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Exhibit (c)(2)
EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE OTSEGO
CORPORATION, a New York corporation, with its principal office and place of
business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Employer") and XXXXXX X. XXXX, an individual, residing at 000 Xxxx Xxxxxx,
Xxxxxxxx, XX 00000 (hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as President, Chief Executive Officer
and Director of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be paid
to Employee, and the other terms and provisions of this Agreement were duly
approved by action of Employer's Board of Directors at a meeting held on the 3rd
day of June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM:
Employer does hereby employ Employee as its President and Chief Executive
Officer for an initial term of five (5) years commencing on the date hereof.
The Employer shall have the option to renew this Agreement and extend
Employee's employment upon the same terms and provisions as are contained herein
except as to compensation for an additional period of five (5) years. The
minimum compensation to be paid to Employee during such renewal term shall be
an amount mutually agreeable to the Employer and Employee. The Employer shall
give to Employee written notice of its election to renew this Agreement at
least six (6) months prior to expiration of the initial term.
SECOND: COMPENSATION:
Employer shall pay to Employee for services to be rendered hereunder
compensation at a minimum rate of $187,000.00 per annum during the initial term
hereof, payable in weekly installments or on such other basis as may be agreed
upon. Employee's compensation
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shall be reviewed from time to time by the Board of Directors of Employer or an
appropriate committee thereof, after which such compensation may be increased in
such amount as may be determined by such Board or committee, as the case may be,
in its sole discretion. Nothing contained in this Agreement shall preclude
Employer from granting or Employee from receiving benefits under or
participating in any bonus, incentive, profit sharing, stock option, stock
purchase, retirement, pension, insurance or similar benefit plan of Employer now
or hereinafter in effect for its management personnel.
THIRD: OTHER BENEFITS:
Employee will be provided continued coverage at not less than current
levels under all Employer's life insurance, health, hospitalization, dental and
Major Medical plans. Employee shall also be provided an automobile suitable and
appropriate to his position with Employer.
FOURTH: DUTIES AND SERVICES:
Employee is engaged as President and Chief Executive Officer of
Employer during the term hereof. Employer will use its best efforts and powers
to sustain and continue Employee's election as Director and his designation as
President and Chief Executive Officer; and Employee will serve in such capacity
or capacities for Employer, and will serve in such other capacities for any
controlled affiliate of Employer to which he may be elected or appointed from
time to time. Employee shall devote his full time, attention and efforts to the
business and affairs of Employer, except during usual vacation periods and
reasonable periods of illness or incapacity, and shall perform his duties
faithfully, diligently and to the best of his ability. Subject to Paragraph
SEVENTH, nothing contained herein shall be construed to prevent Employee; (1)
from acting as a member of the Board of Directors of any other corporation and
from receiving compensation therefor; (2) from making investments of any
character in any business; or (3) from otherwise engaging in other business
activities, provided in each cash, however, that such service as a director,
investments, or any business activities do not interfere substantially with the
performance of Employee's duties hereunder. If Employee is not elected as
Director or designated as President and Chief Executive Officer of Employer, or
is removed from either of such positions, in each case without cause and
without his approval, such failure to elect or designate or such removal shall
constitute a default hereunder on the part of Employer and Employee shall
continue to be compensated as provided in Paragraph SECOND hereof, as the case
may be, but from and after any such default (1) Employee's employment shall,
nevertheless, continue in accordance with the terms and provisions of this
Agreement and as a consultant to the Employer, (2) Employee shall thereupon be
obligated to perform consulting services for the Employer at the Employer's
offices in Cooperstown, New York for a maximum, of four (4) days during each
calendar month, and (3) Employee shall not be restricted in performing services
elsewhere for other parties. In such event, Employee shall also receive service
credit under any retirement or pension plan of
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Employer than in effect as if Employee had continued to render uninterrupted
services for the remainder of the term of this Agreement. For the purpose of
this Paragraph, a substantial reduction in Employee's authority, powers or
duties shall constitute removal from his position.
FIFTH: EXPENSES:
The Employer shall arrange for the payment of expenses incurred by
Employee in furtherance of or in connection with the business of the Employer,
including but not limited to all traveling expenses and all entertainment
expenses (whether incurred at Employee's residence, while traveling, or
otherwise). If any such expenses are paid in the first instance by Employee, the
Employer will arrange for his reimbursement therefor. The Employer recognizes
that, in the performance of his duties. Employee may be required to entertain
various persons and representatives of organizations with whom the Employer has
or would like to have business relationships. The Employer will arrange for the
reimbursement of Employee upon presentation of expense vouchers for any such
expenses which are adaptable to the usual accounting procedures established by
the Employer.
SIXTH: WORKING FACILITIES:
Employee shall be furnished with a private office in Cooperstown, New
York and a secretary and such other facilities and services suitable to his
positions and adequate to his needs for the performance of his duties
including, without limitation, suitable transportation at least equal to that
which Employee currently receives from Employer. Employee shall, on a monthly
basis, furnish Employer with itemized information in conformity with its usual
accounting procedures concerning his personal use of any such facilities or
services and shall reimburse Employer for such personal use at rates prescribed
by it.
SEVENTH: CONFIDENTIAL INFORMATION:
Employee shall not, during or subsequent to his employment hereunder,
divulge, furnish or make accessible to anyone (otherwise than in the regular
course of the business of Employer) any knowledge or information, techniques,
plans, trade or business secrets or confidential information relating to the
business of Employer or with respect to any other confidential or secret aspect
of the business of Employer, nor shall Employee make any use of the same for
his own purposes or for the benefit of anyone under any circumstances; provided
that, after the term of his employment, these restrictions shall not apply to
such knowledge, techniques, plans, trade or business secrets or confidential
information which is then in, or subsequently becomes part of, the public
domain, except because of disclosure by Employee without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph
be enforced to the fullest extent permissible under the laws and public
policies in each jurisdiction in which enforcement might be sought.
Accordingly, if any particular portion of this Paragraph be adjudicated as
invalid or unenforceable, this Paragraph shall be deemed amended to delete
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therefrom such portion so adjudicated, such deletion to apply only with respect
to the operation of this Paragraph in the particular jurisdiction so
adjudicating. If there be a breach or threatened breach of this Paragraph,
Employer shall be entitled to an injunction restraining Employee from such
breach, but nothing herein shall be construed as prohibiting Employer from
pursuing any other remedies for such breach or threatened breach. The
provisions of this paragraph SEVENTH shall survive the termination or
expiration of this Agreement.
EIGHTH: DISABILITY:
If (1) Employee shall suffer any illness, disability or incapacity so
that he is unable to perform his duties hereunder and such illness, disability
or incapacity shall be deemed by a duly licensed physician (who may be
Employee's personal physician) to be permanent or (2) Employee is unable to
render full-time services to the Employer of the character required hereunder
for services to the Employer of the character required hereunder for a period of
six (6) consecutive months by reason of illness, disability or incapacity and
the Board of Directors of the Employer and if the Company determines that
Employee has been permanently disabled, then and in either of such events,
Employee will continue to render such advisory and consultative services as he
is able, and as may be reasonably requested of him by the directors and officers
of the Employer and he shall receive his annual compensation for the balance of
the term of this Agreement in such installments as he shall then be currently
receiving. Compensation during any period of disability shall be adjusted for
reimbursement from any disability insurance paid for by Employer.
NINTH: DEATH:
In the event of Employee's death during the term of this Agreement,
the Employer shall pay to Employee's designated beneficiary or beneficiaries,
or, in default of such designation, to his estate, the annual salary due for
the balance of the Agreement prorated for any partial year thereof and payable
in a lump sum within ninety (90) days from the date of his death.
TENTH: EARLY TERMINATION:
This Agreement may be terminated prior to the end of the Term provided
in paragraph FIRST under and subject to the following conditions:
a) Employee shall have the right to terminate this Agreement during the
Term by giving thirty (30) days advance written notice. Upon the expiration
of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and after the
date hereof, either Employer or Employee may, at his/its independent election,
such election to be evidenced by written notice, terminate this Agreement.
Effective upon the giving of such notice, regardless of which party elects to
give such notice, Employer shall pay to Employee a sum equal to Employee's then
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current annual salary multiplied by the years (including fractional years)
remaining in the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings. As used in this Paragraph THIRD, "change in
control" means (i) any such change required to be reported to the Securities
and Exchange Commission under Item 1 in a Current Report on Form 8-K (or a
successor provision thereof); provided, however, that no change in control
shall be deemed to have occurred which involves the acquisition, holding,
voting or disposing of less than 40% of Employer's outstanding voting
securities, or (ii) the sale of all or a substantial portion of the productive
assets of Employer. For purposes of this Paragraph, "Employer" shall include
both jointly and severally, Delaware Otsego Corporation and The New York,
Susquehanna and Western Railway Corporation.
c) Employer may terminate this Agreement at any time without cause by
giving thirty (30) days advance written notice to Employee. Effective upon the
giving of such notice, Employer shall pay to Employee a sum equal to Employee's
then current annual salary multiplied by the years (including fractional years)
remaining in the Term of this Agreement prior to the giving of such notice,
less any legally required withholdings.
d) Employer may terminate this Agreement at any time for cause. For
purposes of this Agreement, "cause" shall include any one or more of the
following:
1. A material breach of any covenant, provision or condition
of this Agreement by Employee.
2. Commission by Employee of a felony or a crime involving
moral turpitude.
3. Any gross negligence or willful misconduct in the
performance of Employee's duties that results in detriment to Employer.
Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
ELEVENTH: NOTICE:
Any notice required or given under this Agreement shall be sufficient if in
writing and sent by registered or certified mail to his residence in the case
of Employee or to Attention: Secretary, Delaware Otsego Corporation in the case
of Employer, at the addresses hereinabove set forth, or to such other addresses
as may be designated.
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subsequently by the parties hereto. Any such notice shall be deemed given when
so addressed and mailed.
TWELFTH: WAIVER OF BREACH:
A waiver by Employer or Employee of a breach of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of any
subsequent breach by the other party.
THIRTEENTH: ENTIRE AGREEMENT:
This Agreement contains the entire understanding and agreement between the
parties and cannot be amended, modified or supplemented in any respect, except
by an agreement in writing signed by the party against whom enforcement of any
amendment, modification or supplement is sought.
FOURTEENTH: SUCCESSORS AND ASSIGNS:
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns including, without limitation, any corporation or
other entity which may acquire all or substantially all of the capital stock,
assets and/or business of Employer or with or into which Employer may be
consolidated or merged, and Employee, his heirs, executors, administrators and
legal representatives.
FIFTEENTH: GOVERNING LAW:
This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
/s/ XXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxx X. Xxxxxxx
Chairman of the Board
/s/ XXXXXX X. XXXX
-----------------------------
Xxxxxx X. Xxxx
Chief Executive Officer
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RIDER TO EMPLOYMENT AGREEMENT
This Rider to Employment Contract (hereinafter "this Rider") is entered into as
of July 14, 1997 by and between Xxxxxx X. Xxxx , (hereafter "Employee") and
DELAWARE OTSEGO CORPORATION (hereafter "Employer").
WHEREAS, Employer and Employee entered into an Employment Agreement dated June
3, 1995 (hereinafter the "Employment Agreement"); and
WHEREAS, Employer and Employee, after receiving certain advice regarding the
income tax treatment of certain payments that Employee may be entitled to
receive under the Employment Agreement, wish to enter into this Rider for their
mutual benefit;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth hereinafter and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties, intending to be legally bound,
covenant and agree as follows:
1. In the event of a termination of the Employment Agreement pursuant to the
provisions of Section NINTH (b) or (c) upon or as a result of a change in
control of Employer then, notwithstanding any inconsistent provisions of the
Employment Agreement to the contrary, the amount to be paid to Employee by
Employer shall be equal to 2.99 times the highest annual cash compensation,
consisting solely of salary and bonus, paid to the Employee during any calendar
year in each of the three calendar years immediately prior to the change in
control. In addition,
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the Employer shall continue to provide the Employee for a period of 2.99 years
after such termination with health, hospitalization and medical insurance as
were provided at the time of the termination, at the Employer's expense. In
making such payment, Employer shall cooperate with Employee, at Employee's
election, in deferring payment of part or all of such sum over a period of three
calendar years.
2. Notwithstanding the foregoing, prior to the payment of any amount payable as
set forth above, the certified public accountants of the Employer immediately
prior to the change in control, (the "Certified Public Accountants") shall
determine as promptly as practical and in any event within 20 business days
following such termination the deductibility of any payment or distribution by
the Employer to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of the Employment Agreement,
this Rider or otherwise) (the "Agreement Payments") by the Employer for Federal
income purposes because of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"). The Certified Public Accountants will determine the
amount, if any, that the Agreement Payments shall be increased or decreased to
maximize the aggregate present value of Agreement Payments without causing any
portion of such Agreement Payments to be nondeductible by the Employer because
of said Section 280G of the Code.
3. If under paragraph 2 of this Rider the Certified Public Accountants determine
that any adjustment to the Agreement Payments is required, the Employer shall
promptly give the Employee notice to that effect and a copy of the detailed
calculation thereof , together with a statement showing which and how much of
the Agreement Payments shall be adjusted.
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4. As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may be made by the Employer which
should not have been made ("Overpayment") or that additional Agreement Payments
which will have not been made by the Employer could have been made
("Underpayment"), in each case, consistent with the determination made by the
Certified Public Accountants under paragraph 2 and 3 of this Rider. In the event
that advice and determination of the Certified Public Accountants under
paragraphs 2 and 3 is followed by Employer and Employee and the Certified Public
Accountants, based upon the assertion of a deficiency by the Internal Revenue
Service, determines that an Overpayment has been made, then the Employer shall
make additional payments to Employee sufficient to (i) reimburse Employee for
his expenses, if any, for representation before the Internal Revenue Service,
and (ii) result in the net payment received by Employee after income taxes,
after consideration of any additional tax, interest or penalties imposes by the
Internal Revenue Service, being equal to the amount Employee would have received
had no Overpayment been made. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Employee.
5. Payment by the Employer of the sums provided for herein, together with any
wages earned prior to the termination of the employment Agreement, shall
constitute full settlement of any land all claims which Employee may have
against Employer. Employee and Employer shall, upon Employer's reasonable
request, execute a mutual release of all claims.
6. Except as expressly set forth herein, the terms and conditions of the
Employment
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Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Rider on the 14th day
of July, 1997.
DELAWARE OTSEGO CORPORATION Employee
by: s/ Xxxxxxx Xxxxxxx s/Xxxxxx X. Xxxx
------------------------------------ -----------------------------------
Chairman of the Board of Directors
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EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE OTSEGO
CORPORATION, a New York corporation, with its principal office and place of
business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Employer") and C. XXXXX XXXXX, an individual, residing at X.X. Xxx 000,
Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as Executive Vice President and Chief
Operating Officer of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be paid
to Employee, and the other terms and provisions of this Agreement were duly
approved by action of Employer's Board of Directors at a meeting held on the 3rd
day of June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM: Employer does hereby employ Employee as its Executive Vice
President and Chief Operating Officer for a period of five (5) years commencing
on the date hereof, unless sooner terminated as provided herein. This Agreement
may be renewed for such term or terms as may be mutually agreed upon by Employer
and Employee. Not later than six (6) months prior to the expiration date of the
initial term of this Agreement, Employer shall, at the request of Employee,
discuss with Employee the subject of the renewal of the term of this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, this
Agreement, if still then in effect, shall terminate on Employee's 65th birthday.
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SECOND: COMPENSATION: Employer shall pay to Employee for services to be
rendered hereunder compensation at a minimum rate of $125,000.00 per annum,
payable in weekly installments or on such other basis as may be agreed upon.
Employee's compensation shall be reviewed from time to time by the Board of
Directors of Employer or an appropriate committee thereof, after which such
compensation may be increased in such amount as may be determined by such Board
or committee, as the case may be, in its sole discretion. Nothing contained in
this Agreement shall preclude Employer from granting or Employee from receiving
benefits under or participating in any bonus, incentive, profit sharing, stock
option, stock purchase, retirement, pension, insurance or similar benefit plan
of Employer now or hereinafter in effect for its management personnel.
THIRD: DUTIES AND SERVICES: Employee is engaged as Executive Vice President
and Chief Operating Officer of Employer during the term hereof. Employer will
use its best efforts and powers to sustain and continue Employee's election as
Executive Vice President and Chief Operating Officer and his designation as
Executive Vice President and Chief Operating Officer; and Employee will serve in
such capacity or capacities for Employer, and will serve in such capacity or
capacities for any controlled affiliate of Employer to which he may be elected
or appointed from time to time. Employee shall devote his full time, attention
and efforts to the business and affairs of Employer, except during usual
vacation periods and reasonable periods of illness or incapacity, and shall
perform his duties faithfully, diligently and to the best of his ability.
Subject to Paragraph SEVENTH, nothing contained herein shall be construed to
prevent Employee: (1) from acting as a member of the Board of Directors of any
other corporation and from receiving compensation therefor; (2) from making
investments of any character in any business; or (3) from otherwise engaging in
other business activities, provided in each case, however, that such service as
a director, investments, or any business activities do not interfere
substantially with the performance of Employee's duties hereunder. In the event
of Employer's breach of Paragraph SIXTH herein, or if Employee is not designated
as Executive Vice President and Chief Operating Officer of Employer, or is
removed from such position(s), in each case without cause and without his
approval, Employee shall continue to be compensated for the remainder of the
Term of this Agreement as provided in Paragraph SECOND hereof, but from and
after any such default Employee's employment shall, nevertheless, continue in
accordance with the terms and provisions of this Agreement and as a consultant
to the Employer, (2) Employee shall thereupon be obligated to perform consulting
services for the Employer at the Employer's offices in Cooperstown, New York for
a maximum of four (4) days during each calendar month, and (3) Employee shall
not be restricted in performing services elsewhere for other parties. In the
event of any such default, Employee shall also receive service credit under any
retirement or pension plan of Employer then in effect as if Employee had
continued to render uninterrupted services for the remainder of the term of this
Agreement had it remained in full force and effect. For the purpose of this
Paragraph, a substantial reduction in Employee's authority, powers or duties
shall constitute removal from his position.
FOURTH: EXPENSES: Employee is authorized to incur reasonable and necessary
expenses for promoting the business of Employer, including expenses for
entertainment, travel and similar items.
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Employer will reimburse Employee for all such expenses upon presentation by him,
from time to time, of an itemized account thereof in conformity with Employer's
usual accounting procedures.
FIFTH: WORKING FACILITIES: Employee shall be furnished witha private office
in Cooperstown, New York, or such other location as may be mutually agreed upon,
and a secretary and such other facilities and services suitable to his positions
and adequate to his needs for the performance of his duties including, without
limitation, suitable transportation, at least equal to that which Employee
currently receives from Employer. Employee shall, on a monthly basis, furnish
Employer with itemized information in conformity with its usual accounting
procedures concerning his personal use of any such facilities or services and
shall reimburse Employer for such personal use at rates prescribed by it.
SIXTH: CONFIDENTIAL INFORMATION: Employee shall not, during or subsequent
to his employment hereunder, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of the business of Employer) any knowledge
or information, techniques, plans, trade or business secrets or confidential
information relating to the business of Employer or with respect to any other
confidential or secret aspect of the business of Employer, nor shall Employee
make any use of the same for his own purposes or for the benefit of anyone under
any circumstances; provided that, after the term of his employment, these
restrictions shall not apply to such knowledge, techniques, plans, trade or
business secrets or confidential information which is then in, or subsequently
becomes part of, the public domain, except because of disclosure by Employee
without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph
be enforced to the fullest extent permissible under the laws and public policies
in each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of this Paragraph be adjudicated as invalid or unenforceable,
this Paragraph shall be deemed amended to delete therefrom such portion so
adjudicated, such deletion to apply only with respect to the operation of this
Paragraph in the particular jurisdiction so adjudicating. If there be a breach
or threatened breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing herein shall be
construed as prohibiting Employer from pursuing any other remedies for such
breach or threatened breach. The provisions of this paragraph SEVENTH shall
survive the termination or expiration of this Agreement.
SEVENTH: DISABILITY: If (1) Employee shall suffer any illness, disability
or incapacity so that he is unable to perform his duties hereunder and such
illness, disability or incapacity shall be deemed by a duly licensed physician
(who may be Employee's personal physician) to be permanent; or (2) Employee
shall suffer any illness, disability or incapacity so that he is unable to
render full-time services to Employer of the character required hereunder with
reasonable efficiency for a period of six (6) consecutive months by reason of
illness, disability or incapacity and the Employer determines that Employee has
been permanently disabled, then, and in either of such events, Employee will
continue to render such advisory and consultative services as he is able, and as
may be reasonably requested of him by the directors and officers of Employer,
and he shall receive his annual
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compensation for the balance of the term of this Agreement in such installments
as he shall then be currently receiving. Compensation during any period of
disability shall be adjusted for reimbursement from any disability insurance
paid for by Employer.
EIGHTH: DEATH: In the event of Employee's death during the term of this
Agreement, the Employer shall pay to Employee's designated beneficiary or
beneficiaries, or, in default of such designation, to his estate, the annual
salary due for the balance of the Agreement prorated for any partial year
thereof and payable in a lump sum within ninety (90) days from the date of his
death.
NINTH: EARLY TERMINATION: This Agreement may be terminated prior to the end
of the Term provided in paragraph FIRST under and subject to the following
conditions:
a) Employee shall have the right to terminate this Agreement during
the Term by giving thirty (30) days advance written notice. Upon the expiration
of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and after the date
hereof, either Employer or Employee may, at his/its independent election, such
election to be evidenced by written notice, terminate this Agreement. Effective
upon the giving of such notice, regardless of which party elects to give such
notice, Employer shall pay to Employee a sum equal to Employee's then current
annual salary multiplied by the years (including fractional years) remaining in
the Term of this Agreement prior to the giving of such notice, less any legally
required withholdings. As used in this Paragraph THIRD, "change in control"
means (i) any such change required to be reported to the Securities and Exchange
Commission under Item 1 in a Current Report on Form 8-K (or a successor
provision thereof); provided, however, that no change in control shall be deemed
to have occurred which involves the acquisition, holding, voting or disposing of
less than 40% of Employer's outstanding voting securities, or (ii) the sale of
all or a substantial portion of the productive assets of Employer. For purposes
of this Paragraph, "Employer" shall include both jointly and severally, Delaware
Otsego Corporation and The New York, Susquehanna and Western Railway
Corporation.
c)Employer may terminate this Agreement at any time without cause by giving
thirty (30) days advance written notice to Employee. Effective upon the giving
of such notice, Employer shall pay to Employee a sum equal to Employee's then
current annual salary multiplied by the years (including fractional years)
remaining in the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings.
d)Employer may terminate this Agreement at any time for cause by written notice.
For purposes of this Agreement, "cause" shall include any one or more of the
following:
1. A material breach of any covenant, provision or condition of this
Agreement by Employee.
2. Commission by Employee of a felony or a crime involving moral turpitude.
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3. Any gross negligence or willful misconduct in the performance of
Employee's duties that results in detriment to Employer.
Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
e) In the event of termination under subparagraphs (a) or (d) above,
Employee hereby expressly agrees that the giving of such notice under such
subparagraphs shall also constitute the termination and cancellation of any
incentive stock options to purchase the common stock of Delaware Otsego
Corporation Employee may then hold.
TENTH: NOTICE: Any notice required or given under this Agreement shall be
sufficient if in writing and sent by registered or certified mail to his
residence in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove set forth, or
to such other addresses as may be designated subsequently by the parties hereto.
Any such notice shall be deemed given when so addressed and mailed.
ELEVENTH: WAIVER OF BREACH: A waiver by Employer or Employee of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
TWELFTH: ENTIRE AGREEMENT: This Agreement contains the entire understanding
and agreement between the parties and cannot be amended, modified or
supplemented in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or supplement is
sought.
THIRTEENTH: SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon Employer and its successors and assigns
including, without limitation, any corporation or other entity which may acquire
all or substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged, and
Employee, his heirs, executors, administrators and legal representatives.
FOURTEENTH: GOVERNING LAW: This Agreement shall be governed by the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
By: s/ Xxxxxx X. Xxxx
-------------------------------------
Title: President
----------------------------------
s/ C. Xxxxx Xxxxx
----------------------------------------
C. XXXXX XXXXX
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RIDER TO EMPLOYMENT AGREEMENT
This Rider to Employment Contract (hereinafter "this Rider") is entered into as
of July 14, 1997 by and between C. Xxxxx Xxxxx , (hereafter "Employee") and
DELAWARE OTSEGO CORPORATION (hereafter "Employer").
WHEREAS, Employer and Employee entered into an Employment Agreement dated June
3, 1995 (hereinafter the "Employment Agreement"); and
WHEREAS, Employer and Employee, after receiving certain advice regarding the
income tax treatment of certain payments that Employee may be entitled to
receive under the Employment Agreement, wish to enter into this Rider for their
mutual benefit;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth hereinafter and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties, intending to be legally bound,
covenant and agree as follows:
1. In the event of a termination of the Employment Agreement pursuant to the
provisions of Section NINTH (b) or (c) upon or as a result of a change in
control of Employer then, notwithstanding any inconsistent provisions of the
Employment Agreement to the contrary, the amount to be paid to Employee by
Employer shall be equal to 2.99 times the highest annual cash compensation,
consisting solely of salary and bonus, paid to the Employee during any calendar
year in each of the three calendar years immediately prior to the change in
control. In addition,
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the Employer shall continue to provide the Employee for a period of 2.99 years
after such termination with health, hospitalization and medical insurance as
were provided at the time of the termination, at the Employer's expense. In
making such payment, Employer shall cooperate with Employee, at Employee's
election, in deferring payment of part or all of such sum over a period of three
calendar years.
2. Notwithstanding the foregoing, prior to the payment of any amount payable as
set forth above, the certified public accountants of the Employer immediately
prior to the change in control, (the "Certified Public Accountants") shall
determine as promptly as practical and in any event within 20 business days
following such termination the deductibility of any payment or distribution by
the Employer to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of the Employment Agreement,
this Rider or otherwise) (the "Agreement Payments") by the Employer for Federal
income purposes because of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"). The Certified Public Accountants will determine the
amount, if any, that the Agreement Payments shall be increased or decreased to
maximize the aggregate present value of Agreement Payments without causing any
portion of such Agreement Payments to be nondeductible by the Employer because
of said Section 280G of the Code.
3. If under paragraph 2 of this Rider the Certified Public Accountants determine
that any adjustment to the Agreement Payments is required, the Employer shall
promptly give the Employee notice to that effect and a copy of the detailed
calculation thereof , together with a statement showing which and how much of
the Agreement Payments shall be adjusted.
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4. As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may be made by the Employer which
should not have been made ("Overpayment") or that additional Agreement Payments
which will have not been made by the Employer could have been made
("Underpayment"), in each case, consistent with the determination made by the
Certified Public Accountants under paragraph 2 and 3 of this Rider. In the event
that advice and determination of the Certified Public Accountants under
paragraphs 2 and 3 is followed by Employer and Employee and the Certified Public
Accountants, based upon the assertion of a deficiency by the Internal Revenue
Service, determines that an Overpayment has been made, then the Employer shall
make additional payments to Employee sufficient to (i) reimburse Employee for
his expenses, if any, for representation before the Internal Revenue Service,
and (ii) result in the net payment received by Employee after income taxes,
after consideration of any additional tax, interest or penalties imposes by the
Internal Revenue Service, being equal to the amount Employee would have received
had no Overpayment been made. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Employee.
5. Payment by the Employer of the sums provided for herein, together with any
wages earned prior to the termination of the employment Agreement, shall
constitute full settlement of any land all claims which Employee may have
against Employer. Employee and Employer shall, upon Employer's reasonable
request, execute a mutual release of all claims.
6. Except as expressly set forth herein, the terms and conditions of the
Employment
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Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Rider on the 14th day
of July, 1997.
DELAWARE OTSEGO CORPORATION Employee
by: s/ Xxxxxx X. Xxxx s/ C. Xxxxx Xxxxx
------------------------------- -----------------------------------
President
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EMPLOYMENT AGREEMENT
AGREEMENT made this 31st day of January, 1996, by and between THE NEW YORK,
SUSQUEHANNA AND WESTERN RAILWAY CORPORATION, a New Jersey corporation, with its
principal office and place of business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxx 00000 (hereinafter called "Employer"), and XXXXXX X. XXXXXX, an individual,
residing at ________________________________, (hereinafter called "Employee").
WITNESSETH:
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be
paid to Employee, and the other terms and provisions of this Agreement were
duly approved by action of Employer's Board of Directors at a meeting held on
the 30th day of January, 1996.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM: Employer does hereby employ Employee as its Executive Vice
President for a period of five (5) years commencing on the date hereof, unless
sooner terminated as provided herein. This Agreement may be renewed for such
term or terms as may be mutually agreed upon by Employer and Employee. Not
later than six (6) months prior to the expiration date of the initial term of
this Agreement, Employer shall, at the request of Employee, discuss with
Employee the subject of the renewal of the term of this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, this
Agreement, if still then in effect, shall terminate on Employee's 65th birthday.
SECOND: COMPENSATION: Employer shall pay to Employee for services to be
rendered hereunder compensation at a minimum rate of $140,000.00 per annum,
payable in weekly
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installments or on such other basis as may be agreed upon. Employee's
compensation shall be reviewed from time to time by the Board of Directors of
Employer or an appropriate committee thereof, after which such compensation may
be increased in such amount as may be determined by such Board or committee, as
the case may be, in its sole discretion. Nothing contained in this Agreement
shall preclude Employer from granting or Employee from receiving benefits under
or participating in any bonus, incentive, profit sharing, stock option, stock
purchase, retirement, pension, insurance or similar benefit plan of Employer now
or hereinafter in effect for its management personnel.
THIRD: DUTIES AND SERVICES: Employee is engaged as Executive Vice
President of Employer during the term hereof and shall report directly to and
have duties assigned by the President and Chief Executive Officer. Such duties
shall be consistent with his title and position. For purposes of example only,
and not as an inclusive or exclusive list, such duties shall include management
of rail operations, railroad sales and marketing, governmental relations,
industrial development and similar executive level functions; and Employee will
serve in such capacity or capacities for Employer, and will serve in such
capacity or capacities for any controlled affiliate of Employer to which he may
be elected or appointed from time to time. Employee shall devote his full time,
attention and efforts to the business and affairs of Employer, except during
usual vacation periods and reasonable periods of illness or incapacity, and
shall perform his duties faithfully, diligently and to the best of his ability.
Subject to Paragraph SEVENTH, nothing contained herein shall be construed to
prevent Employee: (1) from acting as a member of the Board of Directors of any
other corporation and from receiving compensation therefor; (2) from making
investments of any character in any business; or (3) from otherwise engaging in
other business activities, provided in each case, however, that such service as
a director, investments, or any business activities do not interfere
substantially with the performance of Employee's duties hereunder. In the event
of Employer's breach of Paragraph SIXTH herein, or if Employee is not designated
as Executive Vice President of Employer, or is removed from such position(s), in
each case without cause and without his approval, Employee shall continue to be
compensated for the remainder of the Term of this Agreement as provided in
Paragraph SECOND hereof, but from and after any such default Employee's
employment shall, nevertheless, continue in accordance with the terms and
provisions of this Agreement and as a consultant to the Employer, (2) Employee
shall thereupon be obligated to perform consulting services for the Employer at
the Employer's offices in Cooperstown, New York for a maximum of four (4) days
during each calendar month, and (3) Employee shall not be restricted in
performing services elsewhere for other parties. In the event of any such
default, Employee shall also receive service credit under any retirement or
pension plan of Employer then in effect as if Employee had continued to render
uninterrupted services for the remainder of the term of this Agreement had it
remained in full force and effect. For the purpose of this Paragraph, a
substantial reduction in Employee's authority, powers or duties shall constitute
removal from his position.
FOURTH: EXPENSES: Employee is authorized to incur reasonable and
necessary expenses for promoting the business of Employer, including expenses
for entertainment, travel and similar items. Employer will reimburse Employee
for all such expenses upon presentation by him, from
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time to time, of an itemized account thereof in conformity with Employer's usual
accounting procedures.
FIFTH: WORKING FACILITIES: Employee shall be furnished with a private
office in the State of New Jersey, or such other location as may be mutually
agreed upon, and such other facilities and services suitable to his positions
and adequate to his needs for the performance of his duties. Employee shall, on
a monthly basis, furnish Employer with itemized information in conformity with
its usual accounting procedures concerning his personal use of any such
facilities or services and shall reimburse Employer for such personal use at
rates prescribed by it.
SIXTH: CONFIDENTIAL INFORMATION: Employee shall not, during or subsequent
to his employment hereunder, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of the business of Employer) any knowledge
or information, techniques, plans, trade or business secrets or confidential
information relating to the business of Employer or with respect to any other
confidential or secret aspect of the business of Employer, nor shall Employee
make any use of the same for his own purposes or for the benefit of anyone under
any circumstances; provided that, after the term of his employment, these
restrictions shall not apply to such knowledge, techniques, plans, trade or
business secrets or confidential information which is then in, or subsequently
becomes part of, the public domain, except because of disclosure by Employee
without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph be
enforced to the fullest extent permissible under the laws and public policies in
each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of this Paragraph be adjudicated as invalid or unenforceable,
this Paragraph shall be deemed amended to delete therefrom such portion so
adjudicated, such deletion to apply only with respect to the operation of this
Paragraph in the particular jurisdiction so adjudicating. If there be a breach
or threatened breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing herein shall be
construed as prohibiting Employer from pursuing any other remedies for such
breach or threatened breach. The provisions of this paragraph SEVENTH shall
survive the termination or expiration of this Agreement.
SEVENTH: DISABILITY: If (1) Employee shall suffer any illness, disability
or incapacity so that he is unable to perform his duties hereunder and such
illness, disability or incapacity shall be deemed by a duly licensed physician
(who may be Employee's personal physician) to be permanent; or (2) Employee
shall suffer any illness, disability or incapacity so that he is unable to
render full-time services to Employer of the character required hereunder with
reasonable efficiency for a period of six (6) consecutive months by reason of
illness, disability or incapacity and the Employer determines that Employee has
been permanently disabled, then, and in either of such events, Employee will
continue to render such advisory and consultative services as he is able, and as
may be reasonably requested of him by the directors and officers of Employer,
and he shall receive his annual compensation for the balance of the term of this
Agreement in such installments as he shall then be currently receiving.
Compensation during any period of disability shall be adjusted for
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reimbursement from any disability insurance paid for by Employer.
EIGHTH: DEATH: In the event of Employee's death during the term of this
Agreement, the Employer shall pay to Employee's designated beneficiary or
beneficiaries, or, in default of such designation, to his estate, the annual
salary due for the balance of the Agreement prorated for any partial year
thereof and payable in a lump sum within ninety (90) days from the date of his
death.
NINTH: EARLY TERMINATION: This Agreement may be terminated prior to the
end of the Term provided in paragraph FIRST under and subject to the following
conditions:
a) Employee shall have the right to terminate this Agreement
during the Term by giving thirty (30) days advance written notice. Upon the
expiration of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and
after the date hereof, either Employer or Employee may, at his/its independent
election, such election to be evidenced by written notice, terminate this
Agreement. Effective upon the giving of such notice, regardless of which party
elects to give such notice, Employer shall pay to Employee a sum equal to
Employee's then current annual salary multiplied by the years (including
fractional years) remaining in the Term of this Agreement prior to the giving
of such notice, less any legally required withholdings. As used in this
Paragraph THIRD, "change in control" means (i) any such change required to be
reported to the Securities and Exchange Commission under Item 1 in a Current
Report on Form 8-K (or a successor provision thereof); provided, however, that
no change in control shall be deemed to have occurred which involves the
acquisition, holding, voting or disposing of less than 40% of Employer's
outstanding voting securities, or (ii) the sale of all or a substantial portion
of the productive assets of Employer. For purposes of this Paragraph,
"Employer" shall include both jointly and severally, Delaware Otsego
Corporation and The New York, Susquehanna and Western Railway Corporation.
c) Employer may terminate this Agreement at any time without
cause by giving thirty (30) days advance written notice to Employee. Effective
upon the giving of such notice, Employer shall pay to Employee a sum equal to
Employee's then current annual salary multiplied by the years (including
fractional years) remaining in the Term of this Agreement prior to the giving
of such notice, less any legally required withholdings.
d) Employer may terminate this Agreement at any time for cause
by written notice. For purposes of this Agreement, "cause" shall include any
one or more of the following:
1. A material breach of any covenant, provision or
condition of this Agreement by Employee.
2. Commission by Employee of a felony or a crime
involving moral turpitude.
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3. Any gross negligence or willful misconduct in the
performance of Employee's duties that results in
detriment to Employer.
Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
e) In the event of termination under subparagraphs (a) or (d)
above, Employee hereby expressly agrees that the giving of such notice under
such subparagraphs shall also constitute the termination and cancellation of
any incentive stock options to purchase the common stock of Delaware Otsego
Corporation Employee may then hold.
TENTH; NOTICE: Any notice required or given under this Agreement shall
be sufficient if in writing and sent by registered or certified mail to his
residence in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove set forth, or
to such other addresses as may be designated subsequently by the parties
hereto. Any such notice shall be deemed given when so addressed and mailed.
ELEVENTH; WAIVER OF BREACH: A waiver by Employer or Employee of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the other party.
TWELFTH; ENTIRE AGREEMENT: This Agreement contains the entire
understanding and agreement between the parties and cannot be amended, modified
or supplemented in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or supplement is
sought.
THIRTEENTH; SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon Employer and its successors and assigns
including, without limitation, any corporation or other entity which may acquire
all or substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged, and
Employee, his heirs, executors, administrators and legal representatives.
FOURTEENTH; GOVERNING LAW: This Agreement shall be governed by the laws
of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day first hereinabove written.
THE NEW YORK, SUSQUEHANNA AND
WESTERN RAILWAY CORPORATION
By: /s/ Xxxxxx X. Xxxx
--------------------------
Title: President
-----------------------
/s/ Xxxxxx X. Xxxxxx
--------------------------
XXXXXX X. XXXXXX
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EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1995, by and between THE NEW YORK,
SUSQUEHANNA AND WESTERN RAILWAY CORPORATION, a New Jersey corporation, with its
principal office and place of business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxx 00000 (hereinafter called "Employer") and XXXX XXXXXX, an individual,
residing at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter called
"Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as Vice President-Marketing & Sales
of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be
paid to Employee, and the other terms and provisions of this Agreement were duly
approved by action of Employer's Board of Directors at a meeting held on the 3rd
day of June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM: Employer does hereby employ Employee as its Vice
President-Marketing & Sales for a period of one (1) year commencing on the date
hereof, unless sooner terminated as provided herein. This Agreement may be
renewed for such term or terms as may be mutually agreed upon by Employer and
Employee. Not later than three (3) months prior to the expiration date of the
initial term of this Agreement, Employer shall, at the request of Employee,
discuss with Employee the subject of the renewal of the term of this Agreement.
SECOND: COMPENSATION: Employer shall pay to Employee for services to be
rendered hereunder compensation at a minimum rate of $100,000.00 per annum,
payable in weekly installments or on such other basis as may be agreed upon.
Employee's compensation shall be
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reviewed from time to time by the Board of Directors of Employer or an
appropriate committee thereof, after which such compensation may be increased in
such amount as may be determined by such Board or committee, as the case may be,
in its sole discretion. Nothing contained in this Agreement shall preclude
Employer from granting or Employee from receiving benefits under or
participating in any bonus, incentive, profit sharing, stock option, stock
purchase, retirement, pension, insurance or similar benefit plan of Employer now
or hereinafter in effect for its management personnel.
THIRD: DUTIES AND SERVICES: Employee is engaged as Vice
President-Marketing & Sales of Employer during the term hereof. Employer will
use its best efforts and powers to sustain and continue Employee's election as
Vice President-Marketing & Sales and his designation as Vice President-Marketing
& Sales; and Employee will serve in such capacity or capacities for Employer,
and will serve in such capacity or capacities for any controlled affiliate of
Employer to which he may be elected or appointed from time to time. Employee
shall devote his full time, attention and efforts to the business and affairs of
Employer, except during usual vacation periods and reasonable periods of illness
or incapacity, and shall perform his duties faithfully, diligently and to the
best of his ability. Subject to Paragraph SEVENTH, nothing contained herein
shall be construed to prevent Employee: (1) from acting as a member of the Board
of Directors of any other corporation and from receiving compensation therefor;
(2) from making investments of any character in any business; or (3) from
otherwise engaging in other business activities, provided in each case, however,
that such service as a director, investments, or any business activities do not
interfere substantially with the performance of Employee's duties hereunder. In
the event of Employer's breach of Paragraph SIXTH herein, or if Employee is not
designated as Vice President-Marketing & Sales of Employer, or is removed from
such position(s), in each case without cause and without his approval, Employee
shall continue to be compensated for the remainder of the Term of this Agreement
as provided in Paragraph SECOND hereof, but from and after any such default, (1)
Employee's employment shall, nevertheless, continue in accordance with the terms
and provisions of this Agreement and as a consultant to the Employer, (2)
Employee shall thereupon be obligated to perform consulting services for the
Employer at the Employer's offices in Cooperstown, New York for a maximum of
four (4) days during each calendar month, and (3) Employee shall not be
restricted in performing services elsewhere for other parties. In the event of
any such default, Employee shall also receive service credit under any
retirement or pension plan of Employer then in effect as if Employee had
continued to render uninterrupted services for the remainder of the term of this
Agreement had it remained in full force and effect. For the purpose of this
Paragraph, a substantial reduction in Employee's authority, powers or duties
shall constitute removal from his position.
FOURTH: EXPENSES: Employee is authorized to incur reasonable and
necessary expenses for promoting the business of Employer, including expenses
for entertainment, travel and similar items. Employer will reimburse Employee
for all such expenses upon presentation by him, from time to time, of an
itemized account thereof in conformity with Employer's usual accounting
procedures.
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FIFTH: WORKING FACILITIES: Employee shall be furnished with a private
office in Xxxxxxxx Park, New Jersey, or such other location as may be mutually
agreed upon, and a secretary and such other facilities and services suitable to
his positions and adequate to his needs for the performance of his duties
including, without limitation, suitable transportation, at least equal to that
which Employee currently receives from Employer. Employee shall, on a monthly
basis, furnish Employer with itemized information in conformity with its usual
accounting procedures concerning his personal use of any such facilities or
services and shall reimburse Employer for such personal use at rates prescribed
by it.
SIXTH: CONFIDENTIAL INFORMATION: Employee shall not, during or
subsequent to his employment hereunder, divulge, furnish or make accessible to
anyone (otherwise than in the regular course of the business of Employer) any
knowledge or information, techniques, plans, trade or business secrets or
confidential information relating to the business of Employer or with respect to
any other confidential or secret aspect of the business of Employer, nor shall
Employee make any use of the same for his own purposes or for the benefit of
anyone under any circumstances; provided that, after the term of his employment,
these restrictions shall not apply to such knowledge, techniques, plans, trade
or business secrets or confidential information which is then in, or
subsequently becomes part of, the public domain, except because of disclosure by
Employee without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph
be enforced to the fullest extent permissible under the laws and public policies
in each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of this Paragraph be adjudicated as invalid or unenforceable,
this Paragraph shall be deemed amended to delete therefrom such portion so
adjudicated, such deletion to apply only with respect to the operation of this
Paragraph in the particular jurisdiction so adjudicating. If there be a breach
or threatened breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing herein shall be
construed as prohibiting Employer from pursuing any other remedies for such
breach or threatened breach. The provisions of this paragraph SEVENTH shall
survive the termination or expiration of this Agreement.
SEVENTH: DISABILITY: If (1) Employee shall suffer any illness,
disability or incapacity so that he is unable to perform his duties hereunder
and such illness, disability or incapacity shall be deemed by a duly licensed
physician (who may be Employee's personal physician) to be permanent; or (2)
Employee shall suffer any illness, disability or incapacity so that he is unable
to render full-time services to Employer of the character required hereunder
with reasonable efficiency for a period of six (6) consecutive months by reason
of illness, disability or incapacity and the Employer determines that Employee
has been permanently disabled, then, and in either of such events, Employee will
continue to render such advisory and consultative services as he is able, and as
may be reasonably requested of him by the directors and officers of Employer,
and he shall receive his annual compensation for the balance of the term of this
Agreement in such installments as he shall then be currently receiving.
Compensation during any period of disability shall be adjusted for reimbursement
from any disability insurance paid for by Employer.
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EIGHTH: DEATH: In the event of Employee's death during the term of this
Agreement, the Employer shall pay to Employee's designated beneficiary or
beneficiaries, or, in default of such designation, to his estate, an amount
equal to twelve months salary hereunder, due for the balance payable in a lump
sum within ninety (90) days from the date of his death.
NINTH: EARLY TERMINATION: This Agreement may be terminated prior to the
end of the Term provided in paragraph FIRST under and subject to the following
conditions:
a) Employee shall have the right to terminate this Agreement
during the Term by giving thirty (30) days advance written notice. Upon the
expiration of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and
after the date hereof, either Employer or Employee may, at his/its independent
election, such election to be evidenced by written notice, terminate this
Agreement. Effective upon the giving of such notice, regardless of which party
elects to give such notice, Employer shall pay to Employee a sum equal to
Employee's then current annual salary multiplied by the years (including
fractional years) remaining in the Term of this Agreement prior to the giving of
such notice, less any legally required withholdings. As used in this Paragraph
THIRD, "change in control" means (i) any such change required to be reported to
the Securities and Exchange Commission under Item 1 in a Current Report on Form
8-K (or a successor provision thereof); provided, however, that no change in
control shall be deemed to have occurred which involves the acquisition,
holding, voting or disposing of less than 40% of Employer's outstanding voting
securities, or (ii) the sale of all or a substantial portion of the productive
assets of Employer. For purposes of this Paragraph, "Employer" shall include
both jointly and severally, Delaware Otsego Corporation and The New York,
Susquehanna and Western Railway Corporation.
c) Employer may terminate this Agreement at any time without
cause by giving thirty (30) days advance written notice to Employee. Effective
upon the giving of such notice, Employer shall pay to Employee a sum equal to
Employee's then current annual salary multiplied by the years (including
fractional years) remaining in the Term of this Agreement prior to the giving of
such notice, less any legally required withholdings.
d) Employer may terminate this Agreement at any time for
cause. For purposes of this Agreement, "cause" shall include any one or more of
the following:
1. A material breach of any covenant, provision or
condition of this Agreement by Employee.
2. Commission by Employee of a felony or a crime
involving moral turpitude.
3. Any gross negligence or willful misconduct in the
performance of Employee's duties that results in detriment to Employer.
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Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
TENTH: NOTICE: Any notice required or given under this Agreement shall
be sufficient if in writing and sent by registered or certified mail to his
residence in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove set forth, or
to such other addresses as may be designated subsequently by the parties hereto.
Any such notice shall be deemed given when so addressed and mailed.
ELEVENTH: WAIVER OF BREACH: A waiver by Employer or Employee of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the other party.
TWELFTH: ENTIRE AGREEMENT: This Agreement contains the entire
understanding and agreement between the parties and cannot be amended, modified
or supplemented in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or supplement is
sought.
THIRTEENTH: SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon Employer and its successors and assigns
including, without limitation, any corporation or other entity which may acquire
all or substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged, and
Employee, his heirs, executors, administrators and legal representatives.
FOURTEENTH: GOVERNING LAW: This Agreement shall be governed by the laws
of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day first hereinabove written.
THE NEW YORK, SUSQUEHANNA AND
WESTERN RAILWAY CORPORATION
By: s/ Xxxxxx X. Xxxx
-------------------------------------
Title: President
----------------------------------
s/ Xxxx Xxxxxx
----------------------------------------
XXXX XXXXXX
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EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE OTSEGO
CORPORATION, a New York corporation, with its principal office and place of
business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Employer") and XXXXXX X. XXXXX, an individual, residing at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as Vice President-Law, Secretary and
General Counsel of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be paid
to Employee, and the other terms and provisions of this Agreement were duly
approved by action of Employer's Board of Directors at a meeting held on the 3rd
day of June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM: Employer does hereby employ Employee as its Vice
President-Law, Secretary and General Counsel for a period of five (5) years
commencing on the date hereof, unless sooner terminated as provided herein. This
Agreement may be renewed for such term or terms as may be mutually agreed upon
by Employer and Employee. Not later than six (6) months prior to the expiration
date of the initial term of this Agreement, Employer shall, at the request of
Employee, discuss with Employee the subject of the renewal of the term of this
Agreement. Notwithstanding any other provision of this Agreement to the
contrary, this Agreement, if still then in effect, shall terminate on Employee's
65th birthday.
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SECOND: COMPENSATION: Employer shall pay to Employee for services to be
rendered hereunder compensation at a minimum rate of $90,000.00 per annum,
payable in weekly installments or on such other basis as may be agreed upon.
Employee's compensation shall be reviewed from time to time by the Board of
Directors of Employer or an appropriate committee thereof, after which such
compensation may be increased in such amount as may be determined by such Board
or committee, as the case may be, in its sole discretion. Nothing contained in
this Agreement shall preclude Employer from granting or Employee from receiving
benefits under or participating in any bonus, incentive, profit sharing, stock
option, stock purchase, retirement, pension, insurance or similar benefit plan
of Employer now or hereinafter in effect for its management personnel.
THIRD: DUTIES AND SERVICES: Employee is engaged as Vice President-Law,
Secretary and General Counsel of Employer during the term hereof. Employer will
use its best efforts and powers to sustain and continue Employee's election as
Vice President-Law, Secretary and General Counsel and his designation as Vice
President-Law, Secretary and General Counsel; and Employee will serve in such
capacity or capacities for Employer, and will serve in such capacity or
capacities for any controlled affiliate of Employer to which he may be elected
or appointed from time to time. Employee shall devote his full time, attention
and efforts to the business and affairs of Employer, except during usual
vacation periods and reasonable periods of illness or incapacity, and shall
perform his duties faithfully, diligently and to the best of his ability.
Subject to Paragraph SEVENTH, nothing contained herein shall be construed to
prevent Employee: (1) from acting as a member of the Board of Directors of any
other corporation and from receiving compensation therefor; (2) from making
investments of any character in any business; or (3) from otherwise engaging in
other business activities, provided in each case, however, that such service as
a director, investments, or any business activities do not interfere
substantially with the performance of Employee's duties hereunder. In the event
of Employer's breach of Paragraph SIXTH herein, or if Employee is not designated
as Vice President-Law, Secretary and General Counsel of Employer, or is removed
from such position(s), in each case without cause and without his approval,
Employee shall continue to be compensated for the remainder of the Term of this
Agreement as provided in Paragraph SECOND hereof, but from and after any such
default Employee's employment shall, nevertheless, continue in accordance with
the terms and provisions of this Agreement and as a consultant to the Employer,
(2) Employee shall thereupon be obligated to perform consulting services for the
Employer at the Employer's offices in Cooperstown, New York for a maximum of
four (4) days during each calendar month, and (3) Employee shall not be
restricted in performing services elsewhere for other parties. In the event of
any such default, Employee shall also receive service credit under any
retirement or pension plan of Employer then in effect as if Employee had
continued to render uninterrupted services for the remainder of the term of this
Agreement had it remained in full force and effect. For the purpose of this
Paragraph, a substantial reduction in Employee's authority, powers or duties
shall constitute removal from his position.
FOURTH: EXPENSES: Employee is authorized to incur reasonable and necessary
expenses for promoting the business of Employer, including expenses for
entertainment, travel and similar items. Employer will reimburse Employee for
all such expenses upon presentation by him, from time to
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time, of an itemized account thereof in conformity with Employer's usual
accounting procedures.
FIFTH: WORKING FACILITIES: Employee shall be furnished with a private
office in Cooperstown, New York, or such other location as may be mutually
agreed upon, and a secretary and such other facilities and services suitable to
his positions and adequate to his needs for the performance of his duties
including, without limitation, suitable transportation, at least equal to that
which Employee currently receives from Employer. Employee shall, on a monthly
basis, furnish Employer with itemized information in conformity with its usual
accounting procedures concerning his personal use of any such facilities or
services and shall reimburse Employer for such personal use at rates prescribed
by it.
SIXTH: CONFIDENTIAL INFORMATION: Employee shall not, during or subsequent
to his employment hereunder, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of the business of Employer) any knowledge
or information, techniques, plans, trade or business secrets or confidential
information relating to the business of Employer or with respect to any other
confidential or secret aspect of the business of Employer, nor shall Employee
make any use of the same for his own purposes or for the benefit of anyone under
any circumstances; provided that, after the term of his employment, these
restrictions shall not apply to such knowledge, techniques, plans, trade or
business secrets or confidential information which is then in, or subsequently
becomes part of, the public domain, except because of disclosure by Employee
without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph
be enforced to the fullest extent permissible under the laws and public policies
in each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of this Paragraph be adjudicated as invalid or unenforceable,
this Paragraph shall be deemed amended to delete therefrom such portion so
adjudicated, such deletion to apply only with respect to the operation of this
Paragraph in the particular jurisdiction so adjudicating. If there be a breach
or threatened breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing herein shall be
construed as prohibiting Employer from pursuing any other remedies for such
breach or threatened breach. The provisions of this paragraph SEVENTH shall
survive the termination or expiration of this Agreement.
SEVENTH: DISABILITY: If (1) Employee shall suffer any illness, disability
or incapacity so that he is unable to perform his duties hereunder and such
illness, disability or incapacity shall be deemed by a duly licensed physician
(who may be Employee's personal physician) to be permanent; or (2) Employee
shall suffer any illness, disability or incapacity so that he is unable to
render full-time services to Employer of the character required hereunder with
reasonable efficiency for a period of six (6) consecutive months by reason of
illness, disability or incapacity and the Employer determines that Employee has
been permanently disabled, then, and in either of such events, Employee will
continue to render such advisory and consultative services as he is able, and as
may be reasonably requested of him by the directors and officers of Employer,
and he shall receive his annual compensation for the balance of the term of this
Agreement in such installments as he shall
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then be currently receiving. Compensation during any period of disability shall
be adjusted for reimbursement from any disability insurance paid for by
Employer.
EIGHTH: DEATH: In the event of Employee's death during the term of this
Agreement, the Employer shall pay to Employee's designated beneficiary or
beneficiaries, or, in default of such designation, to his estate, the annual
salary due for the balance of the Agreement prorated for any partial year
thereof and payable in a lump sum within ninety (90) days from the date of his
death.
NINTH: EARLY TERMINATION: This Agreement may be terminated prior to the end
of the Term provided in paragraph FIRST under and subject to the following
conditions:
a) Employee shall have the right to terminate this Agreement during
the Term by giving thirty (30) days advance written notice. Upon the expiration
of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and after the date
hereof, either Employer or Employee may, at his/its independent election, such
election to be evidenced by written notice, terminate this Agreement. Effective
upon the giving of such notice, regardless of which party elects to give such
notice, Employer shall pay to Employee a sum equal to Employee's then current
annual salary multiplied by the years (including fractional years) remaining in
the Term of this Agreement prior to the giving of such notice, less any legally
required withholdings. As used in this Paragraph THIRD, "change in control"
means (i) any such change required to be reported to the Securities and Exchange
Commission under Item 1 in a Current Report on Form 8-K (or a successor
provision thereof); provided, however, that no change in control shall be deemed
to have occurred which involves the acquisition, holding, voting or disposing of
less than 40% of Employer's outstanding voting securities, or (ii) the sale of
all or a substantial portion of the productive assets of Employer. For purposes
of this Paragraph, "Employer" shall include both jointly and severally, Delaware
Otsego Corporation and The New York, Susquehanna and Western Railway
Corporation.
c)Employer may terminate this Agreement at any time without cause by giving
thirty (30) days advance written notice to Employee. Effective upon the giving
of such notice, Employer shall pay to Employee a sum equal to Employee's then
current annual salary multiplied by the years (including fractional years)
remaining in the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings.
d)Employer may terminate this Agreement at any time for cause by written notice.
For purposes of this Agreement, "cause" shall include any one or more of the
following:
1. A material breach of any covenant, provision or condition of this
Agreement by Employee.
2. Commission by Employee of a felony or a crime involving moral turpitude.
3. Any gross negligence or willful misconduct in the performance of
Employee's duties that
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results in detriment to Employer.
Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
e) In the event of termination under subparagraphs (a) or (d) above,
Employee hereby expressly agrees that the giving of such notice under such
subparagraphs shall also constitute the termination and cancellation of any
incentive stock options to purchase the common stock of Delaware Otsego
Corporation Employee may then hold.
TENTH: NOTICE: Any notice required or given under this Agreement shall be
sufficient if in writing and sent by registered or certified mail to his
residence in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove set forth, or
to such other addresses as may be designated subsequently by the parties hereto.
Any such notice shall be deemed given when so addressed and mailed.
ELEVENTH: WAIVER OF BREACH: A waiver by Employer or Employee of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
TWELFTH: ENTIRE AGREEMENT: This Agreement contains the entire understanding
and agreement between the parties and cannot be amended, modified or
supplemented in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or supplement is
sought.
THIRTEENTH: SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon Employer and its successors and assigns
including, without limitation, any corporation or other entity which may acquire
all or substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged, and
Employee, his heirs, executors, administrators and legal representatives.
FOURTEENTH: GOVERNING LAW: This Agreement shall be governed by the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
By: s/ Xxxxxx X. Xxxx
-------------------------------------
Title: President
----------------------------------
s/ Xxxxxx X. Xxxxx
--------------------------------------
XXXXXX X. XXXXX
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RIDER TO EMPLOYMENT AGREEMENT
This Rider to Employment Contract (hereinafter "this Rider") is entered into as
of July 14, 1997 by and between Xxxxxx X. Xxxxx , (hereafter "Employee") and
DELAWARE OTSEGO CORPORATION (hereafter "Employer").
WHEREAS, Employer and Employee entered into an Employment Agreement dated June
3, 1995 (hereinafter the "Employment Agreement"); and
WHEREAS, Employer and Employee, after receiving certain advice regarding the
income tax treatment of certain payments that Employee may be entitled to
receive under the Employment Agreement, wish to enter into this Rider for their
mutual benefit;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth hereinafter and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties, intending to be legally bound,
covenant and agree as follows:
1. In the event of a termination of the Employment Agreement pursuant to the
provisions of Section NINTH (b) or (c) upon or as a result of a change in
control of Employer then, notwithstanding any inconsistent provisions of the
Employment Agreement to the contrary, the amount to be paid to Employee by
Employer shall be equal to 2.99 times the highest annual cash compensation,
consisting solely of salary and bonus, paid to the Employee during any calendar
year in each of the three calendar years immediately prior to the change in
control. In addition,
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the Employer shall continue to provide the Employee for a period of 2.99 years
after such termination with health, hospitalization and medical insurance as
were provided at the time of the termination, at the Employer's expense. In
making such payment, Employer shall cooperate with Employee, at Employee's
election, in deferring payment of part or all of such sum over a period of three
calendar years.
2. Notwithstanding the foregoing, prior to the payment of any amount payable as
set forth above, the certified public accountants of the Employer immediately
prior to the change in control, (the "Certified Public Accountants") shall
determine as promptly as practical and in any event within 20 business days
following such termination the deductibility of any payment or distribution by
the Employer to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of the Employment Agreement,
this Rider or otherwise) (the "Agreement Payments") by the Employer for Federal
income purposes because of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"). The Certified Public Accountants will determine the
amount, if any, that the Agreement Payments shall be increased or decreased to
maximize the aggregate present value of Agreement Payments without causing any
portion of such Agreement Payments to be nondeductible by the Employer because
of said Section 280G of the Code.
3. If under paragraph 2 of this Rider the Certified Public Accountants determine
that any adjustment to the Agreement Payments is required, the Employer shall
promptly give the Employee notice to that effect and a copy of the detailed
calculation thereof , together with a statement showing which and how much of
the Agreement Payments shall be adjusted.
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4. As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may be made by the Employer which
should not have been made ("Overpayment") or that additional Agreement Payments
which will have not been made by the Employer could have been made
("Underpayment"), in each case, consistent with the determination made by the
Certified Public Accountants under paragraph 2 and 3 of this Rider. In the event
that advice and determination of the Certified Public Accountants under
paragraphs 2 and 3 is followed by Employer and Employee and the Certified Public
Accountants, based upon the assertion of a deficiency by the Internal Revenue
Service, determines that an Overpayment has been made, then the Employer shall
make additional payments to Employee sufficient to (i) reimburse Employee for
his expenses, if any, for representation before the Internal Revenue Service,
and (ii) result in the net payment received by Employee after income taxes,
after consideration of any additional tax, interest or penalties imposes by the
Internal Revenue Service, being equal to the amount Employee would have received
had no Overpayment been made. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Employee.
5. Payment by the Employer of the sums provided for herein, together with any
wages earned prior to the termination of the employment Agreement, shall
constitute full settlement of any land all claims which Employee may have
against Employer. Employee and Employer shall, upon Employer's reasonable
request, execute a mutual release of all claims.
6. Except as expressly set forth herein, the terms and conditions of the
Employment
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Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Rider on the 14th day
of July, 1997.
DELAWARE OTSEGO CORPORATION Employee
by: s/ Xxxxxx X. Xxxx s/ Xxxxxx X. Xxxxx
------------------------------- -----------------------------------
President
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EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1995, by and between DELAWARE OTSEGO
CORPORATION, a New York corporation, with its principal office and place of
business at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Employer") and XXXXXXX X. XXXXXXX, an individual, residing at 00 Xxxxxxxxx
Xxxx, Xxx Xxxxxxxx, Xxx Xxxx 00000 (hereinafter called "Employee").
W I T N E S S E T H :
WHEREAS, Employee currently serves as Senior Vice President and Chief
Financial Officer of Employer; and
WHEREAS, Employer acknowledges and recognizes the value of Employee's
services and deems it necessary and desirable to retain Employee's full-time
services for the period set forth herein; and
WHEREAS, both Employee and Employer desire to embody the terms and
conditions of Employee's employment in a written agreement which will supersede
all prior agreements of employment, whether written or oral; and
WHEREAS, the employment, the duration thereof, the compensation to be paid
to Employee, and the other terms and provisions of this Agreement were duly
approved by action of Employer's Board of Directors at a meeting held on the 3rd
day of June, 1995.
NOW, THEREFORE, the parties hereto agree as follows:
FIRST: TERM: Employer does hereby employ Employee as its Senior Vice
President and Chief Financial Officer for a period of five (5) years commencing
on the date hereof, unless sooner terminated as provided herein. This Agreement
may be renewed for such term or terms as may be mutually agreed upon by Employer
and Employee. Not later than six (6) months prior to the expiration date of the
initial term of this Agreement, Employer shall, at the request of Employee,
discuss with Employee the subject of the renewal of the term of this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, this
Agreement, if still then in effect, shall terminate on Employee's 65th birthday.
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SECOND: COMPENSATION: Employer shall pay to Employee for services to be
rendered hereunder compensation at a minimum rate of $100,000.00 per annum,
payable in weekly installments or on such other basis as may be agreed upon.
Employee's compensation shall be reviewed from time to time by the Board of
Directors of Employer or an appropriate committee thereof, after which such
compensation may be increased in such amount as may be determined by such Board
or committee, as the case may be, in its sole discretion. Nothing contained in
this Agreement shall preclude Employer from granting or Employee from receiving
benefits under or participating in any bonus, incentive, profit sharing, stock
option, stock purchase, retirement, pension, insurance or similar benefit plan
of Employer now or hereinafter in effect for its management personnel.
THIRD: DUTIES AND SERVICES: Employee is engaged as Senior Vice President
and Chief Financial Officer of Employer during the term hereof. Employer will
use its best efforts and powers to sustain and continue Employee's election as
Senior Vice President and Chief Financial Officer and his designation as Senior
Vice President and Chief Financial Officer; and Employee will serve in such
capacity or capacities for Employer, and will serve in such capacity or
capacities for any controlled affiliate of Employer to which he may be elected
or appointed from time to time. Employee shall devote his full time, attention
and efforts to the business and affairs of Employer, except during usual
vacation periods and reasonable periods of illness or incapacity, and shall
perform his duties faithfully, diligently and to the best of his ability.
Subject to Paragraph SEVENTH, nothing contained herein shall be construed to
prevent Employee: (1) from acting as a member of the Board of Directors of any
other corporation and from receiving compensation therefor; (2) from making
investments of any character in any business; or (3) from otherwise engaging in
other business activities, provided in each case, however, that such service as
a director, investments, or any business activities do not interfere
substantially with the performance of Employee's duties hereunder. In the event
of Employer's breach of Paragraph SIXTH herein, or if Employee is not designated
as Senior Vice President and Chief Financial Officer of Employer, or is removed
from such position(s), in each case without cause and without his approval,
Employee shall continue to be compensated for the remainder of the Term of this
Agreement as provided in Paragraph SECOND hereof, but from and after any such
default Employee's employment shall, nevertheless, continue in accordance with
the terms and provisions of this Agreement and as a consultant to the Employer,
(2) Employee shall thereupon be obligated to perform consulting services for the
Employer at the Employer's offices in Cooperstown, New York for a maximum of
four (4) days during each calendar month, and (3) Employee shall not be
restricted in performing services elsewhere for other parties. In the event of
any such default, Employee shall also receive service credit under any
retirement or pension plan of Employer then in effect as if Employee had
continued to render uninterrupted services for the remainder of the term of this
Agreement had it remained in full force and effect. For the purpose of this
Paragraph, a substantial reduction in Employee's authority, powers or duties
shall constitute removal from his position.
FOURTH: EXPENSES: Employee is authorized to incur reasonable and necessary
expenses for promoting the business of Employer, including expenses for
entertainment, travel and similar items.
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Employer will reimburse Employee for all such expenses upon presentation by him,
from time to time, of an itemized account thereof in conformity with Employer's
usual accounting procedures.
FIFTH: WORKING FACILITIES: Employee shall be furnished with a private
office in Cooperstown, New York, or such other location as may be mutually
agreed upon, and a secretary and such other facilities and services suitable to
his positions and adequate to his needs for the performance of his duties
including, without limitation, suitable transportation, at least equal to that
which Employee currently receives from Employer. Employee shall, on a monthly
basis, furnish Employer with itemized information in conformity with its usual
accounting procedures concerning his personal use of any such facilities or
services and shall reimburse Employer for such personal use at rates prescribed
by it.
SIXTH: CONFIDENTIAL INFORMATION: Employee shall not, during or subsequent
to his employment hereunder, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of the business of Employer) any knowledge
or information, techniques, plans, trade or business secrets or confidential
information relating to the business of Employer or with respect to any other
confidential or secret aspect of the business of Employer, nor shall Employee
make any use of the same for his own purposes or for the benefit of anyone under
any circumstances; provided that, after the term of his employment, these
restrictions shall not apply to such knowledge, techniques, plans, trade or
business secrets or confidential information which is then in, or subsequently
becomes part of, the public domain, except because of disclosure by Employee
without Employer's consent.
It is the desire of the parties that the provisions of this Paragraph
be enforced to the fullest extent permissible under the laws and public policies
in each jurisdiction in which enforcement might be sought. Accordingly, if any
particular portion of this Paragraph be adjudicated as invalid or unenforceable,
this Paragraph shall be deemed amended to delete therefrom such portion so
adjudicated, such deletion to apply only with respect to the operation of this
Paragraph in the particular jurisdiction so adjudicating. If there be a breach
or threatened breach of this Paragraph, Employer shall be entitled to an
injunction restraining Employee from such breach, but nothing herein shall be
construed as prohibiting Employer from pursuing any other remedies for such
breach or threatened breach. The provisions of this paragraph SEVENTH shall
survive the termination or expiration of this Agreement.
SEVENTH: DISABILITY: If (1) Employee shall suffer any illness, disability
or incapacity so that he is unable to perform his duties hereunder and such
illness, disability or incapacity shall be deemed by a duly licensed physician
(who may be Employee's personal physician) to be permanent; or (2) Employee
shall suffer any illness, disability or incapacity so that he is unable to
render full-time services to Employer of the character required hereunder with
reasonable efficiency for a period of six (6) consecutive months by reason of
illness, disability or incapacity and the Employer determines that Employee has
been permanently disabled, then, and in either of such events, Employee will
continue to render such advisory and consultative services as he is able, and as
may be reasonably requested of him by the directors and officers of Employer,
and
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he shall receive his annual compensation for the balance of the term of this
Agreement in such installments as he shall then be currently receiving.
Compensation during any period of disability shall be adjusted for reimbursement
from any disability insurance paid for by Employer.
EIGHTH: DEATH: In the event of Employee's death during the
term of this Agreement, the Employer shall pay to Employee's designated
beneficiary or beneficiaries, or, in default of such designation, to his estate,
the annual salary due for the balance of the Agreement prorated for any partial
year thereof and payable in a lump sum within ninety (90) days from the date of
his death.
NINTH: EARLY TERMINATION: This Agreement may be terminated prior to the end
of the Term provided in paragraph FIRST under and subject to the following
conditions:
a) Employee shall have the right to terminate this Agreement during
the Term by giving thirty (30) days advance written notice. Upon the expiration
of such notice period, Employee shall not be entitled to any further
compensation hereunder.
b) In the event of any change in control of Employer from and after the date
hereof, either Employer or Employee may, at his/its independent election, such
election to be evidenced by written notice, terminate this Agreement. Effective
upon the giving of such notice, regardless of which party elects to give such
notice, Employer shall pay to Employee a sum equal to Employee's then current
annual salary multiplied by the years (including fractional years) remaining in
the Term of this Agreement prior to the giving of such notice, less any legally
required withholdings. As used in this Paragraph THIRD, "change in control"
means (i) any such change required to be reported to the Securities and Exchange
Commission under Item 1 in a Current Report on Form 8-K (or a successor
provision thereof); provided, however, that no change in control shall be deemed
to have occurred which involves the acquisition, holding, voting or disposing of
less than 40% of Employer's outstanding voting securities, or (ii) the sale of
all or a substantial portion of the productive assets of Employer. For purposes
of this Paragraph, "Employer" shall include both jointly and severally, Delaware
Otsego Corporation and The New York, Susquehanna and Western Railway
Corporation.
c)Employer may terminate this Agreement at any time without cause by giving
thirty (30) days advance written notice to Employee. Effective upon the giving
of such notice, Employer shall pay to Employee a sum equal to Employee's then
current annual salary multiplied by the years (including fractional years)
remaining in the Term of this Agreement prior to the giving of such notice, less
any legally required withholdings.
d)Employer may terminate this Agreement at any time for cause by written notice.
For purposes of this Agreement, "cause" shall include any one or more of the
following:
1. A material breach of any covenant, provision or condition of this
Agreement by Employee.
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2. Commission by Employee of a felony or a crime involving moral turpitude.
3. Any gross negligence or willful misconduct in the performance of
Employee's duties that results in detriment to Employer.
Upon any such termination, Employee shall not be entitled to any further
compensation hereunder.
e) In the event of termination under subparagraphs (a) or (d) above,
Employee hereby expressly agrees that the giving of such notice under such
subparagraphs shall also constitute the termination and cancellation of any
incentive stock options to purchase the common stock of Delaware Otsego
Corporation Employee may then hold.
TENTH: NOTICE: Any notice required or given under this Agreement shall be
sufficient if in writing and sent by registered or certified mail to his
residence in the case of Employee or to Attention: Secretary, Delaware Otsego
Corporation in the case of Employer, at the addresses hereinabove set forth, or
to such other addresses as may be designated subsequently by the parties hereto.
Any such notice shall be deemed given when so addressed and mailed.
ELEVENTH: WAIVER OF BREACH: A waiver by Employer or Employee of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
TWELFTH: ENTIRE AGREEMENT: This Agreement contains the entire understanding
and agreement between the parties and cannot be amended, modified or
supplemented in any respect, except by an agreement in writing signed by the
party against whom enforcement of any amendment, modification or supplement is
sought.
THIRTEENTH: SUCCESSORS AND ASSIGNS: This Agreement shall inure to the
benefit of and be binding upon Employer and its successors and assigns
including, without limitation, any corporation or other entity which may acquire
all or substantially all of the capital stock, assets and/or business of
Employer or with or into which Employer may be consolidated or merged, and
Employee, his heirs, executors, administrators and legal representatives.
FOURTEENTH: GOVERNING LAW: This Agreement shall be governed by the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day first hereinabove written.
DELAWARE OTSEGO CORPORATION
By: s/ Xxxxxx X. Xxxx
-------------------------------------
Title: President
----------------------------------
s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
XXXXXXX X. XXXXXXX
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RIDER TO EMPLOYMENT AGREEMENT
This Rider to Employment Contract (hereinafter "this Rider") is entered into as
of July 14, 1997 by and between Xxxxxxx X. Xxxxxxx , (hereafter "Employee") and
DELAWARE OTSEGO CORPORATION (hereafter "Employer").
WHEREAS, Employer and Employee entered into an Employment Agreement dated June
3, 1995 (hereinafter the "Employment Agreement"); and
WHEREAS, Employer and Employee, after receiving certain advice regarding the
income tax treatment of certain payments that Employee may be entitled to
receive under the Employment Agreement, wish to enter into this Rider for their
mutual benefit;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth hereinafter and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties, intending to be legally bound,
covenant and agree as follows:
1. In the event of a termination of the Employment Agreement pursuant to the
provisions of Section NINTH (b) or (c) upon or as a result of a change in
control of Employer then, notwithstanding any inconsistent provisions of the
Employment Agreement to the contrary, the amount to be paid to Employee by
Employer shall be equal to 2.99 times the highest annual cash compensation,
consisting solely of salary and bonus, paid to the Employee during any calendar
year in each of the three calendar years immediately prior to the change in
control. In addition,
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the Employer shall continue to provide the Employee for a period of 2.99 years
after such termination with health, hospitalization and medical insurance as
were provided at the time of the termination, at the Employer's expense. In
making such payment, Employer shall cooperate with Employee, at Employee's
election, in deferring payment of part or all of such sum over a period of three
calendar years.
2. Notwithstanding the foregoing, prior to the payment of any amount payable as
set forth above, the certified public accountants of the Employer immediately
prior to the change in control, (the "Certified Public Accountants") shall
determine as promptly as practical and in any event within 20 business days
following such termination the deductibility of any payment or distribution by
the Employer to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of the Employment Agreement,
this Rider or otherwise) (the "Agreement Payments") by the Employer for Federal
income purposes because of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"). The Certified Public Accountants will determine the
amount, if any, that the Agreement Payments shall be increased or decreased to
maximize the aggregate present value of Agreement Payments without causing any
portion of such Agreement Payments to be nondeductible by the Employer because
of said Section 280G of the Code.
3. If under paragraph 2 of this Rider the Certified Public Accountants determine
that any adjustment to the Agreement Payments is required, the Employer shall
promptly give the Employee notice to that effect and a copy of the detailed
calculation thereof , together with a statement showing which and how much of
the Agreement Payments shall be adjusted.
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4. As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may be made by the Employer which
should not have been made ("Overpayment") or that additional Agreement Payments
which will have not been made by the Employer could have been made
("Underpayment"), in each case, consistent with the determination made by the
Certified Public Accountants under paragraph 2 and 3 of this Rider. In the event
that advice and determination of the Certified Public Accountants under
paragraphs 2 and 3 is followed by Employer and Employee and the Certified Public
Accountants, based upon the assertion of a deficiency by the Internal Revenue
Service, determines that an Overpayment has been made, then the Employer shall
make additional payments to Employee sufficient to (i) reimburse Employee for
his expenses, if any, for representation before the Internal Revenue Service,
and (ii) result in the net payment received by Employee after income taxes,
after consideration of any additional tax, interest or penalties imposes by the
Internal Revenue Service, being equal to the amount Employee would have received
had no Overpayment been made. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Employee.
5. Payment by the Employer of the sums provided for herein, together with any
wages earned prior to the termination of the employment Agreement, shall
constitute full settlement of any land all claims which Employee may have
against Employer. Employee and Employer shall, upon Employer's reasonable
request, execute a mutual release of all claims.
6. Except as expressly set forth herein, the terms and conditions of the
Employment
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Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Rider on the 14th day
of July, 1997.
DELAWARE OTSEGO CORPORATION Employee
by: s/ Xxxxxx X. Xxxx s/ Xxxxxxx X. Xxxxxxx
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President
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