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Exhibit 10.61
NONQUALIFIED DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made and entered into as of this 3rd day of January,
1997, by and between RailAmerica, Inc., a corporation headquartered in Boca
Raton, Florida (the "Employer"), and Xxxx X. Xxxxxx, a resident of the State of
Virginia (the "Employee").
WHEREAS, the Employee has been employed by the Employer as its
President and Chief Operating Officer;
WHEREAS, the Employer recognizes the value of the services performed
by the Employee and wishes to encourage his continued employment;
WHEREAS, the Employee wishes to be afforded the opportunity to defer
payment of compensation until a future date and the Employer desires to
facilitate that goal and to also contribute an additional amount toward the
Employee's retirement pay;
WHEREAS, the parties hereto wish to provide the terms and conditions
upon which the Employee may defer compensation and the Employer may contribute
toward the Employee's retirement pay; and
WHEREAS, the parties hereto intend that this Agreement be considered
an unfunded arrangement, maintained primarily to provide deferred compensation
and retirement benefits for the Employee, a member of a select group of
management or highly compensated employees of the Employer, for purposes of the
Employee Retirement Income Security Act of 1974, as amended;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the parties hereto agree as follows:
1. DEFERRAL OF COMPENSATION OR BONUS. Commencing with the date
of this Agreement, and continuing through the date on which the Employee's
employment terminates because of his death or any other cause, the Employee and
the Employer agree that the Employee shall be entitled to elect to defer any
percentage of the compensation that the Employee would otherwise be entitled to
receive from the Employer in each Fiscal Year of the Employer. In addition,
the Employee shall be entitled to elect to defer all or any portion of any
bonus that the Employer may award during or for any Fiscal Year.
2. ELECTION TO DEFER COMPENSATION. The Employee may elect to
defer compensation or bonus hereunder by filing a written notice to that effect
with the Employer, referred to as an Election of Deferral. Any such Election
of Deferral shall be made before the Employee has earned the right to the
compensation or bonus deferred and shall continue until changed in writing by
the Employee. Any change in the Employee's Election of Deferral shall be
effective with the first payment of compensation or bonus that the Employee
earns and that otherwise would be paid following delivery of notice of a change
in the Employee's Election of Deferral. Any amount of compensation or bonus
deferred shall be referred to as the "Deferral Amount."
3. TRANSFER OF DEFERRAL AMOUNT TO TRUSTEE. The Employer shall
transfer to the then acting trustee (the "Trustee") of the RailAmerica, Inc.
Nonqualified Deferred Compensation Trust (the "Trust") the Employee's Deferral
Amount, as soon as practical following the date that the Deferral Amount
otherwise would have been paid to the Employee but for the Employee's Election
of Deferral. The Deferral Amount shall thereafter be invested
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and reinvested by such trustee and paid from the Trust to the Employee, or his
designated beneficiary, in accordance with this Agreement and the Trust. The
Trust and any assets held by the Trust to assist it in meeting its obligations
hereunder will conform to the substantive terms of the trust described in
Internal Revenue Service Revenue Procedure 92-64.
4. EMPLOYER'S ADDITIONS TO DEFERRAL AMOUNT. In addition to the
Employee's Deferral Amount, the Employer also shall transfer to the Trust for
the Employee's benefit each calendar year at least $20,000, with the first
payment to be made as soon as practical following execution of this Agreement
and subsequent payments to be made during the first quarter of each subsequent
calendar year. This amount shall be referred to as the "Employer's Additions,"
shall be invested and reinvested by such trustee and paid from the Trust to the
Employee, or his designated beneficiary, in accordance with this Agreement and
the Trust.
5. EMPLOYEE'S DEFERRAL ACCOUNT.
a. DEFERRAL ACCOUNT ESTABLISHED UNDER TRUST. The Employee's
Deferral Amount, the Employer's Additions and the proceeds of the investment
and reinvestment of both, shall be credited to an account maintained by the
Trustee, called the Employee's Deferral Account, and shall be accounted for
separately so long as any amount remains to be paid to the Employee or his
beneficiary hereunder. The Employer shall cause the Trustee to provide to the
Employee periodically, and no less often than once every 12 months, a statement
of the Employee's Deferral Account that shows the current investment status of
the Employee's Deferral Account.
b. TRUST'S INVESTMENT OF DEFERRAL ACCOUNT IN INSURANCE
POLICY. As described in the agreement establishing the Trust, the Trustee may
also invest the assets of the Employee's Deferral Account in one or more life
insurance policies issued on the life of the Employee. If the Trustee elects
to invest all or any portion of the Deferral Account in any life insurance
policy issued on the life of the Employee, then the Employee agrees to assist
the Trustee in making application for any such policy by submitting to any
required physical examination and supplying any information necessary for
completion of such application. To the extent that the Trustee invests the
Deferral Account in any life insurance policy, the value of the Deferral
Account attributable to such investment shall be as provided under such life
insurance policy to the owner thereof. If the Trust elects to invest all or
any portion of the Deferral Account in any life insurance policy paying a death
benefit to the Employer upon the Employee's death, then the amount of any such
proceeds shall be deemed to have been paid to the Deferral Account and shall
increase the death benefit payable under Section 7 hereof to the Employee's
designated beneficiary.
6. TERMINATION BENEFIT. From and after the termination of the
Employee from the service of the Employer, the Trustee thereafter shall
distribute to the Employee's Deferral Account held under the Trust to the
Employee in 120 substantially equal monthly payments. The Employee at his sole
option may make an election before the date benefit payments begin from his
Deferral Account to receive his Deferral Account in equal monthly installment
payments over a shorter period or commencing at a later date than otherwise
would apply, or in a single payment. The election referred to in the preceding
sentence must be made at least 15 days before the date benefit payments are
scheduled to begin and shall be irrevocable. The first designated monthly
payment hereunder or the single payment, as the case may be, shall be due and
payable on the first business day of the second month following the Employee's
termination of employment. Subsequent monthly payments, if any, shall be made
on the first
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business day of each month thereafter for the applicable payment period. In
addition to the election referred to above, the Employee at his sole option at
least 15 days before each annual anniversary date of the commencement of
monthly payments hereunder also may make an election to receive the balance of
his Deferral Account in equal monthly installment payments over a shorter
period than otherwise would apply, or in a single payment. Notwithstanding the
foregoing, the Employer may at any time direct the Trustee to accelerate
payments to the Employee hereunder.
7. DEATH BENEFIT.
a. BEFORE PAYMENT OF TERMINATION BENEFIT BEGINS. In
event of the Employee's death before commencement of termination benefits
hereunder, the Employee's Deferral Account held under the Trust shall be paid
in 120 substantially equal monthly payment to the Employee's designated
beneficiary, in accordance with the last such designation received by the
Employer from the Employee before his death. Alternatively, the designated
beneficiary at his or her sole option may make an election before the date
benefit payments begin to receive monthly installment payments over a shorter
period or commencing at a later date than otherwise would apply, or in a single
payment. The election referred to in the preceding sentence must be made at
least 15 days before the date benefits payments are scheduled to begin and
shall be irrevocable. In any event, the first designated monthly payment or
the single payment, as the case may be, shall be due and payable on the first
business day of the second month following the Employee's death. Subsequent
monthly payments, if any, shall be made on the first business day of each month
thereafter for the applicable payment period. Notwithstanding the foregoing,
the Employer may at any time direct the Trustee to accelerate payments to the
Employee's designated beneficiary hereunder.
b. AFTER PAYMENT OF TERMINATION BENEFIT BEGINS. In the
event of the Employee's death after commencement of termination benefits
hereunder but before completion of all such payments due and owning hereunder,
the Trustee shall continue to make such payments, in equal monthly installments,
over the remainder of the period during which the Employee would have received
such payments, and at the time and in the same manner, had the Employee
survived, Such continuing payments shall be made to the Employee's designated
beneficiary, in accordance with the last such designation received by the
Employer from the Employee before his death. Notwithstanding the foregoing, the
Employer may at any time direct the Trustee to accelerate payments to the
Employee's designated beneficiary hereunder.
c. DESIGNATED BENEFICIARY. The Employee's designated
beneficiary shall be the person(s) named in accordance with the last such
designation received by the Employer from the Employee before his death. If no
such designation has been received by the Employer from the Employee before his
death, said payments shall be made to the Employee's surviving spouse, so long
as she shall live and thereafter to such person or persons, including her
estate, as the Employee's surviving spouse may appoint under her Will, making
specific reference hereto. If the Employee is not survived by a spouse or if
she shall fail to so appoint, then said payments shall be made to the then
living children of the Employee, if any, in equal shares, or to the survivor of
such children.
8. HARDSHIP BENEFIT. In the event the Employee suffers a
financial hardship (as hereinafter defined), the Trustee may, if it deems it to
be in the Employee's best interests, distribute to or on behalf of the Employee
as a hardship benefit (the "Hardship Benefit") any portion of the Employee's
Deferral Account attributable to the Employee's Deferral Amount, including
earnings thereon. Financial hardship shall mean an immediate and heavy
financial
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need of the Employee caused by temporary or permanent disability or incapacity
of the Employee or a dependent of the Employee, medical or educational expenses
of any dependent of the Employee, the purchase or maintenance of a residence of
the Employee or a dependent of the Employee, death of the Employee's spouse or
a material reduction in the Employee's family income (the Employee's and
spouse's income).
9. BENEFIT UPON CHANGE IN CONTROL OF EMPLOYER. In the event of a
Change of Control of the Employer, as defined herein, the Trustee immediately
shall distribute the Employee's Deferral Account held under the Trust to the
Employee in a lump sum. For purposes of this Agreement, Change of Control
shall mean (a) 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 (the "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 voting power of the Employer's then outstanding voting securities
entitled to vote generally, (b) the approval by the stockholders of the
Employer of a reorganization, merger, or consolidation, with respect to which
persons who were stockholders of the Employer 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 Employer's
then outstanding securities, (c) a liquidation or dissolution of the Employer
or (d) the sale of all or substantially all of the Employer's assets.
10. ADDITIONAL PERMITTED DISTRIBUTION. In the event that the
Employer and the Employee enter into a salary continuation agreement, or the
Employer institutes a salary continuation plan covering the Employee, the
Employee shall be permitted to request distribution of all or a portion of the
Employee's aggregate Deferral Amount through the date of such agreement or
plan, and the Trustee shall make prompt distribution to the Employee pursuant
to such request. The Employee shall have a limited period of 30 days from the
date of such agreement or plan within which to request such a distribution from
the Trust.
11. NON-COMPETITION DURING EMPLOYMENT. In consideration of the
foregoing agreements of the Employer, the Employee hereby agrees that, so long
as he remains employed by the Employer, he will devote substantially all of his
time, skill, diligence and attention to the business of the Employer, and will
not actively engage, either directly or indirectly, in any business or other
activity which is or may be deemed to be in any way competitive with or adverse
to the best interests of the business of the Employer.
12. DETERMINATION OF BENEFITS, CLAIMS
PROCEDURE AND ADMINISTRATION.
a. REQUEST FOR BENEFIT. A person who believes that he
is being denied a benefit to which he is entitled under this Agreement
(hereinafter referred to as a "Claimant") may file a written request for such
benefit with the Employer, setting forth his claim. The request must be
addressed to the Chairman of the Board of Directors of the Employer at its then
principal place of business.
b. CLAIM PROCEDURE. Upon receipt of a claim, the
Employer shall advise the Claimant that a reply will be forthcoming within
ninety (90) days and shall, in fact, deliver such reply within such period.
The Employer may, however, extend the reply period for an additional ninety
(90) days for reasonable cause. If the claim is denied in whole or in part,
the Employer shall adopt a written opinion, using language calculated to be
understood by the
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Claimant, setting forth: (a) the specific reason or reasons for such denial;
(b) the specific reference to pertinent provisions of this Agreement on which
such denial is based; (c) a description of any additional material or
information necessary for the Claimant to perfect his claim and an explanation
why such material or such information is necessary; (d) appropriate information
as to the steps to be taken if the Claimant wishes to submit the claim for
review; and (e) the time limits for requesting a review under subsection c and
for review under subsection d hereof.
c. REQUEST FOR REVIEW. Within sixty (60) days after the
receipt by the Claimant of the written opinion described above, the Claimant
may request in writing that the Secretary of the Employer review the
determination of the corporation. Such request must be addressed to the
Secretary of the Employer, at its then principal place of business. The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Employer. If the Claimant does not request a review of the
corporation's determination by the Secretary of the Employer within such sixty
(60) day period, he shall be barred and estopped from challenging the
Employer's determination.
d. DECISION ON REVIEW. Within sixty (60) days after the
Secretary's receipt of a request for review, he will review the Employer's
determination. After consideration of all materials presented by the Claimant,
the Secretary will render a written opinion, written in a manner calculated to
be understood by the Claimant, setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions of this
Agreement on which the decision is based. If special circumstances require
that the sixty (60) day time period be extended, the Secretary will so notify
the Claimant and will render the decision as soon as possible, but no later
than one hundred twenty (120) days after receipt of the request for review.
13. BINDING ARBITRATION. If any dispute arises with respect to
this Agreement, each party shall use its best efforts to resolve the dispute
using the claims procedure provided above. If, after 30 days the dispute has
not been resolved, either party may elect to submit the dispute to mediation by
an independent certified circuit civil mediator selected jointly by the parties
by giving notice to the other party of its election to mediate (the "Mediation
Notice"). If a party elects to mediate a dispute, the other party must mediate
the dispute, although the result of the mediation will not be binding on either
party. The mediator shall convene a meeting of the parties to the dispute
within 60 days after his or her appointment.
Either party may elect to submit the dispute to binding
arbitration before a panel of arbitrators in accordance with the Florida
Arbitration Code and the Florida Evidence Code after the conclusion of the
mediation of the dispute by giving the other party a notice of arbitration in
accordance with section 12 (the "Arbitration Notice"). If the parties do not
resolve the dispute through mediation, arbitration will be the sole and
exclusive method of resolving the dispute. All parties must arbitrate the
dispute, and each party will be barred from filing a lawsuit concerning the
subject matter of the dispute, except to obtain an equitable remedy.
The parties shall select a mutually acceptable Florida
corporate lawyer who is rated "AV" by the Xxxxxxxxxx-Xxxxxxx law directory to
arbitrate the dispute. If within ten (10) days after the effective date of the
Arbitration Notice the parties are unable to select such an arbitrator, an
arbitration panel will be selected. The arbitration panel will consist of
three arbitrators selected by agreement of the parties. At least one of the
arbitrators must be a Florida corporate lawyer who is rated "AV" by the
Xxxxxxxxxx-Xxxxxxx law directory. Each party shall select an arbitrator within
twenty (20) days after the effective date of the Arbitration Notice.
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A party who fails to select an arbitrator within the prescribed 20-day period
waives the right to select an arbitrator, and the arbitrators chosen by the
other party will constitute the "arbitration panel" for purposes of this
Agreement. If each party selects an arbitrator, the two arbitrators so
selected shall select the third arbitrator.
Every mediator or arbitrator must be independent (not a lawyer
or relative of a party to this Agreement or an officer, director, employee, or
shareholder of the Employer) without any economic or financial interest of any
kind in the outcome of the mediation or arbitration. Each arbitrator's conduct
will be governed by the Code of Ethics for Arbitrators in Commercial Disputes
(1986) that has been approved and recommended by the American Bar Association
and the American Arbitration Association.
Within 60 days after the effective date of their election or
appointment, the arbitration panel shall convene a hearing for the dispute to
be held on such date and at such time and place in Broward County or Palm Beach
County, Florida as the arbitration panel designates upon 45 days' advance
notice to the parties. The arbitration panel shall render its decision within
30 days after the conclusion of the hearing. The decision of the arbitration
panel will be binding and conclusive as to all the parties and, upon the
pleading of any party, any court having jurisdiction may enter a judgment of
any award rendered in the arbitration, which may include an award of any
damages. The arbitration panel shall hear and decide the dispute based on the
evidenced produced, notwithstanding the failure or refusal to appear by a party
who has been duly notified of the date, time and place of the hearing.
14. NON-ASSIGNABILITY OF BENEFITS. Neither the Employee, his
designated beneficiary nor any other beneficiary under this Agreement shall
have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part or all of the amounts payable hereunder, which are
expressly declared to be unassignable and non- transferable. Any such
attempted assignment or transfer shall be void and shall terminate this
Agreement; the Employer shall thereupon have no further liability hereunder.
No amount payable hereunder shall, before actual payment thereof, be subject to
seizure by any creditor of any such beneficiary for the payment of any debt,
judgment or other obligation, by a proceeding at law or in equity, nor
transferable by operation of law in the event of the bankruptcy, insolvency or
death of the Employee, his designated beneficiary or any other beneficiary
hereunder.
15. AMENDMENT. This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto or their
respective successors and may not be otherwise terminated except as provided
herein.
16. INUREMENT. This Agreement shall be binding upon and inure to
the benefit of the Employer and its successors and assigns, and the Employee,
his successors, heirs, executors, administrators and beneficiaries.
17. INTENDED TAX CONSEQUENCES. The parties acknowledge that it is
their intent that the Employee's Deferral Amount, the Employer's Additions and
any earnings thereon while held by the Trust will not be subject to income
taxes to the Employee until the Employee (or his Designated Beneficiary)
receives any amount hereunder and will not be deductible by the Employer until
payment hereunder. The Employee's Deferral Amount and the Employer's Additions
may be subject to employment taxes, with respect to which the Employer shall
report and withhold appropriately.
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18. NOTICES. Any notice, consent or demand required or permitted
to be given under the provisions of this Agreement shall be in writing, and
shall be signed by the party giving or making the same. If such notice,
consent or demand is mailed to a party hereto, it shall be sent by United
States certified mail, postage prepaid, addressed to such party's last known
address as shown on the records of the Employer. The date of such mailing
shall be deemed the date of notice, consent or demand.
19. GOVERNING LAW; VENUE. This Agreement, and the rights of the
parties hereunder, shall be governed by and construed in accordance with the
laws of the State of Florida. This Agreement shall be subject to the exclusive
jurisdiction of the courts of Broward County or Palm Beach County, Florida.
The parties irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in Broward County or
Palm Beach County, Florida, and further irrevocably waive any claim that any
suit, action or proceeding brought in Broward County or Palm Beach County,
Florida has been brought in an inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, as of the day and year first above written.
RAILAMERICA, INC.
ATTEST:/s/ Xxxxx X. Xxxx By:/s/ Xxxxxx Xxxxxxxx
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Ass't. Secretary EXECUTIVE VICE PRESIDENT
/s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
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