1
EXHIBIT 10(c)
EMPLOYMENT AGREEMENT
BETWEEN
XXXXXX X. XXXXXXXX
AND
FLORIDA EAST COAST INDUSTRIES, INC.
July 15, 1999
2
TABLE OF CONTENTS
PAGE
----
1. Employment Period..................................................... 1
2. Terms of Employment................................................... 1
(a) Position and Duties............................................ 1
(b) Compensation................................................... 2
3. Termination of Employment............................................. 6
(a) Death or Disability............................................ 6
(b) Cause.......................................................... 6
(c) Good Reason.................................................... 7
(d) Commuting Arrangements......................................... 7
(e) Termination for Other Reasons.................................. 7
(f) Notice of Termination.......................................... 8
(g) Date of Termination............................................ 8
4. Obligations of Employer Upon Termination.............................. 8
(a) Accelerating Event............................................. 8
(b) Good Reason; Other than for Cause, Death or Disability......... 8
(c) Death.......................................................... 9
(d) Cause; Other Than for Good Reason.............................. 9
(e) Disability..................................................... 9
(f) Commuting...................................................... 9
(g) Non-Disclosure to Media........................................ 10
5. Change in Control..................................................... 10
(a) Defined........................................................ 10
(b) Entitlement to Benefits........................................ 11
(c) Accelerating Event............................................. 11
(d) Supplemental Payment to Executive.............................. 11
6. Non-Exclusivity of Executive's Rights................................. 11
7. Confidential Information.............................................. 12
8. Non-Competition; Non-Solicitation..................................... 12
9. Remedies for Executive's Breach....................................... 13
10. Dispute............................................................... 13
3
TABLE OF CONTENTS (CONT.)
PAGE
----
11. No Conflicting Obligations of Executive............................... 14
12. Certain Obligations of the Employer Regarding Stock Awards............ 14
13. Indemnity of Executive................................................ 14
14. Successors............................................................ 15
15. Miscellaneous......................................................... 15
- ii -
4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement), dated as of July
15, 1999, between XXXXXX X. XXXXXXXX, an individual (the "Executive"), and
FLORIDA EAST COAST INDUSTRIES, INC. ("Employer"), a Florida corporation, recites
and provides as follows:
WHEREAS, the Board of Directors of Employer (the "Board")
desires that Employer retain the services of the Executive, and the Executive
desires to be employed with Employer, all on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, Employer and the Executive agree as
follows:
1. EMPLOYMENT PERIOD. Employer hereby agrees to employ the
Executive, and the Executive hereby agrees to accept employment by Employer, in
accordance with the terms and provisions of this Agreement, for the period
commencing on July 27, 1999 (the "Effective Date") and continuing until
terminated by either party hereto (the "Employment Period").
2. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the Employment Period, the
Executive shall serve as Executive Vice President and Chief Financial Officer of
Employer and shall have such authority and perform such executive duties as are
commensurate with such positions and as are otherwise assigned by the Board.
(ii) The Executive's services shall be
performed at the headquarters of Employer and its subsidiaries in Florida and
other facilities of Employer and otherwise at such location(s) as Employer may
select.
(iii) During the Employment Period, and
excluding any periods of vacation and leave to which the Executive is entitled,
the Executive agrees to devote his full business attention and time to the
business and affairs of Employer and, to the extent necessary to discharge the
duties assigned to the Executive hereunder, to use the Executive's reasonable
efforts to perform faithfully such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic, charitable, and professional association boards or
committees, subject to the approval of the Chairman of Employer, in each
instance, which approval shall not be unreasonably withheld (service on the
Board of Ansett Australia through the end of 1999 being hereby approved), (B)
deliver lectures or fulfill speaking engagements and (C) manage personal
investments, so long as such activities
5
do not materially interfere with the performance of the Executive's
responsibilities as an employee of Employer in accordance with this Agreement.
(b) COMPENSATION.
(i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Annual Base Salary"), which
shall be paid in equal installments on a semi-monthly basis, at the annual rate
of not less than Two Hundred Twenty-Five Thousand Dollars ($225,000) per year.
During the Employment Period, the Annual Base Salary shall be reviewed at least
annually by the Board. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced and the term "Annual Base Salary" as
used in this Agreement shall mean the Annual Base Salary as so increased.
(ii) Signing Bonus. The Executive shall
receive a grant of restricted stock for one thousand five hundred (1,500) shares
of the Employer's Common Stock issued under the FECI 1998 Stock Incentive Plan.
Such shares shall be subject to restrictions which shall provide that the
Executive shall not transfer such shares during the restriction period and shall
forfeit such shares if during the restriction period he is discharged by the
Employer for Cause (as hereinafter defined in Section 3(b)) or pursuant to
Section 3(d) or resigns from employment with FECI without Good Reason (as
hereinafter defined in Section 3(c)). The restriction period shall lapse with
respect to such shares in equal annual installments on each of the first and
second anniversaries of the Effective Date. Notwithstanding the foregoing, the
restriction period shall lapse immediately as to all such shares in the event
that an Accelerating Event (as hereinafter defined in Section 4(a)) occurs. The
Executive shall be entitled to receive any dividends or other distributions
payable with respect to such shares of restricted stock beginning on the date of
award of such shares. Such stock award shall be evidenced by a written
restricted stock award agreement between the Employer and the Executive, the
terms of which shall be agreed to by the parties in good faith as soon as
practical.
(iii) Short-Term Incentive Bonus. In
addition to Annual Base Salary, during the Employment Period the Executive shall
participate in an annual incentive bonus plan. Such plan shall provide the
Executive with the opportunity to earn a bonus based on achievement of
performance criteria. The incentive bonus plan shall be structured such that the
Executive shall receive up to fifty percent (50%) of Annual Base Salary for
attainment of certain target performance goals (prorated for any partial year of
employment), with a maximum bonus of one hundred percent (100%) of Annual Base
Salary for extraordinary performance (pro rated for any partial year of
employment). The Compensation Committee of the Board will establish the
performance criteria and goals in consultation with the Executive. The bonus
payable pursuant to this Section 2(b)(iii) for any fiscal year shall be paid to
the Executive no later than (A) the thirtieth (30th) day following the issuance
of the audited financial statements of Employer for such year, or (B) ninety
(90) days after the end of such year, whichever occurs first and for Employer's
fiscal 1999 shall be in an amount not less than twenty-two percent (22%) of the
Annual Base Salary.
(iv) Long-Term Incentives: Restricted Stock.
The Executive shall receive a grant of restricted stock for seven thousand five
hundred (7,500) shares of
-2-
6
Employer's Common Stock issued under the FECI 1998 Stock Incentive Plan. Such
shares shall be subject to restrictions which shall provide that the Executive
shall not transfer such shares during the restriction period and shall forfeit
such shares if during the restriction period he is discharged by Employer for
Cause (as hereinafter defined in Section 3(b)) or pursuant to Section 3(d) or
resigns from employment with Employer without Good Reason (as hereinafter
defined in Section 3(c)). The restriction period shall lapse with respect to
such shares in five (5) equal annual installments on each of the first through
the fifth anniversaries of the Effective Date. Notwithstanding the foregoing,
the restriction period shall lapse immediately as to all such shares in the
event that an Accelerating Event (as hereinafter defined in Section 4(a))
occurs. The Executive shall be entitled to receive any dividends or other
distributions payable with respect to such shares of restricted stock beginning
on the date of award of such shares. Such stock award shall be evidenced by a
written restricted stock award agreement between Employer and the Executive, the
terms of which shall be agreed to by the parties in good faith as soon as
practical.
(v) Long-Term Incentives: Stock Options. The
Executive shall receive a grant of non-statutory stock options on forty thousand
five hundred (40,500) shares of Employer's Common Stock issued under the FECI
1998 Stock Incentive Plan. The options shall have a term of ten (10) years
(subject to earlier expiration as hereinafter provided), shall have an exercise
price equal to one hundred percent (100%) of the fair market value, as of the
date of this Agreement (being $39.50 per share) of the shares of common stock
subject to such stock options, and shall vest and become exercisable in five (5)
equal annual installments on the first through the fifth anniversaries of the
Effective Date; provided, however, that such stock options shall vest
immediately and become exercisable in their entirety in the event that an
Accelerating Event (as hereinafter defined in Section 4(a)) occurs. To the
extent not previously exercised, all such stock options shall expire immediately
following the Date of Termination (as hereinafter defined in Section 3(g));
provided, however, that the Executive, or his heirs or legal representatives in
the event of the Executive's death, may exercise all or any part of such stock
options as were exercisable as of the close of business on the Date of
Termination for a period of two (2) years following such Date of Termination in
the event (i) an Accelerating Event (as hereinafter defined in Section 4(a))
occurs, or (ii) the Executive retires at normal retirement age under any
retirement plan of Employer. Such stock options shall include a provision for
adjustment in the option price to reflect any extraordinary distribution made
with respect to the common stock during the term of the options. In the event of
a capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, spinoff, a combination or exchange of
shares or other transaction having a similar substantive effect, the number
shares of stock subject to the stock options and the option price shall be
equitably adjusted. Such stock options shall be evidenced by a written stock
option award agreement between Employer and the Executive, the terms of which
shall be agreed to by the parties in good faith as soon as practical.
(vi) Long Term Incentives: Supplemental
Stock Options. The Executive shall receive a grant of non-statutory stock
options on thirty-seven thousand five hundred (37,500) shares of Employer's
Common Stock issued under the FECI 1998 Stock Incentive Plan. The options shall
have a term of ten (10) years (subject to earlier expiration as hereinafter
provided), shall have an exercise price equal to one hundred percent (100%) of
the fair market value, as of the date of this Agreement (being $39.50 per
share), of the shares of Common Stock subject to such stock options, and shall
vest and become exercisable immediately
-3-
7
upon the earlier of (i) the first date as of which the average closing price of
a share of Employer's Common Stock over twenty (20) consecutive trading days is
not less than Fifty Dollars ($50.00); (ii) the occurrence of an Accelerating
Event (as hereinafter defined in Section 4(a)); or (iii) the fifth anniversary
of the Effective Date. To the extent not previously exercised, all such stock
options shall expire immediately following the Date of Termination (as
hereinafter defined in Section 3(g)); provided, however, that the Executive, or
his heirs or legal representatives in the event of the Executive's death, may
exercise all or any part of such stock option as was exercisable as of the close
of business on the Date of Termination for a period of two (2) years following
such Date of Termination in the event (i) the occurrence of an Accelerating
Event (as hereinafter defined in Section 4(a)); or (ii) the Executive retires at
normal retirement age under any retirement plan of FECI. Such stock options
shall include a provision for adjustment in the option price to reflect any
extraordinary distribution made with respect to the common stock during the term
of the options. In the event of a capital adjustment resulting from a stock
dividend, stock split, reorganization, merger, consolidation, spinoff, a
combination or exchange of shares or other transaction having a similar
substantive effect, the number shares of stock subject to the stock options and
the option price shall be equitably adjusted. Such stock option shall be
evidenced by a written stock option award agreement between Employer and the
Executive, the terms of which shall be agreed to by the parties in good faith as
soon as practical.
(vii) Long-Term Incentives: Subsequent
Option Grants. During the Employment Period, the Executive shall be entitled to
participate in long-term equity incentive plans and programs applicable
generally to other peer executives of Employer. Such participation shall
commence with respect to Employer's 2000 fiscal year. Such plans and programs
shall be structured such that the Executive shall receive option grants with
targeted annual grant value (using valuation methods consistent with those used
by Employer for financial reporting purposes) between seventy-five (75%) and one
hundred percent (100%) of Annual Base Salary for attainment of certain target
performance goals (prorated for any partial year of employment). The Employer
will establish the performance criteria and goals in consultation with the
Executive.
(viii) Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of Employer.
(ix) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family and dependents,
as the case may be, shall be eligible for participation in and shall receive all
benefits under all welfare benefit plans, practices, policies and programs
provided by Employer (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of Employer.
(x) Apartment Expense. The Executive shall
obtain temporary housing and thereafter a furnished apartment for his use during
the Employment Period in the vicinity of St. Augustine/Jacksonville, Florida.
Employer shall pay directly or reimburse the Executive for the room charges for
such temporary housing and all reasonable rental and utility charges incurred in
connection with such furnished apartment during the Employment Period.
-4-
8
Employer shall also pay directly or reimburse the Executive for all reasonable
moving charges incurred in relocating personal effects and business materials
from his primary residence to such temporary housing and apartment. If the
Executive purchases a residence in the St. Augustine/Jacksonville, Florida area
during the Employment Period, Employer shall continue reimbursement to Executive
in amounts corresponding to the charges associated with the furnished apartment
until Executive has relocated his family to Xx. Xxxxxxxxx/Xxxxxxxxxxxx, Xxxxxxx.
(xi) Travel Expenses. Employer shall pay
directly or reimburse the Executive for reasonable direct out-of-pocket costs
incurred in making one roundtrip between the city in which Employer's
headquarters is located and his home in Edina, Minnesota, each week during the
Employment Period, exclusive only of vacation weeks; provided, however, that in
no event shall the Employer be obligated to make such reimbursement with respect
to more than thirty-three (33) trips in any twelve (12) month period; and,
provided, further, if the Executive desires to bring up to three family members
to Florida for a visit on any one trip, Employer will likewise reimburse their
expenses in lieu of a trip reimbursement for the Executive (provided that not
more than four of such trips are made in any one year); and, provided, further,
that the Executive shall at his sole expense make full use of the reduced fare
plan awarded to him by Northwest Airlines in making such travel.
(xii) Other Expenses. The Executive shall be
entitled to receive prompt reimbursement for all employment-related expenses
incurred by the Executive during the Employment Period in accordance with the
most favorable policies, practices and procedures of Employer as in effect
generally from time to time after the Effective Date with respect to other peer
executives of Employer.
(xiii) Fringe Benefits. During the
Employment Period, the Executive and/or the Executive's family and dependents
shall be entitled to fringe benefits in accordance with the most favorable
plans, practices, programs and policies of Employer as in effect generally from
time to time after the Effective Date with respect to other peer executives of
Employer.
(xiv) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office and support
staff at the Employer's headquarters at least equal to the most favorable of the
foregoing provided generally from time to time after the Effective Date with
respect to other peer executives of Employer.
(xv) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of Employer as in effect
generally from time to time after the Effective Date with respect to other peer
executives of Employer.
(xvi) Car Allowance. During the Employment
Period, the Executive shall be entitled to a car allowance in accordance with
Employer's car allowance policy, in lieu of expenses associated with the
operation of his automobile.
-5-
9
(xvii) Golden Parachute Excise Tax. If any
amounts payable under this Agreement are subject to the excise tax imposed under
Section 4999 of the Internal Revenue Code on "excess parachute payments,"
Employer will in good faith compute the excise tax imposed under Code Section
4999 and shall pay that amount to the Executive, including any federal, state,
local and excise taxes imposed on the foregoing payment under this Section
2(b)(xvii). The determination will be made before the taxes are due and payable
by the Executive, to the extent possible. The calculations under this Section
will be made in a manner consistent with the requirements of Code Section 280G
and 4999, as in effect at the time the calculations are made.
(xviii) Right to Change Plans. Employer
shall not be obligated to institute, maintain or refrain from changing, amending
or discontinuing any benefit plan, program, or perquisite referred to in
Sections 2(b)(viii), 2(b)(ix) and 2(b)(xiii), so long as such changes are
similarly applicable to other executives of Employer.
3. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Executive's employment
shall terminate automatically upon the Executive's death during the Employment
Period. If Employer determines in good faith that the Disability of the
Executive has occurred (pursuant to the definition of disability set forth
below), it may give to the Executive notice of its intention to terminate the
Executive's employment. In such event, the Executive's employment with Employer
shall terminate upon a date selected by Employer and set forth in such notice
(the "Disability Effective Date"), provided that, prior to such date, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with Employer on a full-time basis for
one hundred eighty (180) consecutive business days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a
physician selected by Employer or its insurers and acceptable to the Executive
or the Executive's legal representative (such agreement as to acceptability not
to be withheld unreasonably).
(b) CAUSE. Employer may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" shall mean (i) a
material breach by the Executive of the Executive's obligations under this
Agreement (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such breach is
in the best interest of Employer and which is not remedied in a reasonable
period of time after receipt of notice from Employer specifying such breach;
(ii) the conviction of the Executive for committing an act of fraud,
embezzlement, theft or other act constituting a felony or the guilty or nolo
contendere plea of the Executive to such a felony; (iii) insubordination or the
willful engaging by Executive in gross misconduct or the willful violation of an
Employer policy which results in material and demonstrable injury to Employer;
or (iv) a material act of dishonesty or breach of trust on the part of the
Executive resulting or intending to result directly or indirectly in material
personal gain or enrichment at the expense of Employer. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for Employer shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of Employer.
-6-
10
(c) GOOD REASON. The Executive may terminate his
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, in the absence of the consent of the Executive, a reasonable determination
by the Executive that any of the following has occurred:
(i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 2(a) of this Agreement, or
any other action by Employer which results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated and insubstantial action not taken in bad faith and which is remedied
by Employer promptly after receipt of notice thereof given by the Executive; or
(ii) any failure by Employer to comply with
any of the provisions of this Agreement applicable to it, other than any
isolated and insubstantial failure not occurring in bad faith and which is
remedied promptly after notice thereof from the Executive.
(d) COMMUTING ARRANGEMENTS. The Executive initially
intends to commute to his place of work hereunder from his home in Edina,
Minnesota, where he will reside on two out of every three weekends during the
Employment Period. The Executive and the Employer will make a good faith effort
to make this arrangement work to the Employer's reasonable satisfaction.
However, if, at any time prior to January 1, 2001, the Employer determines that
it is not satisfied with this arrangement, it may provide a notice to such
effect to the Executive. If the Executive does not agree, within thirty (30)
days of receipt of such notice, to promptly (taking into account school years
and the significant family considerations) relocate his primary residence to the
St. Augustine/Jacksonville, Florida area, then the Employer may at any time
within thirty (30) days following the expiration of such thirty (30) day period
terminate the employment of Executive by giving notice to the Executive, which
notice shall set forth the Date of Termination. If the Executive does so
relocate (whether at the request of Employer or otherwise), Employer will
reimburse him for the reasonable direct costs incurred by him in connection with
such relocation upon such terms and conditions as are substantially comparable
to relocation packages typically provided by Employer to other senior executives
within the last twelve (12) months.
(e) TERMINATION FOR OTHER REASONS. Employer may
terminate the employment of the Executive without Cause and without regard to
the provisions of Section 3(d) by giving notice to the Executive, which notice
shall set forth the Date of Termination. The Executive may resign from his
employment without Good Reason hereunder by giving notice to Employer at least
thirty (30) days prior to the Date of Termination.
(f) NOTICE OF TERMINATION. Any termination shall be
communicated by Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" means a notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) in the case
of a termination under Section 3(b) or 3(c), to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated (the failure by the Executive or Employer to set forth in the Notice
of Termination any fact or circumstance
-7-
11
shall not waive any right of the Executive or Employer hereunder or preclude the
Executive or Employer from asserting such fact or circumstance in enforcing the
Executive's or Employer's rights hereunder), and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than fifteen (15)
days after the giving of such notice, unless otherwise required by Section
3(g)).
(g) DATE OF TERMINATION. "Date of Termination" shall
mean (i) if the Executive's employment is terminated by Employer due to the
Executive's Disability, the Date of Termination shall be the Disability
Effective Date, (ii) if the Executive's employment is terminated by reason of
the Executive's death, the Date of Termination shall be the date of death of the
Executive, and (iii) in all other case, the date of receipt of the Notice of
Termination or any permitted later date specified therein, as the case may be.
4. OBLIGATIONS OF EMPLOYER UPON TERMINATION.
(a) ACCELERATING EVENT. As used in this Agreement,
the term "Accelerating Event" shall mean any of the following: (i) the
Executive's employment terminates under the circumstances described in Section
3(a), (ii) the Executive is discharged without Cause, (iii) the Executive
resigns with Good Reason, or (iv) a Change in Control Entitlement (as defined in
Section 5(b)) occurs.
(b) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR
DISABILITY. If, during the Employment Period, Employer shall terminate the
Executive's employment other than for Cause, death or Disability or the
Executive shall terminate employment for Good Reason:
(i) Employer shall pay to the Executive in a
lump sum in cash within thirty (30) days after the Date of Termination the sum
of (A) the Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid; (B) to the extent not theretofore paid, any annual
bonus payable to the Executive for any prior completed fiscal year; (C) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid; and (D) any
accrued vacation pay, expense reimbursement and any other entitlements accrued
by the Executive under Section 2(b), to the extent not theretofore paid (the sum
of the amount described in clauses (A), (B), (C) and (D) shall be hereinafter
referred to as the "Accrued Obligations"); and
(ii) Employer shall pay to the Executive in
eighteen (18) monthly installments beginning thirty (30) days following the Date
of Termination an amount equal to the sum of (A) one hundred fifty percent
(150%) of the Executive's Annual Base Salary plus (B) fifty percent (50%) of the
payment made under Section 2(b)(iii), if any, with respect to the most recently
completed fiscal year of Employer; and
(iii) For eighteen (18) months following the
Date of Termination, or such longer period as any plan, program, practice or
policy may provide, Employer shall continue benefits to the Executive and/or the
Executive's family and dependents at least equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 2(b)(ix) if the Executive's employment had not been
terminated, in accordance with the most favorable plans, practices, programs or
policies of
-8-
12
Employer as in effect generally at any time thereafter with respect to other
peer executives of Employer and their families ("Welfare Benefit Continuation").
If the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility.
(c) DEATH. If the Executive's employment is
terminated by reason of the Executive's death, this Agreement shall terminate
without further obligation to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within thirty (30) days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If the
Executive's employment shall be terminated for Cause or the Executive terminates
his employment without Good Reason, this Agreement shall terminate without
further obligation to the Employer other than the obligation to pay to the
Executive the Accrued Obligations and the amount of any compensation previously
deferred by the Executive, in each case to the extent theretofore unpaid, all of
which shall be paid in cash within thirty (30) days of the Date of Termination.
(e) DISABILITY. If the Executive's employment shall
be terminated by reason of the Executive's Disability, this Agreement shall
terminate without further obligation to the Executive, other than for payment of
Accrued Obligations and the timely payment or provision of the Welfare Benefit
Continuation. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within thirty (30) days of the Date of Termination. The Executive shall
be entitled after the Disability Effective Date to receive disability and other
benefits as in effect at the Disability Effective Date with respect to other
peer executives of Employer and their families.
(f) COMMUTING. If the Executive's employment shall be
terminated pursuant to Section 3(d), this Agreement shall terminate without
further obligation to Employer other than:
(i) Employer shall pay to the Executive the
Accrued Obligations in cash within thirty (30) days of the Date of Termination;
(ii) Employer shall pay to the Executive in
nine (9) monthly installments beginning thirty (30) days following the Date of
Termination an amount equal to seventy-five percent (75%) of the Executive's
Annual Base Salary; and
(iii) For nine (9) months following the Date
of Termination, or such longer period as any plan, program, practice or policy
may provide, Employer shall continue benefits to the Executive and/or the
Executive's family and dependents at least equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 2(b)(ix) if the Executive's Employment had not been
terminated, in accordance with the most favorable plans, practices, programs or
policies of
-9-
13
Employer as in effect generally at any time thereafter with respect to other
peer executives of Employer and their families ("Welfare Benefit Continuation").
If the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility.
(g) NON-DISCLOSURE TO MEDIA. After the Date of
Termination, the Executive and Employer agree that they will not discuss the
Executive's employment and resignation or termination (including the terms of
this Agreement) with any representatives of the media, either directly or
indirectly, without the consent of the other party hereto.
5. CHANGE IN CONTROL.
(a) DEFINED. For purposes of this Agreement, a
"Change in Control" of the Employer shall be deemed to have occurred as of the
first day that any one or more of the following conditions shall have occurred:
(i) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Act")), other than the present majority owner, The St. Xxx Company, or any
majority-owned subsidiary of The St. Xxx Company becomes the "beneficial owner"
(as defined in Rule 13-d under the Act) directly or indirectly, of securities
representing more than fifty percent (50%) of the total voting power represented
by the Employer's then outstanding voting securities;
(ii) A change in the composition of the
Board of Directors of the Employer (the "Board"), as a result of which fewer
than a majority of the directors are Incumbent Directors. "Incumbent Directors"
shall mean directors who either (A) are directors of the Employer as of the date
hereof, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors of the Employer); or
(iii) The Employer merges or consolidates
with any other corporation, including The St. Xxx Company or any subsidiary
thereof, or the Employer adopts, and the stockholders approve, if necessary, a
plan of complete liquidation of the Employer, or the Employer sells or disposes
of substantially all of its assets.
(b) ENTITLEMENT TO BENEFITS. The Executive shall be
entitled to certain additional benefits upon a Change in Control if:
(i) within two (2) years following a Change
in Control, the Employer either (A) substantially reduces the duties or
responsibilities of the Executive from those in effect immediately prior to such
occurrence or (B) reduces the Annual Base Salary other than a reduction which is
a part of an organization-wide salary reduction plan; or
-10-
14
(ii) within the period which is the last
ninety (90) days of the first year after the occurrence of a Change in Control,
the Executive voluntarily resigns his employment hereunder for any reason.
The accrual of such entitlements is referred to herein as "Change in Control
Entitlement."
(c) ACCELERATING EVENT. A Change in Control
Entitlement shall be an Accelerating Event as defined in Section 4(a).
(d) SUPPLEMENTAL PAYMENT TO EXECUTIVE. Upon the
accrual of Change in Control Entitlement, the Employer shall pay to the
Executive in a lump sum in cash within thirty (30) days of the date of such
Change in Control, an amount equal to two (2) times the Annual Base Salary.
6. NON-EXCLUSIVITY OF EXECUTIVE'S RIGHTS. Except as provided
in Sections 4(b)(iii), 4(c) and 4(e), nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by Employer and for which the Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as the Executive
may have under any contract or agreement with Employer. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with Employer at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
7. CONFIDENTIAL INFORMATION.
(a) The Executive shall hold in a fiduciary capacity
for the benefit of Employer all secret or confidential information, knowledge or
data relating to Employer or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by Employer or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with Employer, the Executive
shall not, without the prior written consent of Employer or except as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than Employer and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 6 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
(b) All records, files, memoranda, reports, price
lists, customer lists, drawings, designs, proposals, plans, sketches, documents,
computer programs, CAD systems, CAM systems, disks, computer printouts and the
like (together with all copies thereof) relating to the business of Employer,
which Executive shall use or prepare or otherwise have in his possession in the
course of, or as a result of, his employment hereunder shall, as between the
parties hereto, remain the sole property of Employer. Executive shall use such
materials solely for the benefit of Employer and shall not divulge any such
materials other than in furtherance of
-11-
15
Employer's interests. Executive hereby agrees that he will return all such
materials, including copies, to Employer upon demand, or upon the cessation of
his employment.
(c) Any termination of the Executive's employment
hereunder or of this Agreement shall have no effect on the continuing operation
of this Section 6.
8. NON-COMPETITION; NON-SOLICITATION.
(a) In consideration of Employer undertaking to employ the
Executive under the terms provided for herein, including, without limitation,
the grant of the substantial number of shares of restricted stock options
provided for in Section 2(b), and to protect the Employer's valuable trade
secrets and other business and professional information and its relationships
with existing and prospective customers and suppliers, the Executive agrees
that, except as is set forth below, for a period commencing on the Effective
Date hereof and ending on the first anniversary of the date the Executive ceases
to be employed by Employer (the "Non-Competition Period"), the Executive shall
not, directly or indirectly, either for himself or any other person, own,
manage, control, materially participate in, invest in, permit his name to be
used by, act as consultant or advisor to, render material services for (alone or
in association with any person, firm, corporation or other business
organization) or otherwise assist in any manner any business which is a
competitor of a substantial portion of the Employer's business at the date the
Executive ceases to be employed by the Employer (a "Competitor").
Notwithstanding the foregoing, the restrictions set forth above shall
immediately terminate and shall be of no further force or effect (i) in the
event of a default by Employer of the performance of any of the obligations
hereunder, which default is not cured within ten (10) days after notice thereof,
or (ii) if the Executive's employment has been terminated by Employer other than
for Cause, or (iii) if the Executive resigns for Good Reason. Nothing herein
shall prohibit the Executive from being a passive owner of not more than five
percent (5%) of the equity securities of an enterprise engaged in such business
which is publicly traded, so long as he has no active participation in the
business of such enterprise.
(b) During the Non-Competition Period, the Executive shall
not, directly or indirectly, (i) induce or attempt to induce or aid others in
inducing an employee of Employer to leave the employ of Employer, or in any way
interfere with the relationship between Employer and an employee thereof except
in the proper exercise of the Executive's authority, or (ii) in any way
interfere with the relationship between Employer and any customer, supplier,
licensee or other business relation thereof.
(c) If, at the time of enforcement of this Section 8, a court
shall hold that the duration, scope, area or other restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope, area or other restrictions reasonable under such
circumstances shall be substituted for the stated duration, scope, area or other
restrictions.
(d) The covenants made in this Section 8 shall be construed as
an agreement independent of any other provisions of this Agreement, and shall
survive the termination of this Agreement. Moreover, the existence of any claim
or cause of action of the
-12-
16
Executive against Employer or any of its affiliates, whether or not predicated
upon the terms of this Agreement, shall not constitute a defense to the
enforcement of these covenants.
9. REMEDIES FOR EXECUTIVE'S BREACH. In the event Executive
violates any provision of Sections 7 or 8 and such violation continues after
notice thereof to the Executive and the expiration of a reasonable opportunity
to cure, then Employer may thereafter terminate the payment of any
post-termination benefits hereunder, and Employer will have no further
obligation to Executive under this Agreement. The parties acknowledge that any
violation of Section 7 or 8 can cause substantial and irreparable harm to
Employer. Therefore, Employer shall be entitled to pursue any and all legal and
equitable remedies, including but not limited to any injunctions.
10. DISPUTE. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by binding arbitration, which
shall be the sole and exclusive method of resolving any questions, claims or
other matters arising under this Agreement or any claim that Employer has in any
way violated the non-discrimination and/or other provisions of Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act
of 1967, as amended; the Americans with Disabilities Act; the Family and Medical
Leave Act; the Employee Retirement Income Security Act of 1974, as amended; and,
in general, any federal law or the law of the State of Florida. Such proceeding
shall be conducted by final and binding arbitration before a panel of one or
more arbitrators under the administration of the American Arbitration
Association, and in a location mutually agreed to by the Executive and Employer.
The Federal and State courts located in the United States of America are hereby
given jurisdiction to render judgment upon, and to enforce, each arbitration
award, and the parties hereby expressly consent and submit to the jurisdiction
of such courts. Notwithstanding the foregoing, in the event that a violation of
the Agreement would cause irreparable injury, Employer and the Executive agree
that in addition to the other rights and remedies provided in this Agreement
(and without waiving their rights to have all other matters arbitrated as
provided above) the other party may immediately take judicial action to obtain
injunctive relief.
11. NO CONFLICTING OBLIGATIONS OF EXECUTIVE. Executive
represents and warrants that he is not subject to any duties or restrictions
under any prior agreement with any previous employer or other person, and that
he has no rights or obligations except as previously disclosed to Employer which
may conflict with the interests of Employer or with the performance of the
Executive's duties and obligations under this Agreement. Executive agrees to
notify Employer immediately if any such conflicts occur in the future.
12. CERTAIN OBLIGATIONS OF THE EMPLOYER REGARDING STOCK
AWARDS. At its expense, and as soon as practicable hereafter, with respect to
the shares of Common Stock described in Section 2(b)(ii) and 2(b)(iv) and the
shares of Common Stock issuable upon exercise of the stock options described in
Section 2(b)(v) and 2(b)(vi), the Employer shall (i) seek the approval of its
shareholders with regard to the grant of such restricted stock and stock
options, (ii) register such shares under the Securities Act of 1933, as amended,
on Form S-8, (iii) qualify such shares for issuance under all applicable state
securities laws and (iv) ensure that such shares are listed for trading on the
New York Stock Exchange. Notwithstanding any other provision of this Agreement
to the contrary, the Employer shall be under no obligation to issue any shares
of Common Stock to the Executive pursuant to this Agreement until, in accordance
-13-
17
with the immediately preceding sentence, such shares are so registered and
qualified and either (x) the Employer is able to repurchase in the open market
or private transactions, on a legal, practical and prudent basis, a number of
shares of Common Stock equal to the number issuable to the Executive or (y)
shares of Common Stock which are listed for trading on the New York Stock
Exchange are otherwise available for issuance by the Employer hereunder. With
respect to the shares of Common Stock described in Section 2(b)(ii) and Section
2(b)(iv), in the event that the issuance of any such shares to the Executive
shall be delayed by reason of the provisions of this Section, the Employer shall
pay to the Executive in cash on the date of issuance of such shares in the
amount or cash-equivalent thereof that would have been paid to the Executive as
dividends or other distributions payable with respect to such shares had such
issuance not been so delayed.
13. INDEMNITY OF EXECUTIVE. Employer shall indemnify and
defend the Executive against all claims relating to the performance of his
duties hereunder to the fullest extent permitted by Employer's Certificate of
Incorporation and Bylaws, the relevant provisions of which shall not be amended
in their application to the Executive to be any less favorable to him than as at
present, except as required by law. During the continuance of the Executive's
employment hereunder, Employer shall maintain in effect uninterrupted standard
directors and officers liability insurance coverage insuring the Executive
against such claims, with limits of coverage of not less than Ten Million
Dollars ($10,000,000) per occurrence and without deductibles.
14. SUCCESSORS.
(a) This Agreement is personal to the Executive and
without the prior consent of Employer shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon Employer and its successors and assigns.
(c) Employer will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. As used in this Agreement, "Employer" shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
15. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
-14-
18
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, or by
telecopier, or by courier, addressed as follows:
If to the Executive to: If to the Employer to:
Xxxxxx X. Xxxxxxxx Florida East Coast Industries, Inc.
5800 Long Brake Trail Xxx Xxxxxx Xxxxxx
Xxxxx, XX 00000 Xx. Xxxxxxxxx, XX 00000
Facsimile: 612/829-9655 Attention: Chairman
Facsimile: 904/826-2213
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto.
(d) In the event of a dispute arising out of this
Agreement, any party receiving any monetary or injunctive remedy, whether at law
or in equity, which is final and not subject to appeal shall be entitled to its
reasonable attorneys' fees and costs incurred with respect to obtaining such
remedy from the other party.
(e) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Employer may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(g) The Executive's or Employer's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or Employer may have
hereunder, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(h) Any entitlements to the Executive created under
Section 2(b) shall be contract rights to the extent not prohibited by law,
except as provided in Section 2(b)(xviii).
-15-
19
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
Employer has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
EMPLOYER:
FLORIDA EAST COAST INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Chairman
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxxx
-16-
20
RESTRICTED STOCK AGREEMENT
(Long Term Incentive)
between
FLORIDA EAST COAST INDUSTRIES, INC.
and
XXXXXX X. XXXXXXXX
July 27, 1999
21
THIS AGREEMENT, dated July 27, 1999 between Florida East Coast
Industries, Inc. (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Employee") is
made pursuant to the provisions of Section 2(b)(iv) of that certain Employment
Agreement dated July 15, 1999 between the Company and the Employee (the
"Employment Agreement").
In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:
1. Grant of Restricted Stock. Under the Company's 1998 Stock Incentive
Plan, as amended (the "Plan"), the Company hereby grants to the
Employee, subject to the terms and conditions herein set forth, seven
thousand five hundred (7,500) shares of the Company's Common Stock (the
"Restricted Stock").
2. Terms and Conditions. The Restricted Stock is subject to the
following terms and conditions:
(a) Limited Nontransferability. This Restricted Stock shall be
nontransferable during the term of the Restrictions (as hereinafter set
forth) except by will or by the laws of descent and distribution.
(b) Restrictions and Lapse of Restrictions. The Restricted
Stock shall be subject to the Employee's continued employment by the
Company or a parent or subsidiary corporation (the "Restrictions"),
which shall lapse according to the following schedule as of the stated
yearly anniversaries of the date hereof (each an "Anniversary Date"):
ANNIVERSARY UNRESTRICTED
DATE PERCENTAGE
----------- ------------
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%
22
Notwithstanding the foregoing, upon the occurrence of an Accelerating
Event (as defined in Section 4(a) of the Employment Agreement), all
Restrictions shall lapse upon the date of such Accelerating Event.
3. Forfeiture of Restricted Stock Upon Termination of Employment. The
rights of the Employee and his successors in interest in Restricted
Stock on which the Restrictions have not lapsed pursuant to paragraph
2(b) shall terminate in full when the Employee's employment with the
Company or a parent or subsidiary corporation is terminated by the
Company for Cause (as defined in Section 3(b) of the Employment
Agreement) or pursuant to Section 3(d) of the Employment Agreement or
by the Employee without Good Reason (as defined in Section 3(c) of the
Employment Agreement).
4. Dividends/Distributions. The Company shall pay to the Employee any
dividends or other distributions payable with respect to the Restricted
Stock, notwithstanding the Restrictions, beginning on the date hereof
but not beyond the date of any forfeiture thereof pursuant to the
provisions of paragraph 3.
5. Withholding. The Employee agrees to make arrangements satisfactory
to the Company to comply with any income tax withholding requirements
that may apply upon the lapse of the Restrictions on the Restricted
Stock. The Employee will be entitled to elect to satisfy his tax
withholding obligation by the withholding by the Company, at the
appropriate time, of shares of the Company's Common Stock from the
Restricted Stock in a number sufficient, based upon the fair market
value (as defined below) of such Common Stock on the relevant date, to
satisfy such tax withholding requirements. For purposes of this
Agreement, "fair market value" means, as of any given date, the closing
price of the Company's Common Stock on such date as quoted in the NYSE
Composite Transactions Report in the Wall Street Journal. If there were
no sales reported as of a particular date, fair market value will be
computed as of the last date preceding such date on which a sale was
reported.
6. Delivery of Certificates. The Company may delay delivery of the
certificate for shares granted hereunder until (i) the admission of
such shares to listing on any stock exchange on which the Company's
Common Stock may then be listed, (ii) completion of
2
23
any registration or other qualification of such shares under any state
or federal law regulation that the Company's counsel shall determine as
necessary or advisable, and (iii) receipt by the Company of advice by
counsel that all applicable legal requirements have been complied with.
7. Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by binding arbitration,
which shall be the sole and exclusive method of resolving any
questions, claims or other matters arising under this Agreement. Such
proceeding shall be conducted by final and binding arbitration before a
panel of one or more arbitrators under the administration of the
American Arbitration Association, and in a location mutually agreed to
by the Employee and the Company. The Federal and State courts located
in the United States of America are hereby given jurisdiction to render
judgment upon, and to enforce, each arbitration award, and the parties
hereby expressly consent and submit to the jurisdiction of such courts.
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) This Agreement and Section 12 of the Employment Agreement
constitute the entire agreement between the parties with respect to the
subject matter hereof. In the event of any inconsistency between the
provisions of this Agreement and the provisions of the Plan, the
provisions of this Agreement shall govern.
(c) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, or by telecopier, or by courier, addressed as follows:
3
24
If to the Employee to: If to the Company to:
Xxxxxx X. Xxxxxxxx Florida East Coast Industries, Inc.
5800 Long Brake Trail Xxx Xxxxxx Xxxxxx
Xxxxx, XX 00000 Xx. Xxxxxxxxx, XX 00000
Facsimile: 612/829-9655 Attention: Treasurer
Facsimile: 904/396-4042
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(d) In the event of a dispute arising out of this Agreement,
any party receiving any monetary or injunctive remedy, whether at law
or in equity, which is final and not subject to appeal shall be
entitled to its reasonable attorneys' fees and costs incurred with
respect to obtaining such remedy from the other party.
(e) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(f) The Employee's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of
this Agreement or the failure to assert any right the Employee or the
Company may have hereunder, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
FLORIDA EAST COAST INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Chairman and Chief Executive Officer
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
XXXXXX X. XXXXXXXX
4
25
RESTRICTED STOCK AGREEMENT
(Signing Bonus)
between
FLORIDA EAST COAST INDUSTRIES, INC.
and
XXXXXX X. XXXXXXXX
July 27, 1999
26
THIS AGREEMENT, dated July 27, 1999 between Florida East Coast
Industries, Inc. (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Employee") is
made pursuant to the provisions of Section 2(b)(ii) of that certain Employment
Agreement dated July 15, 1999 between the Company and the Employee (the
"Employment Agreement").
In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:
1. Grant of Restricted Stock. Under the Company's 1998 Stock Incentive
Plan, as amended (the "Plan"), the Company hereby grants to the
Employee, subject to the terms and conditions herein set forth, one
thousand five hundred (1,500) shares of the Company's Common Stock (the
"Restricted Stock").
2. Terms and Conditions. The Restricted Stock is subject to the
following terms and conditions:
(a) Limited Nontransferability. This Restricted Stock shall be
nontransferable during the term of the Restrictions (as hereinafter set
forth) except by will or by the laws of descent and distribution.
(b) Restrictions and Lapse of Restrictions. The Restricted
Stock shall be subject to the Employee's continued employment by the
Company or a parent or subsidiary corporation (the "Restrictions"),
which shall lapse according to the following schedule as of the stated
yearly anniversaries of the date hereof (each an "Anniversary Date"):
ANNIVERSARY UNRESTRICTED
DATE PERCENTAGE
----------- ------------
First 50%
Second 50%
27
Notwithstanding the foregoing, upon the occurrence of an Accelerating
Event (as defined in Section 4(a) of the Employment Agreement), all
Restrictions shall lapse upon the date of such Accelerating Event.
3. Forfeiture of Restricted Stock Upon Termination of Employment. The
rights of the Employee and his successors in interest in Restricted
Stock on which the Restrictions have not lapsed pursuant to paragraph
2(b) shall terminate in full when the Employee's employment with the
Company or a parent or subsidiary corporation is terminated by the
Company for Cause (as defined in Section 3(b) of the Employment
Agreement) or pursuant to Section 3(d) of the Employment Agreement or
by the Employee without Good Reason (as defined in Section 3(c) of the
Employment Agreement).
4. Dividends/Distributions. The Company shall pay to the Employee any
dividends or other distributions payable with respect to the Restricted
Stock, notwithstanding the Restrictions, beginning on the date hereof
but not beyond the date of any forfeiture thereof pursuant to the
provisions of paragraph 3.
5. Withholding. The Employee agrees to make arrangements satisfactory
to the Company to comply with any income tax withholding requirements
that may apply upon the lapse of the Restrictions on the Restricted
Stock. The Employee will be entitled to elect to satisfy his tax
withholding obligation by the withholding by the Company, at the
appropriate time, of shares of the Company's Common Stock from the
Restricted Stock in a number sufficient, based upon the fair market
value (as defined below) of such Common Stock on the relevant date, to
satisfy such tax withholding requirements. For purposes of this
Agreement, "fair market value" means, as of any given date, the closing
price of the Company's Common Stock on such date as quoted in the NYSE
Composite Transactions Report in the Wall Street Journal. If there were
no sales reported as of a particular date, fair market value will be
computed as of the last date preceding such date on which a sale was
reported.
2
28
6. Delivery of Certificates. The Company may delay delivery of the
certificate for shares granted hereunder until (i) the admission of
such shares to listing on any stock exchange on which the Company's
Common Stock may then be listed, (ii) completion of any registration or
other qualification of such shares under any state or federal law
regulation that the Company's counsel shall determine as necessary or
advisable, and (iii) receipt by the Company of advice by counsel that
all applicable legal requirements have been complied with.
7. Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by binding arbitration,
which shall be the sole and exclusive method of resolving any
questions, claims or other matters arising under this Agreement. Such
proceeding shall be conducted by final and binding arbitration before a
panel of one or more arbitrators under the administration of the
American Arbitration Association, and in a location mutually agreed to
by the Employee and the Company. The Federal and State courts located
in the United States of America are hereby given jurisdiction to render
judgment upon, and to enforce, each arbitration award, and the parties
hereby expressly consent and submit to the jurisdiction of such courts.
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) This Agreement and Section 12 of the Employment Agreement
constitute the entire agreement between the parties with respect to the
subject matter hereof. In the event of any inconsistency between the
provisions of this Agreement and the provisions of the Plan, the
provisions of this Agreement shall govern.
3
29
(c) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, or by telecopier, or by courier, addressed as follows:
If to the Employee to: If to the Company to:
Xxxxxx X. Xxxxxxxx Florida East Coast Industries, Inc.
5800 Long Brake Trail Xxx Xxxxxx Xxxxxx
Xxxxx, XX 00000 Xx. Xxxxxxxxx, XX 00000
Facsimile: 612/829-9655 Attention: Treasurer
Facsimile: 904/396-4042
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(d) In the event of a dispute arising out of this Agreement,
any party receiving any monetary or injunctive remedy, whether at law
or in equity, which is final and not subject to appeal shall be
entitled to its reasonable attorneys' fees and costs incurred with
respect to obtaining such remedy from the other party.
(e) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(f) The Employee's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of
this Agreement or the failure to assert
4
30
any right the Employee or the Company may have hereunder, shall not be
deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
FLORIDA EAST COAST INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Chairman and Chief Executive Officer
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
XXXXXX X. XXXXXXXX
5
31
BASIC STOCK OPTION AGREEMENT
between
FLORIDA EAST COAST INDUSTRIES, INC.
and
XXXXXX X. XXXXXXXX
July 27, 1999
32
THIS AGREEMENT, dated July 27, 1999 between Florida East Coast
Industries, Inc. (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Employee") is
made pursuant to the provisions of Section 2(b)(v) of that certain Employment
Agreement dated July 15, 1999 between the Company and the Employee (the
"Employment Agreement").
In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:
1. Non-Statutory Option. Under the Company's 1998 Stock
Incentive Plan, as amended (the "Plan"), the Company hereby grants the
Employee a non-statutory option ("NSO") to purchase from the Company
40,500 shares of the Company's Common Stock. The exercise price of the
NSO is $39.50 per share, being the fair market value of the Company's
Common Stock on the date hereof.
2. Entitlement to Exercise the NSO. The grant of the NSO is
subject to the following terms and conditions:
(a) Vesting. One-fifth of the NSO, 8,100 shares,
shall vest on and may be exercised at any time on or after
July 27, 2000. Another one-fifth of the NSO, 8,100 shares,
shall vest on and may be exercised at any time on or after
July 27, 2001. Another one-fifth of the NSO, 8,100 shares,
shall on vest and may be exercised at any time on or after
July 27, 2002. Another one-fifth of the NSO, 8,100 shares,
shall vest on and may be exercised at any time on or after
July 27, 2003. The remaining one-fifth of the NSO, 8,100
shares, shall vest on and may be exercised at any time on or
after July 27, 2004. In addition, all of the NSO shall vest on
and may be exercised at any time on or after an Accelerating
Event (as defined in Section 4(a) of the Employment
Agreement). The vesting of any portion of the NSO is
conditioned on the Employee's continued employment by the
Company or a parent or subsidiary of the Company as of the
relevant vesting date.
(b) Exercise Period. Except as otherwise stated
in this Agreement, the vested portion of the NSO may be
exercised, in whole or in part,
33
from the dates described in subsections (a) above until the
earliest of (i) July 27, 2009, (ii) two years following the
effective date that the Employee's employment terminates by
reason of an Accelerating Event (as defined in Section 4(a) of
the Employment Agreement) or normal retirement (as determined
under any retirement plan of the Company), or (iii) the
effective date that the Employee terminates employment for any
other reason (but in no event earlier than two years following
the accrual of Change in Control Entitlement (as defined in
Section 5(b) of the Employment Agreement)).
(c) Exercise Following Death. If the Employee
dies while employed by the Company or a parent or subsidiary
corporation, then the person to whom the Employee's rights
under the NSO shall have passed by will or by the laws of
distribution may exercise any of the NSO within two years
after the Employee's death.
3. Payment Under NSO. Payment of the NSO price may be made in
cash, in shares of the Company's Common Stock, or in any combination
thereof. If shares of the Company's Common Stock are delivered to make
any such payment, the shares shall be valued at the fair market value
(as defined below) thereof on the date of exercise of the NSO. For
purposes of this Agreement, "fair market value" means, as of any given
date, the closing price of the Company's Common Stock on such date as
quoted in the NYSE Composite Transactions Report in the Wall Street
Journal. If there were no sales reported as of a particular date, fair
market value will be computed as of the last date preceding such date
on which a sale was reported.
4. Limited Transferability of NSO. The NSO is not transferable
(other than by will or by the laws of descent and distribution) and,
except as otherwise stated in this Agreement, may be exercised during
the Employee's lifetime only by the Employee.
5. Adjustments. The NSO shall be equitably adjusted with
respect to the exercise price to reflect any extraordinary distribution
made with respect to the Company's Common Stock during the term of the
options. In the event of a capital adjustment resulting from a stock
dividend, stock split, reorganization, merger,
2
34
consolidation, spinoff, a combination or exchange of shares or other
transaction having a similar substantive effect, the number of shares
of stock subject to the NSO and the exercise price shall be equitably
adjusted.
6. Exercise. The vested portion of the NSO may be exercised in
whole or in part, but only with respect to whole shares of the
Company's Common Stock, and may be exercised more than once until all
shares which are subject to the NSO have been purchased. An NSO may be
exercised by delivery to the Company of notice stating the number of
shares elected to be purchased, and by payment to the Company as
described in paragraph 3.
7. Withholding. By signing this Agreement, the Employee agrees
to make arrangements satisfactory to the Company to comply with any
income tax withholding requirements that may apply upon the exercise of
the NSO or the disposition of the Company's Common Stock received upon
the exercise of the NSO. The Employee will be entitled to elect to
satisfy his tax withholding obligation by the withholding by the
Company, at the appropriate time, of shares of the Company's Common
Stock otherwise issuable to the Employee under this Agreement in a
number sufficient, based upon the fair market value (as defined above)
of such Common Stock on the relevant date, to satisfy such tax
withholding requirements.
8. Delivery of Certificates. The Company may delay delivery of
the certificate for shares purchased pursuant to the exercise of an NSO
until (i) the admission of such shares to listing on any stock exchange
on which the Company's Common Stock may then be listed, (ii) completion
of any registration or other qualification of such shares under any
state or federal law regulation that the Company's counsel shall
determine as necessary or advisable, and (iii) receipt by the Company
of advice by counsel that all applicable legal requirements have been
complied with.
9. Dispute Resolution. Any dispute or controversy arising
under or in connection with this Agreement shall be settled by binding
arbitration, which shall be the sole and exclusive method of resolving
any questions, claims or other matters arising under this Agreement.
Such proceeding shall be conducted by final and binding
3
35
arbitration before a panel of one or more arbitrators under the
administration of the American Arbitration Association, and in a
location mutually agreed to by the Employee and the Company. The
Federal and State courts located in the United States of America are
hereby given jurisdiction to render judgment upon, and to enforce, each
arbitration award, and the parties hereby expressly consent and submit
to the jurisdiction of such courts.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, without reference
to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) This Agreement and Section 12 of the Employment
Agreement constitute the entire agreement between the parties with
respect to the subject matter hereof. In the event of any inconsistency
between the provisions of this Agreement and the provisions of the
Plan, the provisions of this Agreement shall govern.
(c) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested,
postage prepaid, or by telecopier, or by courier, addressed as follows:
If to the Employee to: If to the Company to:
Xxxxxx X. Xxxxxxxx Florida East Coast Industries, Inc.
5800 Long Brake Trail Xxx Xxxxxx Xxxxxx
Xxxxx, XX 00000 Xx. Xxxxxxxxx, XX 00000
Facsimile: 612/829-9655 Attention: Treasurer
Facsimile: 904/396-4042
4
36
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(d) In the event of a dispute arising out of this
Agreement, any party receiving any monetary or injunctive remedy,
whether at law or in equity, which is final and not subject to appeal
shall be entitled to its reasonable attorneys' fees and costs incurred
with respect to obtaining such remedy from the other party.
(e) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(f) The Employee's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision
of this Agreement or the failure to assert any right the Employee or
the Company may have hereunder, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this
Agreement.
FLORIDA EAST COAST INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Chairman and Chief Executive Officer
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
XXXXXX X. XXXXXXXX
5
37
SUPPLEMENTAL STOCK OPTION AGREEMENT
between
FLORIDA EAST COAST INDUSTRIES, INC.
and
XXXXXX X. XXXXXXXX
July 27, 1999
38
THIS AGREEMENT, dated July 27, 1999 between Florida East Coast
Industries, Inc. (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Employee") is
made pursuant to the provisions of Section 2(b)(vi) of that certain Employment
Agreement dated July 15, 1999 between the Company and the Employee (the
"Employment Agreement").
In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:
1. Non-Statutory Option. Under the Company's 1998 Stock
Incentive Plan, as amended (the "Plan"), the Company hereby grants the
Employee a non-statutory option ("NSO") to purchase from the Company
37,500 shares of the Company's Common Stock. The exercise price of the
NSO is $39.50 per share, being the fair market value of the Company's
Common Stock on the date hereof.
2. Entitlement to Exercise the NSO. The grant of the NSO is
subject to the following terms and conditions:
(a) Vesting. The NSO shall vest and become
exercisable immediately upon the earlier of (i) the first date
as of which the average closing price of a share of the
Company's Common Stock over twenty (20) consecutive trading
days is not less than Fifty Dollars ($50.00); (ii) the
occurrence of an Accelerating Event (as defined in Section
4(a) of the Employment Agreement); or (iii) July 27, 2004.
(b) Exercise Period. Except as otherwise stated
in this Agreement, the vested portion of the NSO may be
exercised, in whole or in part, from the dates described in
subsections (a) above until the earliest of (i) July 27, 2009,
(ii) two years following the effective date that the
Employee's employment terminates by reason of an Accelerating
Event (as defined in Section 4(a) of the Employment Agreement)
or normal retirement (as determined under any
39
retirement plan of the Company), (iii) the effective date that
the Employee terminates employment for any other reason (but
in no event earlier than two years following accrual of Change
in Control Entitlement (as defined in Section 5(b) of the
Employment Agreement)).
(c) Exercise Following Death. If the Employee
dies while employed by the Company or a parent or subsidiary
corporation and at a time when any portion of the NSO is
vested and exercisable, then the person to whom the Employee's
rights under the NSO shall have passed by will or by the laws
of distribution may exercise any of the vested and exercisable
portion of the NSO within two years after the Employee's
death.
3. Payment Under NSO. Payment of the NSO price may be made in
cash, in shares of the Company's Common Stock, or in any combination
thereof. If shares of the Company's Common Stock are delivered to make
any such payment, the shares shall be valued at the fair market value
(as defined below) thereof on the date of exercise of the NSO. For
purposes of this Agreement, "fair market value" means, as of any given
date, the closing price of the Company's Common Stock on such date as
quoted in the NYSE Composite Transactions Report in the Wall Street
Journal. If there were no sales reported as of a particular date, fair
market value will be computed as of the last date preceding such date
on which a sale was reported.
4. Limited Transferability of NSO. The NSO is not transferable
(other than by will or by the laws of descent and distribution) and,
except as otherwise stated in this Agreement, may be exercised during
the Employee's lifetime only by the Employee.
5. Adjustments. The NSO shall be equitably adjusted with
respect to the exercise price to reflect any extraordinary distribution
made with respect to the Company's Common Stock during the term of the
options. In the event of a capital adjustment resulting from a stock
dividend, stock split, reorganization, merger, consolidation, spinoff,
a combination or exchange of shares or other transaction having a
2
40
similar substantive effect, the number of shares of stock subject to
the NSO and the exercise price shall be equitably adjusted.
6. Exercise. The vested portion of the NSO may be exercised in
whole or in part, but only with respect to whole shares of the
Company's Common Stock and may be exercised more than once until all
shares which are subject to the NSO have been purchased. An NSO may be
exercised by delivery to the Company of notice stating the number of
shares elected to be purchased, and by payment to the Company as
described in paragraph 3.
7. Withholding. By signing this Agreement, the Employee agrees
to make arrangements satisfactory to the Company to comply with any
income tax withholding requirements that may apply upon the exercise of
the NSO or the disposition of the Company's Common Stock received upon
the exercise of the NSO. The Employee will be entitled to elect to
satisfy his tax withholding obligation by the withholding by the
Company, at the appropriate time, of shares of the Company's Common
Stock otherwise issuable to the Employee under this Agreement in a
number sufficient, based upon the fair market value (as defined above)
of such Common Stock on the relevant date, to satisfy such tax
withholding requirements.
8. Delivery of Certificates. The Company may delay delivery of
the certificate for shares purchased pursuant to the exercise of an NSO
until (i) the admission of such shares to listing on any stock exchange
on which the Company's Common Stock may then be listed, (ii) completion
of any registration or other qualification of such shares under any
state or federal law regulation that the Company's counsel shall
determine as necessary or advisable, and (iii) receipt by the Company
of advice by counsel that all applicable legal requirements have been
complied with.
9. Dispute Resolution. Any dispute or controversy arising
under or in connection with this Agreement shall be settled by binding
arbitration, which shall be the sole and exclusive method of resolving
any questions, claims or other matters arising
3
41
under this Agreement. Such proceeding shall be conducted by final and
binding arbitration before a panel of one or more arbitrators under the
administration of the American Arbitration Association, and in a
location mutually agreed to by the Employee and the Company. The
Federal and State courts located in the United States of America are
hereby given jurisdiction to render judgment upon, and to enforce, each
arbitration award, and the parties hereby expressly consent and submit
to the jurisdiction of such courts.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, without reference
to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) This Agreement and Section 12 of the Employment
Agreement constitute the entire agreement between the parties with
respect to the subject matter hereof. In the event of any inconsistency
between the provisions of this Agreement and the provisions of the
Plan, the provisions of this Agreement shall govern.
(c) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested,
postage prepaid, or by telecopier, or by courier, addressed as follows:
4
42
If to the Employee to: If to the Company to:
Xxxxxx X. Xxxxxxxx Florida East Coast Industries, Inc.
5800 Long Brake Trail Xxx Xxxxxx Xxxxxx
Xxxxx, XX 00000 Xx. Xxxxxxxxx, XX 00000
Facsimile: 612/829-9655 Attention: Treasurer
Facsimile: 904/396-4042
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(d) In the event of a dispute arising out of this
Agreement, any party receiving any monetary or injunctive remedy,
whether at law or in equity, which is final and not subject to appeal
shall be entitled to its reasonable attorneys' fees and costs incurred
with respect to obtaining such remedy from the other party.
(e) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(f) The Employee's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision
of this Agreement or the failure to assert any right the Employee or
the Company may have hereunder, shall not be
5
43
deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
FLORIDA EAST COAST INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Chairman and Chief Executive Officer
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
XXXXXX X. XXXXXXXX
6
