Document:

LETTER AGREEMENT FOR HENRY H. GERKENS

 

Exhibit 10.1

April 27, 2004

Henry H. Gerkens

13410 Sutton Park Drive South

Jacksonville, Florida 32224

Dear Henry:

     On behalf of Landstar System, Inc. (the “Company”) and the Board of
Directors (the “Board”), we are pleased to acknowledge your appointment as
Chief Executive Officer of the Company. In this capacity, you will be the
principal executive officer of the Company and have all of the duties and
obligations generally associated with that position at the Company.

     As Chief Executive Officer, you shall continue to be compensated on the
same terms and conditions as are currently applicable to you, except that,
effective as of July 1, 2004, (i) your base salary shall increase to the annual
rate of $400,000, (ii) your Participant’s Percentage Participation under the
Company’s Executive Incentive Compensation Plan (the “EICP”) shall increase to
100% and (iii) you shall be granted a one time special award of 50,000 options
under the Company’s 2002 Employee Stock Option Plan (the “Option Plan”). Each
such option shall have an exercise price equal to the Fair Market Value (as
such term is defined in the Option Plan) of the Company’s Common Stock on July
1, 2004 and shall vest on December 31, 2008, provided you remain employed with
the Company on such date.

     In addition, with respect to 2004, your bonus under the EICP shall be
determined based on the product of (x) the multiplier under the EICP for 2004,
if any, times (y) $341,300, representing the sum of (i) $141,300 (or 90% of
your base salary for the first six months of 2004) plus (ii) $200,000 (or 100%
of your base salary for the last six months of 2004).

     You shall serve as the Chief Executive Officer at the pleasure of the Board and
as a member of the Board at the discretion of our shareholders.
Notwithstanding the foregoing, if the Company terminates your employment for
any reason other than Cause or Disability (as such terms are defined in your
Key Executive Employment Protection Agreement (“KEEPA”)) or you voluntarily
terminate your employment for Good Reason (as defined in clauses (i) and (ii)
in the definition of such term in the KEEPA, but determined based on your
title, authority and compensation as in effect immediately following your
appointment as Chief Executive Officer) at any time that your rights to receive
severance are not governed by the KEEPA (that is, generally prior to the
occurrence of Change of Control, as defined in the KEEPA), then the Company
shall pay you a lump sum severance benefit equal to two times your annual base
salary (as scheduled to be in effect on July 1, 2004, or as it may hereafter be
increased) within five (5) business days of the date of your termination of
employment. If you receive this severance benefit, you and, to the extent
applicable, your dependents shall be entitled, after the date of your
termination until the earlier of (x) the second anniversary of such date or (y)
the date you become eligible for

 

 

comparable benefits under a similar plan, policy or program of a subsequent
employer, to continue participation in all of the Company’s employee and
executive welfare benefit plans (the “Benefit Plans”) in which you participated
immediately prior to the date of your termination. To the extent any such
benefits cannot be provided under the terms of the applicable plan, policy or
program, the Company shall provide you a comparable benefit under another plan
or from the Company’s general assets. Your continued participation in the
Benefit Plans will be on the same terms and conditions that would have applied
had you continued to be an employee of the Company. In addition, you would be
entitled to receive any vested amounts or benefits owing to you under the
Company’s otherwise applicable employee benefit plans and programs (including
any equity compensation plan), and all options granted to you under the second
paragraph of this letter agreement which have not previously vested in
accordance with their terms shall become fully vested and exercisable under the
Option Plan.

     You acknowledge that in the event you receive all of the compensation and
other benefits provided for in the immediately preceding paragraph in respect
of any termination of your employment with the Company, you will not assert any
claims against the Company with respect to such termination and the payments
and benefits paid to you pursuant to the immediately preceding paragraph will
be in full satisfaction of any and all claims you may have against the Company
with respect to such termination.

     For the avoidance of doubt, at any time that the rights and protections
provided to you under the KEEPA are in effect, the severance benefits payable
to you hereunder shall not be applicable and you shall be entitled to receive
the full benefit and protection afforded to you under the terms of the KEEPA.

     Please confirm your acceptance of your appointment as Chief Executive
Officer and the terms set forth in this letter agreement by signing where
indicated below.

	 
	Sincerely,

	 

	/s/ Ronald W. Drucker

Ronald W. Drucker, Chairman

	Governance Committee of the Board of Directors

	 

	/s/ Robert C. LaRose

	

	Robert C. LaRose

	Vice President, Chief Financial Officer, & Secretary

	 	 	 	 	 
	Agreed and Accepted:

	 	/s/Henry H. Gerkens

	 	 
	

	 	 	 	 
	

	 	Henry H. Gerkens	 	 

Date: April 27, 2004

2LETTER AGREEMENT FOR JEFFREY C. CROWE

 

Exhibit 10.2

April 27, 2004

Jeffrey C. Crowe

13410 Sutton Park Drive South

Jacksonville, FL 32224

Dear Jeff:

     On behalf of Landstar System, Inc. (the “Company”) and the Board of
Directors (the “Board”), we want to thank you for your leadership and
outstanding efforts on behalf of the Company. We are also pleased that you
will continue as Chairman of the Board of Directors (“Chairman”). In this
capacity you will have all of the duties and obligations of each member of the
Board, but will also provide the Company services in addition to those
performed by other directors, on the terms and conditions set forth below.

     You will continue to serve as Chairman at the pleasure of the Board and as
a member of the Board at the discretion of our shareholders. You may elect to
voluntarily terminate your services at any time. During this continuing
service, you shall be paid a base salary in the annualized amount of $250,000,
payable in accordance with the Company’s usual payroll practices. Such amount
will be in lieu of any other fees that might be payable to you for service as a
director, and will encompass the compensation payable for your service as a
director and for the additional services that you will perform, as described
below.

     Your duties and responsibilities will be commensurate with your title as
non-executive Chairman, and will include representing the Company at such
conferences, trade shows and other events and occurrences that you shall be
requested to attend by the Board or the Chief Executive Officer, as well as
performing such other assignments consistent with your position as shall be
requested of you from time to time. In the performance of these services, you
will not be an executive officer of the Company and will not have the power to
bind the Company. You will be entitled to be reimbursed for any expenses that
you incur on behalf of the Company in the performance of your duties and
obligations hereunder in accordance with the Company’s generally applicable
policies and procedures, as in effect from time to time.

     It is agreed and understood that these services will not require a full
business time commitment on behalf of the Company. However, as services that
we will request of you will require that you perform these functions at
specified times and locations, and under the supervision of the Board and the
Chief Executive Officer, you will continue to be treated as a common law
employee of the Company. As an employee, you shall be entitled to continue to
participate in all of the Company’s employee benefit plans, programs and
arrangements in accordance with the terms thereof. However, you agree

 

 

with the Company that your Key Employee Protection Agreement, dated as of
January 30, 1998, shall be terminated effective as of the date hereof.

     If you cease to serve as the Chairman at any time prior to age 65, whether
by action of the Company or the shareholders, or whether in your discretion,
you agree that you shall be a consultant to the Company at the annual rate of
$250,000 per annum, payable quarterly, in advance, and shall provide such
services to the Company as shall reasonably be requested of you from time to
time by the Board or the Chief Executive Officer. It is expected that the
nature and scope of such services will generally be of a type consistent your
stature and experience, and shall be provided at such time and in such
locations as you shall determine, unless the Company shall otherwise request a
specific time and location upon reasonable advance notice. The term of your
consulting services shall be two years following the cessation of your services
as Chairman, which term may be extended by mutual agreement of the parties.
During the period that you are providing such consulting services, the Company
recognizes that you may provide services to other persons (except that the
Company may terminate your services as a consultant by written notice if you
shall also be providing services to a competitor of the Company).

     Please confirm your acceptance of the terms set forth in this letter
agreement by signing where indicated below.

	 
	Sincerely,

	 

	/s/ Ronald W. Drucker

Ronald W. Drucker, Chairman

	Governance Committee of the Board of Directors

	 

	/s/ Robert C. LaRose

Robert C. LaRose

	Vice President, Chief Financial Officer, and Secretary

	 

	Agreed and Accepted:

	 

	/s/ Jeffrey C. Crowe

	

Jeffrey C. Crowe

	 

	Date: April 27, 2004

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