Document:

Exhibit 10.15

 

ASSET PURCHASE AGREEMENT

 

This ASSET
PURCHASE AGREEMENT (this “Agreement”),
dated March 21, 2007
and effective as of March 21, 2007 (“Effective
Date”) is entered into by and among ECHO GLOBAL LOGISTICS INC., a
Delaware Corporation, (“Purchaser”), SELECTRANS,
LLC, a Nevada limited liability company,. (“Selectrans”),
and each of DOUGLAS R. WAGGONER (“Doug”),
ALLISON L. WAGGONER (“Allison”) and
DARYL P. CHOL (“Daryl”) (collectively
the “Owners” and collectively,
except for Allison, and including Selectrans, the “Sellers”). Certain capitalized terms used herein shall have
the meaning given such terms in Section 26
below.

 

RECITALS

 

A.                                        Prior to the consummation of
the transactions contemplated under this Agreement, Selectrans is an
Application Service Provider (“ASP”) engaged
in the business of providing freight management, carrier integration data and
software products with respect to or related to the use of “Shipkit”, its
proprietary software product developed by the Sellers, and related services to
companies that utilize the freight transportation industry (the “Business”);

 

B.                                          Collectively, the Owners as
set forth on the Ownership Schedule attached
hereto own all of the member interests in Selectrans, and each Owner is the
sole owner of his or her member interest set forth next to such Owner’s name on
the Ownership Schedule; and

 

C.                                          The Sellers wish to sell to
Purchaser, and Purchaser wishes to purchase from the Sellers, the Purchased
Assets, all on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the
mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiently of which are hereby acknowledged, the parties to
this Agreement hereby agree as follows:

 

1.                                           Purchased Assets.   Upon the terms and subject
to the conditions set forth in this Agreement, Selectrans hereby sells,
conveys, assigns, transfers and delivers the Purchased Assets to Purchaser, and
Purchaser hereby purchases the Purchased Assets from Selectrans, for the
consideration and in accordance with the provisions of this Agreement. The
Sellers hereby agree to take all actions necessary to effectuate the conveyance
of the Purchased Assets from Selectrans to Purchaser. The term “Purchased Assets” shall mean each of the
following, if any:

 

(a)                                    all customer contracts,
sales materials, sales leads, and other sales related documentation and the
right to pursue any types of sales orders related to the business (as listed on
Schedule 1(a) attached hereto
and incorporated herein);

 

(b)                                   all software, data, and
related computer code of Selectrans, in all stages of development and
preparation, websites, domain names and all intellectual property, including
the copyright and trademark of “Shipkit” of Selectrans, including licenses
thereof (as listed on Schedule 1(b) attached hereto and incorporated herein);

 

(c)                                    all rights and benefits that
Selectrans may have under any and all agreements, purchase orders, forward
commitments for works-in-progress, licenses, leases and other contracts and
agreements, whether written or oral, express or implied, if any;

 

(d)                                   all rights to receive
revenue from any users of Selectrans technology products and services and
related services including “ShipKit” (the “Future Technology
Revenue”) (as listed on Schedule 1(d) attached hereto and incorporated herein);

 

 

(e)                                  all furniture,
fixtures and equipment of Selectrans, if any, (the “FF&E”)
(as listed on Schedule 1(e) attached hereto and incorporated herein).

 

2.                                         Excluded Assets.   Notwithstanding
the foregoing, Selectrans hereby retains ownership and other rights with
respect to: (a) cash on hand of Selectrans (b) records and tax
returns of Selectrans, and (c) all rights and property of Selectrans, if
any, excluded under this Agreement or as set forth on Schedule 2 attached hereto and incorporated
herein (collectively, the “Excluded Assets”).

 

3.                                         Assumed Liabilities.   No liabilities
of any kind are assumed by Purchaser.

 

4.                                       Retained Liabilities.

 

All liabilities of Selectrans, including leased equipment and
leaseholds, if any, (as set forth on Schedule 4 attached hereto and
incorporated herein), other than the Assumed Liabilities (the “Retained Liabilities”) shall remain
obligations of Selectrans and the Purchaser shall not assume any responsibility
or liability in connection with the Retained Liabilities as a result of the
execution of this Agreement or the consummation of the Transactions
contemplated hereby. The Purchaser does not assume or agree to be liable for
any Retained Liability, including without limitation, any obligations owed by
Seller to any bank, governmental entity, or other creditor of any type, and any
accounts payable of Seller.

 

5.                                         Initial Purchase Price.

 

(a)                                     The initial purchase price
shall be paid and delivered at Closing by the Purchaser to Selectrans or its
nominees for the sale, transfer and delivery of the Purchased Assets and the
rights, benefits and obligations conferred upon the parties and undertaken by
the parties under this Agreement, shall be paid and delivered such amounts and
such Class A Common Shares set forth below (the “Initial Purchase Price”):

 

(i)                                     Three Hundred
and Fifty thousand U.S. Dollars ($350,000), to be paid to Selectrans upon the
date of execution of this Agreement (the “Initial
Cash Portion”), by wire transfer of immediately available fund.

 

(ii)                                     one hundred and fifty
thousand (150,000) shares of Echo Global Logistics, Inc. Class A
Common Stock (“Initial Common Shares”).

 

(b)                                  The Initial
Purchase Price will be allocated among the Purchased Assets (including the
restrictive covenants set forth in Section 11),
and the other consideration provided by the Sellers in accordance
with the allocation set forth in Schedule
5(b). The Sellers and the Purchaser agree to report this transaction
for all applicable income tax and other purposes in a manner consistent with
such allocation.

 

6.                                         Additional Purchase Price.

 

(a)                                  For the
purposes of this Section 6, the following terms shall have the meanings set forth
below:

 

“Earn-Out Period” shall mean the period beginning on the
Effective Date and ending three years following the Effective Date.

 

“Gross Revenue” shall be determined on an accrual basis and
shall include all of the Future Technology Revenue charged to customers,
including Selectans customers, during the Earn-Out Period from the sale or
exploitation of the technology products and services transferred to Purchaser
pursuant to this Agreement, including the ShipKit software, as such software
may be modified or customized by Purchaser subsequent to the Effective Date.
Gross Revenue also shall include the transaction fees from the exploitation

 

 

of ShipKit by Purchaser, including all fees charged or which could have
been charged when Purchaser offers ShipKit to any of its customers and such
customer utilizes ShipKit, whether or not Purchaser charges the customer such
transaction fees. Purchaser shall credit Gross Revenue for each transaction in
the amount which is the actually charged to customer but not less than $2.50
per transaction, whether or not Purchaser charges its customers transaction
fees. The Selectrans’ Standard Transaction Fees Pricing Schedule is attached as
Schedule 6(a), which sets forth Selectrans suggested transaction fees. The
Additional Purchase Price as defined in Section 6 shall only apply in instances
where the Gross Revenue generated is from a Selectrans or Shopkit stand alone
application, that is sold and priced in a stand alone manner. Additional
Purchase Price shall not apply to revenue generated from Echo or Echo’s
technology including in circustances where elements of Selectrans technology is
embedded or adopted into Echo’s systems or software.

 

“Sales People” means each of Doug and
Daryl.

 

(b)                                           In addition to
the Initial Purchase Price payable on the date hereof,  Doug and Daryl,
collectively, on a 50%/50% basis each to Doug and Daryl, shall be paid and be
delivered during the Earn-Out Period, as additional purchase price for the
Purchased Assets (“the Additional Purchase
Price”): (i) additional cash payments calculated in accordance
with the definitions set forth in Section 6(a) equal
to thirty-five percent (35%) of the Gross Revenue generated by the Business
during the Eam-Out Period to be paid each quarter (the “Additional Cash Portion”), up to a maximum
of $1,000,000 in the aggregate (the “Maximum
Additional Cash Portion”) during over the entire Earn-Out Period,
and (ii) if, under the terms of this Section 6, the Maximum
Additional Cash Portion of $1,000,000 is owed to Selectrans, then at such time,
as part of the Additional Purchase Price, Purchaser shall assign and deliver to
Selectrans, or its nominee, the additional amount of 75,000 Class A Common
Shares of Echo Global Logistics, Inc. (the “Additional Common Shares”).

 

(c)                                   Promptly following the end
of each quarter during the Earn-Out Period and at the end of the Earn-Out
Period, but in no event later than sixty (60) days following the end of each
such period, the Purchaser shall prepare in good faith the computation of the Additional Purchase Price setting forth the
Gross Revenue and the amount due Selectrans, all in reasonable detail (the “Additional Purchase Price Computation Statement” or
“Statement”), together with all
information requested by Selectrans to permit verification of the information
set forth therein, to Selectrans for review. The Chief Financial Officer of the
Purchaser shall certify to Selectrans that the information set forth in the
Statement is true and correct. Purchaser shall also permit Selectrans and its
representatives reasonable access to the books and records of Purchaser related
to the Business to permit and enable Selectrans to verify the information
provided by Purchaser.

 

(d)                                  Within thirty (30) days
following receipt of the Statement, Selectrans shall deliver to the Purchaser a
notice of objection (an “Objection Notice”)
disputing the Statement or a notice of acceptance (an “Acceptance
Notice”) accepting the Statement with respect to the determination
by the Purchaser of the amounts of Additional Cash Portion and the Additional
Common Shares. If an Acceptance Notice is delivered by Selectrans to the
Purchaser within such thirty (30) day period, then the determination by the
Purchaser shall be final and binding on the Sellers, and within fifteen (15)
days thereafter, the amount of the Additional Cash Portion and the Additional
Common Shares then due and owing to Selectrans shall be paid or delivered to
Selectrans.

 

(e)                                   If an Objection Notice is
delivered by Selectrans to the Purchaser within such thirty (30) day period,
then except for amounts of the Additional Purchase Price set forth in the
Statement not in dispute which shall be paid as hereinbefore provided, such
disputed amounts set forth therein shall be resolved as follows:

 

(i)                                      Selectrans and Purchaser
shall promptly endeavor to negotiate in good faith in an

 

 

attempt
to agree upon the amount of the Additional Cash Portion or the Additional
Common Shares. In the event that a written agreement determining such amounts
has not been reached within ten (10) business days after the date of
receipt by the Purchaser from Selectrans of Selectrans’ Objection Notice
thereto, the Purchaser shall suggest three reputable accounting firms with whom
the Purchaser and its principals and the Sellers have no professional
relationship to adjudicate the determination of the Additional Purchase Price,
and Selectrans shall be permitted to choose one of these firms, which
accounting firm shall serve as the arbiter for the dispute over the Additional
Purchase Prices (the “Arbiter”). Upon
the selection of the Arbiter, each of the Purchaser’s and Selectrans’
determination of the Additional Purchase Price shall be submitted to the
Arbiter.

 

(ii)                                  The Arbiter
shall be directed to render a written report on the unresolved disputed issues
with respect to the Additional Purchase Price as promptly as practicable, and
to resolve only those issues of dispute set forth in the Objection Notice.
Selectrans and Purchaser shall each furnish to the Arbiter such work papers,
schedules and other documents and information relating to the unresolved disputed
issues as the Arbiter may reasonably request. The Arbiter shall establish the
procedures it shall follow (including procedures regarding to the presentation
of materials supporting each party’s position) giving due regard to the mutual
intention of the Purchaser and Selectrans to resolve each of the disputed items
and amounts as accurately, quickly, efficiently and inexpensively as possible.
The resolution of the dispute and the calculation of the Additional Purchase
Price shall be final and binding upon each party hereto.

 

(f)                                    Within fifteen
(15) business days after final determination of the Additional Purchase Price,
Purchaser shall pay the entire amount, as finally determined, by wire transfer
of immediately available funds to an account designated in writing by
Selectrans.

 

7.                                        Representations and Warranties of an  Owner. Except for
Allison who makes no representations or warranties whatsoever, each Owner,
severally and not jointly, hereby represents and warrants to the Purchaser as
follows:

 

(a)                                   Authority.   The
Owner has full power, right and authority to enter into and perform his or her
obligations under this Agreement and each of the Transaction Documents to which
the Owner is a party, except as disclosed on Schedule
7(a).

 

(b)                                   Enforceability.   This
Agreement and each of the Transaction Documents to which the Owner is a party
has been duly executed and delivered by such Owner and is the valid and binding
obligation of such Owner or Selectrans as the case may be and is enforceable
against such Owner or Selectrans in accordance with its respective terms. To
the best of Owner’s knowledge and belief, no permits, approvals or consents of
or notifications to (i) any governmental entities or (ii) any other
Persons are necessary in connection with the execution, delivery and
performance by such Owner of this Agreement and the Transaction Documents to
which such Owner is a party and the consummation by such Owner of the
transactions contemplated hereby and thereby.

 

(c)                                    Transaction Not a Breach.   Neither the execution and delivery of this
Agreement and the Transaction Documents by the Owner, nor the performance by
such Owner of the transactions contemplated hereby or thereby will not violate
and conflict with, or result in the breach of any of the terms, conditions, or
provisions of any contract, agreement, mortgage, or other instrument or
obligation of any nature to which such Owner is a party or by which such Owner
is bound.

 

8.                                        Representations
and Warranties of the Sellers.   The
Sellers hereby represent and warrant to the Purchaser as follows:

 

(a)                                   Authority.   Selectrans has full power, right and
authority to enter into and perform its obligations under this Agreement and
each of the Transaction Documents to which it is a party. The

 

 

execution,
delivery and performance by Selectrans of this Agreement and each of the
Transaction Documents to which Selectrans is a party has been duly and properly
authorized by all requisite action in accordance with applicable law and with
the Operating Agreement of Selectrans, except as disclosed on Schedule  7(a).

 

(b)                                      Enforceability.   This Agreement and each of the Transaction
Documents to which Selectrans is a party has been duly executed and delivered
by Selectrans and is the valid and binding obligation of Selectrans and is
enforceable against Selectrans in accordance with its respective terms. To the
best of Sellers’ knowledge and belief, no permits, approvals or consents of or
notifications to (i) any governmental entities or (ii) any other
Persons are necessary in connection with the execution, delivery and
performance by Selectrans of this Agreement and the Transaction Documents to
which Selectrans is a party and the consummation by Selectrans of the
transactions contemplated hereby and thereby,

 

(c)                                       Transaction Not a Breach.   Neither the execution and delivery of this
Agreement and the Transaction Documents by Selectrans, nor the performance by
Selectrans of the transactions contemplated hereby or thereby will not violate
and conflict with, or result in the breach of any of the terms, conditions, or
provisions of this Agreement or of any contract, agreement, mortgage, or other
instrument or obligation of any nature to which Selectrans is a party or by
which Selectrans is bound.

 

(d)                                      Title to Purchased Assets.   Selectrans
has valid title to the Purchased Assets, free and clear of all liens claims or
encumbrances.

 

9.                                         Representations
and Warranties of the Purchaser.   The Purchaser hereby represents and warrants
to the Sellers and Owners as follows:

 

(a)                                     Authorization.   Purchaser has full power, right and authority
to enter into and perform its obligations under this Agreement and each of the
Transaction Documents to which it is a party. The execution, delivery and
performance by Purchaser of this Agreement and each of the Transaction
Documents to which it is a party have been duly and properly authorized by all
requisite limited liability company action in accordance with applicable law
and with the corporate documents and authority of Purchaser.

 

(b)                                    Enforceability.   This Agreement and each of the Transaction
Documents to which Purchaser is a party have been duly executed and delivered
by Purchaser and are the valid and binding obligation of Purchaser and are
enforceable against Purchaser in accordance with their respective terms. No
permits, approvals or consents of or notifications to (i) any governmental
entities or (ii) any other Persons are necessary in connection with the
execution, delivery and performance by Purchaser of this Agreement and the Transaction
Documents and the consummation by Purchaser of the transactions contemplated
hereby or thereby.

 

(c)                                     Transaction Not a Breach.   The execution, delivery and performance of
this Agreement and the Transaction Documents by Purchaser will not violate and
conflict with, or result in the breach of any of the terms, conditions, or
provisions of Purchaser’s Articles of Incorporation, Bylaws, or agreement or of
any contract, agreement, mortgage, or other instrument or obligation of any
nature to which Purchaser is a party or by which Purchaser is bound.

 

10.                               Deliveries.

 

(a)                                  Sellers’
Deliveries. In connection with the execution of this Agreement
and the consummation of the transactions contemplated hereby, the Sellers are
delivering to the Purchaser the following, all of which shall be deemed to be
delivered simultaneously:

 

(i)                                      A Bill of Sale for the
Purchased Assets, duly executed by each of the Sellers, in

 

 

substantially the form attached hereto as
Exhibit A (the “Bill of Sale”).

 

(ii)                                  Legal and
actual possession of the Purchased Assets to the Purchaser, together with any
keys, combinations, alarm systems and related codes and other rights of access
required to take legal and actual possession of the Purchased Assets.

 

(iii)                               Such other
documents of Sellers as may be necessary and proper to consummate the
transactions set forth herein.

 

(iv)                              All source code
and related technology documentation of Selectrans.

 

(b)                                 Purchaser
Deliveries. In connection with the execution of this Agreement
and the consummation of the transactions contemplated hereby, the Purchaser is
delivering to the Sellers and the Owners the following, all of which shall be
deemed to be delivered simultaneously:

 

(i)                                     Payment of the
Initial Cash Portion to Sellers and Owners;

 

(ii)                                  Delivery of
certificates evidencing the transfer to Sellers of the Initial Common Shares
allocated among Sellers in accordance with the written direction of Sellers to
Purchaser.

 

(iii)                               Such other
documents of Purchaser as may be necessary and proper to consummate the
transactions set forth herein.

 

11.                           Noncompetition. Subject to
the provisions of Schedule 11(i) of this Agreement as it relates to Daryl
only, it is agreed as set forth herein.

 

(a)                                  Each Seller
agrees and consents that there exists valid and sufficient consideration that
during the Noncompetition Period (as defined below), such Seller will not,
directly or indirectly, in any manner willfully (whether as an owner, officer,
director, partner, manager, employee, independent contractor, consultant or
otherwise):

 

(i)                                         engage or participate in any
other company or entity to the actual knowledge of Seller engaged in or
planning to engage in the Business in the United States; or

 

(ii)                                  solicit, place,
market, service, accept, aid, consult or do business with any customer or account
of Selectrans that has done business with Selectrans within the past twelve
months, with respect to the Business within the United States, except for the
benefit of the Purchaser.

 

(b)                                  Each Seller agrees that
during the Noncompetition Period, such Seller will not, directly or indirectly,
in any manner willfully (whether as an owner, officer, director, partner,
manager, employee, independent contractor, consultant or otherwise), solicit
for employment or other services or employ or engage as a consultant or
otherwise any then current employee, supplier and/or vendor of the Purchaser.

 

(c)                                   At all times during the
Noncompetition Period, each Seller agrees not to willfully disparage, denigrate
or derogate in any way, directly or indirectly, the Purchaser or the Business.
In addition, each Seller unconditionally agrees not to willfully take any
action intended to disturb or disrupt the conduct of the Business by the
Purchaser during the Noncompetition Period.

 

(d)                                  For purposes hereof, the “Noncompetition Period” shall mean the mean the three year
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date.

 

 

(e)                                      Each of the covenants
contained in this Section 11
shall terminate with respect to each and every Seller upon (A) the failure
by Purchaser to make any material payment due and owing under this Agreement if
such breach remains uncured for thirty (30) days following written notice
thereof, provided that these covenants shall not terminate if Purchaser
is contesting in good faith its obligation to make such payment, pursuant to a
written notice to Sellers alleging a material breach hereunder and such breach
remains uncured for thirty (30) days following such notice, or
(B) (I) the voluntary filing of a petition under the bankruptcy code
by Purchaser, (II) the filing of an involuntary bankruptcy petition against
Purchaser, which petition is not dismissed within ninety days, (III) the
Purchaser making an assignment for the benefit of its creditors.

 

(f)                                        Notwithstanding the
foregoing, nothing in this Section 11
shall prevent any Seller from owning less than 1% of the equity of any
corporation traded on any national, international, or regional stock exchange
or in the over-the-counter market.

 

(g)                                     If any Seller breaches, or
threatens to commit a breach of, any of the covenants set forth in this
Section 11 (the “Restrictive Covenants”),
the Purchaser shall have the right and remedy to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, including
immediate temporary injunctive relief without bond and without the necessity of
showing actual monetary damages, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the
Purchaser and that money damages would not provide an adequate remedy to the
Company, which right and remedy is in addition to, and not in lieu of, any
other rights and remedies available to the Purchaser under law or in equity.
Each Seller acknowledges that such Seller has means to support himself and his
dependents other than by engaging in the Business, or a business similar to the
Business, and the provisions of this Section 11
will not impair such ability, provided that the Purchaser employs Daryl as
provided in this Agreement.

 

(h)                                 If any court of
competent jurisdiction at any time deems the Restrictive Covenants, or any part
hereof, unenforceable because of the duration or geographical scope of such
provisions, the other provisions of this Section 11,
will nevertheless stand and to the full extent consistent with law continue in
full force and effect, and it is the intention and desire of the parties that
the court treat any provisions of this Agreement which are not fully
enforceable as having been modified to the extent deemed necessary by the court
to render them reasonable and enforceable, and that the court enforce them to
such extent.

 

(i)                                     If Daryl’s
employment by the Purchaser is terminated by Purchaser at any time prior to the
third anniversary of the Effective Date, then (i) the noncompetition
covenant set forth in Section 1 l(a)(i) above that applies to all
Sellers shall not apply to Daryl thereafter, and (ii) at such time Daryl
shall be granted a non-exclusive, royalty free, perpetual license for use and
exploit the ShipKit software, but not the tradename “ShipKit”, as modified,
customized and existing on the later of the Effective Date, or if employed,
then on the date of termination of Daryl’s employment, and such other terms and
conditions set forth in Schedule 11(i) attached
hereto and made a part hereof.

 

12.                                 Accounts Receivable. All payments
and reimbursements made by any third party in the name of or to Selectrans in
connection with or arising out of the Purchased Assets after the Closing Date
shall be held by Selectrans in trust to the benefit of Purchaser and, promptly,
and in any event within three (3) business days, upon receipt by
Selectrans of any such payment or reimbursements, Selectrans shall forward to
Purchaser the amount of such payment or reimbursement without right of set off,
together with all corresponding notes and information received in connection
therewith.

 

13.                                 Several and Not Joint Liability. Purchaser
hereby agrees and acknowledges that any liability of a Seller in connection with
this Agreement, whether with respect to a contingent claim, a tort claim, a
breach of this Agreement, or otherwise, shall be several and not joint.

 

 

14.                                  Operation of Business during the
Earn-Out Period.

 

(a)                                       During the Earn-Out Period,
(i) Purchaser shall maintain the integrity of  the Business
for accounting purposes, so as to make the calculation of Additional Purchase
Price feasible and verifiable; (ii) the Purchaser will use commercially
reasonable efforts to maximize the Gross Revenue of the Business.

 

(b)                                      During the Earn-Out Period,
Purchaser shall maintain and preserve the Business and its assets in accordance
with ordinary business prudence and shall operate the Business in a
commercially reasonable manner, and shall (i) not take any action to harm
the goodwill and business relationships of the Business; (ii) comply with
the undertakings set forth in Sections 6(g) and 6(h) above, and
(iii) maintain the books and records relating to the Business in the usual
and ordinary manner and in a manner that fairly and correctly reflects the
Gross Revenue of the Business.

 

(c)                                       During the Earn-Out Period,
if Purchaser either (i) acquires an existing customer of Selectrons listed
on Schedule 1(a), or (ii) provides the ShipK.it software and services
included in the Business to such customers without charge, then in each case
then the gross revenue of such customer shall be calculated as if such customer
had not been acquired or had been charged, and the entire amount of such gross
revenue that would have been realized shall continue to be added to Gross
Revenue in the calculation of the Additional Purchase Price, including both the
Additional Cash Portion and the Maximum Additional Cash Portion, as if such
customer had not been acquired by Purchaser.

 

15.                                  Fees and Expenses. All costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including, but not limited to, any broker’s or finder’s
fees) shall be paid by the party incurring such costs and expenses.

 

16.                                  Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, without regard to the conflicts of law rules thereof.

 

17.                                  Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns, but will not be assignable
or delegable by any Seller, on the one hand, or the Purchaser, on the other
hand, without the prior written consent of the other party hereto, provided,
however, that the Purchaser shall be entitled to assign its rights and
benefits hereto, without the consent of the Sellers (a) to an Affiliate of
the Purchaser so long as the Affiliate assumes the Purchaser’s rights and
obligations hereunder and (b) in connection with a sale of all or
substantially all of Purchaser’s assets so long as the assignee assumes the
Purchaser’s obligations hereunder, and provided further, that the
Sellers and each of them and the Owners shall be entitled to assign their
rights and benefits hereto, without the consent of the Purchaser (a) to
and among the Sellers or their nominees, and (b) to an Affiliate of a
Seller so long as the Affiliate assumes the Seller’s rights and obligations
hereunder, and (c) in connection with a sale of all or substantially all
of such Selectans’ assets or if Selectrans is merged into a successor entity,
so long as the assignee assumes Selectrans’ obligations hereunder.

 

18.                                  Amendment and Waiver. This
Agreement or any provision hereof, may be amended or waived; provided,
that any such amendment or waiver will be binding on the parties hereto only if
such amendment or waiver is set forth in a writing executed by the party or
parties to be bound by such amendment or waiver. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other breach of this Agreement or any of the
documents, agreements and instruments executed in connection herewith or
contemplated hereby.

 

19.                                  Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall have
the force and effect of the original and such counterparts together shall
constitute one and the same instrument. A facsimile signature shall be
acceptable as an original for all purposes.

 

 

20.                                 Notices. All notices,
consents and other communications to be sent or given hereunder by any of the
parties shall in every case be in writing and shall be deemed properly served
if (a) delivered personally, (b) delivered by a recognized overnight
courier service, or (c) sent by facsimile transmission with a confirmation
copy sent by overnight courier, in each case, to the parties at the addresses
and facsimile numbers as set forth below or at such other addresses and
facsimile numbers as may be furnished in writing:

 

(i)                                     If to
Selectrans, the Sellers, or the owners:

 

Selectrans Group, LLC

 

and

 

Daryl P. Chol

 

with a copy (which shall not constitute notice) to Daryl’s attorney:

 

Frederick Choi

 

and

 

Douglas R. Waggoner

 

with a copy (which shall not constitute notice) to
Doug’s and Selectrans’ attorney:

 

Robert I. Wertheimer

Wertheimer & Zaluda

707 Skokie Boulevard

Suite 555

Northbrook, Illinois 60062

Fax: (847)480-5282

 

(ii)                                    If to the Purchaser:

Echo Global Logistics Inc.

600 West Chicago Avenue, Suite 830

Chicago, Illinois 60610

Fax 312.873.4365

Attention: President

 

 

Date of service of such notice shall be (x) the date such notice
is personally delivered, (y) one (1) day after the date of delivery
to the overnight courier if sent by overnight courier, or (z) the next
succeeding business day after transmission by facsimile.

 

21.                                   No Third
Party Beneficiaries; Entire Agreement. No person or
entity who is not a party to this Agreement, including, but not limited to, any
employee or former employee of Selectrans, shall be deemed to be a beneficiary
of any provision of this Agreement, and no such person shall have any claim,
cause of action, right or remedy pursuant to this Agreement. This Agreement,
including the Exhibits and Schedules attached hereto (and any other instruments
executed and delivered in connection herewith), and any other agreements
required by this Agreement, embody the entire agreement and understanding of
the parties with respect to the transactions contemplated by this Agreement.
This Agreement supersedes all prior discussions, negotiations, agreements and
understandings (both written and oral) between the parties with respect to the
transactions contemplated hereby that are not reflected or set forth in this
Agreement, the Exhibits or the Schedules attached hereto and any other
agreements required by this Agreement.

 

22.                                   Further
Assurances. Each party hereto agrees to
promptly execute and deliver all further instruments and documents and take all
further action necessary or appropriate or that the other party may reasonably
request in order to effect the purposes of this Agreement and the Transaction
Documents.

 

23.                                   No Other
Representations and Warranties. Except for the
representations and warranties expressly set forth in this Agreement and the
Schedules attached hereto, Purchaser acknowledges that no Selling Parties makes
any other express or implied representation or warranty with respect to the
Purchased Assets or the Business.

 

24.                                   No Strict
Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against
any party hereto.

 

25.                                   Legal
Counsel. By executing this Agreement,
each of the Owners, the Sellers and the Purchaser acknowledge that each was
advised to obtain their own separate attorney and other advisors in connection
with this Agreement and the transactions contemplated hereby and that only
their separate attorney is able to advise each party as to their individual
best interests hereunder.

 

26.                                   Definitions: In addition to
the other capitalized words and terms found elsewhere in this Agreement, the
following capitalized terms shall mean as follows:

 

(a)                                   “Affiliate”
shall mean, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise). A
reference to any party or Person in this Agreement includes such Persons that
are Affiliates of that party or Person.

 

(b)                                  “Nominee”
shall mean as to any party hereto, such Person or Persons that are
designed as a nominee by such party.

 

(c)                                   “Purchaser”
shall mean in addition to ECHO GLOBAL LOGISTICS, INC., any successor or
assignee corporation or corporations into which or with which the Purchaser may
be merged, changed or consolidated, any corporation the stock of which shall be
exchanged or converted into the Common Stock of Purchaser, and any assignee of
or successor to all or substantially all of the assets of the Purchaser.

 

 

(c)                                       “Purchase
Price” shall mean the aggregate of both the Initial
Purchase Price and the Additional Purchase Price.

 

(d)                                      “Person”
or “Persons” shall
mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, Nominee or an entity in a representative capacity.

 

(e)                                       “Transaction
Documents” shall mean this Agreement, including the Schedules
and Exhibits attached hereto (and any other instruments executed and delivered
in connection herewith), and any other agreements required by this Agreement.

 

(f)                                         “Willfully” shall mean conduct that is an act or omission
of a Seller or Purchaser that is willful, intentional, reckless or gross
negligence, but shall not mean ordinary negligence.

 

27.                                    Books and
Records.  Sellers and Purchaser agree
that each shall maintain their material books and records for at least three
(3) years following the date hereof and retain them for at least two
(2) years thereafter, and further, shall permit each of the other parties
and their  representatives reasonable
access upon reasonable notice to such books and records for any matter which
such party has a reasonable and legitimate basis.

 

28.                                    Acknowledgement
regarding Allison. The parties
hereto acknowledge that Allison is executing this Agreement solely as a member
of Selectrans, a limited liability company, without representation or warranty
as to any matter contained herein and not individually. All parties covenant
and agree that under no circumstances will Allison be sued or made a party to
any litigation by any party hereto for any cause or matter arising under this
Agreement, except as a necessary party and then solely as a member of
Selectrans.

 

29.                                    Joinder of
Spouses.  Daryl is married. His spouse
is not party to this Agreement. Her signature appearing on this Agreement are
affixed for the sole and only purpose of indicating in writing their consent to
the actions of her spouse with respect to this Agreement (statutorily required
under the community property laws of the State of California). It is agreed
that Daryl’s spouse is not subject to any duties, liabilities, or responsibilities
with respect to this Agreement and shall not be made a party to any litigation
for any cause or matter arising under this Agreement or related thereto.

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written. Each of the Owners, the
Sellers and the Purchaser acknowledges that they have read and understood this
Agreement, including, without limitation Section 25 hereof, and has either
obtained its own independent counsel with respect to the transactions contemplated
hereby, or waived its right to have counsel review this Agreement.

 

 

	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  SELECTRANS GROUP, LLC,

  
	
   

  	
  A Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  Its members

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Douglas R. Waggoner

  
	
   

  	
   

  	
  Douglas
  R. Waggoner, as a member

  
	
   

  	
   

  	
  and
  individually as a Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Allison L. Waggoner

  
	
   

  	
   

  	
  Allison
  L. Waggoner, solely as a member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Daryl P.Chol

  
	
   

  	
   

  	
  Daryl Chol, as a member and individually as a Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date
  of execution: March 21, 2007

  
	
   

  	
   

  
	
   

  	
  I
  am the spouse of Daryl Chol. I hereby approve and consent to my spouse’s
  entering into this contract.

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Jacquelyn A.Chol

  
	
   

  	
   

  	
  Jacquelyn
  A.Chol

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  ECHO GLOBAL LOGISTICS INC.,

  
	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Orazia Buzza

  
	
   

  	
   

  	
  Print
  Name:

  	
  Orazia
  Buzza

  
	
   

  	
   

  	
  Its:
  

  	
  President

  
	
   

  	
   

  	
  Date
  of Execution:March 22, 2007

  
	
   

  	
   

  
	
   

  	
  OWNERS:

  
	
   

  	
  /s/
  Douglas R. Waggoner

  
	
   

  	
  Douglas
  R. Waggoner

  
	
   

  	
   

  
	
   

  	
  /s/
  Allison L.Waggoner

  
	
   

  	
  Allison
  L.Waggoner

  
	
   

  	
   

  
	
   

  	
  /s/
  Daryl P. Chol

  
	
   

  	
  Daryl
  P. Chol

  
	
   

  	
   

  
	
   

  	
  Date
  of execution: March 21, 2007Exhibit No. 10.7

 

BEST
BUY CO., INC.

LONG-TERM
INCENTIVE PROGRAM AWARD AGREEMENT

Award Date: October 18, 2007

 

The Award.  As of the Award Date set forth in the Award
Notification accompanying this award, Best Buy Co., Inc. (“Best Buy”)
grants to you an option to purchase the number of shares of Best Buy common
stock set forth in such Award Notification (the “Option”) at the option price
per share set forth in such Award Notification, and/or a mix of long-term
incentive award alternatives you have selected, including (i) a number of
performance shares of Best Buy common stock (the “Performance Shares”), (ii) a
number of restricted shares of Best Buy common stock (the “Restricted Shares”),
and/or (iii) a number of performance units to be paid in cash (the “Performance
Units”) as set forth in such Award Notification, on the terms and conditions
contained in this Long-Term Incentive Program Award Agreement (this “Agreement”)
and the Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as
amended (the “Plan”).  Capitalized terms
not defined in the body of this Agreement are defined in the Addendum.

 

Option

 

Duration and Exercisability of Option.  You may not exercise any portion of the
Option prior to one year from the Award Date, and the Option expires 10 years
after the Award Date (the “Expiration Date”). 
You may exercise the Option in cumulative installments of 25% on and
after each of the first four anniversaries of the Award Date.  The entire Option will vest earlier and become
exercisable upon your Qualified Retirement, Disability or death or if, within
12 months following a Change of Control, your employment is terminated without
Cause or you terminate your employment for Good Reason.  The Option may only be exercised by you
during your lifetime, and may not be assigned or transferred other than by will
or the laws of descent and distribution.

 

Exercise and Tax Withholding.  The Option may be
exercised in whole or in part by notice to Best Buy (through the Plan
administrator or other means as shall be specified by Best Buy from
time-to-time) stating the number of shares to be purchased under the Option and
the method of payment.  The notice must
be accompanied by payment in full of the exercise price for all shares designated
in the notice.  Payment of the exercise
price may be made by cash, check or delivery of previously owned shares of
stock having a Fair Market Value (as defined in the Plan) on the date of
exercise equal to the exercise price, or a combination thereof.  The Option will not be eligible for treatment
as a qualified or incentive stock option for federal income tax purposes.  You are liable for any federal and state
income or other taxes applicable upon the grant or exercise of the Option or
the disposition of the underlying shares, and you acknowledge that you should
consult with your own tax advisor regarding the applicable tax
consequences.  Upon exercise of the
Option, Best Buy will withhold from the shares that would otherwise be
delivered to you a number of shares having a fair market value equal to the
amount of all applicable taxes required by Best Buy to be withheld or collected
upon the exercise of the Option, unless your notice of exercise indicates your
desire to satisfy such withholding obligations through the payment of cash or the
delivery of previously acquired shares of Best Buy common stock, and such cash
or shares are delivered to Best Buy promptly thereafter.  You have no rights in the shares subject to
the Option until such shares are received upon exercise of the Option.

 

Retirement, Disability, Death or
Termination.  Upon
your Qualified Retirement, you will have one year from the effective date of
your retirement to exercise the Option. 
If you die while employed, the representative of your estate or your
heirs will have one year from the date of your death to exercise the
Option.  If you become Disabled, you will
have one year from the effective date of such classification to exercise the
Option.  If your employment is terminated
by Best Buy or an Affiliate without Cause or if you resign or otherwise
voluntarily terminate your employment with Best Buy or an Affiliate, you will
have 60 days from the date of your termination to exercise the Option, to the
extent the Option had vested as of your termination date.  In no case, however, may the Option be
exercised after the Expiration Date.  The
Option may not be exercised following termination of employment for Cause.

 

 

Performance Shares

 

Restricted Period.  The Performance Shares are subject to the
restrictions contained in this Agreement and the Plan during the period (for
purposes of this Section III, the “Restricted Period”) beginning on the
Award Date and ending on February 26, 2011, subject to the provisions of Section 3.3
below.  The restrictions will lapse and
the Performance Shares will become transferable and non-forfeitable as of February 26,
2011 if the Vesting Criteria set forth in the attached Vesting Criteria
Schedule have been met.  If the Vesting
Criteria are not met as of such date, your rights to some or all of the
Performance Shares, as set forth in the Vesting Criteria Schedule, will be
immediately forfeited.  The Committee
will determine in its sole discretion whether the Vesting Criteria are met,
upon which the Performance Shares will be issued in your name no later than 75
days after the end of the Restricted Period, either by book-entry registration
or issuance of a stock certificate.  If
the Performance Shares are issued prior to the end of the Restricted Period, the
stock certificate will be held by Best Buy, and may bear an appropriate legend
referring to the restrictions applicable to the Performance Shares.

 

Restrictions.  The Performance Shares are subject to the
following restrictions during the Restricted Period:

 

The
Performance Shares are subject to forfeiture to Best Buy as provided in this
Agreement and the Plan.

The
Performance Shares may not be sold, assigned, transferred or pledged during the
Restricted Period.  You may not transfer
the right to receive the Performance Shares, other than by will or the laws of
descent and distribution, and any such attempted transfer will be void.

 

Forfeiture/Acceleration.  Upon your Qualified Retirement prior to February 26,
2011, the Restricted Period will continue and the Performance Shares will not
be issued until such date as the Committee determines in its sole discretion
whether and to what extent the Vesting Criteria set forth in the Vesting
Criteria Schedule have been met, as set forth in Section 3.1 above.   If your employment is terminated by reason
of death or you become Disabled prior to February 26, 2011, the
restrictions will lapse and the Performance Shares will be issued and become
non-forfeitable and transferable as of the date of such termination in the same
amount as if the performance goals had been achieved such that 100% of the
Performance Shares had been earned through the date of termination.  If, prior to February 26,
2011 and within 12 months following a Change in Control, your employment is
terminated without Cause or you terminate your employment for Good Reason, the
restrictions will lapse and the Performance Shares will be issued and become
non-forfeitable and transferable as of the date of such termination in the same
amount as if the performance goals had been achieved such that 100% of the
Performance Shares had been earned through the date of termination.  If your employment is terminated prior to February 26,
2011 for any other reason, your rights to all of the Performance Shares will be
immediately and irrevocably forfeited.

 

Rights. 
Until issuance of the Performance Shares, you will not have any rights
of a shareholder with respect to the Performance Shares.  Upon issuance of the Performance Shares, you
will, subject to the restrictions of this Agreement and the Plan, have all of
the rights of a shareholder with respect to the Performance Shares, unless and
until the Performance Shares are forfeited, except that you will not have the
right to vote the Performance Shares during the Restricted Period.  Any dividends or other distributions (whether
cash, stock, or otherwise) paid on the Performance Shares during the Restricted
Period will be held by Best Buy until the end of the Restricted Period, at
which time Best Buy will pay you all such dividends and other distributions
less any applicable tax withholding amounts. 
If the Performance Shares are forfeited as described in Section 3.3
of this Agreement, then all rights to such payments will also be forfeited.

 

Income Taxes. 
You are liable for any federal and state income or other taxes
applicable upon the grant of the Performance Shares if you make an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended,
within 30 days of the date of grant, or upon the lapse of the restrictions on
the Performance Shares, and the subsequent disposition of the Performance
Shares, and you acknowledge that you should consult with your own tax advisor
regarding the applicable tax consequences. 
Upon the lapse of the restrictions on the Performance Shares, Best Buy
will withhold from the Performance Shares the number of Performance Shares
having a fair market value equal to the amount of all applicable taxes required
by Best Buy to be withheld upon the lapse of the restrictions on the
Performance Shares.

 

Restricted Shares

 

Restricted Period.  The Restricted Shares are subject to the
restrictions contained in this Agreement and the Plan during the period (for
purposes of this Section IV, the “Restricted Period”) beginning on the
Award Date and ending on

 

 

February 26,
2011, subject to the provisions of Section 4.3 below.  The restrictions will lapse and the
Restricted Shares will become transferable and non-forfeitable as of February 26,
2011 if the Vesting Criteria set forth in the attached Vesting Criteria
Schedule have been met.  If the Vesting
Criteria are not met as of such date, your rights to some or all of the
Restricted Shares, as set forth in the Vesting Criteria Schedule, will be
immediately forfeited.  The Committee
will determine in its sole discretion whether the Vesting Criteria are met,
upon which the Restricted Shares will be issued in your name no later than 75
days after the end of the Restricted Period, either by book-entry registration
or issuance of a stock certificate.  If
the Restricted Shares are issued prior to the end of the Restricted Period, the
stock certificate will be held by Best Buy, and may bear a legend referring to
the restrictions applicable to the Restricted Shares.

 

Restrictions.  The Restricted Shares are subject to the
following restrictions during the Restricted Period:

 

The Restricted Shares are subject to forfeiture to Best Buy as provided
in this Agreement and the Plan.

The Restricted Shares may not be sold, assigned, transferred or pledged
during the Restricted Period.  You may
not transfer the right to receive the Restricted Shares, other than by will or
the laws of descent and distribution, and any such attempted transfer will be
void.

 

Forfeiture/Acceleration.  Upon your Qualified Retirement prior to February 26,
2011, the Restricted Period will continue and the Restricted Shares will not be
issued until such date as the Committee determines in its sole discretion
whether and to what extent the Vesting Criteria set forth in the Vesting
Criteria Schedule have been met, as set forth in Section 4.1 above.  If your employment is terminated by reason of
death or you become Disabled prior to February 26, 2011, the restrictions
will lapse and the Restricted Shares will be issued and become non-forfeitable
and transferable as of the date of such termination in the same amount as if
the performance goals had been achieved such that 100% of the Restricted Shares
had been earned through the date of termination.  If, prior to February 26,
2011 and within 12 months following a Change in Control, your employment is
terminated without Cause or you terminate your employment for Good Reason, the
restrictions will lapse and the Restricted Shares will become non-forfeitable
and transferable as of the date of such termination in the same amount as if
the performance goals had been achieved such that 100% of the Restricted Shares
had been earned through the date of termination.  If your employment is terminated prior to February 26,
2011 for any other reason, your rights to all of the Restricted Shares will be
immediately and irrevocably forfeited.

 

Rights. 
Until issuance of the Restricted Shares, you will not have any rights of
a shareholder with respect to the Restricted Shares.  Upon issuance of the Restricted Shares, you
will, subject to the restrictions of this Agreement and the Plan, have all of
the rights of a shareholder with respect to the Restricted Shares, unless and
until the Restricted Shares are forfeited, except that you will not have the
right to vote the Restricted Shares during the Restricted Period.  Any dividends or other distributions (whether
cash, stock, or otherwise) paid on the Restricted Shares during the Restricted
Period will be held by Best Buy until the end of the Restricted Period, at
which time Best Buy will pay you all such dividends and other distributions
less any applicable tax withholding amounts. 
If the Restricted Shares are forfeited as described in Section 4.3
of this Agreement, then all rights to such payments will also be forfeited.

 

Income Taxes. 
You are liable for any federal and state income or other taxes
applicable upon the grant of the Restricted Shares if you make an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended,
within 30 days of the date of grant, or upon the lapse of the restrictions on
the Restricted Shares, and the subsequent disposition of the Restricted Shares,
and you acknowledge that you should consult with your own tax advisor regarding
the applicable tax consequences.  Upon
the lapse of the restrictions on the Restricted Shares, Best Buy will withhold
from the Restricted Shares the number of Restricted Shares having a fair market
value equal to the amount of all applicable taxes required by Best Buy to be
withheld upon the lapse of the restrictions on the Restricted Shares.

 

Performance Units

 

Restricted Period.  The Performance Units are subject to the
restrictions contained in this Agreement and the Plan during the period (for
purposes of this Section V, the “Restricted Period”) beginning on the
Award Date and ending on February 26, 2011, subject to the provisions of Section 5.4
below.  The restrictions will lapse and
the Performance Units will become non-forfeitable as of February 26, 2011
if the Vesting Criteria set forth in the 

 

 

attached
Vesting Criteria Schedule have been met. 
If the Vesting Criteria are not met as of such date, your rights to some
or all of the cash value of the Performance Units, as set forth in the Vesting
Criteria Schedule, will be immediately forfeited.  The Committee will determine in its sole discretion
whether the Vesting Criteria are met.

 

Payment. 
Subject to the provisions of Section 5.4 of this Agreement, the
Performance Units shall be paid in cash at the end of the Restricted Period,
with each payment occurring as soon as practicable after the Committee
determines, in its discretion after the end of the Restricted Period, whether
and to what extent the performance goals have been achieved in accordance with
the terms set forth in the Vesting Criteria Schedule, but in all cases within
75 days after the end of the Restricted Period.

 

Restrictions.  The Performance Units are subject to the
following restrictions during the Restricted Period:

 

The Performance Units, and the right to receive the cash payment, is
subject to forfeiture to Best Buy as provided in this Agreement and the Plan.

The
Performance Units, and the right to receive the cash payment, may not be sold,
assigned, transferred or pledged during the Restricted Period.  You may not transfer the Performance Units or
the right to receive the cash payment, other than by will or the laws of
descent and distribution, and any such attempted transfer will be void.

 

Forfeiture/Early Payment.  Upon your Qualified Retirement prior to February 26,
2011, the Restricted Period will continue and cash payment on the Performance
Units will not be made until such date as the Committee determines in its sole
discretion whether and to what extent the Vesting Criteria set forth in the
Vesting Criteria Schedule have been met, as set forth in Section 5.1 above.  If your employment is terminated by reason of
death or you become Disabled prior to February 26, 2011, the restrictions
will lapse and you or your estate shall be entitled to receive a cash payment
of the Performance Units in the same amount as if the performance goals had
been achieved such that 100% of the value of the Performance Units had been
earned through the date of termination, to be paid as soon as soon as
practicable, but in all cases within 75 days after the date of termination.  If,
prior to February 26, 2011 and within 12 months following a Change in
Control, your employment is terminated without Cause or you terminate your
employment for Good Reason, the restrictions will lapse and you shall be
entitled to receive a cash payment of the Performance Units in the same amount
as if the performance goals had been achieved such that 100% of the value of
the Performance Units had been earned through the date of termination, to be
paid as soon as soon as practicable, but in all cases within 75 days after the
date of termination.  If your employment
is terminated prior to February 26, 2011 for any other reason, your rights
to all of the Performance Units, and the right to receive the cash payment,
will be immediately and irrevocably forfeited.

 

Income Taxes. 
Best Buy shall have the right to deduct from all payments made under
this Agreement any federal, state, or local taxes required by law to be
withheld with respect to such payments.

 

Confidentiality.  In
consideration of the Option and the Performance Shares, Restricted Shares and/or Performance Units, you acknowledge that Best Buy operates in a
competitive environment and that Best Buy has a substantial interest in
protecting its Confidential Information, and you agree, during your employment
by Best Buy and thereafter, to maintain the confidentiality of Best Buy’s
Confidential Information and to use such Confidential Information for the
exclusive benefit of Best Buy.

 

Terms and Conditions.  This Agreement does not guarantee your
continued employment or alter the right of Best Buy or its affiliates to
terminate your employment at any time. 
This Award is granted pursuant to the Plan and is subject to its
terms.  In the event of any conflict
between the provisions of this Agreement and the Plan, the provisions of the
Plan will govern.  By
your acceptance of this award, you acknowledge receipt of a copy of the
Prospectus for the Plan and your agreement to the terms and conditions of the
Plan and this Agreement.

 

 

	
   

  	
  BEST BUY CO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  

  	
   

  

 

 

ADDENDUM TO

LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT

 

For the purposes hereof the
terms used herein will have the following meanings:

 

“Affiliate” will mean a company
controlled directly or indirectly by Best Buy, where “control” will mean the
right, either directly or indirectly, to elect a majority of the directors
thereof without the consent or acquiescence of any third party.

 

“Beneficial Owner” will have the
meaning defined in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended.

 

“Cause” will mean:

 

(i)            You have
breached your obligations of confidentiality to Best Buy or any of its
Affiliates;

 

(ii)           You
commit an act, or omit to take action, in bad faith which results in material
detriment to Best Buy or any of its Affiliates;

 

(iii)          You have violated Best
Buy’s Conflict of Interest policy (unless authorized by state or federal law);

 

(iv)          You have violated Best
Buy’s Securities Trading policy (unless authorized by state or federal law);

 

(v)           You have
committed fraud, misappropriation, embezzlement or other act of dishonesty,
including theft or misuse of Best Buy property, equipment or store merchandise
or violation or abuse of Best Buy’s discount policy, in connection with Best
Buy or any of its Affiliates or its or their businesses;

 

(vi)          You have
been convicted or have pleaded guilty or nolo contendere to criminal misconduct
constituting a felony or a gross misdemeanor, which gross misdemeanor involves
a breach of ethics, moral turpitude, or immoral or other conduct reflecting
adversely upon the reputation or interest of Best Buy or its Affiliates;

 

(vii)         Your
use of narcotics, liquor or illicit drugs has had a detrimental effect on your
performance of employment responsibilities; or

 

(viii)        You
are in material default under any agreement between you and Best Buy or any of
its Affiliates following any applicable notice and cure period.

 

A “Change of Control” will be
deemed to have occurred if the conditions set forth in any one of the following
paragraphs will have been satisfied:

 

(I)            any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of Best Buy representing 50% or more of the combined voting power of
Best Buy’s then outstanding securities excluding, at the time of their original
acquisition, from the calculation of securities beneficially owned by such
Person, any securities acquired directly from Best Buy or its Affiliates or in
connection with a transaction described in clause (a) of paragraph III
below; or

 

(II)           individuals
who at the Award Date constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of Best Buy) whose
appointment or election by the Board or nomination for election by Best Buy’s
shareholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the Award
Date or whose appointment, election or nomination for election was previously
so approved or recommended, cease for any reason to constitute a majority
thereof; or

 

(III)         there
is consummated a merger or consolidation of Best Buy or any Affiliate with any
other company, other than (a) a merger or consolidation which would result in
the voting securities of Best Buy outstanding 

 

 

immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of Best Buy or any Affiliate, at least 50% of the
combined voting power of the voting securities of Best Buy or such surviving
entity or parent thereof outstanding immediately after such merger or
consolidation, or (b) a merger or consolidation effected to implement a
recapitalization of Best Buy (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly of securities of Best Buy
representing 50% or more of the combined voting power of Best Buy’s then
outstanding securities; or

 

(IV)         the
shareholders of Best Buy approve a plan of complete liquidation of Best Buy or
there is consummated an agreement for the sale or disposition by Best Buy of
all or substantially all Best Buy’s assets, other than a sale or disposition by
Best Buy of all or substantially all of Best Buy’s assets to an entity, at least
50% of the combined voting power of the voting securities of which are owned by
shareholders of Best Buy in substantially the same proportions as their
ownership of Best Buy immediately prior to such sale; or

 

(V)           the Board
determines in its sole discretion that a change in control of Best Buy has
occurred.

 

(VI)         Notwithstanding
the foregoing, a “Change in Control” will not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of Best Buy immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of Best Buy immediately
following such transaction or series of transactions.

 

“Committee” will mean the
Compensation and Human Resources Committee of the Board of Directors of Best
Buy or any other committee of the Board designated by the Board to administer the
Plan.

 

“Confidential Information” will
mean any and all information in whatever form, whether written, electronically
stored, orally transmitted or memorized pertaining to:  trade secrets; customer lists, records and
other information regarding customers; price lists and pricing policies,
financial plans, records, ledgers and information; purchase orders, agreements
and related data; business development plans; products and technologies;
product tests; manufacturing costs; product or service pricing; sales and
marketing plans; research and development plans; personnel and employment
records, files, data and policies (regardless of whether the information
pertain to you or other employees of Best Buy); tax or financial information;
business and sales methods and operations; business correspondence, memoranda
and other records; inventions, improvements and discoveries; processes and
methods; and business operations and related data formulae; computer records
and related data; know-how, research and development; trademark, technology,
technical information, copyrighted material; and any other confidential or
proprietary data and information which you encounter during employment, all of
which are held, possessed and/or owned by Best Buy and all of which are used in
the operations and business of Best Buy. 
Confidential Information does not include information which is or
becomes generally known within Best Buy’s industry through no act or omission
by you; provided, however, that the compilation, manipulation or other
exploitation of generally known information may constitute Confidential
Information.

 

“Disabled” will mean an employee
who is deemed disabled if he or she is unable to perform any of the material
and substantial duties of his or her regular occupation due to a sickness or
injury, and such inability to perform continues for at least six consecutive
months.  If any such Affiliate does not
have a long term disability plan in effect at such time, you will be deemed
disabled for the purposes hereof if you would have qualified for long term
disability payments under Best Buy’s long term disability plan had you then
been an employee of Best Buy.

 

“Good Reason” will mean the occurrence of any
of the following events following a Change in Control, except for the
occurrence of such an event in connection with the termination of your
employment by Best Buy or any successor company or affiliated entity then
employing you for Cause, Disability or death:

 

(I)            the
assignment of employment duties or responsibilities which are not substantially
comparable in responsibility and status to the employment duties and
responsibilities held by you immediately prior to the Change in Control;

 

(II)           a
material reduction in your base salary as in effect immediately prior to the Change
in Control; or

 

 

(III)         being
required to work in a location more than 50 miles from your office location
immediately prior to the Change in Control, except for requirements of
temporary travel on Best Buy’s business to an extent substantially consistent
with your business travel obligations immediately prior to the Change in
Control.

 

“Person” will have the meaning
defined in Sections 3(a)(9) and 13(d) of the Securities Exchange Act
of 1934, as amended, except that such term will not include (i) Best Buy
or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of Best Buy or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of Best Buy in substantially the same
proportions as their ownership of stock of Best Buy.

 

“Qualified Retirement” will mean
any termination of employment for retirement on or after age 60, so long as the
employee has served Best Buy continuously for at least the three years
immediately preceding the retirement.

 

 

VESTING CRITERIA SCHEDULE TO

LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT

 

Performance Share Vesting

 

Performance Share Vesting is determined based on the following
illustration:

 

	
  Vesting Based on

  Best Buy TSR vs.

  S&P 500 Member 

  Companies

  	
  

  	
  S&P 500 Member

  Companies’ Total

  Shareholder

  Return

  

 

TSR
Formula

 

Total Shareholder Return (TSR) represents the
annual return shareholders receive on their investment, including both paid
dividends and capital gains (stock price appreciation).  The beginning price is calculated by taking
the average of the closing prices over a 90 day period prior to March 2,
2008.  The ending price is calculated by
taking the average of the closing prices over a 90 day period prior to
February 26, 2011. TSR % is
determined for both Best Buy and each of the S&P 500 member companies using
the formula below.

 

 

Vesting
Formula

 

Best
Buy’s TSR % is then compared to the TSR % of the S&P 500 member companies.

 

For
Performance below the 25th Percentile, no shares vest.

 

For
Performance from 25th Percentile to 40th Percentile,
vesting is determined based on the following formula:

 

(Best Buy TSR % - S&P 25th
Percentile TSR %)                       x   
50%

(S&P 40th Percentile TSR % -
S&P 25th Percentile TSR %)

 

For
Performance from 40th Percentile to 50th Percentile,
vesting is determined based on the following formula:

 

(Best Buy TSR % - S&P 40th
Percentile TSR %)                       x   
50%   +   50%

(S&P 50th Percentile TSR % -
S&P 40th Percentile TSR %)

 

For
Performance from 50th Percentile to 75th Percentile,
vesting is determined based on the following formula:

 

 

(Best Buy TSR % - S&P 50th
Percentile TSR %)                      x   
50%    +   100%

(S&P 75th Percentile TSR % -
S&P 50th Percentile TSR %)

 

For Performance at or above the 75th Percentile, 150% of
shares vest.

 

Restricted Share Vesting

 

Restricted Shares will be earned if Best Buy’s fiscal 2009 Economic
Value Added (“EVA”) achieves a certain level compared with the fiscal 2009 EVA
target as determined by the Committee. 
EVA measures the amount by which Best Buy’s after-tax profits, after
certain adjustments, exceed Best Buy’s cost of capital.  The following sets forth the percentage of
Restricted Shares that may be earned based on varying levels of Best Buy’s
fiscal 2009 EVA as a percentage of the fiscal 2009 EVA target:

 

	
  Fiscal 2009 EVA as a Percentage

  of Fiscal 2009 EVA Target

  	
   

  	
  % of Restricted Shares

  that will be Earned

  	
   

  
	
  111% and Above

  	
   

  	
  125

  	
  %

  
	
  At least 91% but less than 111%

  	
   

  	
  100

  	
  %

  
	
  At least 75% but less than 91%

  	
   

  	
  75

  	
  %

  
	
  Below 75%

  	
   

  	
  0

  	
  %

  

 

Performance
Unit Vesting

 

Performance Units will be earned if Best Buy’s fiscal 2009 Economic
Value Added (“EVA”) achieves a certain level compared with the fiscal 2009 EVA
target as determined by the Committee. 
EVA measures the amount by which Best Buy’s after-tax profits, after
certain adjustments, exceed Best Buy’s cost of capital.  The following sets forth the dollar value of
Performance Units that may be earned based on varying levels of Best Buy’s
fiscal 2009 EVA as a percentage of the fiscal 2009 EVA target:

 

	
  Fiscal 2009 EVA as a Percentage

  of Fiscal 2009 EVA Target

  	
   

  	
  $  Value of Performance

  Units that will be

  Earned

  	
   

  
	
  111% and Above

  	
   

  	
  $

  	
  1.25

  	
   

  
	
  At least 91% but less than 111%

  	
   

  	
  $

  	
  1.00

  	
   

  
	
  At least 75% but less than 91%

  	
   

  	
  $

  	
  0.75

  	
   

  
	
  Below 75%

  	
   

  	
  $

  	
  0.00

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