EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is dated as
of June 15, 1999, between Geologistics Corporation, a Delaware corporation
(the "COMPANY"), and Robert Arovas (the "EXECUTIVE").
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.
2. TERM. The Executive's employment by the Company will
commence on the date hereof and terminate at 12:01 a.m. on June 15, 2002 (the
"EXPIRATION DATE)" unless sooner terminated or extended as hereinafter
provided (such period, the "EMPLOYMENT PERIOD"); PROVIDED, HOWEVER, that the
initial Employment Period, and the corresponding Expiration Date, shall
automatically be extended for successive one (1) year terms if neither Party
has advised the other in writing in accordance with Section 11 at least six
(6) months prior to the end of the then current Employment Period that such
Employment Period will not be extended for an additional one (1) year period.
In the event that such notice is given, the Executive's employment will
terminate on the last business day of the then current Employment Period.
3. POSITION, DUTIES AND RESPONSIBILITIES.
(a) POSITION. The Executive hereby agrees to serve as
Executive Vice President and Chief Operating Officer of the Company reporting
to the Chief Executive Officer and the Board of Directors of the Company (the
"BOARD"). In addition, the Executive shall serve as Acting Chief Financial
Officer until such time as that position can be filled. The Executive shall
devote his best efforts and his full business time and attentio nto the
performance of services to the Company in his capacity as an officer thereof
and as may reasonably be requested by the Board, except when taking time off
for vacations, holidays, illness or such other reasons as permitted under
this Agreement or in accordance with the Company's policies, practices and
procedures, as long as such time off does not interfere with the performance
of his duties. The Company shall retain full direction and control of the
means and methods by which the Executive performs the above services.
(b) PLACE OF EMPLOYMENT. Unless the parties agree otherwise in
writing, during the term of this Agreement, the Executive shall perform the
services required by this Agreement at the Company's principal offices in
either Chicago, Illinois or Atlanta, Georgia; PROVIDED, HOWEVER, that the
Company may from time to time reasonably require the Executive to travel
temporarily to other locations on the Company's business at the Company's
expense.
(c) OTHER ACTIVITIES. Except with the prior written approval of the
Board (which the Board may grant or withhold in its sole discretion), the
Executive, during the Employment Period, will not (i) accept any other
employment, (ii) serve on the board of directors or similar body of any other
business entity, or (iii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage) that is or
may be competitive with, or that might place him in a conflicting position
with, that of the Company or any of its subsidiaries; PROVIDED, HOWEVER, that
the Executive's receipt of severance payments
and benefits from any prior employer, which are not in exchange for any
services to be rendered to or on behalf of such employer during the
Employment Period, shall not be a violation of this Section 3(c).
4. COMPENSATION AND RELATED MATTERS.
(a) SALARY. During the Employment Period, the Company shall
pay the Executive an annual base salary ("SALARY") of not less than $300,000,
to be paid consistent with the standard payroll practices of the Company but
in any event in installments no less frequently than monthly.
(b) BUSINESS EXPENSES. The Company shall promptly reimburse
the Executive for reasonable business expenses incurred in connection with
the conduct of the Company's business upon presentation of sufficient
evidence of such expenditures consistent with the Company's policies as may
be in place from time to time.
(c) CASH INCENTIVE COMPENSATION. The Executive shall be
eligible to receive additional performance-based cash bonus compensation (the
"CASH INCENTIVE COMPENSATION") of up to seventy percent (70%) of the
Executive's Salary for each fiscal year upon his satisfaction of certain
financial targets and other clearly defined management objectives (the "CASH
INCENTIVE OBJECTIVES") to be established annually by the Compensation
Committee of the Board. For the Company's 1999 fiscal year, the Cash
Incentive Objectives shall be established within sixty (60) days of the date
hereof and shall be based on the plan for reorganization submitted to the
Company by the Executive on or about August 13, 1999, as the same may be
reviewed and revised by the Company and the Executive, and, for each
subsequent fiscal year, the Cash Incentive Objectives shall be established no
later than sixty (60) days following the commencement of such fiscal year.
The Executive's Cash Incentive Compensation for the Company's 1999 fiscal
year shall be payable on a prorated basis by multiplying such amount by a
fraction, the numerator being the number of days in the Employment Period
during such year and the denominator being 365.
(d) AUTOMOBILE ALLOWANCE. The Company will provide the
Executive with the use of a Company-leased automobile in accordance with
applicable Company policy.
(e) PAID TIME OFF. The Executive will be entitled to paid
time off in each calendar year in accordance with the Company's policies,
practices and procedures applicable to executives, which shall include, but
not be limited to, four weeks of vacation, all holidays observed by the
Company, personal days and sick days; PROVIDED, HOWEVER, that the Company
will permit the Executive to carry over up to two weeks of accrued but unused
vacation days for use in the following calendar year or will pay the
Executive for such vacation days, at the Company's option.
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(f) HOUSING ALLOWANCE/RELOCATION REIMBURSEMENT. The
Company will provide the Executive with the use of a Company-leased apartment
in the Atlanta, Georgia metropolitan area; PROVIDED, HOWEVER, that if, during
the first six (6) months of his employment with the Company, the Executive,
in his sole discretion, elects to relocate his primary residence from
California to Georgia or agrees to any subsequent relocation thereafter at
the request of the Company, the Company will reimburse the Executive for the
reasonable costs associated with such relocation(s), and said housing
allowance thereafter will be discontinued.
(g) PERSONAL TRAVEL ALLOWANCE. The Company will pay the
Executive's costs for up to three round-trip airline tickets per month, at
the most cost-effective rate, to his home in California.
(h) RESTRICTED STOCK GRANT. The Company shall provide the
Executive with 25,000 shares of restricted Company stock, subject to the
terms and provisions of the Geologistics Corporation 1999 Long-Term Incentive
Plan and the Restricted Share Award Agreement executed thereunder, which
agreement is attached as Exhibit A hereto.
(i) LETTER OF CREDIT. Within thirty (30) days after the
execution of this Agreement, the Executive shall receive an irrevocable bank
letter of credit (the "LETTER OF CREDIT") in the amount of $500,000, subject
to adjustment as provided below, payable to the Executive (or his heirs,
successors or assigns) in the event of the Company's failure to pay to the
Executive any amounts due and owing, or benefits due, pursuant to Section
4(a) or Section 6(d) of this Agreement, as a result of the Company's
bankruptcy or insolvency or any other reason. Commencing on the date sixteen
(16) months after the date of this Agreement, the amount of the Letter of
Credit shall be reduced by $25,000 per month for each month remaining in the
Employment Period.
(j) OTHER BENEFITS. The Executive shall be entitled to
participate in or receive group health and long-term disability insurance,
bonus plan, 401(k) plan, non-qualified plan and similar benefits as the
Company provides generally from time to time to its executives and life
insurance coverage in an aggregate amount of $750,000 through individual
and/or group policies. The Executive may elect, in lieu of participation in
the Company's group health plan, to obtain private health coverage, the cost
of which shall be reimbursed to the Executive by the Company in an amount of
up to $700 per month.
5. TERMINATION. The Executive's employment hereunder shall or may
be terminated under the following circumstances:
(a) DEATH. The Executive's employment hereunder
shall terminate upon his death.
(b) DISABILITY. The Executive's employment hereunder shall
terminate upon the Executive's "DISABILITY." Disability shall mean any
physical or mental disability or infirmity which renders the Executive unable
to perform his duties under this Agreement for more than ninety (90)
consecutive days during any 180-day period, as determined (i) in accordance
with any long-term disability plan provided by the Company of which the
Executive is a participant, or (ii) by the following procedure: The
Executive agrees to submit to medical examinations by a licensed healthcare
professional selected by the Company, in its sole discretion, to determine
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whether a Disability exists. In addition, the Executive may submit to the
Company documentation of a Disability, or lack thereof, from a licensed
healthcare professional of his choice. Following a determination of a
Disability or lack of Disability by the Company's or the Executive's licensed
healthcare professional, the other party may submit subsequent documentation
relating to the existence of a Disability from a licensed healthcare
professional selected by such other party. In the event that the medical
opinions of such licensed healthcare professionals conflict, such licensed
healthcare professionals shall appoint a third licensed healthcare
professional to examine the Executive, and the opinion of such third licensed
healthcare professional shall be dispositive.
(c) FOR CAUSE. The Company may terminate the Executive's
employment hereunder for "CAUSE" by delivery of written notice to the
Executive specifying the factual basis for the termination and the
provision(s) of this Section 5(c) believed to be applicable thereto. Cause
shall mean (i) Executive's material breach of this Agreement, (ii) his being
formally charged with any felony or any crime involving moral turpitude under
the laws of any state, the District of Columbia or of the United States,
(iii) his gross misconduct in the performance of his duties hereunder,
including without limitation, his willful failure or refusal to carry out any
proper direction by the Board with respect to the services to be rendered by
him hereunder, or his habitual neglect of his duties as an officer of the
Company (other than as a result of a disability), which misconduct or neglect
shall continue for thirty (30) days after receipt of written notice from the
Company, (iv) his engaging in any material misconduct, dishonesty,
misappropriation of the assets of the Company, its equity holders or any of
its or their affiliates, or any acts of gross negligence, in each case,
detrimental in any material respect to any of the foregoing or (v) his
engaging in any venture presented to him by virtue of his position with the
Company wherein the profits of such venture are not made available to the
Company, without having received the prior written consent of the Company.
(d) WITHOUT CAUSE. The Company may terminate the
Executive's employment for any reason upon written Notice of Termination,
given in accordance with Section 5(g), and subject to the payments provided
for in Section 6(d).
(e) VOLUNTARY RESIGNATION. The Executive may voluntarily
resign his position and terminate his employment with the Company without
Good Reason at any time by delivery of a written Notice of Resignation to the
Company, as provided for in Section 5(g), below.
(f) RESIGNATION FOR GOOD REASON. The Executive may terminate
his employment for "GOOD REASON" by delivery of a Notice of Resignation as
described in Section 5(g) below, specifying the factual basis for the
termination and the provision(s) of this Section 5(f) believed to be
applicable thereto. Good Reason shall mean (i) a change in the Executive's
title of Chief Operating Officer, (ii) a substantial diminution in the
Executive's duties and responsibilities with the Company since the date of
this Agreement, (iii) a reduction in the Executive's Salary, bonus
opportunity or benefits provided pursuant to Section 4(b), Sections (4)(d)
through (g) and Section 4(j) of this Agreement or (iv) any material breach of
this Agreement; PROVIDED, HOWEVER, that the sale of any division or business
of the Company not related to the Company's international freight forwarding
business shall not in any event constitute a diminution in the Executive's
duties and responsibilities.
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(g) NOTICE OF TERMINATION OR RESIGNATION. Any termination
of the Executive's employment by the Company shall be communicated by written
"NOTICE OF TERMINATION" to the Executive, and any resignation by the
Executive shall be communicated by written "NOTICE OF RESIGNATION" to the
Company, each of which shall set forth the date such termination or
resignation shall become effective, which date shall, in any event, be no
less than thirty (30) days from the date the notice is given, unless
otherwise provided for in Section 5(h), below. A Notice of Termination or a
Notice of Resignation shall also indicate the specific termination provision
in this Agreement relied upon.
(h) DATE OF TERMINATION. The Date of Termination shall mean
(i) if the Executive's employment is terminated by his death, the date of his
death, (ii) if the Executive's employment is terminated by reason of his
Disability, the date of the final determination of a Disability as provided
in Section 5(b), (iii) if the Executive's employment is terminated pursuant
to Section 5(c) or (d) above, the date specified in the Notice of
Termination, and (iv) if the Executive resigns pursuant to Section 5(e) or
(f), the Date of Resignation; PROVIDED, HOWEVER, that in no event shall the
Date of Termination be earlier than the date of any Notice of Termination.
(i) TERMINATION OBLIGATIONS OF EXECUTIVE. Upon termination of the
Employment Period, (i) the Executive shall be deemed to have resigned from
all offices and directorships then held with the Company or any affiliate,
(ii) the Executive will be required to return all property and Confidential
Information as provided for in Section 8, and the representations and
warranties contained herein and the Executive's obligations under Sections 8,
9, 10 and 19 shall survive termination of the Employment Period and the
expiration of this Agreement.
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DEATH. If the Executive's employment is terminated by
reason of his death, the Company shall pay the Executive's estate his Salary
through the end of the month in which the Date of Termination occurs, and the
Executive's beneficiaries shall be entitled to receive any benefits due to
them as a result of any life insurance policy the Executive receives pursuant
to Section 4(j) of this Agreement. In the event that the Cash Incentive
Objectives are met at the end of the fiscal year in which the Executive's
death occurs, the Company shall also pay to the Executive's estate, within
thirty (30) days after receipt by the Company of the audited financial
statements for such fiscal year and confirmation that the Cash Incentive
Objectives have been met, a proportionate share of the Cash Incentive
Compensation due to the Executive for such fiscal year based upon the number
of days in the fiscal year that the Executive worked for the Company prior to
such termination. In addition, for a period of twelve (12) months from the
Date of Termination, the Company shall keep in force the Executive's existing
health insurance coverage on the same basis as in effect at the Date of
Termination by (i) continuing the coverage of the Executive's dependents
under the Company's group health plan, subject to the Company's right to
amend, modify or terminate any such plan, or (ii) continuing to make the
payments for the Executive's private health insurance for his eligible
dependents, in accordance with the Executive's election pursuant to Section
4(j).
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(b) DISABILITY. During any period that the Executive is
unable to perform his duties hereunder due to physical or mental illness, in
the opinion of a physician selected or approved by the Board or as determined
by any short-term disability plan provided by the Company, the Executive
shall continue to receive the Salary payable to the Executive pursuant to and
in accordance with the terms of Section 4(a) hereof until his employment is
terminated pursuant to Section 5(b) hereof, provided that any payments so
made to the Executive shall be reduced by any amounts paid to the Executive
under any disability benefit plan maintained by the Company. If the
Executive's employment is terminated by reason of a Disability, he shall be
paid his Salary through the Date of Termination. In the event that the Cash
Incentive Objectives are met at the end of the fiscal year in which the
Executive is terminated pursuant to Section 5(b), the Company shall also pay
to the Executive, within thirty (30) days after receipt by the Company of the
audited financial statements for such fiscal year and confirmation that the
Cash Incentive Objectives have been met, a proportionate share of the Cash
Incentive Compensation that may otherwise have been due to the Executive for
such fiscal year based upon the number of days in the fiscal year that the
Executive worked for the Company prior to such termination. In addition, for
a period of twelve (12) months from the Date of Termination, the Company
shall keep in force the Executive's existing health insurance coverage on the
same basis as in effect at the Date of Termination by (i) continuing the
Executive's coverage under the Company's group health plan, subject to the
Company's right to amend, modify or terminate any such plan, or (ii)
continuing to make the payments for the Executive's private health insurance
for the Executive and his eligible dependents, in accordance with the
Executive's election pursuant to Section 4(j).
(c) CAUSE. If the Executive's employment is terminated for
Cause pursuant to Section 5(c) hereof, the Company shall pay the Executive
his Salary through the Date of Termination, and no other payments will be due
and owing.
(d) OTHER TERMINATIONS BY THE COMPANY. If the Company
terminates the Executive's employment without Cause pursuant to Section 5(d)
or if the Executive resigns for Good Reason pursuant to Section 5(f), the
Company shall pay the Executive the Salary payable pursuant to and in
accordance with Section 4(a) for the greater of (i) the period beginning on
the Date of Termination and ending on the Expiration Date or (ii) a period of
twelve (12) months from the Date of Termination (either period referred to
herein as the "SEVERANCE PERIOD"). In the event that the Cash Incentive
Objectives are met at the end of the fiscal year in which the Executive is
terminated by the Company without Cause pursuant to Section 5(d) or the
Executive resigns for Good Reason pursuant to Section 5(f), the Company shall
also pay to the Executive, within thirty (30) days after receipt by the
Company of the audited financial statements for such fiscal year and
confirmation that the Cash Incentive Objectives have been met, a
proportionate share of the Cash Incentive Compensation that may otherwise
have been due to the Executive for the fiscal year in which the Date of
Termination has occurred based upon the number of days in the fiscal year
that the Executive worked for the Company prior to such termination. In
addition, for a period of twelve (12) months from the Date of Termination,
the Company shall keep in force the Executive's existing health insurance
coverage on the same basis as in effect at the Date of Termination by (i)
continuing the Executive's coverage under the Company's group health plan,
subject to the Company's right to amend, modify or terminate any such plan,
or (ii) continuing to make the payments for the Executive's private health
insurance for the Executive and his eligible dependents, in accordance with
the Executive's election pursuant to
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Section 4(j). Notwithstanding anything to the contrary in this Agreement, no
payments to be made or benefits to be provided to the Executive upon the
termination of his employment pursuant to this Section 6(d) shall be made or
provided unless and until the Executive executes a general release releasing
the Company and its affiliates from all rights and claims arising under this
Agreement or otherwise relating to his employment or the termination thereof
and such general release becomes effective pursuant to its terms.
(e) VOLUNTARY RESIGNATION. If the Executive terminates his
employment with the Company pursuant to Section 5(e) hereof, the Company
shall pay the Executive's Salary through the Date of Resignation, and no
other payments shall be due and owing.
7. CHANGE OF CONTROL. In the event that the Executive's employment
is terminated (a) without Cause at any time during the Employment Period
after a "CHANGE OF CONTROL" or (b) with Cause within six (6) months following
a Change of Control, the Executive shall be entitled to the compensation and
benefits provided for in Section 6(d) or Section 6(c), as applicable, plus,
in each case, the compensation and benefits set forth in Section 6(d) for an
additional period of six (6) months (the payment of which shall also be
deemed to be a part of the Severance Period), subject to the same conditions
contained in Section 6. A Change of Control shall be deemed to have occurred
in the event that the "PERMITTED HOLDERS", individually or together, cease
for any reason to beneficially own at least thirty percent (30%) of the
Company's then outstanding shares of common stock or the combined voting
power of the then outstanding voting securities of the Company. As used
herein, Permitted Holders means holders of common stock of the Company on
August 12, 1999 and each other entity or person to which Oaktree Capital
Management, LLC or William E. Simons & Sons LLC, or their respective
affiliates, provides management or investment advisory services.
8. CONFIDENTIALITY, COMPANY PROPERTY AND NON-SOLICITATION COVENANTS.
(a) CONFIDENTIALITY. The Executive will not, during the
Employment Period or any period thereafter, directly or indirectly, disclose
or make available to any person, firm, corporation, association or other
entity, any "CONFIDENTIAL INFORMATION," for any reason or purpose whatsoever,
except as necessary in the course of performing his duties under this
Agreement and unless otherwise required by court order, subpoena or other
government or legal process. "CONFIDENTIAL INFORMATION" means: information
disclosed to the Executive or known by the Executive as a consequence of or
through his relationship with the Company, about the customers, employees,
business methods, public relations methods, organization, procedures or
finances, including, without limitation, information of or relating to
customer lists, of the Company and its affiliates; PROVIDED, HOWEVER, that
Confidential Information shall not include any information that (i) was
publicly known at the time of disclosure to the Executive, (ii) becomes
publicly known or available thereafter other than by any means in violation
of this Agreement or any other duty owed to the Company by any person or
entity or (iii) is lawfully disclosed to the Executive by a third party.
Upon termination of the Executive's employment with the Company, regardless
of the reason, all Confidential Information in his possession (together with
all copies or duplicates thereof, including computer files) shall be returned
to the Company and shall not be retained by the Executive or furnished to any
third party; PROVIDED, HOWEVER, that the Executive may retain personal
diaries, documents relating to his compensation and benefits, and this
Agreement.
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(b) COMPANY PROPERTY. All personal property and equipment
furnished to or prepared by the Executive in the course of or incident to his
employment belong to the Company and shall be promptly returned to the
Company upon termination of the Employment Period or at such other time as
the Company may request. Personal property includes, without limitation, all
books, manuals, records, reports, notes, contracts, lists, blueprints, and
other documents, or materials, or copies thereof (including computer files),
and all other proprietary information relating to the business of the
Company. Following termination, the Executive will not retain any written or
other tangible material containing any proprietary information of the
Company.
(c) NON-SOLICITATION. At all times during the Employment
Period and for the longer of any Severance Period or nine (9) months after
the termination of the Executive's employment by the Company for Cause or by
the Executive without Good Reason, the Executive will not, directly or
indirectly, either on his own account or jointly with or as a manager, agent,
officer, employee, consultant, partner, joint venturer, owner or shareholder
or otherwise on behalf of any other person, firm or corporation, (i) carry on
or be engaged or interested in, or solicit, the sale of physical logistics
services to any person, firm or corporation which at any time during the
Employment Period has been or is a customer of the Company, (ii) endeavor to
canvas or solicit in competition with the Company or to interfere with the
supply of orders for goods or services from or by any person, firm or
corporation which during the Employment Period has been or is a supplier of
goods or services to the Company, or (iii) solicit or attempt to solicit away
from the Company any of its officers or employees or offer employment to any
person who, during the six (6) months immediately preceding the date of such
solicitation or offer, is or was an officer or employee of the Company.
9. COVENANT NOT TO COMPETE. At all times during the Employment
Period and for the longer of any Severance Period or twelve (12) months after
termination if the Executive's employment is terminated by the Company for
Cause or by the Executive without Good Reason, the Executive will not,
directly or indirectly, own, manage, operate, join, control or participate in
the ownership, management, operation or control of, or be connected as a
director, officer, employee, partner, consultant or otherwise with, any
profit or non-profit business or organization which, directly or indirectly,
competes with, or in any way interferes with, the business of providing
physical logistics services similar to that provided by the Company or any of
its affiliates, in any part of North America. Notwithstanding the foregoing,
nothing in this Section 9 shall prohibit the Executive from working for or
providing services to any customer or supplier or former customer or supplier
of the Company or any other person or entity that is not engaged in the
business of providing physical logistics services or from owning less than
one percent (1%) of the issued and outstanding shares of a corporation the
shares of which are traded on a public stock exchange.
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10. INJUNCTIVE RELIEF AND ENFORCEMENT. In the event of any breach
by the Executive of the terms of Sections 5(i), 8 or 9, the Company shall be
entitled to institute legal proceedings to obtain damages for any such breach
and to enforce the specific performance of this Agreement by the Executive
and to enjoin the Executive from any further violation of Sections 5(i), 8 or
9 and to exercise such remedies cumulatively or in conjunction with all other
rights and remedies provided by law. The Executive acknowledges, however,
that the remedies at law for any breach by him of the provisions of Sections
5(i), 8 or 9 may be inadequate. In addition, in the event any provision of
Sections 5(i), 8 or 9 is determined by any court of competent jurisdiction to
be unenforceable by reason of extending for too great a period of time or too
great a geographical area or by reason of being too extensive in any other
respect, each such provision shall be interpreted to extend to the maximum
extent for which it may be enforceable, and enforced as so interpreted, all
as determined by such court in such action.
11. NOTICES. All notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when personally delivered, when transmitted by telecopy
with receipt confirmed, or one day after delivery to an overnight air courier
guaranteeing next day delivery, addressed as follows:
If to the Executive: Robert Arovas
2746 Buchanan Street
San Francisco, CA. 94123
With a copy to: Brian T. Foley
Brian Foley and Co., Inc.
One North Broadway
White Plains, New York 10604
If to the Company: Geologistics Corporation
13952 Denver West Parkway
Suite 150
Golden, Colorado 80401
Attention: General Counsel
With a copy to: Milbank, Tweed, Hadley & McCloy LLP
601 South Figueroa Street
30th Floor
Los Angeles, CA 90017
Attention: Eric H. Schunk
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
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12. ARBITRATION. Notwithstanding anything herein to the contrary,
in the event of a dispute between the parties arising out of or relating to
this Agreement, or the breach hereof, the parties agree that such dispute
shall be resolved by final and binding arbitration in Atlanta, Georgia,
administered by the American Arbitration Association ("AAA"), in accordance
with AAA's Commercial Arbitration Rules then in effect. Discovery may be
obtained during such arbitration proceedings to the extent authorized by the
arbitrator. Any award issued as a result of such arbitration shall be final
and binding between the parties thereto, and shall be enforceable by any
court having jurisdiction over the party against whom enforcement is sought.
The fees and expenses of such arbitration (including reasonable attorneys'
fees) or any action to enforce an arbitration award shall be paid by the
party incurring them, except that the arbitrator may determine that the party
that does not prevail in such arbitration may be required to pay a portion of
the prevailing party's fees and expenses.
13. LEGAL FEES. The Company will reimburse the Executive for fees
and expenses, up to a maximum amount of $7,500.00, incurred in connection
with having this Agreement reviewed by legal counsel of his own choosing
prior to execution, upon his submission of a statement for such fees and
expenses from legal counsel.
14. INDEMNIFICATION. The Company agrees to indemnify the Executive
to the fullest extent provided for in the Indemnification Agreement that is
annexed hereto as Exhibit B.
15. SEVERABILITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect; provided, however, that if any one or more of the
terms contained in Sections 8 or 9 hereto is for any reason held to be
excessively broad with regard to time, duration, geographic scope or
activity, that term shall not be deleted but shall be reformed and construed
in a manner to enable it to be enforced to the extent compatible with
applicable law.
16. ASSIGNMENT. This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any successor to its
business and will inure to the benefit and be binding upon any such
successor.
17. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but both of which together
will constitute one and the same instrument.
18. HEADINGS. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation
of this Agreement.
19. CHOICE OF LAW. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of New York (without reference to the choice of law provisions of New
York law), except with respect to matters of law concerning the internal
corporate affairs of the Company, and as to those matters the law of the
State of Delaware shall govern.
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20. LIMITATIONS ON LIABILITY.
(a) If the Executive is awarded any damages for any breach of
this Agreement, a breach of any covenant contained in this Agreement (whether
express or implied by either law or fact), or any other cause of action based
in whole or in part on his employment with the Company, such damages shall be
limited to contractual damages and shall exclude (i) punitive damages, and
(ii) consequential and/or incidental damages (E.G., lost profits and other
indirect or speculative damages). The maximum amount of damages that the
Executive may recover for any reason shall be the amount equal to all amounts
owed (but not yet paid) to the Executive pursuant to this Agreement through
its natural term or through any Severance Period.
(b) Any damages which the Company may be awarded because of
the Executive's breach of this Agreement shall not include indirect or
speculative damages or punitive damages.
21. ENTIRE AGREEMENT. This Agreement, together with Exhibits A and
B hereto, contains the entire agreement and understanding between the Company
and the Executive with respect to the employment of the Executive by the
Company as contemplated hereby, and this Agreement supersedes all prior
agreements, understandings, representations, promises, negotiations and
discussions, whether written or oral. This Agreement may not be changed
unless in writing and signed by both the Executive and a member of the Board.
22. THE EXECUTIVE'S ACKNOWLEDGMENT. The Executive acknowledges
(a) that he has consulted with or has had the opportunity to consult with
independent counsel of his own choice concerning this Agreement and has been
advised to do so by the Company, and (b) that he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it freely
based on his own judgment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
GEOLOGISTICS CORPORATION
/s/ Ron Jackson
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Name: Ron Jackson
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Title: VP & General Counsel
------------------------------
ROBERT AROVAS
/s/ Robert Arovas
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