EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of April 17,
2000, by and between Motor Coach Industries International, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company, through its subsidiaries and
affiliates, is engaged in the business of (i) designing, manufacturing,
assembling, and marketing of coaches of monocoque or unitized construction
configuration, and (ii) distribution of replacement parts to the intercity
coach and transit bus markets (the "Business"); and
WHEREAS, the Company desires that the Executive serve as
Chief Financial Officer of the Company and the Executive desires to hold such
position under the terms and conditions of this Agreement; and
WHEREAS, the parties desire to enter into this Agreement
setting forth the terms and conditions of the employment relationship of the
Executive with the Company.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive,
and the Executive hereby accepts employment with the Company, upon the terms
and subject to the conditions set forth herein.
2. TERM. Subject to earlier termination pursuant to Section
10 hereof, the term of the employment by the Company of the Executive
pursuant to this Agreement (the "Term") shall commence on April 17, 2000 (the
"Effective Date"), and terminate on the second anniversary thereof.
3. POSITION. During the Term, the Executive shall serve as
the Chief Financial Officer of the Company, and shall perform such other
duties as the Board of Directors of the Company (the "Company Board") or the
Company's Chief Executive Officer shall from time to time determine.
4. DUTIES. During the Term, the Executive shall devote his
full time and attention during normal business hours to the business and
affairs of the Company, except for vacations in accordance with the Company's
policies and for illness or incapacity, in accordance with Section 9 hereof.
5. SALARY AND BONUS.
(a) During the Term, the Company shall pay to the
Executive a Base Salary at the rate of $325,000.00 per year. Commencing on
the first anniversary of the Effective Date, the Company Board shall review
the Base Salary annually and shall make such adjustments from time to time as
it may deem advisable. The Base Salary shall be payable to the Executive in
substantially equal installments in accord-ance with the Company's normal
payroll practices.
(b) For the Company's fiscal year ending December
31, 2000, and for each fiscal year thereafter during the Term, the Executive
shall be eligible to receive an annual cash bonus at the discretion of the
Company Board in accordance with the [Management Bonus Program] or other
incentive compensation plan established by the Company Board for the
Company's executive officers.
6. STOCK OPTION PLAN. During the Term, the Executive shall
be eligible to participate in the MCII Holdings (USA), Inc. Management Stock
Option Plan or other stock option plan established by the Company Board for
the Company's executive officers and may be granted options thereunder at the
discretion of the Board.
7. VACATION, HOLIDAYS AND SICK LEAVE. During the Term, the
Executive shall be entitled to paid vacation, paid holidays and sick leave in
accordance with the Company's standard policies for its senior executive
officers.
8. BUSINESS EXPENSES. The Executive shall be reimbursed for
all reasonable and necessary business expenses incurred by him in connection
with his employment (including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company)
upon timely submission by the Executive of receipts and other documentation
as required by the Internal Revenue Code of 1986, as amended (the "Code"),
and in accordance with the Company's normal expense reimbursement policies.
9. OTHER BENEFITS. During the Term, the Executive shall be
eligible to participate fully in all health and other employee benefit
arrangements available to senior executive officers of the Company generally.
10. TERMINATION OF AGREEMENT. The Executive's employment by
the Company pursuant to this Agreement shall not be terminated prior to the end
of the Term hereof except as set forth in this Section 10.
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(a) BY MUTUAL CONSENT. The Executive's employment
pursuant to this Agreement may be terminated at any time by the mutual
written agreement of the Company and the Executive.
(b) DEATH. The Executive's employment by the
Company pursuant to this Agreement shall be terminated upon the death of the
Executive, in which event the Executive's spouse or heirs shall receive, when
the same would have been paid to the Executive, (i) all Base Salary and
benefits to be paid or provided to the Executive under this Agreement through
the Date of Termination (as defined in Section 10(f) hereof) and (ii) the
Base Salary and health benefits to be paid or provided to the Executive under
this Agreement until the earlier of (x) six months following the Date of
Termination and (y) the expiration of the Term.
(c) DISABILITY. The Executive's employment by the
Company pursuant to this Agreement may be terminated by written notice to the
Executive by the Company or to the Company by the Executive in the event that
(i) the Executive becomes unable to perform his normal duties by reason of
physical or mental illness or accident for any six (6) consecutive month
period, or (ii) the Company receives written opinions from both a physician
for the Company and a physician for the Executive that the Executive will be
so disabled. In the event that this Agreement is terminated pursuant to this
Section 10(c), the Executive shall be entitled to receive, when the same
would have been paid to the Executive, (i) all Base Salary and benefits to be
paid or provided to the Executive under this Agreement through the Date of
Termination and (ii) the Base Salary and health benefits to be paid or
provided to the Executive under this Agreement until the earlier of (x) six
months following the Date of Termination and (y) the expiration of the Term.
(d) BY THE COMPANY FOR CAUSE. This Agreement may
be terminated by the Company by written notice to the Executive ("Notice of
Termination") upon the occurrence of any of the following events (each of
which shall constitute "Cause" for termination): (i) the Executive commits
any act of gross negligence, incompetence, fraud or willful misconduct
causing harm to the Company, (ii) the conviction of the Executive of a felony
that could adversely affect the Company or its reputation, (iii) the
Executive intentionally obtains personal gain, profit or enrichment at the
expense of the Company or from any transaction in which the Executive has an
interest which is adverse to the interest of the Company unless the Executive
shall have obtained the prior written consent of the Company Board, (iv) the
Executive acts in a manner which is materially detrimental or damaging to the
Company's reputation, business operations or relations with its employees,
suppliers or customers, or (v) any material breach by the Executive of this
Agreement, including, without limitation, a material
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breach of Section 13 hereof, which breach remains uncorrected for a period of
fifteen (15) days after receipt by the Executive of written notice from the
Company setting forth the breach. In the event the Executive's employment by
the Company is terminated pursuant to this Section 10(d), the Executive shall
be entitled to receive all Base Salary and benefits to be paid or provided to
the Executive under this Agreement through the Date of Termination.
(e) BY THE COMPANY WITHOUT CAUSE. The employment
by the Company of the Executive pursuant to this Agreement may be terminated
by the Company at any time without Cause by delivery of a Notice of
Termination to the Executive. In the event that the employment by the Company
of the Executive pursuant to this Agreement is terminated by the Company
without Cause pursuant to this Section 10(e), the Executive shall be entitled
to receive, when the same would have been paid to the Executive, the greater
of (i) all Base Salary and benefits to be paid or provided to the Executive
under this Agreement through the Term, and (ii) the Base Salary and benefits
to be paid or provided to the Executive under this Agreement for twelve (12)
months after the Date of Termination.
(f) DATE OF TERMINATION. The Executive's Date of
Termination shall be (i) if the Executive's employment by the Company is
terminated pursuant to Section 10(b), the date of his death, (ii) if the
Executive's employment by the Company is terminated pursuant to Section
10(c), the last day of the six-month period referred to in Section 10(c),
(iii) if the Executive's employment by the Company is terminated pursuant to
Section 10(d), the date on which a Notice of Termination is given, and (iv)
if the Executive's employment is terminated pursuant to Section 10(e), the
date set forth in the Notice of Termination.
11. REPRESENTATIONS.
(a) The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the
Company and is a valid and binding agreement of the Company enforceable
against it in accordance with its terms.
(b) The Executive represents and warrants that he
is not a party to any agreement or instrument which would prevent him from
entering into or performing his duties in any way under this Agreement.
12. ASSIGNMENT; BINDING AGREEMENT. This Agreement is a
personal contract and the rights and interests of the Executive hereunder may
not be sold,
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transferred, assigned, pledged, encumbered, or hypothecated by him, except as
otherwise expressly permitted by the provisions of this Agreement. This
Agreement shall inure to the benefit of and be enforceable by the Executive
and his personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amount would still be payable to him hereunder had the
Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to his
devisee, legatee, or other designee or, if there is no such designee, to his
estate.
13. CONFIDENTIALITY; NON-COMPETITION; OWNERSHIP OF WORKS.
(a) Executive acknowledges that: (i) the Business
is intensely competitive and that Executive's employment by the Company will
require that Executive have access to and knowledge of confidential
information of the Company, including, but not limited to, the identity of
the Company's customers, the identity of the representatives of customers
with whom the Company has dealt, the kinds of services provided by the
Company to customers and offered to be performed for potential customers, the
manner in which such services are performed or offered to be performed, the
service needs of actual or prospective customers, pricing information,
information concerning the creation, acquisition, or disposition of products
and services, creative ideas and concepts, computer software applications and
other programs, research data, personnel information and other trade secrets
(the "Confidential Information"); (ii) the direct or indirect disclosure of
any such Confidential Information would place the Company at a competitive
disadvantage and would do damage, monetary or otherwise, to the Company's
business; and (iii) the engaging by Executive in any of the activities
prohibited by this Section 13 may constitute improper appropriation and/or
use of such Confidential Information. Executive expressly acknowledges the
trade secret status of the Confidential Information and that the Confidential
Information constitutes a protectable business interest of the Company.
Accordingly, the Company and Executive agree as follows:
(b) For purposes of this Section 13, the Company
shall be construed to include the Company and its parents and subsidiaries
engaged in the Business, including any divisions managed by Executive.
(c) During Executive's employment with the
Company, and at all times after the termination of Executive's employment by
expiration of the Term or otherwise, Executive shall not, directly or
indirectly, whether individually, as a director, stockholder, owner, partner,
employee, principal, or agent of any business, or in any other capacity, make
known, disclose, furnish, make available, or utilize any of the
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Confidential Information, other than in the proper performance of the duties
contemplated herein, or as expressly permitted herein, or as required by a
court of competent jurisdiction or other administrative or legislative body;
PROVIDED THAT, prior to disclosing any of the Confidential Information as
required by a court or other administrative or legislative body, Executive
shall promptly notify the Company so that the Company may seek a protective
order or other appropriate remedy. Executive agrees to return all documents
or other materials containing Confidential Information, including all
photocopies, extracts and summaries thereof, and any such information stored
electronically on tapes, computer disks or in any other manner, to the
Company at any time upon request by the Company and immediately upon the
termination of his employment for any reason.
(d) During Executive's employment with the
Company, Executive shall not engage in "Competition" with the Company. For
purposes of this Agreement, Competition by Executive shall mean Executive's
engaging in, or otherwise directly or indirectly being employed by or acting
as a consultant or lender to, or being a director, officer, employee,
principal, agent, stockholder, member, owner or partner of, or permitting his
name to be used in connection with the activities of, any other business or
organization anywhere in the Western Hemisphere which competes, directly or
indirectly, with the Business of the Company.
(e) For a period of two (2) years following the
termination of Executive's employment, whether upon expiration of the Term or
otherwise, Executive shall not engage in Competition, as defined above, with
the Company in any locality or region of the Western Hemisphere in which the
Company had operations at the time of, or within six (6) months prior to,
Executive's termination, or in which, during the six (6) month period prior
to Executive's termination, the Company had made substantial plans with the
intention of establishing operations in such locality or region; PROVIDED
THAT, it shall not be a violation of this sub-paragraph for Executive to
become the registered or beneficial owner of up to one percent (1%) of any
class of the capital stock of a competing corporation registered under the
Securities Exchange Act of 1934, as amended, provided that Executive does not
actively participate in the business of such corporation until such time as
this covenant expires.
(f) For a period of two (2) years after he ceases
to be employed hereunder by the Company, whether upon expiration of the Term
or otherwise, Executive agrees that he will not, directly or indirectly, for
his benefit or for the benefit of any other person, firm or entity, do any of
the following:
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i solicit from any customer doing business
with the Company as of Executive's termination, business of the same or
of a similar nature to the business of the Company with such customer;
ii solicit from any known potential customer
of the Company business of the same or of a similar nature to that
which has been the subject of a known written or oral bid, offer, or
proposal by the Company, or of substantial preparation with a view to
making such a bid, proposal, or offer, within six (6) months prior to
Executive's termination;
iii recruit or solicit the employment or
services of, or hire, any person who was known to be employed by the
Company upon termination of Executive's employment, or within six (6)
months prior thereto; or
iv otherwise knowingly interfere with the
business or accounts of the Company.
(g) The Executive will make full and prompt
disclosure to the Company of all inventions, improvements, formulas, data,
programs, processes, ideas, concepts, discoveries, methods, developments,
software, and works of authorship, whether or not copyrightable,
trademarkable, or patentable, which are created, made, conceived, or reduced
to practice by the Executive, either alone, under his direction or jointly
with others during the period of his employment with the Company, whether or
not during normal working hours or on the premises of the Company, which (i)
relate to the actual or anticipated business, activities, or research of the
Company, or (ii) result from or are suggested by work performed by the
Executive for the Company, or (iii) result, to any extent, from use of the
Company's premises or property (all of which are collectively referred to in
this Agreement as "Works"). All Works shall be the sole property of the
Company, and, to the extent that the Company is not already considered the
owner thereof as a matter of law, the Executive hereby assigns to the
Company, without further compensation, all his right, title, and interest in
and to such Works and any and all related intellectual property rights
(including, but not limited to, patents, patent applications, copyrights,
copyright applications, and trademarks) in the Western Hemisphere and
elsewhere. Notwithstanding the foregoing, this Agreement does not apply to
any invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on the
Executive's own time, unless: (A) the invention relates (X) to the Business
of the Company, or (Y) to the Company's actual demonstratively anticipated
research or development; or (B) the invention results from any work performed
by the Executive for the Company.
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(h) Executive acknowledges that the services to be
rendered by him to the Company are of a special and unique character, which
gives this Agreement a peculiar value to the Company, the loss of which may
not be reasonably or adequately compensated for by damages in an action at
law, and that a breach or threatened breach by him of any of the provisions
contained in this Section 13 will cause the Company irreparable injury.
Executive therefore agrees that the Company shall be entitled, in addition to
any other right or remedy, to a temporary, preliminary, and permanent
injunction, without the necessity of proving the inadequacy of monetary
damages or the posting of any bond or security, enjoining or restraining
Executive from any such violation or threatened violations.
(i) Executive further acknowledges and agrees that due to
the uniqueness of his services and confidential nature of the information he
will possess, the covenants set forth herein are reasonable and necessary for
the protection of the business and goodwill of the Company.
(j) If any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity, or
subject, such provisions shall be construed by limiting and reducing them so
as to be enforceable to the fullest extent permitted by law.
14. ENTIRE AGREEMENT. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred
to herein, and supersedes any other undertakings and agreements, whether oral
or in writing, previously entered into by them with respect thereto. The
Executive represents that, in executing this Agreement, he does not rely and
has not relied upon any representation or statement not set forth herein made
by the Company with regard to the subject matter or effect of this Agreement
or otherwise.
15. AMENDMENT OR MODIFICATION, WAIVER. No provision of this
Agreement may be amended or waived, unless such amendment or waiver is agreed
to in writing, signed by the Executive and by a duly authorized officer of
the Company. No waiver by any party hereto of any breach by another party
hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same time, any prior time, or any subsequent
time.
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16. NOTICES. Any notice to be given hereunder shall be in
writing and shall be deemed given when delivered personally, sent by courier
or facsimile or registered or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or
to such other address as such party may subsequently give notice hereunder in
writing:
To the Executive at:
Xxxxx X. Xxxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxx 00000
To the Company at:
Motor Coach Industries International, Inc.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Vice President & General Counsel
Any notice delivered personally or by courier under this
Section 16 shall be deemed given on the date delivered and any notice sent by
facsimile or registered or certified mail, postage prepaid, return receipt
requested, shall be deemed given on the date transmitted by facsimile or
mailed.
17. SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be validated and shall
be enforced to the fullest extent permitted by law.
18. SURVIVORSHIP. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
19. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of Illinois, without
regard to the principles of conflicts of law thereof.
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20. HEADINGS. All descriptive headings of sections and
paragraphs in this Agreement are intended solely for convenience, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
21. WITHHOLDING. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state, or local law.
22. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement on April 17, 2000, to be effective as of the Effective
Date.
MOTOR COACH INDUSTRIES INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
--------------------------------
XXXXX X. XXXXXX
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