Exhibit 10.24
AGREEMENT
This AGREEMENT (the "Agreement"), dated as of February 15,
2001, between Motor Coach Industries International, Inc., a Delaware
corporation, and Tocatta, Inc., a Florida corporation (the "Consultant").
WHEREAS, Motor Coach Industries International, Inc. is
desirous of retaining Consultant whereby the Consultant will provide the
services of Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx, III, as interim Chief
Executive Officer and interim Chief Operating Officer, respectively, of Motor
Coach Industries International, Inc. and its subsidiaries and affiliates
(individually and collectively referred to herein as "Company");
WHEREAS, Consultant is ready, willing, and able to provide the
aforementioned services;
WHEREAS, the parties desire to enter into this Agreement
setting forth the terms and conditions of the services to be provided by the
Consultant to the Company.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. Services to be Provided.
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Effective as of February 15, 2001, the Company hereby
agrees to engage the Consultant, and the Consultant hereby agrees to provide to
Company, upon the terms and subject to the conditions set forth herein, the
services of Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx, III, as interim Chief
Executive Officer and interim Chief Operating Officer, respectively (each, an
"Officer", and collectively, the "Officers"), as such duties may be defined and
modified from time to time by the Company's board of directors ("Board"). In
addition, Consultant shall cause the Chief Executive Officer to serve as a
director on the Board, to serve at the pleasure of the Board.
2. Term.
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Subject to Section 8 hereof, the term of this Agreement
(the "Term") is for an initial period commencing on February 15, 2001, and
terminating on February 15, 2002. Thereafter, the Term may be extended upon
mutual written agreement of the Company and Consultant.
3. Insurance and Indemnity of the Officers.
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The Company shall maintain Directors' & Officers' liability
insurance in such amount as the Board from time to time determines, and the
Company shall cause the Officers to be included within the coverage of such
insurance during the Term and any extension thereof. The Company shall indemnify
the Officers to the maximum extent permitted under Delaware law
and the Company's by-laws. The Company shall also obtain and maintain, during
the Term and any extension thereof, life insurance for each of the Officers in
the amount of at least $1 million for each Officer.
4. Independent Contractor.
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Nothing herein contained shall be construed to constitute
the parties hereto as partners or as joint venturers, or either as agent of the
other, or as employer and employee, and Consultant shall not present to third
parties that any such relationships exist between the Company and the
Consultant. Consultant shall perform consulting services hereunder as an
independent contractor to the Company and, unless specifically authorized in
writing, Consultant shall have no authority to obligate the Company or enter
into any agreement on its behalf.
5. Fees.
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(a) During the Term, in consideration of all of the
services to be provided by the Consultant hereunder, the Company shall pay to
the Consultant the sum of $8,000.00 per week, payable on a bi-weekly basis
("Base Fee"). Notwithstanding the preceding sentence, in the event that (i) the
Company's independent auditing firm issues a qualified opinion in connection
with its audit of the Company's financial statements, and (ii) the Consultant
has elected not to terminate the Agreement in accordance with Section 8, the
Company shall pay Consultant a $75,000.00 retention bonus within thirty (30)
days of the issuance of the opinion.
(b) In addition to the Base Fee, and in the event that
Motor Coach Industries International, Inc. ("MCII") achieves a certain level of
EBITDA for calendar year 2001 (as defined and determined in MCII's final audited
financial statements for 2001) and this Agreement has not been terminated prior
to the expiration of the Term, the Company shall pay to the Consultant the
following performance-based fee(s):
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LEVELS 2001 EBITDA (in millions) PERFORMANCE FEE(S)
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1 55 to 64.999 $400,000
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2 65 to 74.999 Xxxxx 0 plus $500,000
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3 75 to 84.999 Xxxxx 0 plus $600,000
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4 85 + Level 3 plus $700,000
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Notwithstanding the foregoing, in the event that (i) the Company's independent
auditing firm issues a qualified opinion in connection with its audit of the
Company's financial statements, and (ii) the Consultant has elected not to
terminate the Agreement in accordance with Section 8, the Company and the
Consultant will negotiate mutually agreeable performance fee and 2001 EBITDA
levels required to earn the performance fee(s). Any fees earned in accordance
with this subsection shall be paid on or before April 15, 2002.
6. Business Expenses.
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The Consultant shall be reimbursed by the Company for all
reasonable and necessary business expenses incurred by the Officers in
connection with their services (including, without limitation, reasonable
expenses for travel and entertainment incurred in conducting or promoting
business for the Company) upon timely submission by the Consultant of receipts
and other documentation as required by the Internal Revenue Code of 1986, as
amended (the "Code"), and in accordance with the Company's normal expense
reimbursement policies.
7. Ownership of Intellectual Property.
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All intellectual property conceived or developed by the
Consultant and/or either of the Officers during the Term which relate to the
Company or any of its products or services shall belong to and constitute
property of the Company. To the extent any such property is not considered to be
a "work for hire," then Consultant hereby assigns all of its rights, title and
interest in any such intellectual property to the Company.
8. Termination of Agreement.
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The services by the Consultant pursuant to this Agreement
shall not be terminated prior to the end of the Term except as set forth in this
Section 8. Consultant may terminate this Agreement immediately in the event that
the Company's independent auditing firm issues a qualified opinion in connection
with its audit of the Company's financial statements. In addition, this
Agreement shall be terminated (a) by mutual written agreement of the Company and
the Consultant; or (b) by the death or disability of the Officers; provided,
however, that in the event of the death or disability of one of the Officers and
the Agreement is not otherwise terminated, the Base Fee shall be reduced by 25%
effective as of the date of death or disability of the Officer, and the
performance fee(s) set forth in Section 5(b) shall be reduced by 25%; or (c) by
the Company for Cause (as defined herein); or (d) by the Company without Cause.
As used in this Agreement, "Cause" shall mean one or more of the following
events: (i) either of the Officers has failed to perform his material duties in
a reasonably satisfactory manner; or (ii) any reckless or grossly negligent act
by either of the Officers having the effect of injuring the interest, business
or reputation of the Company in any material respect; or (iii) the commission by
either of the Officers of any felony (including entry of a nolo contendere
plea); or (iv) any misappropriation or embezzlement by either of the Officers of
any property of the Company. Upon termination of the Agreement pursuant to this
Section 8, other than termination by the Company without Cause, the Company
shall pay to the Consultant the Base Fee accrued through the effective date of
termination. Upon termination of the Agreement by the Company without Cause, the
Company shall pay the Consultant 50% of the Base Salary for the remainder of the
Term.
9. Representations.
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(a) The Company represents and warrants that this Agreement
has been authorized by all necessary corporate action of the Company; that this
Agreement is a valid and binding agreement of the Company enforceable against it
in accordance with the Agreement's terms; and that the Company is not a party to
any agreement or instrument which would prevent it from performing its
obligations in any way under this Agreement.
(b) The Consultant represents and warrants that this
Agreement has been authorized by all necessary corporate action of the
Consultant; that this Agreement is a valid and binding agreement of the
Consultant enforceable against it in accordance with the Agreement's terms; and
that the Consultant is not a party to any agreement or instrument which would
prevent it from entering into or providing its services in any way under this
Agreement.
10. Assignment; Binding Agreement.
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This Agreement is a personal contract and the rights and
interests of the Consultant hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by it, except as otherwise expressly
permitted by the provisions of this Agreement. Moreover, Consultant may not
delegate the performance of the services to be provided under this Agreement
other than to Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx, III. This Agreement
shall inure to the benefit of and be enforceable by the Consultant and its
successors and permitted assigns. The Company may assign this Agreement to any
of its subsidiaries or other affiliates.
11. Non-Competition Covenants.
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During the Term (and any extension thereof) and until the
third anniversary of the expiration thereof, the Consultant shall not, and the
Consultant shall cause each of the Officers not to, directly or indirectly, (a)
participate in the ownership, management, operation or control of, or be
connected with or employed by, or act as a consultant for, or have any financial
interest in or aid or knowingly assist any other person or entity in the conduct
of, any business or entity that (i) engages in any aspect of the designing,
manufacturing, assembling and marketing of coaches of monocoque or unitized
construction configuration, or the distribution of replacement parts which are
exclusively for the use of intercity monocoque coaches and monocoque transit
buses (the "Business"), (ii) is contemplating engaging in such Business, or
(iii) provides any services that compete with those services provided in the
Business by the Company, in the case of (i), (ii) and (iii), anywhere within the
Western Hemisphere or (b) hire any officer or other employee of the Company or
solicit or direct anyone else to solicit any officer or other employee of the
Company (i) to terminate his or her employment or other relationship with the
Company or (ii) to seek or accept employment or other affiliation with any other
entity (other than any solicitation directed at the public in general in
publications available to the public in general).
12. Confidentiality Covenant.
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The Consultant agrees that it will not, and the Consultant
shall cause each of the Officers not to, at any time during the Term or at any
time thereafter, directly or indirectly, use for its or his own account, or
disclose to any person, firm or corporation, other than authorized officers,
directors and employees of the Company, any Confidential Information (as defined
herein) of the Company. As used herein, "Confidential Information" of the
Company means information of any kind, nature, or description that is disclosed
to or otherwise known to the Consultant and/or the Officers as a direct or
indirect consequence of its, his, or their association with the Company, and
which is not generally known to the public or in the businesses in which the
Company is engaged, or which information relates to specific investment
opportunities within the scope of the business of the Company which were
considered by the Company during the Term.
13. Entire Agreement.
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This Agreement contains all the understandings between the
parties hereto pertaining to the matters referred to herein, and supersedes any
other undertakings and agreements, whether oral or in writing, previously
entered into by them with respect thereto. The Consultant represents that, in
executing this Agreement, it does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with regard
to the subject matter or effect of this Agreement or otherwise.
14. Amendment or Modification; Waiver.
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No provision of this Agreement may be amended or waived,
unless such amendment or waiver is agreed to in writing, signed by the
Consultant and by a duly authorized officer of the Company. No waiver by any
party hereto of any breach by another party hereto of any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of a similar or dissimilar condition or provision at the same time, any prior
time or any subsequent time.
15. Notices.
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Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or facsimile or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice hereunder in writing:
To the Consultant at:
Tocatta, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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Facsimile: 000-000-0000
To the Company at:
MCII Holdings (USA), Inc.
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Any notice delivered personally or by courier under this
Section 15 shall be deemed given on the date delivered, and any notice sent by
facsimile or registered or certified mail, postage prepaid, return receipt
requested, shall be deemed given on the date transmitted by facsimile or mailed.
16. Severability.
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If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law. Moreover, if any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity or
subject, such provisions shall be construed by limiting and reducing them so as
to be enforceable to the fullest extent permitted by law.
17. Survivorship.
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The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
18. Applicable Law.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles and conflicts of law thereof. THE PARTIES HERETO WAIVE THEIR RIGHT TO
A JURY TRIAL WITH RESPECT TO DISPUTES HEREUNDER. The Company and the Consultant
hereby agree and consent to the jurisdiction of the Chancery Court of and for
New Castle County, Delaware (the "Court"). The Consultant hereby irrevocably
consents to the service of any and all process in any such suit, action or
proceeding by the delivery of such process to such party at the address and in
the manner provided in Section 15.
19. Headings.
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All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
20. Status of Payments to Consultant.
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(a) The fees or any other amounts paid to Consultant
hereunder shall not be considered salary for any purpose, and Consultant and the
Officers will not be entitled to any of the fringe and supplemental benefits
that the Company provides for its employees. The Company shall have no liability
whatsoever to the Consultant hereunder on account of this Agreement, except
payment to Consultant of the fee(s) provided for in Article 5 hereof.
(b) Consultant has full responsibility for the payment of
all federal, state, and local taxes or contributions imposed or required under
unemployment insurance, social security, FICA, and income tax laws applicable to
Consultant and/or the Officers in connection with this Agreement.
21. Counterparts.
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This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
MOTOR COACH INDUSTRIES INTERNATIONAL, INC.
By: /s/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: CFO
TOCATTA, INC.
By: /s/Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: COO