EXHIBIT 10.92
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "AGREEMENT") is entered into as of the
7th day of April, 2004, by and between RAILAMERICA, INC., a Delaware corporation
(the "COMPANY"), and XXXX X. XXXXXX (the "EXECUTIVE").
RECITALS
WHEREAS, the Executive has been employed pursuant to the terms of an
Amended and Restated Executive Employment Agreement dated as of the 1st day of
January, 2002, by and between the Company and the Executive (the "EMPLOYMENT
AGREEMENT"); and
WHEREAS, the Company and the Executive have agreed that the Employment
Agreement, and the Executive's employment thereunder, shall terminate, effective
as of the date hereof (the "TERMINATION DATE"); and
WHEREAS, the Company and the Executive now wish to set forth in this
Agreement all of their respective rights and obligations resulting from such
termination;
NOW, THEREFORE, in consideration of the mutual promises and covenants
between the parties, the sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree to the following Terms and Conditions:
TERMS AND CONDITIONS
1. RECITALS. All of the foregoing Recitals are true and correct and are
incorporated as part of these Terms and Conditions.
2. TERMINATION OF EMPLOYMENT AGREEMENT. The Company and the Executive
each acknowledge and agree that the Employment Agreement shall terminate and be
of no further force and effect as of the Termination Date.
3. SEVERANCE BENEFITS. The Company shall provide the Executive with the
following payments and benefits (the "SEVERANCE BENEFITS"), in each case reduced
by any applicable employment or withholding taxes to the extent required by
applicable law, and shall take the following actions:
(a) SEVERANCE PAYMENT. The Company agrees to the following:
i. Within two (2) business days following the
Effective Date (as defined in SECTION 24 below), the Company shall pay
the Executive the lump sum amount of one hundred thousand dollars
($100,000.00), which shall be payable as follows: (A) twenty-five
thousand dollars ($25,000.00) shall be paid to Xxxxxxx Xxxxxx Xxxxxx
Page 1 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A. (attorneys for the Executive), and
(B) the balance shall be paid to the Executive, minus all employment
taxes and all other withholdings required by law on the full amount
payable pursuant to this SECTION 3(A); PROVIDED, HOWEVER, that nothing
is this SECTION 3(A)(I) shall limit any right or obligation of the
Company to withhold any amounts required by applicable law.
ii. Within two (2) business days following the
Effective Date, the Company shall cause to be transferred to the
RailAmerica, Inc. Nonqualified Deferred Compensation Trust U/A/D
January 3, 1997 ("1997 DEFERRED COMPENSATION TRUST"), a copy of which
is attached as EXHIBIT 1, for credit to the Executive's account under
that trust the sum of three million dollars ($3,000,000.00). The
Executive will be paid benefits in accordance with the 1997 Deferred
Compensation Trust and the Nonqualified Deferred Compensation Agreement
between the Executive and the Company dated January 3,1997.
iii. The Company shall amend the 1997 Deferred
Compensation Trust in the form attached hereto as EXHIBIT 2. The
Company will provide to the Executive within ten (10) business days
following the Effective Date written documentation of the amendment to
the 1997 Deferred Compensation Trust.
(b) CONTINUED GROUP MEDICAL AND DENTAL COVERAGE. The Company
shall reimburse the Executive for his monthly premiums to maintain his and his
qualified dependents' group medical and dental coverage under the Company's
group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA") and under any replacement plan the Company may obtain at the
conclusion of the Executive's and his qualified dependents' COBRA entitlement,
which shall be on a level consistent with the coverage afforded to the Executive
and his qualified dependents prior to the Termination Date to the extent
reasonably possible, until the first to occur of (i) the end of the month
containing the fifth (5th) anniversary of the Effective Date, and (ii) the date
that the Executive becomes eligible for substantially equivalent coverage under
another employer's group health plan. In furtherance of this obligation, the
Executive agrees to take all necessary steps to elect and maintain continued
COBRA coverage for the greatest period permitted by law and to assist the
Company in obtaining coverage under any replacement plan.
(c) CONTINUATION OF LONG-TERM INCENTIVE PROGRAM BENEFIT. The
Executive shall receive the following payments under the Company's Long-Term
Incentive Program ("LTIP") (a copy of which is attached hereto as EXHIBIT 3):
i. his entire Performance Award under the LTIP for
the Performance Period running from January 1, 2001, through December
31, 2003 (provided, however, that the parties agree that no such
payment is payable inasmuch as the Performance Targets were not
achieved),
ii. his entire Performance Award for the Performance
Periods running from January 1, 2002, through December 31, 2004, and
from January 1, 2003 through December 31, 2005, and
Page 2 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
iii. a pro-rated portion equal to seventy-five
percent (75%) of his Performance Award for the Performance Period
running from January 1, 2004, through December 31, 2006 (based on a
Termination Date of April 7, 2004).
The payments for each such Performance Period shall be
calculated pursuant to the formula provided in Section 5.6 of the LTIP and shall
be paid to the Executive in the time and manner specified in Section 5.10 of the
LTIP.
(d) STOCK OPTIONS AND RESTRICTED STOCK. A total of 116,666
unvested options to purchase shares of the Company's Common Stock previously
granted to the Executive by the Company shall become vested in the Executive as
of the Effective Date. These options, together with 1,433,334 previously vested
options (collectively, the "OPTIONS"), shall remain exercisable until the second
(2nd) anniversary of the Effective Date, with the exception of the Options
granted as of January 1, 1998, which shall remain exercisable until January 1,
2008. Any Options not exercised in accordance with the foregoing shall expire.
In addition, 24,918 unvested shares of restricted shares previously granted to
the Executive (the "RESTRICTED SHARES") shall become vested in the Executive as
of the Effective Date, and the Company shall cause any restrictive legend on any
such restricted shares to be removed within thirty (30) days thereof. (Copies of
the Option Agreements for each of the foregoing Option grants and copies of the
Restricted Shares are attached hereto as EXHIBIT 4 and EXHIBIT 5, respectively.)
(e) INDEMNIFICATION. The Company and Executive hereby agree to
perform all of their respective obligations under the Indemnification Agreement
(the "INDEMNIFICATION AGREEMENT") between Rail America, Inc., and Xxxx X. Xxxxxx
dated June 23, 2000 (a copy of which is attached hereto as EXHIBIT 6) which
agreement remains in full force and effect, except as provided in SECTION 10
hereof.
(f) CONTINGENT ADDITIONAL PAYMENTS. The parties represent and
warrant that this Agreement is made without any expectation that an event will
occur that would result in application of Sections 280G or 4999 of the Internal
Revenue Code of 1986, as amended (the "CODE"). Nonetheless, in the event the
Internal Revenue Service or any state or local taxing authority determines that
any payment, distribution or other action by the Company to or for the benefit
of the Executive pursuant to this Agreement or otherwise would be subject to the
excise tax imposed by Code Section 4999 (or its successor or other provision
that imposes a similar excise tax) or any excise tax that may be imposed by a
state and/or local law, or any interest or penalties being imposed on the
Executive with respect to any such excise taxes (such excise taxes, together
with any such interest and penalties, are hereinafter collectively referred to
as the "EXCISE TAX"), then the provisions of Section 7 of that certain agreement
between the Executive and the Company dated June 20, 2000, as amended effective
September 1, 2002 (the "2000/02 AGREEMENT") shall apply by treating as a
"Payment" for purposes of Section 7 of the 2000/02 Agreement, any payment,
distribution or other action by the Company to or for the benefit of the
Executive pursuant to the terms of this Agreement or otherwise (including any
additional payments required under this SECTION 3(F)). Except as required to
give effect to this SECTION 3(F), the 2000/02 Agreement shall be null and void,
and the Executive shall be entitled to no payments or benefits thereunder.
Page 3 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
(g) EXECUTIVE'S DEATH. If the Executive dies before receiving
all payments to which he is entitled under this Agreement, or any of the
agreements or programs referred to above, any payment that would have been made
to the Executive will be made to the Executive's surviving spouse, if any, or,
if none or circumstances are such that it is not possible to determine whether
the Executive or his surviving spouse survived, then to the Executive's estate.
If Executive's surviving spouse dies before receiving all payments to which she
is entitled under this SECTION 3(G), any payment that would have been made to
her will be made to her estate.
4. NO FURTHER COMPENSATION. The Executive acknowledges and agrees that
no further compensation or benefits or other monies are owed to the Executive by
the Company, other than the Severance Benefits described in SECTION 3 above, and
any other rights of the Executive under the Company's Employees 401K Savings
Plan (in which the Executive is fully vested with respect to the employer's
contribution) and the Retirement Executive Plan Basic Plan Document, a/k/a/ the
RailAmerica, Inc. Executive Deferred Compensation Plan (the "2003 EXECUTIVE
PLAN") (in which the Executive is fully vested with respect to the employer's
contribution) and conversion rights under the life and disability insurance
features of the Company's Health and Welfare Plan. For this purpose, Company
shall provide or cause to be provided to the Executive the customary notices
concerning benefits as are provided to terminated employees.
5. JOINT PRESS RELEASE. The parties hereto agree that, upon the
execution of this Agreement, the Company shall issue the press release attached
hereto as EXHIBIT 7.
6. NON-COMPETITION AND NON-SOLICITATION. In consideration for the
Company's provision of the Severance Benefits under SECTION 3 of this Agreement,
the Executive agrees to the following:
(a) GENERAL. The Executive acknowledges that he has performed
services for and on behalf of the Company and has acquired Confidential
Information and has had access to Materials (as each of those terms is defined
below) that will directly affect the Consolidated Group. Accordingly, the
parties deem it necessary to provide protective non-competition and
non-solicitation provisions in this Agreement. "CONSOLIDATED GROUP" as used
above and elsewhere in this Agreement shall mean the Company and its
subsidiaries and affiliates.
(b) NON-COMPETITION AND NON-SOLICITATION. The Executive agrees
with the Company that for a period of twelve (12) months from the Effective
Date, the Executive shall not, directly or indirectly, without the prior written
consent of the Board, engage in the following:
i. perform any services or duties in any capacity,
whether as a consultant, independent contractor, agent, director,
officer, manager, supervisor or employee, or otherwise, 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
period in which the Executive was employed by the Company; PROVIDED,
HOWEVER, that, for purposes of this SECTION 6(B)(I), (A) in no event
shall a purely passive personal or family investment of less than five
Page 4 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
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 Effective
Date of this Agreement shall be considered to be a business that was
engaged in during the Executive's employment by the Consolidated Group
only if and to the extent that the 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) the Executive may
become involved with a short-line freight railroad, if such railroad
does not operate track anywhere in the United States or Canada or in
Australia (the later restriction so long as the Company owns Freight
Australia).
ii. The Executive shall not, directly or indirectly,
for himself or for any other person, firm, corporation, partnership,
association or other entity, employ or attempt to employ, or enter into
any contractual arrangement with, any employee or former 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
the Executive's personal secretary, unless such employee or former
employee has not been employed by any member of the Consolidated Group
for a period in excess of six (6) months.
(c) The covenants of the Executive set forth in this SECTION 6
are separate and independent covenants, for which valuable consideration has
been paid, the receipt, adequacy and sufficiency of which are hereby
acknowledged by the Executive, and which have been made by the 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 for the basis of injunctive relief, as permitted under SECTION 8
hereof. The covenants set forth in this SECTION 6 are cumulative to each other
and to all other covenants of the Executive in favor of the Company contained in
this Agreement. Should any covenant, term or condition in this SECTION 6 become
or be declared invalid or unenforceable, the parties request that such
unenforceable provision be modified consistent with the intent of this SECTION 6
so that it shall be enforceable as modified.
7. CONFIDENTIALITY.
(a) SEPARATION AGREEMENT. The parties hereto covenant and
agree that this Agreement and its terms and conditions are, collectively and
independently, totally confidential and from the date of this Agreement forward,
shall forever be kept totally confidential and shall not in any manner or for
any reason by disclosed by either party without the express written consent of
the other party, except on a "need to know basis" (i) to the immediate family
members of the Executive, all of whom shall be informed of and be bound by the
provisions of this paragraph; (ii) to the attorneys and accountants of either
party; (iii) as may be required by government agencies, such as the Internal
Revenue Service; or (iv) pursuant to court order or subpoena compelling such
Page 5 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
disclosure. Should either party or their representatives receive any such
subpoena or court order compelling disclosure, that party shall immediately
notify the other party so that it may have the opportunity to interpose an
objection.
(b) BUSINESS INFORMATION. In the course of the Executive's
relationship with the Consolidated Group, some or all of the members of the
Consolidated Group have disclosed or made known to the Executive, and the
Executive has been given access to or has become acquainted with, certain
information, business plans, strategies, trade secrets and the like, relating to
or useful in one or more of the businesses of the Consolidated Group
(collectively "CONFIDENTIAL INFORMATION"), and which the Company considers
proprietary and desires to maintain confidential. As a material inducement to
the Company to enter into this Agreement, the Executive covenants and agrees
that, at all times after the Termination Date, the 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 Chief Executive Officer of the Company, any of the Confidential
Information which he may have acquired in the course of or as an incident to his
relationship with any member of the Consolidated Group, including, without
limitation, pursuant to his employment, the parties agreeing that such
Confidential 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 7 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 the Executive may have prepared,
used, constructed, observed, possessed or controlled shall be and remain the
sole property of the Consolidated Group. On or before the Termination Date, the
Executive shall deliver to the Company all of the Materials, Confidential
Information and all copies thereof in the custody or control of the Executive
and shall certify in writing that he has retained no copy of any Materials.
8. INJUNCTIVE RELIEF. The covenants of the Executive set forth in this
Agreement are separate and independent covenants, for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
hereby acknowledged by the Executive, and which have been made by the 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 or any other member
of the Consolidated Group in any court of competent jurisdiction for the basis
of injunctive relief. Should any covenant, term or condition in this Agreement
become or be held to be overly broad as to geography, time, activity or subject
so as to be unenforceable at law or equity, such provision or provisions shall
be construed by the appropriate judicial body by limiting and reducing it or
them so as to be enforceable to the maximum extent compatible with applicable
law. It is the intent of the parties that the provisions of this Agreement be
enforced to the greatest extent allowable in law or equity.
Page 6 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
9. NO CHARGES FILED. The Executive and the Company mutually represent
and warrant that neither has filed any claims or causes of action against the
other or, with respect to Executive's representation and warranty, against any
other member of the Consolidated Group, including but not limited to any charges
of discrimination against the Company, with any federal, state or local agency
or court.
10. NO ADMINISTRATIVE PROCEEDING TO BE FILED. The Executive and the
Company each agree not to institute any administrative proceeding or lawsuit
against the other or, with respect to the Executive's agreement, any other
member of the Consolidated Group, in violation of SECTION 13 below, and
represent and warrant that, to their best knowledge, no other person or entity
has initiated or is authorized to initiate such administrative proceedings or
lawsuit on his or its behalf. Furthermore, each party agrees not to encourage
any other person or suggest to any other person that he or she institute any
legal action or claim against each other or, with respect to the Executive's
agreement, the Consolidated Group or any past and present shareholders,
directors, officers, or agents. To the extent that any provision of Section 10
of the Indemnification Agreement may suggest a right of the Company contrary to
the Company's agreement in this SECTION 10, Section 10 of the Indemnification
Agreement is of no further force and effect.
11. NON-DISPARAGEMENT. The Executive agrees not to make any disparaging
or negative comment to any other person or entity regarding (a) any member of
the Consolidated Group, (b) any of the owners, directors, officers,
shareholders, members or employees of any member of the Consolidated Group, (c)
the working conditions at the Company, or (d) the circumstances surrounding the
Executive's separation from the Company. The Company's officers and directors
and the officers and directors of any other member of the Consolidated Group
agree not to make any disparaging or negative comment to any other person or
entity regarding the Executive.
12. DUTY OF COOPERATION. The parties hereto agree to cooperate with
each other and each other's attorneys in connection with any threatened or
pending litigation against the Company or any member of the Consolidated Group,
or against the Executive. The Executive agrees to make himself available upon
reasonable notice to prepare for and appear at deposition or at trial in
connection with any such matters, and the Company agrees to make the appropriate
persons available upon reasonable notice to prepare for and appear at deposition
or at trial in connection with any such matters. Notwithstanding anything
contained herein to the contrary, the Executive shall not be obligated to appear
as an expert consultant or expert witness in connection with any matter.
Furthermore, the parties hereto agree to cooperate fully in effecting an orderly
transition with regard to the termination of the Executive's employment and the
transition of his duties to other employees of the Company. The foregoing
obligations shall be without additional cost to the party to whom cooperation is
provided.
Page 7 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
13. MUTUAL GENERAL RELEASES.
(a) THE EXECUTIVE'S RELEASE. The Executive, on behalf of
himself and his spouse, heirs, executors, administrators, personal
representatives and assigns, hereby unconditionally and irrevocably releases,
covenants not to xxx and provides a complete waiver of all rights and claims
that may have arisen, whether known or unknown, until the Effective Date, to the
Company and each member of the Consolidated Group, all of each of their past and
present parents, subsidiaries, affiliated and related entities and divisions and
departments, and each of their owners, directors, officers, shareholders,
members, employees, attorneys and agents, and their predecessors, successors and
assigns. This includes, but is not limited to, rights or claims based on Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil
Rights Act of 1991, the Age Discrimination in Employment Act of 1967 (including
the Older Workers Benefit Protection Act), the Americans with Disabilities Act,
the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave
Act, the Employee Retirement Income Security Act of 1974, the Florida Civil
Rights Act of 1992, and the Railway Labor Act of 1926, as any of the foregoing
may be amended from time to time, and any common law, public policy, contract
(whether oral or written, express or implied) or tort law, including claims for
defamation, and any other local, state or federal law, regulation or ordinance
having any bearing whatsoever on the terms and conditions of the Executive's
employment with or the termination of his employment by the Company. In addition
to waiving his right to file any charge or complaint on his own behalf, the
Executive hereby waives his right to participate in any charge or complaint
which may be made by any other person or organization on his behalf before any
federal, state or local court or administrative agency against any of the
foregoing releasees, except as such waiver is prohibited by law. Should any such
charge be filed, the Executive agrees that he will not accept any relief or
recovery therefrom.
(b) THE COMPANY'S RELEASE. The Company and the other members
of the Consolidated Group hereby unconditionally and irrevocably release and
forever discharge the Executive, and covenant not to xxx and not to assert
against the Executive, any causes of action, claims or demands whatsoever, both
known and unknown, at law or in equity, or before any agency or commission of
local, state and federal governments, arising under any law or other statutory,
administrative and common law that the Company or any other member of the
Consolidated Group ever had, now has or hereafter can, shall or may have for or
by reason of any cause whatsoever, up to the Termination Date, including, but
not limited to any and all claims and causes of action arising out of the
Executive's employment with the Company, whether based on any federal, state or
local statute or ordinance or founded in tort, contract (oral, written or
implied) or any other common law or equitable basis.
(c) Notwithstanding anything contained in this SECTION 13 to
the contrary, however, this Agreement is not intended and shall not operate or
be deemed to constitute a release, waiver, discharge or impairment of any right
or right to prosecute any claim or action on any right that may arise after the
Effective Date, including, with respect to the Executive, his rights under the
2003 Executive Plan and the Company's Employees 401K Savings Plan.
Page 8 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
14. CERTAIN VIOLATIONS. In the event of the Executive's material
violation of any of the provisions of this Agreement, the Company may, in
addition to any other remedy, cease providing any of the Severance Benefits
provided pursuant to SECTION 3.
15. ATTORNEYS' FEES. In the event that a legal action is brought to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover its costs of court, including all attorneys' fees at all trial and
appellate levels.
16. SEVERABILITY. If any provision of this Agreement is invalidated by
a court of competent jurisdiction, then all of the remaining provisions of this
Agreement shall remain in full force and effect, provided that both parties may
still effectively realize the complete benefit of the promises and
considerations conferred hereby.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters set forth herein and
supersedes in its entirety any and all agreements or communications, whether
written or oral, previously made in connection with the matter herein. Any
agreement to amend or modify the terms and conditions of this Agreement must be
in writing and executed by the parties hereto.
18. CONSTRUCTION. The parties acknowledge that each party has reviewed
and revised this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to principles of
conflict of laws. The venue for any action to enforce any provision of this
Agreement shall be the state or federal courts located in Palm Beach County,
Florida.
20. NOTICES. All notices required or permitted to be given hereunder
shall be in writing and shall be personally delivered, delivered by overnight
courier or sent by registered or certified mail, return receipt requested
addressed as set forth herein. Notices personally delivered or sent by overnight
courier shall be deemed given on the date of delivery, and notices mailed in
accordance with the foregoing shall be deemed given upon the earlier of receipt
by the addressee, as evidenced by the return receipt thereof, or three (3) days
after deposit in the U.S. mail. Notice shall be sent (a) if to the Company,
addressed to: RailAmerica, Inc., 0000 Xxxxxx Xxxxx Xxxx., X.X., Xxxx Xxxxx,
Xxxxxxx 00000 Attention: E.V.P and Chief Administrative Officer, and (b) if to
the Executive, to his address as reflected on the payroll records of the
Company, or to such other address designated by the party by written notice in
accordance with this provision.
21. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
Page 9 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
22. NON-ADMISSION OF LIABILITY. Neither this Agreement nor anything
contained herein shall constitute or is to be construed as an admission by the
Company or the Executive as evidence of any liability, wrongdoing, or unlawful
conduct.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instruments and agreement.
24. ACKNOWLEDGMENTS.
(a) EXECUTIVE'S ACKNOWLEDGMENTS. The Executive acknowledges
and agrees that:
i. He has had sufficient time to review this
Agreement and consult with anyone he chooses regarding this Agreement,
that he has been advised to consult with legal counsel regarding this
Agreement and has been represented by counsel of his own choosing and
at his own expense in connection with this Agreement, and that he has
received all information he requires from the Company in order to make
a knowing and voluntary release and waiver of all claims against the
Company.
ii. The Executive acknowledges and agrees that he has
been given at least twenty-one (21) days to review this Agreement and
that he understands that he has seven (7) days from the date he
executes this Agreement to revoke his signature by providing notice in
writing to the Company.
iii. By this Agreement he is receiving consideration
in addition to that to which he is already entitled.
iv. This Agreement and the release contained herein
satisfy all the requirements for an effective release by the Executive
of all age discrimination claims under Age Discrimination in Employment
Act.
(b) COMPANY'S ACKNOWLEDGMENTS. The Company acknowledges and
agrees that:
i. The execution, delivery and performance by the
Company of this Agreement are within its corporate power and authority
and have been duly authorized by its Board of Directors.
ii. This Agreement is, and any other documents and
instruments required by this Agreement to be executed and delivered by
the Company will be, when executed and delivered, the valid and binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
Page 10 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
reorganization, moratorium or similar laws generally affecting the
rights of creditors and subject to general equity principles.
iii. The provisions of this Agreement are intended to
be binding upon and inure to the benefit of the Consolidated Group.
(c) For purposes of this Agreement, "EFFECTIVE DATE" shall
mean the date that is seven (7) days after the Executive executes this
Agreement, provided that the Executive has not exercised his right to revoke in
accordance with this SECTION 24.
[Remainder of page intentionally left blank.]
Page 11 of 12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
25. HEADINGS. The headings are for the convenience of the parties, and
are not to be construed as terms or conditions of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY:
RAILAMERICA, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
EXECUTIVE:
/s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx
Page 12 of 12
LIST OF EXHIBITS TO
SEPARATION AGREEMENT BETWEEN
RAILAMERICA, INC. AND XXXX X. XXXXXX
1. RailAmerica, Inc. Nonqualified Deferred Compensation Trust U/A/D
January 3, 1997
2. Form of Amendment to RailAmerica, Inc. Nonqualified Deferred
Compensation Trust U/A/D January 3, 1997
3. RailAmerica, Inc. Long-Term Incentive Program -- Incorporated by
reference to exhibit 10.89 filed as part of RailAmerica, Inc.'s
Form 10-Q for the quarter ended March 31, 2003, filed with the
Securities and Exchange Commission on May 9, 2003.
4. RailAmerica, Inc. Options Issued to Xxxx Xxxxxx - 1,550,000 options
5. Previously restricted 24,918 shares of RailAmerica, Inc. issued to Xxxx
Xxxxxx
6. Indemnification Agreement between Rail America, Inc., and Xxxx X.
Xxxxxx dated June 23, 2000
7. Press Release
EXHIBIT 1
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
This RailAmerica, Inc. Nonqualified Deferred Compensation Trust Agreement
is made this 3rd day of January, 1997 by and between RailAmerica, Inc. (the
"Company") and Xxxxxx X. Xxxxxxxx (the "Trustee");
WHEREAS, the Company has adopted the nonqualified deferred compensation
Plans as listed in Appendix One hereto and may adopt additional nonqualified
deferred compensation Plans for the benefit of eligible employees (the "Plan");
WHEREAS, the Company has incurred or expects to incur liability under the
terms of such Plans with respect to the individuals participating in such Plans;
WHEREAS, the Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's creditors in the event of the Company's
Insolvency, a herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plans;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plans
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management of highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of the Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plans;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
1. ESTABLISHMENT OF TRUST.
(a) The Company hereby deposits with the Trustee in trust the
amount shown on Appendix Two hereto, which shall become the principal of the
Trust to be held, administered and disposed of by the Trustee as provided in
this Trust Agreement:
(b) The Trust hereby established is irrevocable.
(c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter I,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of Plan participants and general creditors
as herein set forth. Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plans and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against the Company. Any assets held by the Trust will be subject to the claims
of the Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in trust with
the Trustee to augment the principal to be held, administered and disposed of by
the Trustee as provided in this Trust Agreement. Neither the Trustee nor any
Plan participant or beneficiary shall have any right to compel such additional
deposits.
2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The Company shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Plans), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, the Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment Schedule.
The Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plans and shall pay
amounts withheld to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by the Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plans shall be determined by the Company or
such party as it shall designate under the Plans, and any claim for such
benefits stall be considered and reviewed under the procedures set out in the
Plans.
(c) The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plans. The Company shall notify the Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with the
terms of the Plans, the Company shall make the balance of each such payment as
it falls due. The Trustee shall notify the Company where principal and earnings
are not sufficient.
3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent. The Company
shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the
Company is unable to pay its debts as they become due, or (ii) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer
of the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent
-2-
and, pending such determination, the Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets of the Trust for
the benefit of the Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan participants or their beneficiaries
to pursue their rights as general creditors of the Company with respect to
benefits due under the Plans or otherwise.
(4) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this Trust
Agreement only after the Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plans for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct the Trustee to
return to the Company or to divert to others any of the Trust assets before all
payment of benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plans.
5. INVESTMENT AUTHORITY.
(a) The Trust Fund shall be held in trust by the Trustee and shall
be invested and reinvested as provided in this Section 5, without distinction
between principal and Income and without regard to the restrictions of the laws
of the State of Florida, or any other jurisdiction, relating to the investment
of Trust Funds. The Trustee shall invest and reinvest the Trust Fund in its
discretion, except as otherwise directed by the Company, or in accordance with
Section 5(d) in accordance with the directions of an Investment Manager. The
Trustee shall be under no duty or obligation to review any investment to be
acquired, held or disposed of pursuant to such directions nor to make any
recommendation with respect to the disposition or continued retention of any
such investment.
(b) In addition to the more general investment powers provided
below, the Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued
-3-
by the Company. All rights associated with assets of the Trust shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with Plan participants. The Company shall
have the right at anytime, and from time to time in its sole discretion, to
substitute assets of equal fair market value for any asset held by the Trust.
This right is exercisable by the Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
(c) The Company shall establish specific investment policies and
guidelines for Trust Funds. The Trustee shall be responsible only for investing
the Trust Fund in accordance with such policies and guidelines. If any change in
such policies or guidelines is subsequently deemed appropriate, notice of such
change shall be promptly communicated by the Company to the Trustee, but the
Trustee shall be under no duty to take or refrain from taking any action based
on such changes prior to receiving such notice.
(d) The Company may appoint one or more than one Investment
Manager to direct the investment of the Trust Fund. Upon the effective date of
such appointment, such Investment Manager shall have the sole power, without
prior consultation with the Trustee, to manage and direct the acquisition and
disposition of the Trust Fund. The Investment Manager shall keep such records
and make such reports to the Trustee as may be specified in the agreement
appointing such Investment Manager. The Company at its discretion also may
terminate the appointment of any Investment Manager. The Company shall notify
the Trustee of such termination and, in the absence of specific directions from
the Company or the appointment of a successor Investment Manager for the
Investment Account, the Company shall be responsible for the management and
control of the assets formerly managed by the Investment Manager.
(e) To the extent neither the Company nor an Investment Manager
furnishes directions as to the investment of the Trust Fund, the Trustee may
retain uninvested cash or cash balances, without being required to pay interest
thereon, or may invest such assets in short-term investments and one of the
commingled funds described in Section 5(f)(8).
(f) The Trustee shall have the power to do all things and execute
such instruments as it may deem necessary or proper to carry out its
responsibilities under this Trust Agreement, including the following powers:
(1) To invest any and all monies in stock of the Company,
other stocks, bonds, securities, insurance policies insuring the lives of
employees covered by any Plan, mutual funds, investment company or trust shares,
mortgages, notes, choses in action, real estate, improvements thereon, and other
property acceptable to the Trustee;
(2) To sell, exchange, or otherwise dispose of any property
at any time held or acquired by the Trust Fund, at public or private sale, for
cash or on terms, without advertisement, including the right to lease for any
term;
(3) To vote in person or by proxy any corporate stock or
other security and to agree to or take, or refrain from taking, any other action
necessary or appropriate for a shareholder or owner in regard to any
reorganization, merger, consolidation, liquidation, bankruptcy or other
procedure or proceeding affecting any stock, bond, note or other property;
-4-
(4) To compromise, settle, adjust or otherwise act in any
reasonable manner whatsoever on any claim or demand by or against the Trust Fund
and to agree to any rescission or modification of any contact or agreement
affecting the Trust fund;
(5) To deposit any stock, bond or other security in any
depository or other similar institution and to register any stock, bond or other
security in the name of any nominee, without the addition of words indicating
that such security is held in a fiduciary capacity, but accurate records shall
be maintained showing that such security is a Trust Fund asset and the Trustee
shall be responsible for the acts of such depository or nominee;
(6) To hold cash (including, without limitation, in
non-interest bearing accounts) in such amounts and for such time as may be in
its opinion reasonable for the proper management of the Trust Fund;
(7) To grant, sell, purchase, or exercise any option of any
kind or description whatsoever to purchase or sell any security or other
property which is a permissible investment under this Section 5, provided the
Trustee in no event shall grant or sell any option under which any person can
require the Trust Fund to sell any security or other property which the Trust
Fund at the time of such grant or sale does not hold in an amount sufficient to
cover such option and any other outstanding option granted or sold by the
Trustee, and the Trustee in no event shall dispose of any security or other
property covering any option until such option is exercised or otherwise
expires;
(8) To invest all, or any part, of the assets of the Trust
Fund in any common, collective or group trust fund which is maintained under
section 584 of the Code or Revenue Ruling 81-100, 1981-1 C.B. 326, by the
Trustee or any bank which is a member of an "affiliated group" (as that term is
defined in section 1504 of the Code) with the Trustee, the provisions of which
common, collective or group trust fund upon such investment shall automatically
be adopted and made a part of this Trust Agreement for the period such
investment is made in such common, collective or group trust fund;
(9) To make such other investments without regard to any law
now or hereafter in force limiting the investments of trustees or other
fiduciaries.
(g) With respect to any policy of life insurance that the Trustee
owns or under which the death benefits are made payable to the Trustee, the
Trustee shall have the following specific powers and responsibilities;
(1) If the Trustee is the owner of any such policy, the
Trustee reserves all available benefits, privileges, payments, dividends,
surrender values, options, conversion rights and elections, including the right
at any time or times to change the beneficiary, to borrow or otherwise receive
the surrender value, to pledge or assign the policy or its proceeds as
collateral security for any loan which the owner or owners may obtain from any
lender, including a Trustee under this agreement individually or a parent or
affiliate company, and to withdraw the policy if deposited with the trustees,
without any duty on the trustees to see its return.
(2) Upon the death of the insured under the policy the
Trustee shall take such action as they deem best to collect the policy proceeds,
paying the expenses of collection from the Trust Fund, but the Trustee need not
enter into or maintain any litigation to
-5-
enforce payment on the policy until indemnified to their satisfaction against
all expenses and liabilities to which it might by any such litigation be
subjected. The Trustee may release the insurance company from its liability
under the policy and make any compromise which the trustees deem proper.
(3) The insurance company shall not take notice of the
provisions of this Agreement or see to the application of the policy proceeds,
and the Trustee's receipt to the insurance company shall be a complete release
for any payment made and shall bind every participant or beneficiary under this
Agreement.
6. DISPOSITION OF INCOME.
During the term of this Trust, ail income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.
7. ACCOUNTING BY TRUSTEE.
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records, as shall be agreed upon in writing
between the Company and the Trustee. Within 90 days following the close of each
calendar year and within 30 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation, setting
forth all investments, receipts, disbursements and other transactions effected
by it, including a description of all securities and investment purchased and
sold with the cost or net proceeds of such purchases or sales (accrued interest
paid or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
8. RESPONSIBILITY OF TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the Plans or this Trust and is given in
writing by the Company. In the event of a dispute between the company and a
party, the Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its duties or
obligations hereunder.
-6-
(d) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not have any power
that could give this Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of section 301.7701-2 of the Procedure
and Administrative Regulations promulgated pursuant to the Internal Revenue
Code.
9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative and the Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective 45 days after receipt of such notice unless
the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days notice or
upon shorter notice accepted by the Trustee.
(c) Upon a Change of Control, as defined herein, the Trustee may
not be removed by the Company for 5 years.
(d) If the Trustee resigns or is removed within 5 years of a
Change of Control, as defined herein, the Trustee shall select a successor
Trustee in accordance with the provisions of Section 11(b) hereof prior to the
effective date of the Trustee's resignation or removal.
(e) Upon resignation or removal of the Trustee and appointment of
a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 30 days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.
(f) If the Trustee resigns or is removed, a. successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) and (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
-7-
11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with
Section 10(a) or (b) hereof, the Company may appoint any third party, such as a
bank trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace the Trustee upon resignation
or removal. The appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) If the Trustee resigns or is removed pursuant to the
provisions of Section 10(d) hereof and selects a successor Trustee, the Trustee
may appoint any third party such as a bank trust department or other party that
may be granted corporate trustee powers under state law. The appointment of a
successor Trustee shall be effective when accepted in writing by the new
Trustee. The new Trustee shall have all the rights and powers of the former
Trustee, including ownership rights in Trust assets. The former Trustee shall
execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.
12. AMENDMENT AND TERMINATION.
(a) The Trust is irrevocable but this Agreement may be amended
with the written consent of the Trustee and all beneficiaries. No amendment will
be permitted that would vest the assets of the Trust in, or at the direction of,
the Company except as required pursuant to Section 1(d) hereof,
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plans. Upon termination of the Trust, any assets remaining
in the Trust shall be returned to the Company.
13. MISCELLANEOUS.
(a) Any provisions of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
(d) For purposes of this Trust, Change of Control shall mean the
purchase or other acquisition by any person, entity or group of persons, within
the meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934
('Act'), or any comparable successor provisions, of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of
either the outstanding shares of common stock or the combined
-8-
voting power of the company's then outstanding voting securities entitled to
vote generally, or the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 50 percent of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated the Company's
then outstanding securities, or a liquidation or dissolution of the Company or
of the sale of all or substantially all of the Company's assets.
14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be January 3, 1997.
The Company and the Trustee have executed this Trust Agreement effective
as provided herein.
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
TITLE: EXECUTIVE VICE PRESIDENT
ATTEST:
(CORPORATE SEAL)
By: /s/ Xxxxx Xxxx
---------------------
Assistant Secretary
TRUSTEE:
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXX
-9-
APPENDIX ONE
TO
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
Plans Currently in Place Reflecting Agreement with the Following Employees:
1. Nonqualified Deferred Compensation Agreement with Xxxx X. Xxxxxx.
2. Nonqualified Deferred Compensation Agreement with Xxxx Xxxxxx.
APPENDIX TWO
TO
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
The amount of the initial deposit to the RailAmerica, Inc. Nonqualified
Deferred Compensation Trust is Twenty Dollars ($20.00).
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
EXHIBIT 2
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
AMENDMENT TO RAILAMERICA, INC.
NONQUALIFIED DEFERRED COMPENSATION TRUST
This Amendment to the RailAmerica, Inc. Nonqualified Deferred
Compensation Trust (the "TRUST") is executed effective April ___, 2004.
WHEREAS, the Trust was established effective January 3, 1997, pursuant
to agreement between RailAmerica, Inc. (the "COMPANY") and Xxxxxx X. Xxxxxxxx
(the "TRUSTEE") to hold assets contributed to fund benefits under certain
nonqualified deferred compensation plans or agreements;
WHEREAS, the current primary beneficiary of the Trust is Xxxx X. Xxxxxx
(the "EXECUTIVE"), who as served as Chairman, President and Chief Executive
Officer of the Company; and
WHEREAS, Section 12 of the Trust provides that it may be amended with
the written consent of the Trustee and all beneficiaries;
NOW, THEREFORE, the Trust is hereby amended as follows, effective as
provided above:
1. Section 2 of the Trust is amended to add the following subsection
(d):
(d) If, due to changed federal law or regulations, the Trustee
or a Plan participant determines that any amount contributed to the
Trust on behalf of the participant should be includable in the
participant's gross income for federal income tax purposes before
distribution of such amounts under the Plan otherwise would be
permitted, such amounts, as adjusted for investment performance, shall
be paid immediately to the participant, notwithstanding any other
provision of the Plan or of the participant's election concerning
payment. The amount of any such payment shall reduce the participant's
account under the Plan.
2. Section 15 of the Trust is added to read as follows:
15. CONTROL BY COMMITTEE
(a) Except as provided in this SECTION 15, the rights of the
Company provided in the Trust shall shift to a committee (the
"COMMITTEE") to be appointed by Xxxx X. Xxxxxx ("XXXXXX"); provided,
however, that the Company's rights under Sections 10, 11 and 12 hereof
shall remain with the Company. The Committee shall never have any
obligation to pay benefits due under the Plans nor the obligation to
pay Trust expenses, which obligations shall remain with the Company.
Nothing in this SECTION 15(A) shall change in any way the rights of the
Company and its creditors under SECTION 3 hereof.
Page 1 of 2
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
(b) The Committee provided for in the preceding paragraph may
consist of from one (1) to five (5) persons. Marino shall notify the
Company and the Trustee(s) then serving of the appointment of the
Committee members and of their identity. Committee members serve at
Marino's discretion. Under no circumstances, however, may Marino name
himself or anyone dependent on him for support as a Trustee of the
Trust or as the majority in number of Committee members.
(c) Nothing herein shall, or shall be deemed, to permit the
Committee to amend, modify or terminate this Agreement without the
prior written consent of the Company.
The Company, the Trustee and the current beneficiaries have executed
this Amendment to RailAmerica, Inc. Nonqualified Deferred Compensation Trust
effective as provided herein.
RAILAMERICA, INC.
By:
------------------------------------
Title:
---------------------------------
TRUSTEE:
----------------------------------------
Xxxxxx X. Xxxxxxxx
BENEFICIARIES:
----------------------------------------
XXXX X. XXXXXX
----------------------------------------
XXXX XXXXXX
Page 2 of 2
EXHIBIT 4
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 Xxxx X. Xxxxxx (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
- 1 -
(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
- 2 -
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 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
- 3 -
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.
- 4 -
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.
- 5 -
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:
Xxxx X. Xxxxxx Xxxxx, Gildan, Xxxxxx,
0000 Xxxxx Xxxxx Xxxxx Xxxxxx & White, P.A.
Xxxx Xxxxx, Xxxxxxx 00000 United Xxxxxxxx Xxxx Xxxxx
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
and Suite 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
301: Yamato Road Attention: Xxxxxxxx X. Xxxxx, Esq.
Suite 2222
Xxxx Xxxxx, Xxxxxxx 00000
If to the Company: With a copy to:
RailAmerica, Inc. RailAmerica, Inc.
000 Xxxxxx Xxxx 000 Xxxxxx Xxxx
Xxxxx 0000 Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
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.
- 6 -
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 misrepresentation 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.
- 7 -
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/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxxx
------------------------------ -------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx Xxxxxxxx, Chairman
Secretary Compensation Committee
/s/ Xxxxxxx Xxxxxx /s/ Xxxx X. Xxxxxx
------------------------------ -----------------------------------
Witness Xxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxxxx
------------------------------
Witness
- 8 -
RAILAMERICA, INC.
INCENTIVE STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RAILAMERICA, INC. (the "Company") hereby grants, as
of April 8, 1999("Date of Grant"), to Xxxx X. Xxxxxx (the "Optionee") an option
(the "Option") to purchase up to 34,284 shares of the Company's Common Stock.
$.001 par value per share (the "Shares"), at an exercise price per share equal
to $8.75. The Option shall be subject to the terms and conditions set forth
herein. The Option was issued pursuant to the Company's 1998 Executive Incentive
Compensation Plan, as amended from time to time (the "Plan"), which is
incorporated herein for all purposes. The Option is an Incentive Stock Option,
and not a nonqualified stock option. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 12
of this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the Extent that the Option has
become exercisable with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the "Vesting Date") upon which
the Optionee shall be entitled to exercise the Option with respect to the number
of Shares granted as indicated beside the date, provided that the Optionee has
been continuously employed by the Company or a Subsidiary through and on the
applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
11,428 Shares April 8, 2000
11,428 Shares April 8, 2001
11,428 Shares April 8, 2002
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Upon an Optionee's
termination of employment with the Company and its Subsidiaries, any unvested
portion of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of
1
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Committee in its sole discretion have been made for Optionee's, payment to
the Company of the amount, if any, that is necessary to be withheld in
accordance with applicable Federal or state withholding requirements. No Shares
will be issued pursuant to the Option unless and until such issuance and such
exercise shall comply with all relevant provisions of applicable law, including
the requirements of any stock exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), or (d) such other consideration or in such other manner
as may be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of:
(i) three months after the date on which the Optionee's
employment is terminated other than by reason of (A) Cause, which, solely for
purposes of this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's willful misconduct or gross negligence, (B) a mental
or physical disability (within the meaning of Internal Revenue Code Section
22(e)) of the Optionee as determined by a medical doctor satisfactory to the
Committee, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's
employment for Cause;
(iii) twelve months after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Section 22(e) of the Code) as determined by a medical doctor
satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of the death of the Optionee, or, if later. (B)
three months after the date on which the Optionee shall die if such death shall
occur during the one year period specified in Subsection 6(a)(iii) hereof; or
(v) the tenth anniversary of the date as of which the Option
is granted.
2
(b) To the extent not previously exercised, (i) the Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, unless the
successor corporation, or a parent or subsidiary of such successor corporation,
assumes the Option or substitutes an equivalent option or right pursuant to
Section 10(c) of the Plan and (ii) the Committee or the Board in its sole
discretion may by written notice ("cancellation notice") cancel, effective upon
the consummation of any corporate transaction described in Subsection 9(b)(i) of
the Plan in which the Company does survive, the Option (or portion thereof) that
remains unexercised on such date. The Committee or the Board shall give written
notice of any proposed transaction referred to in this Section 6(b) a reasonable
period of time prior to the closing date for such transaction (which notice may
be given either before or after approval of such transaction), in order that
Optionee may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
7. Transferability. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option in whole or in part
prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event of a "Change in Control", as defined
in the Plan or in Exhibit "A", if any, attached hereto, or in the event that
the Committee or the Board exercises its discretion to provide a cancellation
notice with respect to the Option pursuant to Section 6(b) hereof. The Company
may in its sole discretion accelerate the date on which this Option may be
exercised and may accelerate the vesting of any Shares subject to this Option or
previously acquired by the exercise of any Option.
10. No Right to Continued Employment. Neither the Option nor this
Agreement shall confer upon, the Optionee any right to continued employment or
service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Florida.
12. Incentive Stock Option Treatment. The terms of this Option shall be
interpreted in a manner consistent with the intent of the Company and the
Optionee that the Option qualify as an Incentive Stock Option under Section 422
of the Code. If any provision of the Plan or the Agreement shall he
impermissible in order for the Option to qualify as an Incentive Stock
3
Option then the Option shall he construed and enforced as if such provision had
never been included in the Plan or the Option.
13. Interpretation / Provision of Plan Control. This Agreement is
subject to all the terms conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof. and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee or
the Board as may be in effect from time to time. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. The Optionee accepts the Option subject to all the terms
and provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee or the Board upon any questions arising under the Plan and this
Agreement.
14. Notices. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company. to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX. Boca Raton 33487. or if the Company should move its principal
office, to such principal office, and, in the case of the Optionee, to the
Optionee's last permanent address as shown on the Company's records, subject to
the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.
15. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE.
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the exercise
price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject the Optionee to the alternative minimum tax
in the year of exercise.
(b) Disposition of Shares. If Shares transferred pursuant to the
Option are held for at least one year after exercise and are disposed of at
least two years after the date of grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an Option are disposed of within such
one-year period or within two years after the Date of Grant, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the exercise price and the
lesser of (1) the fair market value of the Shares on the date of exercise or (2)
the sale price of the Shares.
(c) Notice of Disqualifying Disposition of Option Shares. If
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Option on or before the later of
4
(1) the: date two years after the date of grant. (2) the date one year after the
date of exercise, the Optionee shall immediately notify the Company in writing
of such disposition. Optionee agrees that Optionee may be subject to the income
tax withholding by the Company on the compensation income recognized by the
Optionee from the early disposition by payment in cash or out of the current
earnings paid to the Optionee.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 20th day of July, 2001.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx D, Xxxxxxxx
-------------------------------
Xxxxxx D, Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or the is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01
OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
5
EXHIBIT"A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries, (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest: or (3) any employee benefit plan of the Company or any of its
Subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board: or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then out
standing voting securities in substantially the same proportions as their
ownership immediately prior to such, reorganization, merger, or consolidation.
(2) a liquidation or dissolution of the Company. or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
RAILAMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1 Grant of option. Rail America. Inc. (the "Company") hereby grants, as of
April 8. 1999 (the "Date of Grant") to Xxxx X. Xxxxxx (the "Optionee") an
option (the "Option") to purchase up to 15,716 shares of the Company's
Common Stock. $.001 par value per share (the "Shares"), at an exercise
price put share equal to $8.75. The Option shall be subject to the terms
and conditions set forth herein. The Option was issued pursuant to the
Company's 1998 Executive Incentive Compensation Plan (the "Plan"), which
is incorporated herein for all purposes. The Option is a Non-Qualified
Stock Option, and not an incentive Stock Option within the meaning of
Section 422 of the internal Revenue Code of 1986, as amended (the "Code").
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees
to be bound by all of the terms and conditions hereof and thereof and all
applicable laws and regulation.
2 Definition. Unless otherwise provided heroin, terms used herein that are
defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of this
Agreement, or in the Plan, the Option shall be exercisable in whole or in
part and cumulatively according to the following schedule, provided that
the Optionee has been continuously employed by the Company or a Subsidiary
through and on applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
5.238 Shares April 8, 2000
5,239 Shares April 8, 2001
5.239 Shares April 8, 2002
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting
Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon an Optionee's termination of employment with the Company and its
Subsidiaries, any unvested portion of the Option shall terminate and be
null and void.
4. Method of Exercise. This Option shall be exercisable in whole or in part
in accordance with the exercise schedule set forth in Section 3 hereof by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder's investment
intent with respect to such Shares as may be required by the Company. Such
written notice shall be signed by the Optionee and shall be delivered in
person or by
-1-
certified mail to the Secretary of [he Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be
deemed to be exercised after both (a) receipt by the Company of such
written notice accompanied by the exercise price and (b) arrangements that
are satisfactory to the Company in its sole discretion have been made for
Optionee's payment to the Company of the amount that is necessary to be
withheld in accordance with applicable Federal or state withholding
requirements. No Shares will be issued pursuant to the Option unless and
until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise xxxxx shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a)
cash: ( b) check; (c) with Shares that have been held by the Optionee for
at least six months (or such other Shares as the Company determines will
not cause the Company to recognize for financial accounting purposes a
charge for compensation expense); or (d) such other consideration or in
such other manner as may be determined by the Board or the Committee in
its absolute discretion.
6. Termination of option
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of:
(i) unless the Committee or the Board otherwise determines in
writing in its sole discretion to provide for a longer period, three
months after the date on which the Optionee's employment with the
Company is terminated for any reason other than by reason of (A)
Cause, which, solely for purposes of this Agreement, shall mean the
termination of the Optionee's employment by reason of the Optionee's
willful misconduct or gross negligence. (B) a mental or physical
disability (within the meaning of Section 22(e) of the Internal
Revenue Code) of the Optionee as determined by a medical doctor
satisfactory to the Committee or the Board, or (C) death;
(ii) immediately upon the termination of the Optionee's employment
with the Company for Cause;
(iii)twelve months after the date on which the Optionee's employment
with the Company is terminated by reason of a menial or physical
disability (within the meaning of Section 22(c) of the Internal
Revenue Code) as determined by a medical doctor satisfactory to the
Committee or the Board:
(iv) twelve months after the date of termination of the Optionee's
employment with the Company by reason of the death of the Optionee
(or if later, three months after the date on which the Optionee
shall die if such death shall occur during the one year period
specified in paragraph (c) of this Section 5): or
-2-
(v) the tenth (10th) anniversary of the Date of Grant.
(b) The Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice") cancel, effective upon
the date of the consummation of any Corporate Transaction described
in Section 9(b)(ii) of the Plan or the consummation of any
reorganization, merger, consolidation or other transaction in which
the Company does not survive, any Option that remains unexercised on
such date. Such cancellation notice shall be given a reasonable
period of time prior to the proposed date of such cancellation and
may be given either before or after approval of such corporate
transaction, in order that the Optionee may have a reasonable period
of time prior to the closing date of the corporate transaction
within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may
become exercisable upon the closing date of such corporate
transaction). The Optionee may condition his exercise of the Option
upon the consummation of a transaction referred to in this Section
6(b).
7 Transferability. The Option granted hereby is not transferable otherwise
than by will or under the applicable laws of descent and distribution. and
during the lifetime of the Optionee the Option shall be exercisable only
by the Optionee, or the Optionee's guardian or legal representative. In
addition, the Option shall not be assigned, negotiated, pledged or
hypothecated in any way (whether by operation of law or otherwise), and
the Option shall not be subject to execution, attachment or similar
process, Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option by
reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately become null and void
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights
and privileges of, a stockholder of the Company with respect to any shares
of Stock purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option.
(a) This Option shall become immediately fully exercisable in the event
of a "Change in Control", as defined in the Plan or in Exhibit "A",
if any. attached hereto, or in the event that the Committee or the
Board exercises its discretion to provide a cancellation notice with
respect to the Option pursuant to Section 6(b) hereof.
(b) The Company may in its sole discretion accelerate the date on which
this Option may be exercised and may accelerate the vesting of any
Shares subject to this Option or previously acquired by the exercise
of any Option
10. No Rights to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or
service with the Company,
-3-
11. Amendment. The Company may from time to time amend, alter, suspend,
discontinue or terminate the Plan and may amend or alter the Option,
provided, however, that no such amendment, alteration, suspension,
discontinuance or termination of the Plan or the Option shall materially
and adversely affect the rights or benefits of the Optionee under the
Option without the consent of the Optionee.
12. Withholding. If at any time specified herein for the making of any
issuance or delivery of the Option or Shares to the Optionee or
beneficiary, any law or regulation of any governmental authority having
jurisdiction in the premises shall require the Company to withhold, or to
make any deduction for, any taxes or take any other action in connection
with the issuance or delivery then to be made, such issuance or delivery
shall be deferred until such withholding or deduction shall have been
provided for by the Optionee or beneficiary, or other appropriate action
shall have been taken.
13. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
14. Interpretation / Provisions of Plan Control. This Agreement is subject to
all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the
Committee or the Board as may be in effect from time to time. If and to
the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of the Plan, the Plan shall control, and
this Agreement shall be deemed to be modified accordingly. The Optionee
accepts the Option subject to all the terms and provisions of the Plan and
this Agreement. The undersigned Optionee hereby accepts as binding,
conclusive and final all decisions or interpretations of the Committee or
the Board upon any questions arising under the Plan and this Agreement.
15. Notices. Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited
in the United States mail, registered, postage prepaid, and addressed, in
the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxx, X.X., Xxxx Xxxxx, XX 00000, or if the Company should move its
principal office, to such principal office, and, in the case of the
Optionee, to the Optionee's last permanent address as shown on the
Company's records, subject to the right of either party to designate some
other address at any time hereafter in a notice satisfying the
requirements of this Section.
16. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING Of THE SHARES.
-4-
(a) Exercise of Option. There may be regular federal income tax
liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.
If Optionee is an employee, the Company will be required to withhold
from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one year, any
gain realized on disposition of the Shares will be treated as
long-term capital gain for federal) income tax purposes.
IN WITNESS WHEREOF, the undersigned have execute this Agreement as of the
20th day of July, 2001.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01 OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
-5-
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of the Agreement a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13 (d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries, (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest: or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved
by a vote (of at least a majority of the directors then comprising the Incumbent
Board other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then
outstanding voting securities in substantially the same proportions as their
ownership immediately prior to such reorganization, merger, or consolidation,
(2) a liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
-6-
RAILAMERICA, INC.
INCENTIVE STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RAILAMERICA, INC. (the "Company") hereby grants, as
of January 1, 2000 ("Date of Grant"), to Xxxx X. Xxxxxx (the "Optionee") an
option (the "Option") to purchase up to 11,111 shares of the Company's Common
Stock, $.001 par value per share (the "Shares"), at an exercise price per share
equal to $9.00. The Option shall be subject to the terms and conditions set
forth herein. The Option was issued pursuant to the Company's 1998 Executive
Incentive Compensation Plan, as amended from time to time (the "Plan"), which is
incorporated herein for all purposes. The Option is an Incentive Stock Option,
and not a nonqualified stock option. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 12
of this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a percentage of Shares as provided below,
the Option may thereafter be exercised by the Optionee, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the "Vesting Date") upon which
the Optionee shall be entitled to exercise the Option with respect to the number
of Shares granted as indicated beside the date, provided that the Optionee has
been continuously employed by the Company or a Subsidiary through and on the
applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
11,111 Shares January 1, 2000
-0- Shares N/A
-0- Shares N/A
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Upon an Optionee's
termination of employment with the Company and its Subsidiaries, any unvested
portion of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of
1
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Committee in its sole discretion have been made for Optionee's payment to
the Company of the amount, if any, that is necessary to be withheld in
accordance with applicable Federal or state withholding requirements. No Shares
will be issued pursuant to the Option unless and until such issuance and such
exercise shall comply with all relevant provisions of applicable law, including
the requirements of any stock exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), or (d) such other consideration or in such other manner
as may be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of:
(i) three months after the date on which the Optionee's
employment is terminated other than by reason of (A) Cause, which, solely for
purposes of this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's willful misconduct or gross negligence, (B) a mental
or physical disability (within the meaning of Internal Revenue Code Section
22(e)) of the Optionee as determined by a medical doctor satisfactory to the
Committee, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's
employment for Cause;
(iii) twelve months after the date on which the Optionee's
employment is terminated by reason of mental or physical disability (within the
meaning of Section 22(e) of the Code) as determined by a medical doctor
satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of the death of the Optionee, or, if later, (B)
three months after the date on which the Optionee shall die if such death shall
occur during the one year period specified in Subsection 6(a)(iii) hereof: or
(v) the tenth anniversary of the date as of which the Option
is granted.
2
(b) To the extent not previously exercised, (i) the Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, unless the
successor corporation, or a parent or subsidiary of such successor corporation,
assumes the Option or substitutes an equivalent option or right pursuant to
Section 10(c) of the Plan, and (ii) the Committee or the Board in its sole
discretion may by written notice ("cancellation notice") cancel, effective upon
the consummation of any corporate transaction described in Subsection 9(b)(i) of
the Plan in which the Company does survive, the Option (or portion thereof) that
remains unexercised on such date. The Committee or the Board shall give written
notice of any proposed transaction referred to in this Section 6(b) a reasonable
period of time prior to the closing date for such transaction (which notice may
be given either before or after approval of such transaction), in order that
Optionee may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
7. Transferability. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event of a "Change in Control", as defined
in the Plan or in Exhibit "A", if any, attached hereto, or in the event that the
Committee or the Board exercises its discretion to provide a cancellation notice
with respect to the Option pursuant to Section 6(b) hereof. The Company may in
its sole discretion accelerate the date on which this Option may be exercised
and may accelerate the vesting of any Shares subject to this Option or
previously acquired by the exercise of any Option.
10. No Right to Continued Employment. Neither the Option nor this
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Florida.
12. Incentive Stock Option Treatment. The terms of this Option shall be
interpreted in a manner consistent with the intent of the Company and the
Optionee that the Option qualify as an Incentive Stock Option under Section 422
of the Code. If any provision of the Plan or the Agreement shall be
impermissible in order for the Option to qualify as an Incentive Stock
3
Option, then the Option shall be construed and enforced as if such provision had
never been included in the Plan or the Option.
13. Interpretation/Provisions of Plan Control. This Agreement is subject
to all terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan adopted by the Committee or the Board as
may be in effect from time to time. If and to the extent that this Agreement
conflicts or is inconsistent with the terms, conditions and provisions of the
Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. The Optionee accepts the Option subject to all the terms and
provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretation of the
Committee or the Board upon any questions arising under the Plan and this
Agreement.
14. Notices. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxxxxxxx. XX, Xxxx Xxxxx 00000, or if the Company should move its principal
office, to such principal office, and, in the case of the Optionee, to the
Optionee's last permanent address as shown on the Company's records, subject to
the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.
15. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the exercise
price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject the Optionee to the alternative minimum tax
in the year of exercise.
(b) Disposition of Shares. If Shares transferred pursuant to the
Option are held for at least one year after exercise and are disposed of at
least two years after the date of grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an Option are disposed of within such
one-year period or within two years after the Date of Grant, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the exercise price and the
lesser of (1) the fair market value of the Shares on the date of exercise, or
(2) the sale price of the Shares.
(c) Notice of Disqualifying Disposition of Option Shares. If
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Option on or before the later of
4
(1) the date two years after the date of grant, (2) the date one year after the
date of exercise, the Optionee shall immediately notify the Company in writing
of such disposition. Optionee agrees that Optionee may be subject to the income
tax withholding by the Company on the compensation income recognized by the
Optionee from the early disposition by payment in cash or out of the current
earnings paid to the Optionee.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of July, 2001.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01
OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
5
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries. (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest, or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stock-holders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then
outstanding voting securities in substantially the same proportions as their
ownership immediately prior to such reorganization, merger, or consolidation.
(2) a liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
RAILAMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RailAmerica, Inc. (the "Company") hereby grants, as of
January 1, 2000 (the "Date of Grant") to Xxxx X. Xxxxxx (the "Optionee")
an option (the "Option") to purchase up to 488,889 shares of the Company's
Common Stock, $.001 par value per share (the "Shares"), at an exercise
price per share equal to $9.00. The Option shall be subject to the terms
and conditions set forth herein. The Option was issued pursuant to the
Company's 1998 Executive Incentive Compensation Plan (the "Plan"), which
is incorporated herein for all purposes. The Option is a Non-Qualified
Stock Option, and not an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees
to be bound by all of the terms and conditions hereof and thereof and all
applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that are
defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of this
Agreement, or in the Plan, the Option shall be exercisable in whole or in
part and cumulatively according to the following schedule, provided that
the Optionee has been continuously employed by the Company or a Subsidiary
through and on the applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
155,555 Shares January 1, 2000
166,667 Shares January 1, 2001
166,667 Shares January 1, 2002
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting
Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon an Optionee's termination of employment with the Company and its
Subsidiaries, any unvested portion of the Option shall terminate and be
null and void.
4. Method of Exercise. This Option shall he exercisable in whole or in part
in accordance with the exercise schedule set forth in Section 3 hereof by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder's investment
intent with respect to such Shares as may be required by the Company. Such
written notice shall be signed by the Optionee and shall be delivered in
person or by
-1-
certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be
deemed to be exercised after both (a) receipt by the Company of such
written notice accompanied by the exercise price and (b) arrangements that
are satisfactory to the Company in its sole discretion have been made for
Optionee's payment to the Company of the amount that is necessary to be
withheld in accordance with applicable Federal or state withholding
requirements. No Shares will be issued pursuant to the Option unless and
until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; (c) with Shares that have been held by the Optionee for
at least six months (or such other Shares as the Company determines will
not cause the Company to recognize for financial accounting purposes a
charge for compensation expense); or (d) such other consideration or in
such other manner as may be determined by the Board or the Committee in
its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of:
(i) unless the Committee or the Board otherwise determines in
writing in its sole discretion to provide for a longer period, three
months after the date on which the Optionee's employment with the
Company is terminated for any reason other than by reason of (A)
Cause, which, solely for purposes of this Agreement, shall mean the
termination of the Optionee's employment by reason of the Optionee's
willful misconduct or gross negligence, (B) a mental or physical
disability (within the meaning of Section 22(e) of the Internal
Revenue Code) of the Optionee as determined by a medical doctor
satisfactory to the Committee or the Board, or (C) death;
(ii) immediately upon the termination of the Optionee's employment
with the Company for Cause;
(iii) twelve months after the date on which the Optionee's
employment with the Company is terminated by reason of a mental or
physical disability (within the meaning of Section 22(e) of the
Internal Revenue Code) as determined by a medical doctor
satisfactory to the Committee or the Board;
(iv) twelve months after the date of termination of the Optionee's
employment with the Company by reason of the death of the Optionee
(or if later, three months after the date on which the Optionee
shall die if such death shall occur during the one year period
specified in paragraph (c) of this Section 5); or
-2-
(v) the tenth (10th) anniversary of the Date of Grant.
(b) The Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice") cancel, effective upon
the date of the consummation of any Corporate Transaction described
in Section 9(b)(ii) of the Plan or the consummation of any
reorganization, merger, consolidation or other transaction in which
the Company does not survive, any Option that remains unexercised on
such date. Such cancellation notice shall be given a reasonable
period of time prior to the proposed date of such cancellation and
may be given either before or after approval of such corporate
transaction, in order that the Optionee may have a reasonable period
of time prior to the closing date of the corporate transaction
within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may
become exercisable upon the closing date of such corporate
transaction). The Optionee may condition his exercise of the Option
upon the consummation of a transaction referred to in this Section
6(b).
7. Transferability. The Option granted hereby is not transferable otherwise
than by will or under the applicable laws of descent and distribution, and
during the lifetime of the Optionee the Option shall be exercisable only
by the Optionee, or the Optionee's guardian or legal representative. In
addition, the Option shall not be assigned, negotiated, pledged or
hypothecated in any way (whether by operation of law or otherwise), and
the Option shall not he subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option by
reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately become null and void.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights
and privileges of, a stockholder of the Company with respect to any shares
of Stock purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option.
(a) This Option shall become immediately fully exercisable in the event
of a "Change in Control", as defined in the Plan or in Exhibit "A",
if any, attached hereto, or in the event that the Committee or the
Board exercises its discretion to provide a cancellation notice with
respect to the Option pursuant to Section 6(b) hereof.
(b) The Company may in its sole discretion accelerate the date on which
this Option may be exercised and may accelerate the vesting of any
Shares subject to this Option or previously acquired by the exercise
of any Option.
10. No Rights to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or
service with the Company.
-3-
11. Amendment. The Company may from time to time amend, alter, suspend,
discontinue or terminate the plan and may amend or alter the Option;
provided, however, that no such amendment, alteration, suspension,
discontinuance or termination of the Plan or the Option shall materially
and adversely affect the rights or benefits of the Optionee under the
Option without the consent of the Optionee.
12. Withholding. If at anytime specified herein for the making of any issuance
or delivery of the Option or Shares to the Optionee or beneficiary, any
law or regulation of any governmental authority having jurisdiction in the
premises shall require the Company to withhold, or to make any deduction
for, any taxes or take any other action in connection with the issuance or
delivery then to be made, such issuance or delivery shall be deferred
until such withholding or deduction shall have been provided for by the
Optionee or beneficiary, or other appropriate action shall have been
taken.
13. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
14. Interpretation / Provisions of Plan Control. This Agreement is subject to
all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the
Committee or the Board as may be in effect from time to time. If and to
the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of the Plan, the Plan shall control, and
this Agreement shall be deemed to be modified accordingly. The Optionee
accepts the Option subject to all the terms and provisions of the Plan and
this Agreement. The undersigned Optionee hereby accepts as binding,
conclusive and final all decisions or interpretations of the Committee or
the Board upon any questions arising under the Plan and this Agreement.
15. Notices. Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited
in the United States mail, registered, postage prepaid, and addressed, in
the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxx, X.X., Xxxx Xxxxx, XX 00000, or if the Company should move its
principal office, to such principal office, and, in the case of the
Optionee, to the Optionee's last permanent address as shown on the
Company's records, subject to the right of either part to designate some
other address at any time hereafter in a notice satisfying the
requirements of this Section.
16. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
-4-
(a) Exercise of Option. There may be a regular federal income tax
liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.
If Optionee is an employee, the Company will he required to withhold
from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one year, any
gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of July, 2001.
COMPANY:
RAILAMERICA INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01 OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
-5-
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2)of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries, (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest; or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stock-holders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then outstanding
voting securities in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, or consolidation. (2) a
liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
-6-
RAILAMERICA, INC.
INCENTIVE STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RAILAMERICA. INC. (the "Company") hereby grants, as
of June 22, 2001 ("Date of Grant"), to Xxxx 0. Xxxxxx (the "Optionee") an option
(the "Option") to purchase up to 8.326 shares of the Company's Common Stock,
$.001 par value per share (the "Shares"), at an exercise price per share equal
to $12.01. The Option shall be subject to the terms and conditions set forth
herein. The Option was issued pursuant to the Company's 1998 Executive Incentive
Compensation Plan, as amended from time to time (the "Plan"), which is
incorporated herein for all purposes. The Option is an Incentive Stock Option,
and not a nonqualified stock option. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan, and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 12
of this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee, in whole or in part at any
time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the "Vesting Date") upon which
the Optionee shall be entitled to exercise the Option with respect to the number
of Shares granted as indicated beside the date, provided that the Optionee has
been continuously employed by the Company or a Subsidiary through and on the
applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
-0- Shares N/A
-0- Shares N/A
8.326 Shares June 22, 2003
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Upon an Optionee's
termination of employment with the Company and its Subsidiaries, any unvested
portion of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of
1
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Committee in its sole discretion have been made for Optionee's payment to
the Company of the amount, if any, that is necessary to be withheld in
accordance with applicable Federal or state withholding requirements. No Shares
will be issued pursuant to the Option unless and until such issuance and such
exercise shall comply with all relevant provisions of applicable law, including
the requirements of any stock exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), or (d) such other consideration or in such other manner
as may be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of:
(i) three months after the date on which the Optionee's
employment is terminated other than by reason of (A) Cause, which, solely for
purposes of this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's willful misconduct or gross negligence. (B) a mental
or physical disability (within the meaning of Internal Revenue Code Section
22(e)) of the Optionee as determined by a medical doctor satisfactory to the
Committee, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's
employment for Cause;
(iii) twelve months after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Section 22(e) of the Code) as determined by a medical doctor
satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of the death of the Optionee, or, if later, (B)
three months after the date on which the Optionee shall die if such death shall
occur daring the one year period specified in Subsection 6(a)(iii) hereof; or
(v) the tenth anniversary of the date as of which the Option
is granted.
2
(b) To the extent not previously exercised. (i) the Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, unless the
successor corporation, or a parent or subsidiary of such successor corporation,
assumes the Option or substitutes an equivalent option or right pursuant to
Section 10(c) of the Plan, and (ii) the Committee or the Board in its sole
discretion may by written notice ("cancellation notice") cancel, effective upon
the consummation of any corporate transaction described in Subsection 9(b)(i) of
the Plan in which the Company does survive, the Option (or portion thereof) that
remains unexercised on such date. The Committee or the Board shall give written
notice of any proposed transaction referred to in this Section 6(b) a reasonable
period of time prior to the closing date for such transaction (which notice may
be given either before or after approval of such transaction), in order that
Optionee may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
7. Transferability. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event of a "Change in Control", as defined
in the Plan or in Exhibit "A", if any, attached hereto, or in the event that the
Committee or the Board exercises its discretion to provide a cancellation notice
with respect to the Option pursuant to Section 6(b) hereof. The Company may in
its sole discretion accelerate the date on which this Option may be exercised
and may accelerate the vesting of any Shares subject to this Option or
previously acquired by the exercise of any Option.
10. No Right to Continued Employment. Neither the Option nor this
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Florida.
12. Incentive Stock Option Treatment. The terms of this Option shall be
interpreted in a manner consistent with the intent of the Company and the
Optionee that the Option qualify as an Incentive Stock Option under Section 422
of the Code. If any provision of the Plan or the Agreement shall be
impermissible in order for the Option to qualify as an Incentive Stock
3
Option, then the Option shall be construed and enforced as if such provision had
never been included in the Plan or the Option.
13. Interpretation/Provisions of Plan Control. This Agreement is subject
to all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan adopted by the Committee or the Board as
may be in effect from time to time. If and to the extent that this Agreement
conflicts or is inconsistent with the terms, conditions and provisions of the
Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. The Optionee accepts the Option subject to all the terms and
provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee or the Board upon any questions arising under the plan and this
Agreement.
14. Notices. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX, Xxxx Xxxxx 00000, or if the Company should move its principal
office, to such principal office, and, in the case of the Optionee, to the
Optionee's last permanent address as shown on the Company's records, subject to
the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.
15. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the exercise
price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject the Optionee to the alternative minimum tax
in the year of exercise.
(b) Disposition of Shares. If Shares transferred pursuant to the
Option are held for at least one year after exercise and are disposed of at
least two years after the date of grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an Option are disposed of within such
one-year period or within two years after the Date of Grant, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates to the extent of the difference between the exercise price and the
lesser of (1) the fair market value of the Shares on the date of exercise, or
(2) the sale price of the Shares.
(c) Notice of Disqualifying Disposition of Option Shares. If
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Option on or before the later of
4
(1) the date two years after the date of grant, (2) the date one year after the
date of exercise, the Optionee shall immediately notify the Company in writing
of such disposition. Optionee agrees that Optionee may be subject to the income
tax withholding by the Company on the compensation income recognized by the
Optionee from the early disposition by payment in cash or out of the current
earnings paid to the Optionee.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of July, 2001.
COMPANY:
RAILAMERICA, INC.
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01
OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
5
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
Ownership of a "Controlling interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries. (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest; or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stock-holders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board, or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3 % of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then
outstanding voting securities in substantially the same proportions as their
ownership immediately prior to such reorganization, merger, or consolidation,
(2) a liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
RAILAMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option RailAmerica,. Inc. (the "Company") hereby grants, as of
June 22, 2001 (the "Date of Grant") to Xxxx X. Xxxxxx (the "Optionee") an
option (the "Option"') to purchase up to 341,674 shares of the Company's
Common Stock, $.001 par value per share (the "Shares"), at an exercise
price per share equal to $12.01. The Option shall be subject to the terms
and conditions set forth herein. The Option was issued pursuant to the
Company's 1998 Executive Incentive Compensation Plan (the "Plan"), which
is incorporated herein for all purposes. The Option is a Non-Qualified
Stock Option, and not an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees
to be bound by all of the terms and conditions hereof and thereof and all
applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that are
defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of
this Agreement, or in the Plan, the Option shall be exercisable in whole
or in part and cumulatively according to the following schedule, provided
that the Optionee has been continuously employed by the Company or a
Subsidiary through and on the applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
116,667 Shares June 22, 2001
116,666 Shares June 22, 2002
108,341 Shares June 23, 2003
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting
Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon an Optionee's termination of employment with the Company and its
Subsidiaries, any unvested portion of the Option shall terminate and be
null and void.
4. Method of Exercise. This Option shall be exercisable in whole or in part
in accordance with the exercise schedule set forth in Section 3 hereof by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder's investment
intent with respect to such Shares as may be required by the Company. Such
written notice shall be signed by the Optionee and shall be delivered in
person or by
-1-
certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be
deemed to be exercised after both (a) receipt by the Company of such
written notice accompanied by the exercise price and (b) arrangements that
are satisfactory to the Company in its sole discretion have been made for
Optionee's payment to the Company of the amount that is necessary to be
withheld in accordance with applicable Federal or state withholding
requirements. No Shares will be issued pursuant to the Option unless and
until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; (c) with Shares that have been held by the Optionee for
at least six months (or such other Shares as the Company determines will
not cause the Company to recognize for financial accounting purposes a
charge for compensation expense); or (d) such other consideration or in
such other manner as may be determined by the Board or the Committee in
its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of:
(i) unless the Committee or the Board otherwise determines in
writing in its sole discretion to provide for a longer period, three
months after the date on which the Optionee's employment with the
Company is terminated for any reason other than by reason of (A)
Cause, which, solely for purposes of this Agreement, shall mean the
termination of the Optionee's employment by reason of the Optionee's
willful misconduct or gross negligence, (B) a mental or physical
disability (within the meaning of Section 22(e) of the Internal
Revenue Code) of the Optionee as determined by a medical doctor
satisfactory to the Committee or the Board, or (C) death;
(ii) immediately upon the termination of the Optionee's employment
with the Company for Cause;
(iii) twelve months after the date on which the Optionee's
employment with the Company is terminated by reason of a mental or
physical disability (within the meaning of Section 22(e) of the
Internal Revenue Code) as determined by a medical doctor
satisfactory to the Committee or the Board;
(iv) twelve months after the date of termination of the Optionee's
employment with the Company by reason of the death of the Optionee
(or if later, three months after the date on which the Optionee
shall die if such death shall occur during the one year period
specified in paragraph (c) of this Section 5); or
-2-
(v) the tenth (10th) anniversary of the Date of Grant.
(b) The Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice") cancel, effective upon
the date of the consummation of any Corporate Transaction described
in Section 9(b)(ii) of the Plan or the consummation of any
reorganization, merger, consolidation or other transaction in which
the Company does not survive, any Option that remains unexercised on
such date. Such cancellation notice shall be given a reasonable
period of time prior to the proposed date of such cancellation and
may be given either before or after approval of such corporate
transaction, in order that the Optionee may have a reasonable period
of time prior to the closing date of the corporate transaction
within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may
become exercisable upon the closing date of such corporate
transaction). The Optionee may condition his exercise of the Option
upon the consummation of a transaction referred to in this Section
6(b).
7. Transferability. The Option granted hereby is not transferable otherwise
than by will or under the applicable laws of descent and distribution, and
during the lifetime of the Optionee the Option shall be exercisable only
by the Optionee, or the Optionee's guardian or legal representative. In
addition, the Option shall not be assigned, negotiated, pledged or
hypothecated in any way (whether by operation of law or otherwise), and
the Option shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option by
reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately become null and void.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights
and privileges of, a stockholder of the Company with respect to any shares
of Stock purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option.
(a) This Option shall become immediately fully exercisable in the event
of a "Change in Control", as defined in the Plan or in Exhibit "A",
if any, attached hereto, or in the event that the Committee or the
Board exercises its discretion to provide a cancellation notice with
respect to the Option pursuant to Section 6(b) hereof.
(b) The Company may in its sole discretion accelerate the date on which
this Option may be exercised and may accelerate the vesting of any
Shares subject to this Option or previously acquired by the exercise
of any Option.
10. No Rights to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or
service with the Company.
-3-
11. Amendment. The Company may from time to time amend, alter, suspend,
discontinue or terminate the Plan and may amend or alter the Option;
provided, however, that no such amendment, alteration, suspension,
discontinuance or termination of the Plan or the Option shall materially
and adversely affect the rights or benefits of the Optionee under the
Option without the consent of the Optionee.
12. Withholding. If at any time specified herein for the making of any
issuance or delivery of the Option or Shares to the Optionee or
beneficiary, any law or regulation of any governmental authority having
jurisdiction in the premises shall require the Company to withhold, or to
make any deduction for, any taxes or take any other action in connection
with the issuance or delivery then to be made, such issuance or delivery
shall be deferred until such withholding or deduction shall have been
provided for by the Optionee or beneficiary, or other appropriate action
shall have been taken.
13. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
14. Interpretation / Provisions of Plan Control. This Agreement is subject to
all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the
Committee or the Board as may be in effect from time to time. If and to
the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of the Plan, the Plan shall control, and
this Agreement shall be deemed to be modified accordingly. The Optionee
accepts the Option subject to all the terms and provisions of the Plan and
this Agreement. The undersigned Optionee hereby accepts as binding,
conclusive and final all decisions or interpretations of the Committee or
the Board upon any questions arising under the Plan and this Agreement.
15. Notices. Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited
in the United States mail, registered, postage prepaid, and addressed, in
the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxx, X.X., Xxxx Xxxxx, XX 00000, or if the Company should move its
principal office, to such principal office, and, in the case of the
Optionee, to the Optionee's last permanent address as shown on the
Company's records, subject to the right of either party to designate some
other address at any time hereafter in a notice satisfying the
requirements of this Section.
16. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
-4-
(a) Exercise of Option. There may be a regular federal income tax
liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.
If Optionee is an employee, the Company will be required to withhold
from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one year,
any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of July, 2001.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
Executive VP and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 9.11.01 OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
-5-
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries. (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest; or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then outstanding
voting securities in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, or consolidation, (2) a
liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
-6-
RAILAMERICA, INC.
INCENTIVE STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RAILAMERICA, INC. (the "Company") hereby grants, as
of June 20, 2002 ("Date of Grant"), to Xxxx X. Xxxxxx (the "Optionee") an option
(the "Option") to purchase up to 9,804 shares of the Company's Common Stock,
$.001 par value per share (the "Shares"), at an exercise price per share equal
to $10.20. The Option shall be subject to the terms and conditions set forth
herein. The Option was issued pursuant to the Company's 1998 Executive Incentive
Compensation Plan, as amended from time to time (the "Plan"), which is
incorporated herein for all purposes. The Option is an Incentive Stock Option,
and not a nonqualified stock option. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 12
of this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the "Vesting Date") upon which
the Optionee stall be entitled to exercise the Option with respect to the number
of Shares granted as indicated beside the date, provided that the Optionee has
been continuously employed by the Company or a Subsidiary through and on the
applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
9,804 June 20, 2004
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date, Upon an Optionee's
termination of employment with the Company and its Subsidiaries, any unvested
portion of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
1
holder's investment intent with respect to such Shares as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price. This Option shall be deemed to be exercised after both
(a) receipt by the Company of such written notice accompanied by the exercise
price and (b) arrangements that are satisfactory to the Committee in its sole
discretion have been made for Optionee's payment to the Company of the amount,
if any, that is necessary to be withheld in accordance with applicable federal
or state withholding requirements. No Shares will be issued pursuant to the
Option unless and until such issuance and such exercise shall comply with all
relevant provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), or (d) such other consideration or in such other manner
as may be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate, and become null and void at the time of the earliest
to occur of;
(i) three months after the date on which, the Optionee's
employment is terminated other than by reason of (A) Cause, which, solely for
purposes of this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's willful misconduct or gross negligence, (B) a mental
or physical disability (within the meaning of Internal Revenue Code Section
22(e)) of the Optionee as determined by a medical doctor satisfactory to the
Committee, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's
employment for Cause;
(iii) twelve months after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Section 22(e) of the Code) as determined by a medical doctor
satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of the death of the Optionee, or if later, (B)
three months after the date on which the Optionee shall die if such death
shall occur during the one year period specified in Subsection 6(a)(iii) hereof;
or
(v) the tenth anniversary of the date as of which the Option
is granted.
(b) To the extent not previously exercised, (i) the Option shall
terminate immediately in the event of(1) the liquidation or dissolution of the
Company, or (2) any
2
reorganization, merger, consolidation or other form of corporate transaction in
which the Company does not survive, unless the successor corporation, or a
parent or subsidiary of such successor corporation, assumes the Option or
substitutes an equivalent option or right pursuant to Section 10(c) of the Plan,
and (ii) the Committee or the Board in its sole discretion may by written notice
("cancellation notice") cancel effective upon the consummation of any corporate
transaction described in Subsection 9(b)(i) of the Plan in which the Company
does survive, the Option (or portion thereof) that remains unexercised on such
date. The Committee or the Board shall give written notice of any proposed
transaction referred to in this Section 6(b) a reasonable period of time prior
to the closing date for such transaction (which notice may be given, either
before or after approval of such transaction), in order that Optionee may have a
reasonable period of time prior to the closing date of such transaction within
which to exercise the Option if and to the extent that it then is exercisable
(including any portion of the Option that may become exercisable upon the
closing date of such transaction). The Optionee may condition his exercise of
the Option upon the consummation of a transaction referred to in this Section
6(b).
7. Transferability. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event of a "Change in Control", as defined
in the Plan or in Exhibit "A", if any attached hereto, or in the event that the
Committee or the Board exercises its discretion to provide a cancellation notice
with respect to the Option pursuant to Section 6(b) hereof. The Company may in
its sole discretion accelerate the date on which this Option may be exercised
and may accelerate the vesting of any Shares subject to this Option or
previously acquired by the exercise of any Option.
10. No Right to Continued Employment. Neither the Option nor this
Agreement shall confer upon the Optionee any right to continued employment or
service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Florida.
12. Incentive Stock Option Treatment. The terms of this Option shall be
interpreted in a manner consistent with the intent of the Company and the
Optionee that the Option qualify as an Incentive Stock Option under Section 422
of the Code. If any provision of the Plan or the Agreement shall be
impermissible in order for the Option to qualify as an Incentive Stock Option,
then the Option shall be construed and enforced as if such provision had never
been included in the Plan or the Option.
3
13. Interpretation / Provisions of Plan Control. This Agreement is
subject to all the terms, conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee or
the Board as may be in effect from time to time. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. The Optionee accepts the Option subject to all the terms
and provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee or the Board upon any questions arising under the Plan and this
Agreement.
14. Notices. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at 0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX, Xxxx Xxxxx 00000, or if the Company should move its principal
office, to such principal office, and, in the case of the Optionee, to the
Optionee's last permanent address as shown on the Company's records, subject to
the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.
15. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the exercise
price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject the Optionee to the alternative minimum tax
in the year of exercise.
(b) Disposition of Shares. If Shares transferred pursuant to the
Option are held for at least one year after exercise and are disposed of at
least two years after the date of grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an Option are disposed of within such
one-year period or within two years after the Date of Grant, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the exercise price and the
lesser of (1) the fair market value of the Shares on the date of exercise, or
(2) the sale price of the Shares.
(c) Notice of Disqualifying Disposition of Option Shares. If
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Option on or before the later of (1) the date two years after the date of
grant, (2) the date one year after the date of exercise, the Optionee shall
immediately notify the Company in writing of such disposition, Optionee agrees
that Optionee may be subject to the income tax withholding by the Company on the
4
compensation income recognized by the Optionee from the early disposition by
payment in cash or out of the current earnings paid to the Optionee.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of June, 2002.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President and
Chief Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirely, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Dated: 7/14/02
OPTIONEE:
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
5
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries, (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest, or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then
out-standing voting securities in substantially the same proportions as their
ownership immediately prior to such reorganization, merger, or consolidation,
(2) a liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
6
RAILAMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
XXXX X. XXXXXX
AGREEMENT
1. Grant of Option. RailAmerica, Inc. (the "Company") hereby grants, as of
June 20, 2002 (the "Date of Grant") to Xxxx X. Xxxxxx (the "Optionee") an option
(the "Option") to purchase up to 340,196 shares of the Company's, Common Stock.
$.001 par value per share (the "Shares"), at an exercise price per share equal
to $10.20. The Option shall be subject to the terms and conditions set forth
herein. The Option was issued pursuant to the Company's 1998 Executive Incentive
Compensation Plan (the "Plan"), which is incorporated herein for all purposes.
The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Optionee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all of the terms and conditions hereof and
thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that are
defined in the Plan and not defined herein shall have the meanings attributed
thereto in the Plan.
Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of this
Agreement of in the Plan, the Option shall be exercisable in whole or in part
and cumulatively according to the following schedule, provided that the Optionee
has been continuously employed by the Company or a Subsidiary through and on the
applicable Vesting Date:
Number of Shares Vesting Date
---------------- ------------
116,667 June 20, 2002
116,667 June 20, 2003
106,862 June 20, 2004
Except as otherwise specifically provided herein, there shall be no
proportionate or partial testing in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Upon an Optionee's
termination of employment with the Company and its Subsidiaries, any unvested
portion of the Option shall terminate and be null and void.
-1-
4. Method of Exercise. This Option shall be exercisable in whole or in part
in accordance with the exercise schedule set forth in Section 3 hereof by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent, with
respect to such Shares as may be required by the Company. Such written notice
shall be signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company. The written notice shall be accompanied by
payment of the exercise price. This Option shall be deemed to be exercised after
both (a) receipt by the Company of such written notice accompanied by the
exercise price and (b) arrangements that are satisfactory to the Company in its
sole discretion have been made for Optionee's payment to the Company of the
amount that is necessary to be withheld in accordance with applicable federal or
state withholding requirements. No Shares will he issued pursuant to the Option
unless and until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock exchange
upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a) cash;
(b) check; (c) with Shares that have been held by the Optionee for at least six
months (or such other Shares as the Company determines will not cause the
Company to recognize for financial accounting purposes a charge for compensation
expense); or (d) such other consideration or in such other manner as may be
determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of:
(i) unless the Committee or the Board otherwise determines in
writing in its sole discretion to provide for a longer period, three
months alter the date on which the Optionee's employment with the
Company is terminated for any reason other than by reason of (A)
Cause. which, solely for purposes of this Agreement shall mean the
termination of the Optionee's employment by reason of the Optionee's
willful misconduct or gross negligence. (B) a mental or physical
disability (within the meaning of Section 22(e) of the Internal
Revenue Code) of the Optionee as determined by a medical doctor
satisfactory to the Committee or the Board, or (C) death:
(ii) immediately upon the termination of the Optionee's employment
with the Company for Cause:
(iii) twelve months after the date on which the Optionee's
employment with the Company is terminated by reason of a mental or
physical disability (within the meaning of Section 22(e) of the
Internal Revenue Code) as determined by a medical doctor
satisfactory to the Committee or the Board:
-2-
(iv) twelve months after the date of termination of the Optionee's
employment with the Company by reason of the death of the Optionee
(or if later, three months after the date on which the Optionee
shall die if such death shall occur during the one year period
specified in paragraph (c) of this Section 5): or
(v) the tenth (10th) anniversary of the Date of Grant.
(b) The Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice") cancel, effective upon
the date of the consummation of any Corporate Transaction described
in Section 9(b)(ii) of the Plan or the consummation of any
reorganization, merger, consolidation or other transaction in which
the Company does not survive, any Option that remains unexercised on
such date. Such cancellation notice shall be given a reasonable
period of time prior to the proposed date of such cancellation and
may be given either before or after approval of such corporate
transaction, in order that the Optionee may have a reasonable period
of time prior to the closing date of the corporate transaction
within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may
become exercisable upon the closing date of such corporate
transaction). The Optionee may condition his exercise of the Option
upon the consummation of a transaction referred to in this Section
6(b).
7. Transferability. The Option granted hereby is not transferable otherwise
than by will or under the applicable laws of descent and distribution, and
during the lifetime of the Optionee the Option shall be exercisable only by the
Optionee, or the Optionee's guardian or legal representative. In addition, the
Option shall not be assigned, negotiated, pledged or hypothecated in any way
(whether by operation of law or otherwise), and the Option shall not be subject
to execution, attachment or similar process. Upon any attempt to transfer,
assign, negotiate, pledge or hypothecate the Option, or in the event of any
levy upon the Option by reason of any execution, attachment or similar process
contrary to the provisions hereof, the Option shall immediately become null and
void.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option.
(a) This Option shall become immediately fully exercisable in the event
of a "Change in Control", as defined in the Plan or in Exhibit "A",
if any, attached hereto, or in the event that the Committee or the
Board exercises its discretion to provide a cancellation notice with
respect to the Option pursuant to Section 6(b) hereof.
-3-
(b) The Company may in its sole discretion accelerate the date on which
this Option may be exercised and may accelerate the vesting of any
Shares subject to this Option or previously acquired by the exercise
of any Option.
10. No Rights to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or service with
the Company.
11. Amendment. The Company may from time to time amend, after, suspend,
discontinue or terminate the Plan and may amend or alter the Option; provided,
however, that no such amendment, alteration, suspension, discontinuance or
termination of the Plan or the Option shall materially and adversely affect the
rights or benefits of the Optionee under the Option without the consent of the
Optionee.
12. Withholding. If any time specified herein for the making of any issuance
or delivery of the Option or Shares to the Optionee or beneficiary, any law or
regulation of any governmental authority having jurisdiction in the premises
shall require the Company to withhold, or to make any deduction for any taxes of
take any other action in connection with the issuance or delivery then to be
made, such issuance or delivery shall be deferred until such withholding or
deduction shall have been provided for by the Optionee or beneficiary, or other
appropriate action shall have been taken.
13. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
14. Interpretation Provisions of Plan Control. This Agreement is subject to
all the terms. conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan adopted by the Committee or the Board as
may be in effect from time to time. If and to the extent that this Agreement
conflicts or is inconsistent with the terms, conditions and provisions of the
Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. The Optionee accepts the Option subject to all the terms and
provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee or the Board upon any questions arising under the Plan and this
Agreement.
15. Notices. Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited in
the United States mail, registered, postage prepaid, and addressed, in the case
of the Company, to the Company's Secretary at 5300 Broken Sound Blvd. N.W.. Boca
Raton, PL 33487, or if the Company should move its principal office, to such
principal office, and, in the case of the Optionee, to the Optionee's last
permanent address as shown on the Company's records, subject to the right of
either party to designate some other address at any time hereafter in a notice
satisfying the requirements of this Section.
-4-
16. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There may be a regular federal income tax
liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any of the fair market
value of the Shares on the date of exercise over the Exercise Price.
If Optionee is an employee, the Company will be required to withhold
from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one year, any
gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
20th day of June, 2002.
COMPANY:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President and Chief
Administrative Officer
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advise of counsel prior to executing this Option, and fully
understands all provisions of the Option.
Date: 7/14/02 OPTIONEE:
By: /s/ Xxxx X Xxxxxx
-----------------------------------
Xxxx X Xxxxxx
-5-
EXHIBIT "A"
Additional Change of Control Definitions
For the purpose of this Agreement, a "Change of Control" shall also mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries. (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgate under the Exchange Act) of a Controlling
Interest or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company) shall be for
purpose of this Agreement considered as though such person were a member of the
Incumbent Board: or
(iii) Approval by the stockholders of the Company of (1) a
reorganization merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's for entity's then outstanding
voting securities in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation. (2) a
liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
-6-
EXHIBIT 5
1. Stock Certificate #RRA 0565, for 2,418 shares dated January 15, 2004.
2. Stock Certificate #RRA 0376, for 7,500 shares dated June 19, 2003.
3. Stock Certificate #RRA 0377, for 7,500 shares dated June 19, 2003.
4. Stock Certificate #RRA 0378, for 7,500 shares dated June 19, 2003.
EXHIBIT 6
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT, dated as of the 22nd day of June, 2000,
between RAILAMERICA, INC., a Delaware corporation (the "Company"), and
Xxxx X. Xxxxxx (the "Indemnitee").
RECITALS
A. The Indemnitee is currently serving as a director and/or officer of
the Company or is serving at the request of the Company as an officer, director,
consultant, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
and the Company desires to continue to retain such services of the Indemnitee.
B. In consideration of, and as a material inducement for such service,
the Indemnitee requires that he be indemnified from liability in accordance with
the provisions of this Agreement to the fullest extent permitted by law.
C. The Company is willing to indemnify the Indemnitee in accordance
with the provisions of this Agreement to the fullest extent permitted by law in
order to continue to retain (he services of the Indemnitee.
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants contained herein, the Company and the Indemnitee agree as follows:
SECTION 1. MANDATORY INDEMNIFICATION IN PROCEEDINGS OTHER THAN THOSE BY OR
IN THE RIGHT OF THE COMPANY. Subject to Section 4 hereof, the Company shall
indemnify and hold harmless the Indemnitee from and against any and all claims,
damages, expenses (including attorneys' fees), judgments, penalties, fines
(including excise taxes assessed with respect to an employee benefit plan),
settlements, and all other liabilities incurred or paid by him in connection
with the investigation, defense, prosecution, settlement or appeal of, or being
or preparing to be a witness in, any threatened pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) and to which the
Indemnitee was or is a party or is threatened to be made a party or was or is a
witness by reason of the fact that the Indemnitee is or was an officer,
director, consultant, employee or agent of the Company, or is or was serving at
the request of the Company as an officer, director, consultant, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, or by reason of anything done
or not done by the Indemnitee in any such capacity or capacities, provided that
the Indemnitee acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
SECTION 2. MANDATORY INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT
OF THE COMPANY. Subject to Section 4 hereof, the Company shall indemnify and
hold harmless the Indemnitee from and against any and all expenses (including
attorneys' fees) and amounts actually and reasonably incurred or paid by him in
connection with the investigation, defense, prosecution, settlement or appeal of
or being or preparing to be a witness in, any threatened, pending or completed
action, suit or proceeding by or in the right of the Company to procure a
judgment in its favor, whether civil, criminal, administrative or investigative,
and to which the Indemnitee was or is a party or is threatened to be made a
party or was or is a witness by reason of the fact that the Indemnitee is or was
an officer, director, consultant, employee or agent of the Company, or is or was
serving at the request of the Company as an officer, director, consultant,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, or by reason of
anything done or not done by the Indemnitee in any such capacity or capacities,
provided that (i) the Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and (ii) no indemnification shall be made under this Section 2 in respect of any
claim, issue or matter as to which the Indemnitee shall have been adjudged to be
liable to the Company for misconduct in the performance of his duty to the
Company unless, and only to the extent that, the court in which such proceeding
was brought (or any other court of competent jurisdiction) shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
SECTION 3. INDEMNIFICATION FOLLOWING ADJUDICATION OF NEGLIGENCE. The
Indemnitee shall be entitled to the indemnification provided in Sections 1 and 2
hereof in accordance with the terms hereof regardless of any adjudication that
the Indemnitee was liable for negligence, gross negligence or recklessness (but
not willful misconduct) in the performance of his duty to the Company; provided,
however, that the Indemnitee acted in good faith and in a manner he believed to
be in the best interests of the Company.
SECTION 4. AUTHORIZATION OF INDEMNIFICATION.
4.1. Procedure for Determination Regarding Indemnification. Any
indemnification under Sections 1, 2 and 3 hereof (unless ordered by a court)
shall be made by the Company only as authorized in the specific case upon a
determination (the "Determination") that indemnification of the Indemnitee is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct set forth in Section 1, 2 or 3 hereof, as the case may be.
Subject to Sections 5.6, 5.7 and 8 of this Agreement, the Determination shall be
made in the following order of preference:
(1) first, by the Company's Board of Directors (the "Board")
by majority vote or consent of a quorum consisting of directors ("Disinterested
Directors")
2
who are not, at the time of the Determination, named parties to such action,
suit or proceeding; or
(2) next, if such a quorum of Disinterested Directors cannot
be obtained by majority vote or consent of a committee duly designated by the
Board (in which designation all directors, whether or not Disinterested
Directors, may participate) consisting solely of two or more Disinterested
Directors; or
(3) next, if such a committee cannot be designated, by any
independent legal counsel (who may be any outside counsel regularly employed by
the Company) in a written opinion; or
(4) next, if such legal counsel determination cannot be
obtained, by vote or consent of the holders of a majority of the Company's
common stock.
4.2. No Presumptions. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Indemnitee
did not act in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
4.3. Benefit Plan Conduct. The Indemnitee's conduct with respect to an '
employee benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan shall be deemed
to be conduct that the Indemnitee reasonably believed to be not opposed to the
best interests of the Company.
4.4. Reliance as Safe Harbor. For purposes of any Determination
hereunder, the Indemnitee shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on (i) the records or books of account of the Company or another enterprise,
including financial statements, (ii) information supplied to him by the officers
of the Company or another enterprise in the course of their duties, (iii) the
advice of legal counsel for the Company or another enterprise, or (iv)
information or records given or reports made to the Company or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company or another enterprise.
The term "another enterprise" as used in this Section 4.4 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of the
Company as an officer, director, consultant, partner, trustee, employee or
agent. The provisions of this Section 4.4 shall not be deemed to be exclusive or
to limit in any way the other circumstances it which the Indemnitee may be
deemed to have met the applicable standard of conduct set forth in Sections 1, 2
or 3 hereof, as the case may be.
3
4.5. Success on Merits or Otherwise. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding described in
Section 1 or 2 hereof, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 4.5, the term
"successful on the merits or otherwise" shall include, but not be limited to,
(i) any termination, withdrawal, or dismissal (with or without prejudice) of any
claim, action, suit or proceeding against the Indemnitee without any express
finding of liability or guilt against him, (ii) the expiration of 120 days after
the making of any claim or threat of an action, suit or proceeding without the
institution of the same and without any promise or payment made to induce a
settlement, or (iii) the settlement of any action, suit or proceeding under
Section 1, 2 or 3 hereof pursuant to which the Indemnitee pays less than
$10,000.
4.6. Partial Indemnification or Reimbursement. If the Indemnitee is
entitled under any provision of this Agreement to indemnification and/or
reimbursement by the Company for some or a portion of the clams, damages,
expenses (including attorneys' fees), judgments, fines or amounts paid in
settlement by the Indemnitee in connection with the investigation, defense,
settlement or appeal of any action specified in Section 1, 2 or 3 hereof, but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify and/or reimburse the Indemnitee for the portion thereof to which the
Indemnitee is entitled. The party or parties making the Determination shall
determine the portion (if less than all) of such claims, damages, expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement for
which the Indemnitee is entitled to Indemnification and/or reimbursement under
this Agreement.
SECTION 5. PROCEDURES FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN
SATISFIED.
5.1. Costs. All costs of making The Determination required by Section 4
hereof shall be borne solely by the Company, including, but not limited to, the
costs of legal counsel, proxy solicitations and judicial determinations. The
Company shall also be solely responsible for paying (i) all reasonable expenses
incurred by the Indemnitee to enforce this Agreement, including, but not limited
to, the costs incurred by the Indemnitee to obtain court-ordered indemnification
pursuant to Section 8 hereof, regardless of the outcome of any such application
or proceeding, and (ii) all costs of defending any suits or proceedings
challenging payments to the Indemnitee under this Agreement.
5.2. Timing of the Determination. The Company shall use its best efforts
to make the Determination contemplated by Section 4 hereof promptly. In
addition, the Company agrees:
(a) if the Determination is to be made by the Board or a committee
thereof, such Determination shall be made not later than 45 days after a written
request for a Determination (a "Request") is delivered to the Company by the
Indemnitee;
4
(b) if the Determination is to be made by independent legal
counsel, such Determination shall be made not later than 45 days after a Request
is delivered to the Company by the Indemnitee; and
(c) if the Determination is to be made by the stockholders of the
Company, such Determination shall be made not later than 90 days after a Request
is delivered to the Company by the Indemnitee.
The failure to make a Determination within the above-specified time period shall
constitute a Determination approving full indemnification or reimbursement of
the Indemnitee. Notwithstanding anything herein to the contrary, a Determination
may be made in advance of (i) the Indemnitee's payment (or incurring) of
expenses with respect to which indemnification or reimbursement is sought,
and/or (ii) final disposition of the action, suit or proceeding with respect to
which indemnification or reimbursement is sought.
5.3. Reasonableness of Expenses. The evaluation and finding as to the
reasonableness of expenses incurred by the Indemnitee for purposes of this
Agreement shall be made (in the following order of preference) within 45 days of
the Indemnitee's delivery to the Company of a Request that includes a reasonable
accounting of expenses incurred:
(a) first, by the Board by a majority vote or consent of a quorum
consisting of Disinterested Directors; or
(b) next, if a quorum cannot be obtained under subdivision (a), by
majority vote or consent of a committee duly designated by the Board (in which
designation all directors, whether or not Disinterested Directors, may
participate), consisting solely of two or more Disinterested Directors; or
(c) next, if such a committee cannot be designated, by any
independent legal counsel (who may be any outside counsel regularly employed by
the Company); or
(d) next, if such legal counsel determination cannot be obtained,
by vote or consent of the holders of a majority of the Company's common stock.
All expenses shall be considered reasonable for purposes of this Agreement if
the finding contemplated by this Section 5.3 is not made within the prescribed
time. The finding required by this Section 5.3 may be made in advance of the
payment (or incurring) of the expenses for which indemnification or
reimbursement is sought.
5.4. Payment of Indemnified Amount. Immediately following a Determination
that the Indemnitee has met the applicable standard of conduct set forth in
Section 1, 2 or 3 hereof, as the case may be, and the finding of reasonableness
of expense contemplated by Section 5.3 hereof, or the passage of time
prescribed for making such determination(s), the Company shall pay to the
Indemnitee in cash the amount to which the Indemnitee is
5
entitled to be indemnified and/or reimbursed, as the case may be, without
further authorization or action by the Board; provided, however, that the
expenses for which indemnification or reimbursement is sought have actually been
incurred by the Indemnitee.
5.5. Stockholder Vote on Determination. Notwithstanding the provisions of
the Delaware General Corporation law, the Indemnitee and any other stockholder
who is a party to the proceeding for which indemnification or reimbursement is
sought shall be entitled to vote on say Determination to be made by the
Company's stockholders, including a Determination made pursuant to Section 5.7
hereof. In addition, in connection with each meeting at which a stockholder
Determination will be made, the Company shall solicit proxies that expressly
include a proposal to indemnify or reimburse the Indemnitee. The Company proxy
statement relating to the proposal to indemnify or reimburse the Indemnitee
shall not include a recommendation against indemnification or reimbursement.
5.6. Selection of Independent Legal Counsel. If the Determination
required under Section 4.1 or 5.7 or the evaluation of reasonableness of
expenses under Section 5.3 is to be made by independent legal counsel, such
counsel shall be selected by the Indemnitee with the approval of the Board,
which approval shall not be unreasonably withheld. The fees and expenses
incurred by counsel in making any Determination (including Determinations
pursuant to Section 5.8 hereof) shall be borne solely by the Company regardless
of the results of any Determination and, if requested by counsel, the Company
shall give such counsel an appropriate written agreement with respect to the
payment of their fees and expenses and such other matters as may be reasonably
requested by counsel.
5.7. Right of Indemnitee to Appeal an Adverse Determination by Board. If
a Determination is made by the Board or a committee thereof that the Indemnitee
did not meet the applicable standard of conduct set forth in Section 1, 2 or 3
hereof, upon the written, request of the Indemnitee, the Company shall cause a
new Determination to be made by any independent legal counsel (who may be any
outside counsel regularly employed by the Company). If a Determination is made
by such legal counsel that the Indemnitee did not meet such applicable standard
of conduct, upon the written request of the Indemnitee and the Indemnitee's
delivery of $500 to the Company, the Company shall cause a new Determination to
be made by the Company's stockholders at the next regular or special meeting of
stockholders. Subject to Section 8 hereof, such Determination by the Company's
stockholders shall be binding and conclusive for all purposes of this Agreement.
5.8. Right of Indemnitee To Select Forum For Determination. If, at any
time subsequent to the date of this Agreement, "Continuing Directors" do not
constitute a majority of the members of the Board, or there is otherwise a
change in control of the Company (as contemplated by Item 403(c) of Regulation
S-K), then upon the request of the Indemnitee, the Company shall cause the
Determination required by Section 4.1 hereof and/or the finding repaired by
Section 5.3 hereof to be made by independent legal counsel selected by the
Indemnitee and approved by the Board (which approval shall not be unreasonably
withheld), which counsel shall be deemed to satisfy the requirements of
6
clause (3) of Section 4.1 hereof and/or clause (c) of Section 5.3. If none of
the legal counsel selected by the Indemnitee are willing and/or able to make the
Determination or the finding, then the Company shall cause the Determination to
be made by a majority vote or consent of a Board committee consisting solely of
Continuing Directors. For purposes of this Agreement, a "Continuing Director"
means either a member of the Board at the date of this Agreement or a person
nominated to serve as a member of the Board by a majority of the then
Continuing Directors.
5.9. Access by Indemnitee to Determination. The Company shall afford to
the Indemnitee and his representatives ample opportunity to present evidence of
the facts upon which the Indemnitee relies for indemnification or reimbursement,
together with other information relating to any requested Determination. The
Company shall also afford the Indemnitee the reasonable opportunity to include
such evidence and information in any Company proxy statement relating to a
stockholder Determination.
5.10. Judicial Determinations in Derivative Suits. In each action or suit
described in Section 2 hereof, the Company shall cause its counsel to use its
best efforts to obtain from the Court in which such action or suit was
brought(i) an express adjudication whether the Indemnitee is liable for
negligence or misconduct in the performance of his duty to the Company, and, if
the Indemnitee is so liable, (ii) a determination whether and to what extent,
despite the adjudication of liability but in view of all the circumstances of
the case (including this Agreement), the Indemnitee is fairly and reasonably
entitled to indemnification.
SECTION 6. SCOPE OF INDEMNITY. Subject to the limitations set forth in
Sections 1 and 2 hereof, the actions, suits and proceedings described in
Sections 1 and 2 hereof shall include, for purposes of this Agreement, any
actions that involve, directly or indirectly, activities of the Indemnitee both
in his official capacities as a Company director or officer and actions taken in
another capacity while serving as director or officer, including, but not
limited to, actions or proceedings involving (i) compensation paid to the
Indemnitee by the Company, (ii) activities by the Indemnitee on behalf of the
Company, (iii) responses to a takeover attempt or threatened takeover attempt of
the Company, and (iv) the Indemnitee's preparation for and appearance (or
potential appearance) as a witness in any proceeding relating, directly or
indirectly, to the Company. In addition, the Company agrees that, for purposes
of clarification of the provisions of Sections 1 and 2 hereof and not for
purposes of limitation, all services performed by the Indemnitee on behalf of,
in connection with or related to any subsidiary of the Company, any employee
benefit plan established for the benefit of employees of the Company or any
subsidiary, any corporation or partnership or other entity in which the Company
or any subsidiary has 5% ownership interest, or any other affiliate shall be
deemed to be at the request of the Company.
SECTION 7. ADVANCE FOR EXPENSES
7.1. Mandatory Advance. Expenses (including attorneys' fees) incurred by
the Indemnitee in investigating, defending, settling or appealing, or being or
preparing to be a
7
witness in, any action, suit or proceeding described in Section 1 or 2 hereof
shall be paid by the Company in advance of the final disposition of such action,
suit or proceeding. The Company shall promptly pay the amount of such expenses
to the Indemnitee, but in no event later than 10 days following the Indemnitee's
delivery to the Company of a written request for an advance pursuant to this
Section 7, together with a reasonable accounting of such expenses.
7.2. Undertaking to Repay. The Indemnitee hereby undertakes and agrees to
repay to the Company any advances made pursuant to this Section 7 if and to the
extent that it shall ultimately be found that the Indemnitee is not entitled to
be indemnified by the Company for such amounts.
7.3. Miscellaneous. The Company shall make the advances contemplated by
this Section 7 regardless of the Indemnitee's financial ability to make
repayment, and regardless whether indemnification of the Indemnitee by the
Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Section 7 shall be unsecured and interest-free.
SECTION 8. COURT-ORDERED INDEMNIFICATION. Regardless of whether the
Indemnitee has met the standard of conduct set forth in Sections 1, 2 or 3
hereof, as the case may be, and notwithstanding the presence or absence of any
Determination whether such standards have been satisfied, the Indemnitee may
apply for indemnification (and/or reimbursement pursuant to Section 12 hereof)
to the court conducting any proceeding to which the Indemnitee is a party or a
witness or to any other court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court considers necessary,
may order Indemnification (and/or reimbursement) if it determines the Indemnitee
is fairly and reasonably entitled to indemnification (and/or reimbursement)in
view of all the relevant circumstances (including this Agreement).
SECTION 9. NONDISCLOSURE OF PAYMENTS. Except as expressly required by
Federal securities laws, neither party shall disclose any payments under this
Agreement unless prior approval of the other party is obtained. Any payments to
the Indemnitee that must be disclosed shall, unless otherwise required by law,
be described only in Company proxy or information statements relating to special
and/or annual meetings of the Company's stockholders, and the Company shall
afford the Indemnitee the reasonable opportunity to review all such disclosures
and, if requested, to explain in such statement any mitigating circumstances
regarding the events reported.
SECTION 10. COVENANT NOT TO XXX, LIMITATION OF ACTIONS AND RELEASE OF
CLAIMS. No legal action shall be brought and no cause of action shall be
asserted by or on behalf of the Company (or any of its subsidiaries) against the
Indemnitee, his spouse, heirs, executors, personal representatives or
administrators after the expiration of 2 years from the date the Indemnitee
ceases (for any reason) to serve as either an officer or a director of the
Company, and any claim or cause of action of the Company
8
(or any of its subsidiaries) shall be extinguished and deemed released unless
asserted by filing of a legal action within such 2-year period.
SECTION 11. INDEMNIFICATION OF INDEMNITEE'S ESTATE. Notwithstanding any
other provision of this Agreement, and regardless whether indemnification of the
Indemnitee would be permitted and/or required under this Agreement, if the
Indemnitee is deceased, the Company shall indemnify and hold harmless the
Indemnitee's estate, spouse, heirs, administrators, personal representatives and
executors (collectively the "Indemnitee's Estate") against, and the Company
shall assume, any and all claims, damages, expenses (including attorneys' fees),
penalties, judgments, fines and amounts paid in settlement actually incurred by
the Indemnitee or the Indemnitee's Estate in connection with the investigation,
defense, settlement or appeal of any action described in Section 1 or 2 hereof.
Indemnification of the Indemnitee's Estate pursuant to this Section 11 shall be
mandatory and not require a Determination or any other finding that the
Indemnitee's conduct satisfied a particular standard of conduct.
SECTION 12. REIMBURSEMENT OF ALL EXPENSES. Notwithstanding any other
provision of this Agreement, and regardless of the presence or absence of any
Determination, the Company promptly (but not later than 30 days following the
Indemnitee's submission of a reasonable accounting) shall reimburse the
Indemnitee for all attorneys' fees and related court costs and other expenses
incurred by the Indemnitee in connection with the investigation, defense,
settlement or appeal of or preparation to be a witness in any action described
in Section 1 or 2 hereof (including, but not limited to, the matters specified
in Section 6 hereof).
SECTION 13. MAINTENANCE OF INSURANCE.
13.1. The Company represents that a copy of the policies of directors and
officers liability insurance ("D&O insurance") that are to effect are set forth,
as Exhibit A hereto. Subject only to the provisions of Section 13.2, the Company
hereby agrees that during the period commencing on the date hereof and ending
six years from the date the Indemnitee ceases to serve the Company, the Company
shall purchase and maintain in effect for the benefit of the Indemnitee such
insurance providing coverage at least as favorable to the Indemnitee as that
presently provided, if such insurance can be purchased for premiums not in
excess of 200% of the amount of the current premiums, adjusted from time to time
in accordance with the Consumer Price Index, or, if such coverage cannot be
obtained, the maximum coverage that can be obtained for 200% of the amount of
the current premiums adjusted from, time to time in accordance with the Consumer
Price Index.
13.2. The Company shall not be required to maintain the insurance referred
to in Section 13.1 hereof if such insurance is not available on terms reasonably
satisfactory to the then Board or if, in the business judgment of the then
Board, either (a) the premium cost for such insurance is disproportionate to the
amount of coverage or (b) the coverage provided by such insurance is so limited
by exclusions that there is insufficient benefit from such insurance.
9
SECTION 14. CHANGES IN THE LAW. If any change after the date of this
Agreement in any applicable law, statute at rule or the Company's Certificate of
Incorporation expands the power of the Company to indemnify the Indemnitee, such
change shall be within the purview of the Indemnitee's rights and the Company's
obligations under this Agreement. If any change in any applicable law, statute
or rule or the Company's Certificate of Incorporation narrows the right of the
Company to indemnify a person such as the Indemnitee, such change, to the extent
not otherwise required by such law, statute or rule or the Company's Certificate
of Incorporation to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations thereunder.
SECTION 15. MISCELLANEOUS.
15.1. Notice Provision. Any notice, payment, demand or communication
required or permitted to be delivered or given by the provisions of this
Agreement shall be deemed to have been effectively delivered or given and
received on the date personally delivered to the respective party to whom it is
directed, or when deposited by registered or certified mail, with postage and
charges prepaid and addressed to the parties at the addresses set forth below
opposite their signatures to this Agreement.
15.2. Entire Agreement. Except for the Company's Certificate of
Incorporation and as provided in Section 5.9 hereof, this Agreement constitutes
the entire understanding of the parties and supersedes all prior understandings,
whether written or oral, between the parties with respect to the subject matter
of this Agreement.
15.3. Severability of Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid, and enforceable.
15.4. Applicable Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware.
15.5. Execution in Counterparts. This Agreement and any amendment may be
executed simultaneously or in counterparts, each of which together shall
constitute one and the same instrument.
10
15.6. Cooperation and Intent. The Company shall cooperate in good faith
with the Indemnitee and use its best efforts to ensure that the Indemnitee is
indemnified and/or reimbursed for liabilities described herein to the fullest
extent permitted by law.
15.7. Amendment. No amendment, modification or alteration of the terms of
this Agreement shall be binding unless in writing, dated subsequent to the date
of this Agreement, and executed by the parties.
15.8. Binding Effect. The obligations of the Company to the Indemnitee
hereunder shall survive and continue as to the Indemnitee even if the indemnitee
ceases to be a director, officer, consultant, employee and/or agent of the
Company. Each and all of the covenants, terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the successors to the Company
and, upon the death of the Indemnitee, to the benefit of the estate, heirs,
executors, administrators and personal representatives of the Indemnitee.
15.9. Nonexclusivity. The rights of indemnification and reimbursement
provided in this Agreement shall be in addition to any rights to which the
Indemnitee may otherwise be entitled by statute, bylaw, agreement, vote of
stockholders or otherwise.
15.10. Effective Date. The provisions of this Agreement shall cover
claims, actions, suits and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place.
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
ADDRESS: THE COMPANY:
0000 Xxxxxx Xxxxx Xxxxxxxxx, XX RAILAMERICA, INC.
Xxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
Chief Administrative
Officer & Secretary
11
ADDRESS: THE INDEMNITEE:
_______________________________ /s/ Xxxx X. Xxxxxx
_______________________________ ---------------------------------
_______________________________ Name: Xxxx X. Xxxxxx
Title: Chairman, President & CEO
12
FOR SETTLEMENT PURPOSES ONLY
UNLESS EXECUTED BY BOTH PARTIES
EXHIBIT 7
[RAILAMERICA LETTERHEAD]
AT THE COMPANY FOR IMMEDIATE RELEASE
Xxxxx Xxxxxx Xxxxxxxxxx Xxxxx 7, 2004
Assistant Vice President
Investor Relations & Corporate Communications
(000) 000-0000
RAILAMERICA ANNOUNCES RETIREMENT OF XXXX X. XXXXXX
BOCA RATON, FL - APRIL 7 - RailAmerica announced today that President and Chief
Executive Officer (CEO) Xxxx X. Xxxxxx has decided to retire from the Company
effective immediately. Xx. Xxxxxx, age 59, had served as RailAmerica's Chairman
of the Board of Directors since the Company's formation in 1992. He also served
as CEO since 1994 and as President since 1996. Under his leadership, RailAmerica
grew from a private company owning one railroad, with revenues of approximately
$1 million to a New York Stock Exchange listed public company owning 47
railroads with revenues of approximately $360 million.
"Xxxx has been a dedicated leader of RailAmerica since the Company was
founded and has achieved a long list of enviable accomplishments," said Xxxxxxx
(Xxx) Xxxxxxx, Chairman of RailAmerica's Board of Directors. "The Company is
highly appreciative of Gary's leadership and vision in helping transform the
Company from one short line railroad to a railroad holding company that is one
of the largest in North America. We thank him for his dedicated service and wish
him well in his future endeavors."
"With the recent announcement of the execution of an agreement to sell
Freight Australia," said Xxxx Xxxxxx, "my work at RailAmerica is now complete.
The Company is well positioned for future, sustained growth and the proceeds to
be received from the pending Australia railroad sale will further strengthen the
balance sheet and provide the capital for the Company to bolster its strong
footprint in the North American railroad industry. I enjoyed tremendously
helping to build RailAmerica over the last 18 years. I could not have done it
without the dedicated service from a very talented, motivated management team
and staff, and a supportive Board of Directors. I expect to now have time to
pursue other projects that interest me and to focus on other personal
priorities."
"The Board will commence a search for a new President and CEO. In the
interim, we expect that our strong management team led by Xxxxxx X. Xxxxxxxx,
Acting President, Xxxxxxx Xxxx, CFO, and Xxx Xxxxxxx, COO will continue to
effectively manage the business. I will be actively involved in helping them
manage the Company, and the Board will continue to provide oversight, governance
and support," stated Xxxxxxx X. Xxxxxxx.
In connection with Xx. Xxxxxx'x retirement, the Company will record a
charge of approximately $0.18 - $0.20 per share in the second quarter for his
retirement benefits. Approximately 50% of the charge relates to non-cash items
for the extension of his stock options and the vesting of certain equity awards.
Page 1 of 2
RailAmerica, Inc. (NYSE: RRA) is the world's premium short line and
regional railroad operator with 47 railroads operating approximately 12,000
miles in the United States, Canada, and Australia. The Company is a member of
the Xxxxxxx 2000(R) Index. Its website may be found at XXX.XXXXXXXXXXX.XXX.
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: THIS PRESS RELEASE CONTAINS
FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS AND THE PERFORMANCE OF
RAILAMERICA THAT INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY INCLUDING, BUT NOT LIMITED TO, FUEL COSTS, FOREIGN CURRENCY
RISKS, FAILURE TO SUCCESSFULLY INTEGRATE ACQUISITIONS, FAILURE TO SERVICE DEBT,
FAILURE TO SUCCESSFULLY MARKET AND SELL FREIGHT AUSTRALIA AND NON-
OPERATING/NON-STRATEGIC PROPERTIES AND ASSETS WHEN SCHEDULED OR AT ALL, FAILURE
TO SUCCESSFULLY REFINANCE DEBT, FAILURE TO ACCOMPLISH NEW MARKETING INITIATIVES,
ECONOMIC CONDITIONS, CUSTOMER DEMAND, INCREASED COMPETITION IN THE RELEVANT
MARKET, AND OTHERS. IN PARTICULAR, FORWARD-LOOKING STATEMENTS REGARDING EARNINGS
AND EBITDA OF THE COMPANY AND ENTITIES TO BE ACQUIRED ARE SUBJECT TO INHERENT
ECONOMIC, FINANCIAL AND OPERATING UNCERTAINTIES, INCLUDING CHANGES IN ECONOMIC
CONDITIONS, REALIZATION OF OPERATING SYNERGIES, THE ABILITY TO RETAIN KEY
CUSTOMERS AND THE IMPACT OF UNFORESEEN COSTS AND LIABILITIES OF SUCH ENTITIES.
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THE STATEMENT WAS MADE. THE
COMPANY ASSUMES NO OBLIGATION TO UPDATE FORWARD-LOOKING INFORMATION TO REFLECT
ACTUAL RESULTS, CHANGES IN ASSUMPTIONS OR CHANGES IN OTHER FACTORS AFFECTING
FORWARD-LOOKING INFORMATION. IF THE COMPANY DOES UPDATE ANY FORWARD-LOOKING
STATEMENT, NO INFERENCE SHOULD BE DRAWN THAT THE COMPANY WILL MAKE ADDITIONAL
UPDATES WITH RESPECT TO THAT STATEMENT OR ANY OTHER FORWARD-LOOKING STATEMENTS.
WE REFER YOU TO THE DOCUMENTS THAT RAILAMERICA FILES FROM TIME TO TIME WITH THE
SECURITIES AND EXCHANGE COMMISSION, SUCH AS THE FORM 10-K, FORM 10-Q AND FORM
8-K, WHICH CONTAIN ADDITIONAL IMPORTANT FACTORS THAT COULD CAUSE ITS ACTUAL
RESULTS TO DIFFER FROM ITS CURRENT EXPECTATIONS AND FROM THE FORWARD-LOOKING
STATEMENTS CONTAINED IN THIS PRESS RELEASE.
Page 2 of 2
