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EMPLOYEE TERM SHEET
1. Each of Xxxxx Xxxx, Xxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxxx agrees to enter
into a new service agreement with Coach USA, Inc. ("Coach") or one of its
subsidiaries for a fixed term of 3 years from closing; thereafter the
notice periods in the existing contracts will apply subject to a maximum of
one year.
2. Xxxxx Xxxx will, following closing, be appointed as a director of
Stagecoach Holdings plc ("Stagecoach") subject to the articles of
association of Stagecoach and the rules of London Stock Exchange.
3. The terms of the new service agreements will be on the same overall terms
as the existing service contracts of those individuals except where changes
are reasonably required to conform with the principles of corporate
governance to which Stagecoach is subject and to remove any provisions
which are, in the reasonable opinion of Stagecoach, inappropriate for a
London listed company of the size and nature of Stagecoach.
4. Xxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxxx and Xxxx Xxxxxxxxxx (the
"Investors") agree that as soon as reasonably practicable taking into
account the London Stock Exchange Code on directors dealings and insider
dealing legislation in the UK, they will invest between them in aggregate
US$9 million in the purchase of Stagecoach ordinary shares.
5. For a period of one year from purchase, the Investors will not be permitted
to dispose of the shares acquired by them. This will be subject to
customary exceptions to be negotiated. At the end of three years from
closing, each Investor will be entitled to receive one new ordinary
Stagecoach share for each 10 ordinary shares purchased under paragraph 4
above then held. This entitlement will be subject to the relevant Investor
continuing to be employed by Coach, except where prior termination by the
employer was without cause and subject to appropriate performance criteria
being achieved. These arrangements will be subject to the required approval
of Stagecoach shareholders being obtained.
6. Stagecoach intends that senior executives of Coach will be entitled to
participate in the existing Stagecoach executive share option scheme or an
appropriate equivalent phantom option scheme arrangement.
7. Existing underwater options will be cancelled.
8. For an executive who is entitled to terminate his contract on a change of
control and to receive a lump sum payment:
(i) if the executive terminates his employment within a period of three
years from the date of the change of control, he will be entitled to
receive the termination payment which would have been due had the
contract been terminated upon
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the change of control together with interest on that sum for the
period from the date of the change of control to the date of
termination at a rate equivalent to the retail bank rate.
(ii) if the executive terminates his employment at any time following the
3 year period above, the executive will be entitled to an amount
calculated on the basis of (i) above or to receive a cash payment
equal to the number of Stagecoach shares which, at the market price
prevailing on the date of the change of control, could have been
purchased with the relevant termination payment had the contract
been terminated upon the change of control, multiplied by the market
price of Stagecoach shares prevailing on the date of termination of
the employment, whichever of the two (2) amounts described above is
the greater amount.
Each of the signatories hereto and Stagecoach agree that this term sheet is a
statement of mutual intent for the purpose of aiding negotiation, and remains
subject to the negotiation of other material terms and the negotiation and
execution of definitive service agreements. The signatories hereto agree to
negotiate definitive service agreements on the basis of the terms herein in good
faith.
/s/ XXXXX XXXX
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Xxxxx Xxxx
/s/ XXXXX XXXXXXXXX
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Xxxxx Xxxxxxxxx
/s/ XXXXXX XXXXXXXXXX
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Xxxxxx Xxxxxxxxxx
/s/ XXXX XXXXXXXXXX
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Xxxx Xxxxxxxxxx
