occurs if Waggoners employment is terminated due to Disability as defined under the 2008 Plan.
(b) Termination Without Cause or Termination for Good Reason. If Waggoners employment is terminated by the Company without Cause, or if Waggoners employment is terminated by Waggoner for Good Reason, Waggoner shall be entitled to:
(i) receive an amount equal to the product of two (2) times the sum of (A) Waggoners base salary as in effect on the date of termination, and (B) the average of the three most recent annual Performance Bonuses received by Waggoner preceding the date of his termination, payable in equal installments over a twenty-four (24) month period following the termination of Waggoners employment in accordance with the Companys normal payroll procedures, provided,
however, that for purposes of this Section 5(b)(i), Waggoner shall be considered to have received a Performance Bonus of $0 for any year in which a Performance Bonus is not actually paid;
(ii) immediate vesting of such portion of outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date, as would have vested had Waggoner remained employed for an additional twelve (12) months following the date of termination, unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a termination described in this Section 5(b), in which case the terms of the applicable award agreement shall apply and supersede this Section 5(b)(ii); and
(iii) if Waggoner qualifies for and elects COBRA continuation coverage with respect to health benefits for Waggoner and his dependents, Waggoner shall receive cash payments equal to the amount of such COBRA premiums for the period ending on the earlier of: (A) twenty-four (24) months following the termination, (B) the date Waggoner has secured comparable benefits through another organizations benefits program or (C) the date Waggoner otherwise becomes ineligible for continuation coverage pursuant to COBRA. Notwithstanding the foregoing, this Section 5(b)(iii) shall cease to apply as of the effective date of any regulation or other guidance under which payment of such component would be deemed to violate any nondiscrimination requirements under the Patient Protection and Affordable Care Act.
For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Waggoner as of the date of termination (including awards that vested upon Waggoners termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
Notwithstanding anything to the contrary herein, no payments shall be due under this Section 5(b) unless and until Waggoner shall have executed a general release and waiver of claims against the Company (the Release), in a form reasonably satisfactory to the Company, and the execution of such Release shall be a condition to Waggoners rights under this Section 5(b). Such Release shall be delivered to Waggoner within ten (10) business days of Waggoners termination of employment, and no payments pursuant to Section 5(b) shall be made prior to the date that both (i) Waggoner has delivered an original, signed Release to the Company and (ii) the revocability period (if any) has elapsed; provided however, that any payments that would otherwise have been made prior to such date but for the fact that Waggoner had not yet delivered an original, signed Release (or the revocability period had not yet elapsed) shall be made as soon as administratively practicable but not later than the seventy-fourth (74th) day following Waggoners termination of employment. Waggoner must deliver an original, signed Release to the Company within ten (10) business days (or such longer period if required by law) after receipt of the same from the Company as a condition to receiving any payments or benefits described in Section 5(b).
6. Section 409A.
(a) To the extent that an amount is payable to Waggoner hereunder upon termination of his employment, and to the extent that such amount is considered to be deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended, and the interpretive guidance issued thereunder (Section 409A), (i) such termination of employment under this Agreement shall be construed to mean a separation from service as defined in Section 409A, and (ii) except to the extent
earlier payment is permitted by Section 409A, if it is determined that Waggoner is a specified employee as defined in Section 409A, the Company shall delay the payment of such amount for six (6) months after the termination of his employment (or until his death, if earlier) or for such other amount of time as may be necessary to comply with the requirements of Section 409A.
(b) This Agreement is intended to comply and shall be administered in a manner that is intended to comply with Section 409A, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions. This Agreement shall be construed and interpreted in accordance with such intent. Each payment made under this Agreement shall be designated as a separate payment within the meaning of Section 409A. The parties agree to make such other amendments to this Agreement as are necessary to comply with the requirements of Section 409A.
7. Change of Control.
(a) If, during the three (3) months prior to the public announcement of a proposed Change of Control, or at any time within twelve (12) months following a Change of Control, Waggoners employment is terminated by the Company for any reason other than Cause, or terminated by Waggoner for Good Reason, Waggoner shall be entitled to (i) the compensation and benefits outlined under Section 5(b) above, except that (A) the amount payable under Section 5(b)(i) shall be paid, to the extent such amount is not subject to Section 409A, in a lump sum as soon as administratively practicable following the date the Release becomes nonrevocable in accordance with Section 5(b) but not later than the seventy-fourth (74th) day following Waggoners termination of employment (the Exempt Amount) and (B) any amount payable under Section 5(b)(i) other than the Exempt Amount shall be paid in installments in accordance with Section 5(b) and (ii) immediate vesting of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date. For purposes of the preceding sentence, the portion of the Exempt Amount resulting from application of the two times/two year exemption in Treas. Reg. 1.409A-1(b)(9)(iii) shall be allocated to scheduled installments under Section 5(b)(i) in reverse chronological order (beginning with the 24th month) until such exemption amount is exhausted. For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Waggoner as of the date of termination (including awards that vested upon Waggoners termination of employment pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan. For purposes of this Agreement, a Change of Control shall have the same meaning as the term Change of Control set forth in the 2008 Plan.
(b) In the event of a Change of Control, Waggoner shall be entitled to immediate vesting of fifty percent (50%) of all outstanding unvested equity awards issued under the 2008 Plan on or following the Effective Date (which percentage shall be applied proportionally to each tranche of unvested equity awards scheduled to vest following the date of such Change of Control), unless the applicable award agreement(s) provides for more favorable vesting treatment in the event of a Change of Control, in which case the terms of the applicable award agreement shall apply and supersede this Section 7(b). For the avoidance of doubt, (i) vested equity awards issued under the 2008 Plan on or following the Effective Date and held by Waggoner as of the date of a Change of Control (including awards that vested upon a Change of Control pursuant to this Agreement) shall otherwise remain subject to the terms and conditions of the applicable award agreement(s) and the 2008 Plan, and (ii) the treatment of equity awards issued under the 2008 Plan (or any predecessor plan) prior to the Effective Date shall be governed by the terms and conditions of the applicable award agreement(s) and plan.
8. Employee Inventions and Proprietary Rights Assignment Agreement. Waggoner agrees to abide by the terms and conditions of the Companys standard Employee Inventions and Proprietary Rights Assignment Agreement as executed by Waggoner and attached hereto as Exhibit A.
9. Covenants Not to Compete or Solicit. During Waggoners employment and for a period of (i) twenty-four (24) months following the termination of Waggoners employment if Waggoners employment terminates pursuant to Sections 5(b) or 7(a) hereof or (ii) twelve (12) months following the termination of Waggoners employment if Waggoners employment terminates for any reason other than pursuant to Sections 5(b) or 7(a) hereof, Waggoner shall not, anywhere in the Geographic Area (as defined below), other than on behalf of the Company or with the prior written consent of the Company, directly or indirectly:
(a) perform services for (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director or otherwise), have any ownership interest in (except for passive ownership of one percent (1%) or less of any entity whose securities have been registered under the Securities Act or Section 12 of the Securities Exchange Act of 1934, as amended), or participate in the financing, operation, management or control of, any firm, partnership, corporation, entity or business that engages or participates in a competing business purpose (as defined below);
(b) induce or attempt to induce any customer, potential customer, supplier, licensee, licensor or business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any customer, potential customer, supplier, licensee, licensor or business relation of the Company or solicit the business of any customer or potential customer of the Company, whether or not Waggoner had personal contact with such entity; and
(c) solicit, encourage, hire or take any other action which is intended to induce or encourage, or has the effect of inducing or encouraging, any employee or independent contractor of the Company or any subsidiary of the Company to terminate his employment or relationship with the Company or any subsidiary of the Company, other than in the discharge of his duties as an officer of the Company.
In the event that Waggoner receives a waiver of the non-competition provision from the Company, which the Company may or may not grant in its sole discretion, Waggoner agrees that he will waive any further claim for severance and insurance benefits beginning on the date of his employment with a new organization, provided that such new employment is comparable to Waggoners employment with the Company in terms of salary and benefits.
For the purpose of this Agreement, the term competing business purpose shall mean the sale or provision of any transportation or logistics-related services that are competitive with in any manner the services sold or offered by the Company during the term of this Agreement. The term Geographic Area shall mean the United States of America.
The covenants contained in this Section 9 shall be construed as a series of separate covenants, one for each county, city, state, or any similar subdivision in any Geographic Area. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of this Section 9 are deemed to exceed
the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws.
10. Equitable Remedies. Waggoner acknowledges and agrees that the agreements and covenants set forth in Sections 8 and 9 are reasonable and necessary for the protection of the Companys business interests, that irreparable injury will result to the Company if Waggoner breaches any of the terms of such covenants, and that in the event of Waggoners actual or threatened breach of any such covenants, the Company will have no adequate remedy at law. Waggoner accordingly agrees that, in the event of any actual or threatened breach by Waggoner of any of such covenants, the Company will be entitled to seek immediate injunctive and other equitable relief, without posting any bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.
11. Dispute Resolution. In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Waggoner and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Chicago, Illinois in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect (and not as they may be modified in the future). Waggoner acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute. Notwithstanding the foregoing, this arbitration provision shall not apply to any disputes or claims relating to or arising out of the misuse or misappropriation of trade secrets or proprietary information.
12. Attorneys Fees. Waggoner shall be entitled to recover from the Company his reasonable attorneys fees and costs if he prevails in an action to enforce any right arising out of this Agreement. Such payment will be made as soon as practicable but no later than the fifteenth (15th) day of the third month of the year following the year in which the action to enforce his rights is finalized.
13. Governing Law. This Agreement has been executed in the State of Illinois, and Waggoner and the Company agree that this Agreement shall be interpreted in accordance with and governed by the laws of the State of Illinois, without regard to its conflicts of laws principles.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that successor or assignee is the successor to substantially all of the assets of the Company, or a majority of its then outstanding Shares, and that such successor or assignee assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. In view of the personal nature of the services to be performed under this Agreement by Waggoner, he shall not have the right to assign or transfer any of his rights, obligations or benefits under this Agreement, except as otherwise noted herein.
15. Entire Agreement. This Agreement, including its attached Exhibits, constitutes the entire employment agreement between Waggoner and the Company regarding the terms and conditions of his employment, with the exception of those provisions of the 2008 Plan (and any predecessor plan) and related award agreements incorporated by reference pursuant to Sections 5 and 7. This Agreement supersedes all prior negotiations, representations or agreements between Waggoner and the Company, whether written or oral, concerning Waggoners employment.
16. No Conflict. Waggoner represents and warrants to the Company that neither his entry into this Agreement nor his performance of his obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation to which Waggoner is a party or by which Waggoner is bound, including, without limitation, any non-competition or confidentiality agreement previously entered into by Waggoner.
17. Validity. Except as otherwise provided in Section 9, above, if any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.
18. Modification. This Agreement may not be modified or amended except by a written agreement signed by Waggoner and the Company.
19. Withholding. All payments made to Waggoner pursuant to this Agreement shall be subject to applicable withholding taxes, if any, and any amount so withheld shall be deemed to have been paid to Waggoner for purposes of amounts due to Waggoner under this Agreement.
20. Adjustments Due to Excise Tax.
(a) If it is determined that any amount or benefit to be paid or payable to Waggoner under this Agreement or otherwise in conjunction with his employment (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in conjunction with his employment) would give rise to liability of Waggoner for the excise tax imposed by Section 4999 of the Internal Revenue Code, as amended from time to time, or any successor provision (the Excise Tax), then the amount or benefits payable to Waggoner (the total value of such amounts or benefits, the Payments) shall be reduced by the Company to the extent necessary so that no portion of the Payments to Waggoner is subject to the Excise Tax. Such reduction shall only be made if the net amount of the Payments, as so reduced (and after deduction of applicable federal, state, and local income and payroll taxes on such reduced Payments other than the Excise Tax (collectively, the Deductions)) is greater than the excess of (i) the net amount of the Payments, without reduction (but after making the Deductions), over (ii) the amount of Excise Tax to which Waggoner would be subject in respect of such Payments. In the event Payments are required to be reduced pursuant to this Section 20(a), Waggoner shall designate the order in which such amounts or benefits shall be reduced in a manner consistent with Section 409A.
(b) The independent public accounting firm serving as the Companys auditing firm, or such other accounting firm, law firm or professional consulting services provider of national reputation and experience reasonably acceptable to the Company and Waggoner (the Accountants), shall prepare all calculations and make all determinations under this Section 20, including the assumptions to be used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 20, the Accountants and each other party may make reasonable assumptions and approximations concerning the application of Section 280G and Section 4999 of the Internal Revenue Code. The Company and Waggoner shall furnish to the Accountants and each other such information and documents as the Accountants and each other may reasonably request to make the calculations and determinations under this Section 20. The Company shall bear all costs the Accountants incur in connection with any calculations contemplated hereby.
Exhibit 99.1
Echo Global Logistics Announces Three Executive Promotions
Promotions Include Chief Operating Officer Dave Menzel, Chief Financial Officer Kyle Sauers and Chief Commercial Officer Evan Schumacher
CHICAGO, October 7, 2013 Echo Global Logistics, Inc. (Nasdaq: ECHO), a leading provider of technology-enabled transportation and supply chain management services, announced today three internal executive promotions.
Dave Menzel is being promoted from Chief Financial Officer to Chief Operating Officer, allowing him to devote his full attention to generating increased productivity and continued process improvement at Echo. He has been with Echo since 2008.
Kyle Sauers, Senior Vice President Finance & Controller for Echo since 2011, has been promoted to fill the position of Chief Financial Officer.
Evan Schumacher, Senior Vice President Truckload National Accounts, was named to the position of Chief Commercial Officer. Mr. Schumacher will be responsible for driving continued revenue growth and synergies across all Echo sales channels. Mr. Schumacher joined Echo Global Logistics earlier in 2013 after the acquisition of truckload brokerage firm Open Mile, where he was Founder and CEO.
I continue to be excited about our growth opportunities and I am very pleased to have our new senior management team in place to help lead our organization, said Douglas R. Waggoner, Chief Executive Officer of Echo Global Logistics.
All management changes are effective immediately.
About Echo Global Logistics
Echo Global Logistics, based in Chicago, is a leading provider of technology-enabled transportation and supply chain management services, delivered on a proprietary technology platform, serving the transportation and logistics needs of its clients. Echo maintains a web-based technology platform that compiles and analyzes data from its network of over 24,000 transportation providers to serve its clients shipping and freight management needs. Echo procures transportation and provides logistics services for clients across a wide range of industries, such as manufacturing, construction, consumer products and retail. For more information on Echo, visit: www.echo.com.
Source: Echo Global Logistics, Inc.
Investor Relations:
Suzanne Karpick, Echo Global Logistics, Inc.
(312) 784-7414
Media Relations:
Hanni Itah, SSPR
(847) 415 - 9324
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