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EXHIBIT 10.14.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of November 1, 1999 (the "Date of this Agreement") by and between XXXXXX X.
XXXXXX, an individual who resides at 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 (the "Executive") and TRANSTAR, INC., a
Delaware corporation with offices located at 000 Xxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 ("Transtar") on behalf of itself and those
of its subsidiaries listed on Exhibit A attached to this Agreement (the
"Transtar Subsidiaries").
W I T N E S S E T H;
WHEREAS, Prior to the Date of this Agreement and since at least January
1, 1994, the Executive has been employed as President, Chief Executive Officer
and a non-voting ex officio director of Transtar and as President, Chief
Executive Officer, a Director and Chairman of the Boards of Directors of the
Transtar Subsidiaries; and
WHEREAS, Prior to the Date of this Agreement, the Executive has
announced, both publicly and to the appropriate officers of Transtar, the
Transtar Subsidiaries, Transtar Holdings, L.P. and USX Corporation (the
"Transtar Shareholders"), his intention to retire from the employment of
Transtar and the Transtar Subsidiaries and to resign as an ex officio director
of Transtar and as a Director and Chairman of the Boards of the Transtar
Subsidiaries, effective October 31, 1999; and
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WHEREAS, the Transtar Shareholders are contemplating structural changes
to Transtar and the Transtar Subsidiaries which, if implemented, are anticipated
to be completed on or before June 30, 2000 (the "Transaction"); and
WHEREAS, the Transtar Shareholders and the Executive each desire that
Executive postpone his retirement and resignations, extend his employment with
Transtar and serve both Transtar and the Transtar Subsidiaries in the
aforementioned positions after October 31, 1999, but in no event beyond, June
30, 2000, in accordance with the terms and conditions of this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. EMPLOYMENT PERIOD. Unless otherwise terminated in accordance with
the provisions of Section 5 of this Agreement, the term of this Agreement and
the Employment Period provided herein shall commence on November 1, 1999 and
shall extend until (i) closing of the Transaction, (ii) death or disability of
the Executive, or (iii) June 30, 2000, whichever first occurs (the "Employment
Period"). Except upon termination of the Employment Period (i) in accordance
with the provisions of Section 5 of this Agreement or (ii) upon death or
disability of the Executive, the Employment Period shall continue until at least
November 30, 1999. In no event shall the Employment Period continue beyond June
30, 2000.
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2. DUTIES AND RESPONSIBILITIES. During the Employment Period, Transtar
shall continue to employ the Executive, and the Executive shall continue to
serve as President, Chief Executive Officer and non-voting ex officio Director
of Transtar and as President, Chief Executive Officer, Director and Chairman of
the Boards of Directors of the Transtar Subsidiaries. Throughout the Employment
Period, the Executive shall continue to perform all duties and accept all
responsibilities directly related or incidental to such positions and any
additional duties or responsibilities that may be assigned to the Executive by
the Transtar Shareholders or the Transtar Board of Directors. Such additional
duties and responsibilities shall include those assigned to the Executive in
connection with assessment and implementation of any structural changes to
Transtar and the Transtar Subsidiaries. During the Employment Period, the
Executive's office shall continue to be located at the Transtar Headquarters
Building in Monroeville, Pennsylvania.
3. COMPENSATION OF EXECUTIVE. The parties acknowledge that immediately
prior to the Date of this Agreement, the Executive was the recipient of a
compensation package (the "Compensation Package") from Transtar that included,
among other things, monthly salary, annual bonus, participation in employee
welfare and benefit plans, basic pension, life insurance, medical, dental,
supplemental health, disability, deferred compensation and savings plans, Excess
Pension Benefits, Supplemental Pension Benefits, Supplemental Thrift Benefits,
Supplemental Life Insurance Benefits, paid vacation and holidays, use of a
company vehicle, business expense reimbursement, annual medical checkup, limited
reimbursement for fees incurred in connection with professional tax advice and
financial planning services rendered to the Executive, and participation in the
Transtar,
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Inc. Stock Plan and the Transtar, Inc. Stock Option Plan. As full compensation
to the Executive for his performance of the duties and responsibilities
hereunder during the Employment Period, Transtar agrees to pay the Executive,
and the Executive agrees to accept, the Compensation Package under which the
Executive was employed by Transtar immediately prior to the Date of this
Agreement, augmented by the following enhancements:
(a) During the Employment Period, the Executive shall receive the
Compensation Package (including salary) in effect immediately prior to
the Date of this Agreement and all increases in, or improvements to,
the Compensation Package that may be established by Transtar from time
to time throughout the Employment Period;
(b) (i) Upon termination of the Employment Period after December 31, 1999
but no later than March 31, 2000 other than in accordance with the
provisions of Section 5 of this Agreement, the Executive (or his
designated beneficiaries if termination of the Employment Period
results from the death of the Executive) shall be paid, upon
termination of the Employment Period, (1) the Executive's monthly
salary from the date of termination of the Employment Period through
June 30, 2000, and (2) an annual bonus for the year 2000 in the amount
of $162,500; or (ii) upon termination of the Employment Period after
March 31, 2000 other than in accordance with the provisions of Section
5 of this Agreement, the Executive (or his designated beneficiaries if
termination of the Employment Period results from death of the
Executive) shall be paid, upon termination of the Employment Period,
(1) the Executive's monthly salary from the date of termination of the
Employment Period through December 31, 2000, and (2) an annual bonus
for the year 2000, in the amount of $325,000.
(c) In the event of termination of the Employment Period in accordance with
the provisions
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of Section 5 of this Agreement, the amount of the annual bonus payable
to the Executive in accordance with the provisions of Subsection 3(b)of
this Agreement shall be determined by multiplying the $162,500 or the
$325,000, as the case may be, by a fraction, the numerator of which is
the number of calendar days in the year 2000 that have expired up
through and as of the date of termination, and the denominator of which
is 366.
(d) Redemption of all vested shares and options awarded to the Executive
under the terms and conditions of the Transtar, Inc. Stock Plan and the
Transtar, Inc. Stock Option Plan shall occur and be paid to the
Executive by December 30, 1999, the value of such shares and options to
be determined as if the Executive had retired on October 31, 1999.
(e) If the Employment Period terminates after December 31, 1999, all
benefits payable to the Executive under the Transtar, Inc. Salaried
Retirement, Non-Contributory, Excess Pension Benefits and Supplemental
Pension Benefits Plans shall be calculated using the lower of (1) the
PBGC discount rate that is in effect on October 31, 1999, or (2) the
PBGC discount rate that is in effect on the actual date of retirement.
(f) If the Executive or his spouse, Xxxxxx Xxxxx Xxxxxx, shall die during
the Employment Period, all benefits paid to the survivor of them (or to
their designated beneficiaries if both of them shall die simultaneously
or within thirty (30) calendar days of each other) under the Transtar,
Inc. Salaried Retirement, Non-Contributory, Excess Pension Benefits and
Supplemental Pension Benefits Plans shall be paid in lump sums
calculated as though both the Executive and his spouse had survived the
Employment Period.
(g) Except for salary and amounts paid upon redemption of the Executive's
vested shares or options awarded under the terms and conditions of the
Transtar, Inc. Stock Plan or the
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Transtar, Inc. Stock Option Plan, any components of the Compensation
Package as augmented by the provisions of this Section 3 of this
Agreement payable to the Executive upon termination of the Employment
Period for any reason except in accordance with the provisions of
Section 5 of this Agreement, shall be paid to the Executive (or his
designated beneficiaries if termination of the Employment Period
results from death of the Executive) upon termination of the Employment
Period and in accordance with their value determined (1) as of the date
of termination of the Employment Period or (2) October 31, 1999,
whichever is greater (the difference being referred to herein as the
"Incremental Portion"). To the extent that an Incremental Portion of a
payment for any such component of compensation involving a pension or
health and welfare plan cannot properly or legally be made to the
Executive or his designated beneficiaries from the funds of such
Transtar pension or health and welfare benefit plan, such payment shall
be made from the general funds of Transtar and the amount of such
payment shall be grossed-up to reimburse the Executive for any federal,
state or local income tax payable by the Executive on the Incremental
Portion as result of the payment originating from the general funds of
Transtar instead of from the funds of a Transtar pension or health and
welfare benefit plan.
4. EXTENT OF SERVICE. During the Employment Period, the Executive shall
use his best efforts in the business of Transtar and the Transtar Subsidiaries,
and shall devote substantially his full-time working hours, attention and energy
to the business of Transtar and the Transtar Subsidiaries and to the performance
of his services and the discharge of his duties and responsibilities hereunder.
The Executive shall perform such work duties and responsibilities on behalf of
Transtar and the Transtar Subsidiaries hereunder to the standards
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as have been customary prior to the Date of this Agreement. The Executive shall
not become engaged in any other business activity that may interfere with his
ability to discharge his duties and responsibilities hereunder to Transtar and
the Transtar Subsidiaries. The Executive further agrees that his performance of
duties and responsibilities hereunder shall at all times be subject to the
Policies, corporate governance procedures and Administrative Programs and
Procedures of Transtar and the Transtar Subsidiaries in effect on the Date of
this Agreement and as may be amended or promulgated from time to time during the
Employment Period, and further agrees not to work either on a part time or
independent contractual basis for any other business or enterprise during the
Employment Period. Throughout the Employment Period, the Executive shall
faithfully and diligently perform his duties and responsibilities under this
Agreement and shall use his best efforts to promote the interests of Transtar
and the Transtar Subsidiaries.
5. TERMINATION OF EMPLOYMENT PERIOD FOR CAUSE. Nothing in this
Agreement shall be construed to prevent the termination of this Agreement and
the Employment Period by the Transtar Shareholders or the Transtar Board of
Directors at any time for "cause." For purposes of this Agreement, "cause" shall
mean (i) the Executive's breach in respect of his duties and responsibilities
under this Agreement, if such breach remains unremedied for ten (10) calendar
days after written notice thereof from the Transtar Shareholders or the Transtar
Board of Directors to the Executive, specifying the acts constituting the breach
and requesting that they be remedied; (ii) the Executive having been charged
with a felony during the Employment Period, provided that, in the reasonable
opinion of
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the Board of Directors of Transtar, the charge results, or is likely to result,
in substantial detriment to Transtar or the Transtar Subsidiaries; or (iii) the
Executive's gross negligence or gross misconduct or dereliction of duty, or a
substantial or material breach of this Agreement, that, in the reasonable
opinion of the Board of Directors of Transtar, causes or threatens to cause
serious injury to Transtar or the Transtar Subsidiaries.
6. GOVERNING LAW. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.
7. CONTENTS OF AGREEMENT; AMENDMENT AND ASSIGNMENT. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof, supersedes any prior agreement or employment agreement
between the parties and shall not be changed, modified or terminated except upon
written amendment executed by the parties. This Agreement and any rights
(including compensation) or obligations hereunder shall not be assigned, pledged
or transferred in any way by either party without the prior written consent of
the other, except that (i) Transtar may assign this Agreement to its successor
in interest provided that Transtar guarantees performance of the obligations set
forth in this Agreement by such successor (ii) the Executive may designate his
beneficiaries to receive (and such beneficiaries shall receive) any
compensation, payments or other benefits payable hereunder upon his death, (iii)
any assignment by will or by laws of descent and distribution is permitted, and
(iv)
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the Executive's executors, administrators or other legal representatives may
assign any rights hereunder to the person or persons entitled thereto.
8. NOTICE. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first class,
registered mail, return receipt requested, postage and registry fees prepaid, to
the applicable party and addressed as follows:
If to Transtar: Transtar, Inc.
000 Xxxxxxx Xxxx
X.X. Xxx 00
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention - Vice President - Law
If to Executive: Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
9. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
10. BOARD AND SHAREHOLDER APPROVAL. The effectiveness of this Agreement
as well any obligations of Transtar or the Transtar Subsidiaries hereunder shall
be
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subject to approval by the Board of Directors and shareholders of Transtar and
the shareholders of the Transtar Subsidiaries. If such approvals are not
obtained within fourteen (14) calendar days of the date on which this Agreement
has been fully executed by the parties, then this Agreement shall be of no force
and effect.
11. LEGAL COUNSEL. The Executive acknowledges that this Agreement has
been prepared by Xxxxxx X. Xxxxxxx, Esq. ("Counsel") acting solely in his
capacity as counsel to Transtar and the Transtar Subsidiaries, that any
discussion between the Executive and Counsel which has occurred during the
preparation of this Agreement should not be understood as, or relied upon, by
the Executive as legal advice and further that Counsel has informed the
Executive of Executive's right to retain legal counsel on his own behalf to
review this Agreement and to advise Executive appropriately.
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IN WITNESS WHEREOF, the Executive and Transtar, on behalf of itself and
the Transtar Subsidiaries, have executed this Agreement as of the date first
above written.
ATTEST: TRANSTAR, INC., ON BEHALF
OF ITSELF AND ITS SUBSIDIARIES:
/s/ X. X. XXXXXXX BY /s/ X. X. XXXXXXX
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SECRETARY ITS V.P. FINANCE & CFO
WITNESS:
/s/ X. X. XXXXXXX /s/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
DRAFT 11/17/99
