EXHIBIT 10.2
FORM OF
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement, dated as of the 19th day of February, 1999, is between ABC
Rail Products Corporation, a Delaware corporation ("ABC"), NACO, Inc., a
Delaware corporation and a wholly owned subsidiary of ABC ("NACO"), and
______________ ("Employee").
RECITALS
A. The parties hereto wish to amend, restate and supersede in its
entirety the Employment Agreement, dated as of the 29th day of June, 1988,
between NACO and the Employee, upon the terms and subject to the conditions set
forth herein.
B. The Employee is a key employee of ABC and NACO.
C. ABC and NACO desire to engage the Employee as an employee to render
services to ABC and NACO and to provide for the financial security of the
Employee.
TERMS AND CONDITIONS
For valuable consideration, the parties agree as follows:
1. DEFINITIONS.
a. A "Change in Control" of NACO shall mean (i) any acquisition,
beneficially or otherwise, by an "Unrelated Party" of 25% or more
of the common stock of NACO issued and outstanding immediately
prior to such acquisition (a series of acquisitions by an
Unrelated Party shall be treated as a single acquisition to the
extent the aggregate number of shares acquired in such series
exceeds 25%); (ii) a voluntary or involuntary dissolution or
reorganization of NACO; (iii) a change in the majority of the
board of directors of NACO in connection with, or directly
resulting from, a merger, sale of assets or other reorganization
of NACO, an Unrelated Party tender offer or proxy contest, or the
acquisition by a person or group of more than 25% of the voting
power of NACO; or (iv) a sale by NACO of substantially all of its
assets to another corporation which is not a wholly owned
subsidiary of NACO. A change in the majority of the board of
directors shall be deemed to have occurred if the persons who
were directors of NACO immediately before such event or
acquisition cease to constitute a majority of the board of
directors of NACO or any successor to NACO. For the purpose of
this subsection, an "Unrelated Party" shall mean any party or
group of parties acting together, excluding, however, NACO, any
trustee under any employee benefit plan maintained by NACO, and
any nominee holder for securities exchange in which the common
stock of NACO may be traded, if any. Notwithstanding anything
contained herein to the contrary, a Change in Control shall not
include the reincorporation of NACO in a state other than
Delaware or the restructuring of NACO to create a holding
company, provided that such restructuring does not otherwise
result in Change in Control.
b. "For Cause" shall mean any act of the Employee which constitutes,
on the part of the Employee, common law fraud, a felony or a
gross or willful breach of fiduciary duty to ABC or NACO.
c. "Good Reason" shall mean (i) a reduction in the Employee's annual
base salary, targeted bonus percentage or benefits; (ii) a
significant reduction in the duties, authorities or
responsibilities of the Employee's position; (iii) ABC's or
NACO's requiring the Employee to be based at any office or
location other than at which the Employee is based on the date of
the Change in Control; or (iv) the termination of this Agreement
or the failure to assume the terms of this Agreement, as the case
may be, by ABC or NACO or any successor of ABC or NACO.
2. TERMINATION OF EMPLOYMENT.
a. If ABC or NACO terminates the Employee's employment for a reason
other than For Cause, the Employee shall be compensated by ABC as
follows, in addition to any other payments from ABC or NACO due
to the Employee:
(i) Base salary as of the termination date (or prior to any
reduction resulting in Good Reason for resignation) for a
period of twenty-four months.
(ii) Continuation of ABC's medical, dental and life insurance
coverage in effect at the termination date for a period of
two years or until the Employee is covered by a similar
insurance plan at a new employer, if sooner.
(iii) Continuation of the Employee's car lease or car allowance
for a period of twenty-four months.
(iv) Payment of outplacement services as selected by the
Employee.
(v) The prorata share, based upon the number of months
employed during the fiscal year, of bonus that would have
been earned by the Employee in the fiscal year that the
termination occurs.
b. If, within three years following a Change in Control, ABC or NACO
terminates the Employee's employment for a reason other than For
Cause, or if the Employee terminates his employment with ABC or
NACO for Good Reason, the Employee shall be compensated as
follows, in addition to any other payments from ABC or NACO due
to the Employee:
(i) Each of the items included above in Section 2.a. (i) - (v)
inclusive.
(ii) A payment equal to the larger of (i) two times the average
of the bonus paid to the Employee during the prior two
fiscal years; or (ii) two times the bonus the Employee
would earn based upon the current salary times the
targeted bonus percentage during the year in which the
termination occurs.
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c. If the payments to the Employee under this Section or combined
with other payments to the Employee cause the payments to be in
excess of certain limitations set forth in the Internal Revenue
Code and result in the imposition of excise tax on such payments,
ABC will reimburse the Employee for such excise tax plus the
income and excise taxes thereon.
3. MISCELLANEOUS.
a. This Agreement shall inure to the benefit of, and be enforceable
by, the Employee's legal representatives, heirs and assigns. If
the Employee should die while any amounts are still payable to
him hereunder, all such amounts shall be paid in accordance with
the terms of this Agreement to the Employee's estate.
The parties have executed this Agreement and it becomes effective as of the
date set forth in Recital A on the first page of this Agreement.
NACO, Inc.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Executive Vice President--Corporate
Development and Secretary
ABC RAIL PRODUCTS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Corporate Controller and Assistant Secretary
Employee
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