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Exhibit 10.41
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") made as
of the 1st day of January, 1998, between RailAmerica, Inc., a Delaware
corporation (the "Company"), having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Executive").
WHEREAS, the Company believes it is in the best interests of
the Company and its subsidiaries and affiliates (collectively, the "Consolidated
Group") to continue to employ Executive, and Executive desires to continue to be
employed by the Company; and
WHEREAS, the Compensation Committee (the "Committee") of the
Board of Directors of the Company (the "Board") has approved of the terms of
this Agreement as of the date set forth above; and
WHEREAS, the Company and Executive desire to set forth the
terms and conditions on which Executive shall be employed by the Company and
provide his services to the Consolidated Group.
NOW, THEREFORE, for good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts such employment, all upon the terms and conditions
hereinafter set forth.
2. TERM. Unless sooner terminated pursuant to the provisions
of this Agreement, the initial term of employment under this Agreement shall be
for a period commencing as of January 1, 1998 and ending December 31, 2000 (the
"Employment Period"). The Employment Period shall be extended automatically for
one (1) year periods after the initial term under this Agreement and the end of
each one-year period thereafter, so that there shall be successive one-year
terms of employment under this Agreement commencing on January 1, 2001, unless
the Company or Executive gives written notice of non-extension to the other
party not less than one hundred eighty (180) days prior to the end of the
Employment Period. References herein to the "Employment Period" shall refer to
both such initial term and each such successive term.
3. BASE SALARY. Executive shall be entitled to receive a base
salary from the Company during the Employment Period (the "Base Salary") at the
rate of Three Hundred Thousand Dollars ($300,000.00) per annum. The Base Salary
shall be payable in accordance with the current normal payroll policies of the
Company, which policies may be changed by the Company from time to time in its
sole discretion, and shall be subject to all appropriate withholding taxes.
Effective each January 1 during the Employment Period, commencing with January
1, 1999, the Base Salary shall be increased by such percentage as corresponds to
any annual percentage increase in the consumer
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price index reported in "U.S. City Average: All Items," under the table entitled
"Consumer Price Index for All Urban Consumers" (1967 equals 100), as published
by the U.S. Department of Labor, Bureau of Labor Statistics (the "Index"),
calculated by multiplying the Base Salary for the immediately preceding year by
a fraction, the numerator of which is the Index number for October 1 of such
immediately preceding year, and the denominator of which is the Index number for
October 1 of the next preceding year. In addition to any annual increases in the
Base Salary as a result of changes in the Index, the Base Salary shall be
subject to annual reviews and upward adjustments, effective each January 1
during the Employment Period, commencing with January 1, 1999, in the sole
discretion of the Committee. The Committee shall meet and determine the upward
adjustment, if any, to the Base Salary no later than the December 15 immediately
preceding each January 1 during the Employment Period. An adjustment to the Base
Salary shall not be deemed a modification, amendment or waiver of this Agreement
except as the term "Base Salary" is used in this Agreement; all other provisions
of this Agreement shall, in that case, remain in full force and effect.
4. GENERAL BONUSES. Executive shall participate, with respect
to each full fiscal year during the Employment Period, beginning with the fiscal
year ending December 31, 1998, in the Company's Corporate Senior Executive Bonus
Plan, which shall remain in effect during the entire Employment Period, subject
to such amendments, modifications, supplements or other changes as shall be
determined at any time, or from time to time, by the Committee.
5. COMMON STOCK. The Company shall, after execution of this
Agreement, issue to Executive, at the request of Executive, up to a total of
thirty thousand (30,000) shares of the common stock of the Company, $.01 par
value per share ("Common Stock"), subject to the following terms and conditions:
(a) All requests by Executive must be made by
December 31, 1999;
(b) Executive shall make arrangements
satisfactory to the Committee for
Executive's payment to the Company of the
amount that is necessary for the Company to
withhold in accordance with applicable
federal and state tax withholding
requirements;
(c) For shares to be issued to Executive under
this Section 5, Executive must, prior to or
simultaneously with issuance by the Company
of the shares, purchase an equivalent number
of shares of Common Stock. At least one-half
the total number of shares purchased by
Executive to comply with this condition must
be purchased from the Company, at the market
price of
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the Common Stock at the close of business on
the prior trading day; and
(d) Executive shall not sell the shares of
Common Stock that were either issued to him
or purchased by him under the terms of this
Section until two (2) years after the date
on which those shares were issued to him or
purchased by him.
At Executive's sole discretion, in lieu of such issuance of
shares of Common Stock to him by the Company, he may elect to purchase shares of
Common Stock from the Company at fair market value, in exchange for a promissory
note with a term not to extend beyond December 31, 2000. The Company shall then
pay to Executive bonuses each year during the Employment Period equal to the
principal and interest due under the note during the Employment Period. These
bonuses shall be in addition to any bonuses payable to Executive pursuant to
Section 4 or 7 of this Agreement. The conditions in Sections 5(a) through (d)
immediately above shall apply to any shares purchased by Executive under this
note arrangement.
The shares of Common Stock issued by the Company pursuant to
this Section shall be free of any other conditions of forfeiture or restrictions
on transfer other than those required by federal or state securities laws.
Executive agrees to execute such documentation and make such representations and
acknowledgments as may be reasonably necessary to permit the issuance and
purchase of the shares in compliance with federal and state securities laws and
requirements of the Nasdaq National Market.
The rights to acquire shares of Common Stock from the Company
granted by the Company pursuant to this Section have been approved by the
Committee and granted under and subject to the terms and conditions of the
Company's 1998 Executive Incentive Compensation Plan to be submitted to and
approved by the stockholders of the Company at the Company's 1998 Annual Meeting
of Stockholders (the "Incentive Plan"). Such rights are expressly subject to and
contingent upon stockholder approval of the Incentive Plan and, if such approval
is not obtained, shall be null and void.
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6. OPTION GRANTS. Upon execution of this Agreement, the
Company shall grant to Executive options to purchase three hundred thousand
(300,000) shares of Common Stock, immediately exercisable at the following
prices:
AMOUNT EXERCISE PRICE PER SHARE
------ ------------------------
75,000 $7.25
75,000 $8.00
75,000 $8.75
75,000 $9.50
The options shall have a term of ten (10) years and such additional terms and
conditions as set forth in an option agreement between the Company and Executive
in the form attached hereto as Exhibit "A" (the "Stock Option Agreement").
Executive agrees to execute such documentation and make such representations and
acknowledgments as may be reasonably necessary to permit the issuance and
purchase of the shares in compliance with federal and state securities laws and
requirements of the Nasdaq National Market.
The options granted by the Company pursuant to this Section have been
approved by the Committee and granted under and subject to the terms and
conditions of the Incentive Plan. Such options are expressly subject to and
contingent upon stockholder approval of the Incentive Plan and, if such approval
is not obtained, shall be null and void.
7. OTHER BONUS OR INCENTIVE PAYMENTS. Executive shall, at all
times during the Employment Period, be eligible to receive, in addition to the
Base Salary, bonuses and other benefits provided for hereunder, additional
bonuses, stock options or grants, stock appreciation rights or other incentive
payments to be determined as to the amount and time of payment by the Committee.
8. BENEFITS.
(a) VACATION. For each twelve-month period from January 1
to December 31 during the Employment Period, Executive shall be entitled to four
(4) weeks of vacation without loss of compensation or other benefits to which he
is entitled under this Agreement, to be taken at such times as Executive may
select and the affairs of the Consolidated Group may permit.
(b) EXECUTIVE BENEFIT PROGRAMS. Without limiting the
compensation or other benefits to which Executive may be entitled pursuant to
any other provision of this Agreement, during the Employment Period Executive
shall be entitled to participate in any pension, retirement, insurance or other
employee benefit plan that is maintained at that time by the Company for its
employees generally, including, without limitation, programs of life,
disability, basic medical and
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dental and supplemental medical and dental insurance. Executive shall be
entitled to the benefits under this Section on terms at least as favorable as
those granted to other employees of the Consolidated Group. Notwithstanding the
foregoing, during the Employment Period Executive shall at all times be entitled
to the following minimum benefits:
(i) Medical and dental insurance for himself and
his family, including supplemental coverage for any co-payments and deductibles;
provided, however, that the annual premiums, fees and other costs paid by the
Company for such insurance for Executive and his family shall not exceed Ten
Thousand Dollars ($10,000.00);
(ii) Long-term disability insurance for himself;
provided, however, that the annual premiums, fees and other costs paid by the
Company for such insurance for Executive shall not exceed Ten Thousand Five
Hundred Dollars ($10,500.00) at a Base Salary of Three Hundred Thousand Dollars
($300,000.00) per annum, plus such additional proportional amount, if any, as
may be necessary to ensure that the benefits provided by Executive's long-term
disability insurance increase proportionally as the Base Salary increases above
Three Hundred Thousand Dollars ($300,000.00), it being the intent of the parties
that Executive's long-term disability benefits approximate sixty-seven percent
(67%) of the then-current Base Salary at all times during the Employment Period
if such long-term disability insurance in such amount is then reasonably
available for an annual premium, fees and other costs paid by the Company not to
exceed Ten Thousand Five Hundred Dollars ($10,500.00) plus such additional
proportional amount;
(iii) Term life insurance on the life of Executive
in the benefit amount of One Million Dollars ($1,000,000.00), with the
beneficiaries thereof designated by Executive;
(iv) Directors' and Officers' Liability Insurance,
if reasonably available, provided that the terms and amounts of such insurance
shall be subject to approval by the Board;
(v) Indemnification by the Company to the fullest
extent permitted by law;
(vi) Advancement or reimbursement of funds for all
reasonable travel, entertainment and miscellaneous expenses incurred by
Executive in connection with the performance of his duties under this Agreement;
provided, however, that Executive properly accounts for such expenses to the
Company in accordance with the Company's practices;
(vii) An automobile allowance of One Thousand
Dollars ($1,000.00) per month; and
(viii) An annual payment to be made by the
Company to or on behalf of Executive each January 1 during the Employment
Period, commencing with January 1, 1998, in an amount equal to ten percent (10%)
of the then-current Base Salary, for purposes of funding an
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individual deferred compensation, salary continuation, annuity or other
retirement arrangement for Executive in lieu of a group plan or plans adopted by
the Board providing retirement benefits for the Company's employees generally,
including Executive, comparable to those provided by other similarly-sized
publicly-traded companies.
9. DUTIES. During the Employment Period:
(a) Executive agrees to serve as Chief Executive Officer of
the Company, and to serve in such other positions with the Company and the other
members of the Consolidated Group with such other titles as the Board may from
time to time determine. Executive shall exercise such powers and comply with and
perform such directions and duties in relation to the business and affairs of
the Consolidated Group as may from time to time be vested in or requested by the
Board and shall use his best efforts to improve and extend the businesses of the
Consolidated Group. Executive shall at all times report to, and his activities
shall at all times be subject to the direction and control of, the Board.
(b) Executive shall devote all of his business and
professional time, energy and skill to the service of the Consolidated Group and
the promotion of its interests and shall use his best efforts in the performance
of his duties hereunder. Subject to the restrictions of Section 13, Executive
may, however, devote an appropriate amount of time to directorships in other
profit and non-profit corporations, participation in professional organizations,
management of purely passive personal and family investments (including, without
limitation, in the capacity of a trustee, executor or guardian for family
members) and participation in community, civic and charitable activities;
provided, however, that these matters and the amount of time devoted to them
shall not conflict with or impair Executive's performance of his duties to the
Consolidated Group in any material way and shall not in the aggregate, on
average, involve more than five (5) hours of Executive's time per week.
Executive agrees to abide by all By-laws, rules and regulations established from
time to time by the Company, a majority of its shareholders and/or the Board;
and all commissions, fees or other income earned and received by Executive, in
furtherance of the business of the Consolidated Group, from any person other
than the Company shall be accepted by Executive for the account of the Company.
10. CONFIDENTIALITY. In the course of Executive's relationship
with the Consolidated Group, some or all of the members of the Consolidated
Group have disclosed or made known, or may disclose or make known, to Executive,
and Executive has been or may be given access to or may become acquainted with,
certain information, trade secrets or both, relating to or useful in one or more
of the businesses of the Consolidated Group (collectively "Information"), and
which the Company considers proprietary and desires to maintain confidential.
As a material inducement to the Company to enter into this
Agreement, Executive covenants and agrees that, during the Employment Period and
at all times thereafter, Executive shall not in any manner, either directly or
indirectly, divulge, disclose or communicate to any person or entity, except to
or for the benefit of the Consolidated Group or as directed by the Board, any of
the Information which he may have acquired in the course of or as an incident to
his relationship with
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any member of the Consolidated Group, including, without limitation, pursuant to
his employment hereunder, the parties agreeing that such Information affects the
successful and effective conduct of the businesses of the Consolidated Group and
its goodwill, and that any breach of the terms of this Section is a material
breach of this Agreement. All equipment, documents, memoranda, reports, records,
computer software, disks, tapes, other means of electronic data storage, files,
materials, samples, books, correspondence, lists, other written and graphic
records and the like (collectively, the "Materials"), affecting or relating to
one or more of the businesses of the Consolidated Group, which Executive shall
prepare, use, construct, observe, possess or control shall be and remain the
sole property of the Consolidated Group and/or in its exclusive custody and
control, and must not be removed from the premises of a member of the
Consolidated Group or given to any person or entity except for the benefit of
the Consolidated Group or as directed by the Board. Promptly upon termination of
the Employment Period for any reason, the Materials, Information and all copies
thereof in the custody or control of Executive shall be delivered promptly to
the Company.
11. CHANGE IN CONTROL.
(a) For the purposes of this Agreement, a "Change in
Control" shall be deemed to have taken place if: (i) any person, including a
"group" as defined in either Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended, becomes the beneficial owner of
Company securities, after the date of this Agreement, having twenty-five percent
(25%) or more of the combined voting power of the then-outstanding securities of
the Company that may be cast for the election of directors of the Company (other
than as a result of an issuance of securities specifically approved by Executive
and specifically excluded from the provisions of this Section 11 by subsequent
written agreement of Executive); or (ii) the persons who were directors of the
Company before the occurrence of any of the following transactions shall cease
to constitute a majority of the Board of Directors of the Company, or of the
board of directors of any successor to the Company, as the direct or indirect
result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election or any
combination of the foregoing transactions.
(b) The Company and Executive hereby agree that, if after
a Change in Control occurs (the "Change in Control Date") during the Employment
Period, Executive is requested and, in his sole and absolute discretion,
consents to change his principal business location, the Company shall reimburse
Executive for his relocation expenses, and those of his family, including,
without limitation, moving expenses, temporary living and travel expenses for a
time while arranging to move his residence to the changed location and closing
costs, if any, associated with the sale of his then-existing residence and the
purchase of a replacement residence at the changed location, plus an additional
amount representing a gross-up of any state or federal taxes payable by
Executive as a result of any such reimbursements. If in such a case Executive
shall not consent to change his business location, Executive may continue to
perform the duties required of him hereunder in Boca Raton, Florida, and the
Company shall continue to maintain an office for Executive at that location
commensurate with the Company's office prior to the Change in Control Date.
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(c) During the remaining Employment Period after the
Change in Control Date, the Company shall: (i) continue to honor the terms of
this Agreement, including, without limitation, as to Base Salary and bonus
compensation; and (ii) continue employee benefit programs as to Executive no
less favorable than those in effect on the Change in Control Date (but subject
to such reductions as may be required to maintain such plans in compliance with
applicable federal law and regulation of employee benefit programs).
12. TERMINATION OF EMPLOYMENT PERIOD.
(a) TERMINATION FOR JUDICIALLY-DETERMINED CAUSE. The Board
may terminate the Employment Period pursuant to the terms of this Section 12(a)
FOR CAUSE at any time by giving written notice to Executive. Such termination
shall become effective upon the giving of such notice, except that termination
based upon Section 12(a)(iv) below shall not become effective unless Executive
shall fail to correct such breach within thirty (30) days after receipt of
written notice thereof as provided in the preceding sentence. Upon any such
termination FOR CAUSE, Executive shall have no right to the Base Salary, bonuses
or other payments under Sections 3, 4, 5 and 7, or to participate in any
employee benefit programs under Section 8, as of the effective date of
termination. For purposes of this Section 12(a), "cause" shall mean: (i)
Executive is convicted of a felony; (ii) a judicial determination is made that
Executive, in carrying out his duties hereunder, has exhibited willful gross
negligence or willful gross misconduct resulting, in either case, in material
harm to any member of the Consolidated Group; (iii) Executive is convicted of
misappropriating Consolidated Group assets or convicted of otherwise defrauding
the Consolidated Group; or (iv) a judicial determination is made that Executive
has materially breached any provision of Section 9, 10 or 13 resulting in
material harm to any member of the Consolidated Group.
(b) OTHER "FOR CAUSE" TERMINATION.
(i) The Board may terminate the Employment Period
pursuant to the terms of this Section 12(b) FOR CAUSE if, as a result of
Executive's willful personal dishonesty, gross misconduct, breach of fiduciary
duty involving personal profit, gross negligence or failure to perform his
duties as set forth in Section 9, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or material
breach of any provision of this Agreement, there is material harm to any member
of the Consolidated Group. For purposes of this Section 12(b), no act, or
failure to act, on Executive's part shall be considered "willful" unless done,
or omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interests of the Consolidated Group;
provided, however, that any act or omission to act on Executive's part in
reliance upon an opinion of counsel to the Company or at the direction of the
Board shall not be deemed to be willful. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated FOR CAUSE under this
Section 12(b) unless and until there shall have been delivered to him a copy of
a certification by the Board finding, after reasonable notice to Executive and
an opportunity for him, together with his counsel, to be heard by the Board,
that, in the good faith opinion of the Board, Executive was guilty of conduct
which is deemed to be CAUSE within the meaning of this Section 12(b)(i) and
specifying the particulars thereof in detail. In the
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event that the Board delivers such a certification of termination to Executive
under this Section 12(b)(i), and Executive does not elect to challenge such
termination in accordance with Section 12(b)(ii), the Employment Period shall
terminate twenty-one (21) days after Executive receives such certification.
(ii) Executive may elect to challenge any
termination FOR CAUSE by the Company of the Employment Period under Section
12(b)(i) by providing written notice of such election to the Company within
twenty-one (21) days after Executive receives the certification of termination.
Any such challenge shall be first determined by arbitration to be conducted in
Palm Beach County, Florida, in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The decision of the arbitrator(s) (the
"Arbitration Decision") may be appealed by Executive as set forth below. In the
event Executive challenges his termination FOR CAUSE, pending the Arbitration
Decision Executive shall continue to be paid the Base Salary under Section 3,
continue to be paid any bonuses under Section 5, and continue to participate in
any employee benefit programs under Section 8 that were being paid or provided
immediately prior to the Board's certification of termination, but Executive
shall not be required to perform any duties pursuant to Section 9 or to
otherwise report for work to the Company. If the Arbitration Decision determines
that Executive was properly terminated FOR CAUSE, Executive shall, subject to
his rights upon a successful judicial appeal of the Arbitration Decision as set
forth below, have no further rights from the date of such Arbitration Decision
to Base Salary, to any bonuses under Section 5, or to participate in any
employee benefit programs under Section 8, and the Employment Period shall be
considered to have terminated for purposes of the non-compete and non-solicit
provisions of Section 13 as of the date of the Arbitration Decision. If the
Arbitration Decision determines that Executive was properly terminated FOR
CAUSE, and Executive does not appeal the Arbitration Decision to a court having
jurisdiction thereof within thirty (30) days after the date of the Arbitration
Decision, then the Arbitration Decision shall be considered final and binding on
the parties. If (A) the Arbitration Decision determines that Executive was
improperly terminated FOR CAUSE, or (B) the Arbitration Decision determines that
Executive was properly terminated FOR CAUSE, Executive appeals the Arbitration
Decision to a court having jurisdiction thereof within the thirty-day period and
Executive successfully demonstrates to the court or to the final reviewing court
on further appeal that he was improperly terminated FOR CAUSE, then in either
such case the Employment Period shall be deemed to have been terminated WITHOUT
CAUSE under Section 12(e)(i) as of the date on which Executive received the
certification of termination, and Executive shall be entitled to the remedies
provided pursuant to that Section and shall not thereafter be subject to the
non-compete and non-solicit provisions of Section 13.
(c) DEATH OR DISABILITY. The Employment Period shall
terminate upon the death or disability of Executive. For purposes of this
Section 12(c), "disability" shall mean that, for a period of six (6) months in
any twelve-month period, Executive is incapable of substantially fulfilling the
duties set forth in Section 9 because of physical, mental or emotional
incapacity resulting from injury, sickness or disease as determined by an
independent physician mutually acceptable to the Board and Executive. Upon any
such termination for death or disability, the Company shall pay Executive or his
legal representative, as the case may be, the Base Salary under
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Section 3 through the date of such termination of the Employment Period, plus
any bonus earned but not yet paid under the Corporate Senior Executive Bonus
Plan, any bonus not yet earned or earned but not yet paid under Section 5, any
other bonus or incentive payments earned but not yet paid under any other bonus
or incentive plan under Section 7 and any benefits under Section 8 which have
accrued through such date. In addition, in the case of termination for
disability, the Company shall continue to pay Executive or his legal
representative, as the case may be, the Base Salary under Section 3 until
Executive begins to receive payments under the long-term disability policy paid
for by the Company pursuant to Section 8(b)(ii); provided, however, that, in no
event, shall the Company continue to pay the Base Salary for more than ninety
(90) days after the date of such termination for disability. Lastly, for a
period of eighteen (18) months after the date of termination for death or
disability, the Company shall continue to provide medical and dental insurance
coverage to Executive and his family in the form or forms provided under Section
8(b) immediately prior to the date of such termination.
(d) VOLUNTARY TERMINATION. Executive may, on not less
than one hundred eighty (180) days prior written notice to the Company
specifically setting forth the effective date thereof, terminate the Employment
Period prior to the end of the initial term or any successive term of the
Employment Period under Section 2. Upon any such termination, the Company shall
pay Executive the Base Salary under Section 3 through the effective date of such
termination of the Employment Period, plus any bonus earned but not yet paid
under the Corporate Senior Executive Bonus Plan, any bonus not yet earned or
earned but not yet paid under Section 5, any other bonus or incentive payments
earned but not yet paid under any other bonus or incentive plan under Section 7
and any benefits under Section 8 which have accrued through such date.
(e) TERMINATION WITHOUT CAUSE.
(i) Prior to a Change in Control, if the Employment
Period is terminated by the Company other than pursuant to Section 12(a), 12(b)
or 12(c), the Company shall be in breach of this Agreement, and, in lieu of any
other damages or recoveries, Executive shall be entitled to continue to receive
the Base Salary under Section 3 and benefits under Section 8 for the remainder
of the then-current initial or successive term of the Employment Period, as the
case may be, payable in accordance with the normal payroll and benefit program
policies of the Company. In addition, Executive shall be deemed to have been
employed by the Company at all times during such term of the Employment Period
for purposes of determining his entitlement to a bonus under the Corporate
Senior Executive Bonus Plan, for purposes of determining his entitlement to any
other bonus or incentive payments under Section 5 and Section 7 and for purposes
of his options under Section 6. Notwithstanding the foregoing, in the event that
such Company termination occurs within less than one-hundred eighty (180) days
before the expiration of the then-current initial or successive term of the
Employment Period, the references to the then-current initial or successive term
of the Employment Period in the first two sentences of this Section 12(e)(i)
shall be read as referring also to the next-succeeding successive term of the
Employment Period following such termination.
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(ii) Subsequent to a Change in Control, if (A) the
Employment Period is terminated by the Company other than pursuant to Section
12(a), 12(b) or 12(c), or (B) there shall have occurred a material reduction in
Executive's compensation or employment-related benefits, a change in Executive's
status as Chief Executive Officer of the Company, working conditions or
management responsibilities or a material change in the business objectives or
investment policies of the Company, and Executive voluntarily elects to
immediately terminate the Employment Period by giving notice of termination
within sixty (60) days after any such occurrence, or the last in a series of
such occurrences, then in either such case Executive shall be entitled to
receive, in lieu of the Base Salary, bonuses and other payments and benefits
under this Agreement, and subject to the provisions of subparagraph (y) below, a
lump-sum payment in cash equal to one hundred fifty percent (150%) of
Executive's "base period income" as determined under subparagraph (x) below.
Such amount shall be paid to Executive within fifteen (15) days after the date
of termination of the Employment Period.
(x) Executive's "base period income" shall be
the Base Salary paid, bonuses paid or payable and any other compensation paid to
him with respect to the last full fiscal year preceding the date of termination.
(y) Any amounts payable to Executive upon or
as a result of a Change in Control that would be considered an "excess parachute
payment" under Internal Revenue Code Section 280G, and regulations thereunder,
shall be reduced to the extent necessary so that such amounts do not exceed two
hundred ninety-nine percent (299%) of Executive's "base amount" (as computed in
accordance with Internal Revenue Code provisions and regulations) for
determining whether Executive has received an "excess parachute payment."
13. NON-COMPETITION AND NON-SOLICITATION.
(a) GENERAL. Executive acknowledges that he has performed
services or will perform services hereunder, and will acquire Information and
access to Materials, that will directly affect the businesses of the
Consolidated Group. Accordingly, the parties deem it necessary to provide
protective non-competition and non-solicitation provisions in this Agreement.
(b) NON-COMPETE AND NON-SOLICIT. Executive agrees with the
Company that, during the term set forth in Section 13(c), without the prior
written consent of the Board:
(i) Executive shall not, directly or indirectly,
perform any services or duties in any capacity, whether as a consultant,
independent contractor, agent, director, officer, manager, supervisor or
employee, for any person or entity engaged in any business in the United States
that was engaged in by any member of the Consolidated Group at any time during
the Employment Period; provided, however, that, for purposes of this Section
13(b)(i), (A) in no event shall a purely passive personal or family investment
of less than five percent (5%) of the equity of any entity, without more, be
construed as the performance of duties or services for such entity; (B) a
business which is first engaged in by the Consolidated Group after the execution
of this Agreement
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shall be considered to be a business that was engaged in during the Employment
Period by the Consolidated Group only if and to the extent that Executive agrees
in writing at the time of the Consolidated Group's commencement or acquisition
of such business that it will be so considered; and (C) after the termination of
the Employment Period, Executive may become involved with (x) a short-line
freight railroad, if such railroad does not operate track within fifty (50)
miles of track operated by any member of the Consolidated Group, and (y) a motor
freight carrier business, if such business does not have an office or terminal
within two hundred (200) miles of any motor freight carrier office or terminal
operated by any member of the Consolidated Group; and
(ii) Executive shall not employ or attempt to
employ, or assist in employing, any employee of any member of the Consolidated
Group (whether or not such employment is full-time or part-time or pursuant to a
written contract), other than his personal secretary, for the purpose of having
such employee perform services for another person or entity within the United
States.
(c) TERM. The covenants of Executive set forth in
Section 13(b) shall apply at all times (i) during the Employment Period,
including any period for which Executive is receiving the Base Salary and
benefits pending an Arbitration Decision pursuant to Section 12(b), and (ii), in
the event of termination of the Employment Period pursuant to Section 12(a),
12(b) or 12(d), or an election by Executive not to extend the Employment Period
pursuant to Section 2, for a period of twelve (12) months after termination of
the Employment Period.
14. INJUNCTIVE RELIEF. The covenants of Executive set forth in
Sections 10 and 13 are separate and independent covenants, for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
hereby acknowledged by Executive, and which have been made by Executive to
induce the Company to enter into this Agreement. Each of the aforesaid covenants
may be availed of, or relied upon, by the Company in any court of competent
jurisdiction, and each shall form the basis of injunctive relief and damages,
including expenses of litigation (including, without limitation, reasonable
attorneys' fees upon trial and appeal), suffered by the Company arising out of
any breach of any of the aforesaid covenants by Executive. The covenants of
Executive set forth in Sections 10 and 13 are cumulative to each other and to
all other covenants of Executive in favor of the Company contained in this
Agreement. Should any covenant, term or condition in Section 10 or 13 become or
be declared invalid or unenforceable by a court of competent jurisdiction, then
the parties request that such court judicially modify such unenforceable
provision consistent with the intent of Sections 10 and 13 so that it shall be
enforceable as modified.
15. ENTIRE AGREEMENT. This Agreement, the Stock Option
Agreement and the other documents, plans and instruments contemplated herein
represent the entire understanding and agreement between the parties with
respect to the subject matter hereof, and supersede all other negotiations,
understandings and representations, if any, made by and between such parties.
16. AMENDMENTS. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
the party as to whom
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13
enforcement of any such amendment, supplement, waiver or modification is sought
and making specific reference to this Agreement.
17. ASSIGNMENTS. Executive shall not assign his rights and/or
obligations hereunder. The Company may assign its rights and/or obligations
hereunder to any person or entity which purchases all or substantially all of
the assets of the Consolidated Group, subject to Executive's termination rights
under Section 12(e)(ii).
18. BINDING EFFECT. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
19. NOTICES. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service or mailed (airmail if international) by registered
or certified mail (postage prepaid), return receipt requested, addressed to:
If to Executive: With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Gildan, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & White, P.A.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ United ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Suite ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Suite 1190
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company: With a copy to:
RailAmerica, Inc. RailAmerica, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman, Attention: General Counsel
Compensation Committee
or to such other address as any party may designate by notice complying with the
terms of this Section. Each such notice shall be deemed delivered on the date
delivered if by personal delivery,
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14
or on the date upon which the return receipt is signed or delivery is refused or
the notice is designated by the postal authorities as not deliverable, as the
case may be, if mailed.
20. WAIVERS. The failure or delay of any party at any time to
require performance by the other party of any provision of this Agreement shall
not affect the right of such party to require performance of that provision or
to exercise any right, power or remedy hereunder, and any waiver by any party of
any breach of any provision of this Agreement shall not be construed as a waiver
of any continuing or succeeding breach of such provision, a waiver of the
provision itself or a waiver of any right, power or remedy under this Agreement.
No notice to or demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or other
circumstances.
21. JURISDICTION AND VENUE. The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida, and
that, therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (a) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the courts of record of the State of Florida in Palm
Beach County or the court of the United States, Southern District of Florida;
(b) consents to the jurisdiction of each such court in any such suit, action or
proceeding; (c) waives any objection which it or he may have to the laying of
venue of any such suit, action or proceeding in any of such courts; and (d)
agrees that service of any court papers may be effected on such party by mail,
as provided in this Agreement, or in such other manner as may be provided under
applicable laws or court rules in such courts.
22. ENFORCEMENT COSTS. If any legal action, arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the ultimately successful or prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and other
expenses, even if not taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeals), incurred in that action,
arbitration or other proceeding, in addition to any other relief to which such
party may be entitled.
23. REMEDIES CUMULATIVE. No remedy herein conferred upon any
party is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity, whether by statute,
rule or otherwise. No single or partial exercise by any party of any right,
power or remedy hereunder shall preclude any other or further exercise thereof.
24. GOVERNING LAW. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of Delaware without regard to
principles of conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
RAILAMERICA, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman
Secretary Compensation Committee
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- --------------------------
Witness ▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Witness
- 15 -
16
EXHIBIT A
RAILAMERICA, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), made as of the 1st
day of January, 1998, between RailAmerica, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Optionee").
WHEREAS, the Company has retained the Optionee to render
certain services to the Consolidated Group pursuant to the terms of that certain
Executive Employment Agreement, dated as of January 1, 1998, between the Company
and the Optionee (the "Employment Agreement"); and
WHEREAS, pursuant to the terms of the Employment Agreement,
the Company and the Optionee have provided for the grant to the Optionee of
certain options to purchase shares of Common Stock, all as more particularly set
forth herein (the "Options");
NOW, THEREFORE, for good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:
1. OPTIONS SUBJECT TO EMPLOYMENT AGREEMENT AND STOCKHOLDER
APPROVAL. The Options are being granted pursuant to the terms of the Company's
1998 Executive Incentive Compensation Plan (the "Incentive Plan") and the
Employment Agreement to which this Agreement is attached as Exhibit A, and are
subject to all of the terms and conditions of the Incentive Plan and the
Employment Agreement. Capitalized terms used in this Agreement but not defined
herein are used as defined in the Employment Agreement, except that, for
purposes of this Agreement, Common Stock shall include such other securities,
cash or other property into which shares of Common Stock or such other
securities, cash or other property may be adjusted pursuant to the provisions of
Section 9 hereof or the Incentive Plan. The Optionee's exercise of the Option
shall be subject to and conditioned upon the prior approval by the Company's
stockholders of the Incentive Plan as provided in the Employment Agreement. The
Optionee hereby accepts as binding, conclusive and final all decisions or
interpretations of this Agreement by the Committee or the Board under the
Incentive Plan.
2. GRANT OF OPTIONS. Subject to and upon the terms and
conditions set forth in this Agreement and the Incentive Plan, the Company
hereby grants to the Optionee Options to purchase three hundred thousand
(300,000) shares of Common Stock. Subject to the provisions of Sections 9 and
10, of the total Options granted to the Optionee, Options to purchase
seventy-five thousand (75,000) shares of Common Stock shall be immediately
exercisable at an exercise price of $7.25 per share; Options to purchase
seventy-five thousand (75,000) shares of Common Stock shall be immediately
exercisable at an exercise price of $8.00 per share; Options to purchase
seventy-five thousand (75,000) shares of Common Stock shall be immediately
exercisable at an exercise price of $8.75 per share; and the remaining Options
to purchase seventy-five thousand
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(75,000) shares of Common Stock shall be immediately exercisable at an exercise
price of $9.50 per share. Subject to earlier termination as provided in Sections
9 and 10, the term of each Option shall be the period commencing on the date of
this Agreement and ending on the tenth (10th) anniversary of this Agreement; the
Options shall be of no further force and effect and shall not be exercisable to
any extent after such term expires.
3. GRANT AS NON-QUALIFIED STOCK OPTIONS; OTHER OPTIONS. The
Options are NOT intended to qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"). The Options are
in addition to any other options heretofore or hereafter granted to the Optionee
by the Company.
4. NON-TRANSFERABILITY. Except as provided below, the Options
shall not be assignable or transferrable by the Optionee other than by will or
the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee. Notwithstanding the foregoing, the
Options shall be assignable and transferable by the Optionee to family members,
and to partnerships, trusts and other entities for the exclusive benefit of
family members, for estate planning purposes if and to the extent such
assignments or transfers (a) will not be treated as arms-length transactions
that would result in the assignment or transfer being a taxable event for the
purpose of Section 83 of the Code and the regulations thereunder, and (b) are
then permitted by Securities and Exchange Commission ("SEC") Rule 16b-3 and Form
S-8.
5. PARTIAL EXERCISE. Exercise of the Options may be made in
part at any time and from time to time within the limits set forth in Section 2
above, except that the Options may not be exercised for a fraction of a share.
6. REGISTRATION OF OPTION EXERCISE; PURCHASE FOR INVESTMENT.
The Company shall use its best efforts to file a registration statement on SEC
Form S-8 under the Securities Act of 1933, as amended (the "1933 Act"), relating
to the exercise of the Options and to keep such registration statement effective
and current at all times during which any of the Options is exercisable. If for
any reason the registration statement is not effective and current when the
Optionee elects to exercise any Options, the Optionee agrees (i) that his
purchase of shares of Common Stock upon such exercise will not be made with a
view toward their distribution, as defined in the 1933 Act; (ii) that such
shares of Common Stock may not be transferred or hypothecated unless, in the
opinion of counsel to the Company, such transfer or hypothecation would be in
compliance with the registration provisions of the 1933 Act and relevant state
securities laws, or pursuant to exemptions therefrom; and (iii) to sign a
certificate to such effect at the time of exercising the Options and that the
certificate for the shares so purchased may be inscribed with a legend to ensure
compliance with the 1933 Act and relevant state securities laws.
7. METHOD OF EXERCISING OPTIONS. Subject to the terms and
conditions of this Agreement, the Options may be exercised by written notice to
the Company, at the principal executive office of the Company. Such notice shall
state the election to exercise the Options and the number of shares in respect
of which they are being exercised and shall be signed by the Optionee. Such
notice shall be accompanied by the payment of the full purchase price for such
shares, which shall be payable (i) in cash; (ii) by certified check or bank
cashier's check payable to the order of the Company in the amount of such
purchase price; (iii) by delivery to the Company of shares of
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Common Stock having a fair market value (as defined in Section 9.B) equal to
such purchase price, provided that such shares have been owned by the Optionee
for at least six (6) months or such other period as the Company may determine is
necessary to avoid adverse accounting treatment by the Company; (iv) in the
event that the exercise of the Options is covered by an effective registration
statement, by the delivery from a broker to the Company of an amount of loan
proceeds necessary to pay such purchase price, pursuant to the Optionee's
instructions to the broker to sell some or all of the shares of Common Stock to
be issued upon exercise of the Options and to repay the loan from the proceeds
of the sale, to deliver the remaining cash proceeds, less commissions, brokerage
fees and interest charges, to the Optionee and to deliver any remaining shares
to the Optionee; or (v) by any combination of the methods of payment described
in (i) through (iv) above. The Company shall deliver a certificate or
certificates representing the shares purchased as soon as practicable after the
notice and payment shall be received. The certificate or certificates for the
shares purchased shall, except as otherwise instructed in the case of an
exercise pursuant to (iv) above, all be registered in the name of the Optionee
and shall be delivered to the Optionee. All shares purchased upon the exercise
of Options shall be fully paid and non-assessable. The Optionee shall not have
the rights of a stockholder with respect to the shares covered by the Options
until the date of issuance of a stock certificate to him for such shares. Except
as expressly provided in Section 9, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
8. NO OBLIGATION TO EXERCISE OPTIONS. The grant and acceptance
of the Options imposes no obligation on the Optionee to exercise the Options.
9. ADJUSTMENTS. The Optionee's rights with respect to
unexercised Options shall be adjusted as provided in the Incentive Plan. In
addition, upon the occurrence of any of the following events, the Optionee's
rights with respect to unexercised Options shall be adjusted as hereinafter
provided:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of
Common Stock shall be subdivided or combined into a greater or smaller number of
shares, or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of Options shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend.
B. ACQUISITION OF THE COMPANY. If the Company is to be
consolidated with or acquired by another entity, in a merger, sale of all or
substantially all of the Company's assets or otherwise, in a transaction in
which the Company is not the surviving parent entity (an "Acquisition"), the
Board (or the board of directors of the entity assuming the obligations of the
Company hereunder (the "Successor Board")) shall, with respect to outstanding
Options, take one or more of the following actions: (i) make appropriate
provision for the continuation of such Options by substituting on an equitable
basis for the shares of Common Stock then subject to such
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Options the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition; (ii) accelerate the date of
exercise of such Options or of any installment of such Options; (iii) upon
written notice to the Optionee, provide that all Options must be exercised, to
the extent then exercisable, within a specified number of days after the date of
such notice, at the end of which period the Options shall terminate; or (iv)
terminate all Options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such Options (to the extent then
exercisable) over the exercise price thereof. For purposes of this Agreement,
"fair market value" shall be determined as of the last business day for which
the prices or quotes discussed in this sentence are available prior to the date
of determination and shall mean (a) the average (on that date) of the high and
low sales prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then traded
on a national securities exchange, or in the Nasdaq National Market, if the
Common Stock is then quoted in such market; or (b) the average of the high and
low bid prices (on that date) by an established quotation service (including for
these purposes the Nasdaq Small-Cap Market) for over-the-counter securities, if
the Common Stock is not traded or quoted on a national securities exchange or in
the Nasdaq National Market. However, if the Common Stock is not publicly traded
on the date of determination, "fair market value" shall be deemed to be the fair
value of the Common Stock as determined by the Board (or the Successor Board)
after taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and bid prices of the Common Stock in
private transactions negotiated at arm's length.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than in a transaction
described in subparagraph A or B above) pursuant to which securities of the
Company or of another entity are issued with respect to the outstanding shares
of Common Stock, the Optionee upon exercising the Options shall be entitled to
receive for the purchase price paid upon such exercise the securities that he
would have received if he had exercised the Options prior to such
recapitalization or reorganization.
D. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Options shall terminate
immediately prior to the consummation of such proposed action, or at such other
time and subject to such other conditions as shall be determined by the Board.
E. ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
exercise price of shares subject to the Options.
F. FRACTIONAL SHARES. No fractional shares shall be issued
upon exercise of the Options, and the Optionee shall receive from the Company
cash in lieu of such fractional shares.
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10. TERMINATION OR ACCELERATION OF OPTIONS.
Subject to the last sentence of Section 2 and the provisions
of Section 9:
A. In the event that the Employment Period is terminated
pursuant to Section 12(a) or (b) of the Employment Agreement, the Options shall
immediately terminate at the time of such termination, and there shall exist no
further right to exercise any of such Options. In the event that the Employment
Period is terminated pursuant to Section 12(d) of the Employment Agreement, or
the Employment Period terminates because it is not extended pursuant to a notice
given by the Optionee pursuant to Section 2 of the Employment Agreement, the
Options shall be exercisable for a period of ninety (90) days after such
termination. Upon the expiration of such 90-day period, the Options shall
terminate, and there shall exist no further right to exercise any of such
Options.
B. In the event that the Employment Period is terminated
pursuant to Section 12(c) of the Employment Agreement, the Options shall be
exercisable for a period of one (1) year after such termination. Upon the
expiration of such one-year period, the Options shall terminate, and there shall
exist no further right to exercise any of such Options.
C. In the event that the Employment Period is terminated
pursuant to Section 12(e) of the Employment Agreement, all Options shall be
exercisable for the full 10-year term of the Options.
D. In the event that the Employment Period terminates
because it is not extended pursuant to a notice given by the Company pursuant to
Section 2 of the Employment Agreement, the Options shall be exercisable for a
period of one (1) year after such termination. Upon the expiration of such
one-year period, the Options shall terminate, and there shall exist no further
right to exercise any of such Options.
11. ENTIRE AGREEMENT. This Agreement and the Employment
Agreement represent the entire understanding and agreement between the parties
with respect to the subject matter hereof, and supersede all other negotiations,
understandings and representations, if any, made by and between such parties.
12. AMENDMENTS. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
the party as to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to this Agreement.
13. ASSIGNMENTS. Except as otherwise provided herein, no party
shall assign his or its rights and/or obligations hereunder without the prior
written consent of the other party to this Agreement.
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14. BINDING EFFECT. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
15. NOTICES. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service or mailed (airmail if international) by registered
or certified mail (postage prepaid), return receipt requested, addressed to:
If to the Optionee: With copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Gildan, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & White, P.A.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ United ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Suite ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Suite 2222
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company: With a copy to:
RailAmerica, Inc. RailAmerica, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman, Attention: General Counsel
Compensation Committee
or to such other address as any party may designate by notice complying with the
terms of this Section. Each such notice shall be deemed delivered on the date
delivered if by personal delivery or on the date upon which the return receipt
is signed or delivery is refused or the notice is designated by the postal
authorities as not deliverable, as the case may be, if mailed.
16. HEADINGS. The headings contained in this Agreement are for
convenience of reference only, and shall not limit or otherwise affect in any
way the meaning or interpretation of this
Agreement.
17. SEVERABILITY. If any part of this Agreement is contrary
to, prohibited by or deemed invalid under applicable law or regulation, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given full force and effect so far as possible.
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18. WAIVERS. The failure or delay of any party at any time to
require performance by the other party of any provision of this Agreement shall
not affect the right of such party to require performance of that provision or
to exercise any right, power or remedy hereunder, and any waiver by any party of
any breach of any provision of this Agreement shall not be construed as a waiver
of any continuing or succeeding breach of such provision, a waiver of the
provision itself or a waiver of any right, power or remedy under this Agreement.
No notice to or demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or other
circumstances.
19. JURISDICTION AND VENUE. The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida, and
that, therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (i) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the courts of record of the State of Florida in Palm
Beach County or the court of the United States, Southern District of Florida;
(ii) consents to the jurisdiction of each such court in any suit, action or
proceeding; (iii) waives any objection which he or it may have to the laying of
venue of any such suit, action or proceeding in any of such courts; and (iv)
agrees that service of any court papers may be effected on such party by mail,
as provided in this Agreement, or in such other manner as may be provided under
applicable laws or court rules in such courts.
20. ENFORCEMENT COSTS. If any legal action, arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepre sentation in connection with any
provisions of this Agreement, the ultimately successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, costs and other
expenses, even if not taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeals), incurred in that action,
arbitration or other proceeding, in addition to any other relief to which such
party may be entitled.
21. REMEDIES CUMULATIVE. No remedy herein conferred upon any
party is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity, whether by statute
or otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
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22. GOVERNING LAW. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of Delaware without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
RAILAMERICA, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman
Secretary Compensation Committee
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- -------------------------------
Witness ▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Witness
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AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
---------------------------------------
This Amendment No. 1 ("Amendment No. 1") to that certain Employment
Agreement dated as of January 1, 1998 (the "Agreement") between RailAmerica,
Inc. (the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Executive"), is made and entered
into as of the 17th day of March, 1998.
RECITALS
--------
A. The Executive is currently employed by the Company pursuant to the
Agreement.
B. The Compensation Committee of the Board of Directors of the Company
has determined that Amendment No. 1 will reinforce and encourage the
Executive's continued attention and dedication to the Company.
AGREEMENT
---------
Now, therefore, for good and sufficient consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Agreement is hereby amended to add thereto the following Section
5A:
"5A.(a) Effective as of March 17, 1998, the Company sold Thirty
Thousand (30,000) shares of common stock of the Company to the
Executive in exchange for a Promissory Note in the principal amount
of Ninety Seven Thousand Five Hundred Dollars ($97,500) and bearing
interest at the "short-term applicable federal rate" as such term is
defined in Section 1274(d) of the Internal Revenue Code dated as of
the date hereof (the "Note"). On March 17, 1998, March 17, 1999 and
March 17, 2000, the Company shall pay bonuses (the "Loan Bonuses") to
the Executive, if he is employed by the Company on that date, equal to
the amount payable by the Executive to the Company on that date under
the Note. In lieu of making actual payment of these Loan Bonuses to
the Executive, the Company may apply the bonus amount, less any
applicable withholding taxes, against the amount due under the Note.
These bonuses shall be in addition to any bonuses payable to Executive
pursuant to Sections 4 and 7 of this Agreement.
(b) In the event that the Executive's employment with the Company
terminates by reason of the Executive's death or disability as
described under Section 12(c) hereof, is terminated by the Company
without Cause under Section 12(e) hereof, is terminated under Section
11 hereof after a Change in Control for any reason other than by the
Company for Cause under Sections 12(a) or 12(b) hereof, or terminates
upon the expiration of the Employment Period if the Company has not
offered the
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Excutive to extend the term of the Agreement on substantially the same
terms, then the Company shall pay to the Executive, within 45 days of
such termination, a bonus (the "Final Loan Bonus") equal to the
outstanding principal and accrued interest on the Note. In lieu of
making actual payment of this Final Loan Bonus to the Executive, the
Company may apply the amount of the Final Loan Bonus, less any
applicable withholding taxes, against the amount due under the Note.
2. Except as set forth in this Amendment No. 1, the terms of Agreement
shall remain unchanged and in full force and effect.
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26
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 as of the day and year first written above.
RAILAMERICA, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------- ---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman Compensation
Secretary Committee
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- ----------------------------------------
Witness ▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------
Witness
3