EXHIBIT 10.54
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of July 29,
1998 (the "Effective Date"), is made and entered into by and between RailTex,
Inc., a Texas corporation (the "Company") and Xxxxxx X. Xxxxxxxxxxx
("Executive").
WHEREAS, the Company desires to obtain Executive's management and
executive services by directly engaging Executive as its President and Chief
Executive Officer and by Executive serving as a director of the Company and its
subsidiaries;
WHEREAS, in order to induce Executive to serve in such positions,
the Company desires to provide Executive with compensation and other benefits on
the terms and conditions set forth in this Agreement; and
WHEREAS, Executive is willing to accept such employment and perform
services for the Company, on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, it is agreed as follows:
I . EMPLOYMENT, POSITIONS AND DUTIES.
1.1 The Company hereby agrees to employ Executive and the Executive
hereby agrees to undertake employment with the Company upon the terms and
considerations herein set forth.
1.2 During the Term (as hereafter defined), the Executive will serve
in the positions of President and Chief Executive Officer of the Company and in
appropriate positions in each subsidiary of the Company. Executive will be
appointed immediately to fill an open position as a member of the Board of
Directors of the Company (the "Board"). Throughout the Term, the Company will
(i) cause Executive to be included in the management slate for election as a
director at every shareholders' meeting at which his term as a director would
otherwise expire, and (ii) cause the Executive to be elected as a member of the
Board of Directors of each subsidiary of the Company.
1.3 During the Term, the Executive will devote substantially all of
his working time and efforts to the performance of services, duties and
responsibilities in accordance with this Agreement. The Executive will have such
duties, functions, responsibilities and authority as are (i) consistent with the
positions set forth in Section 1.2, (ii) assigned to his positions by the
applicable bylaws of the Company or (iii) reasonably assigned to him by the
Board. Executive will report directly to the Board. Executive's duties,
functions, responsibilities and authority may be increased, but not decreased,
by the Board and, as so increased, will thereafter constitute Executive's
duties, functions, responsibilities and authority hereunder.
1.4 Notwithstanding the foregoing, Executive may, (i) subject to the
approval of the Board, serve as the director of a noncompeting company, (ii)
serve as an officer, director or otherwise participate in educational, welfare,
social, religious and civic organizations, and (iii) manage personal and family
investments.
1.5 In connection with his employment during the Term, unless
otherwise agreed by the Executive, the Executive will be based at the Company's
principal executive offices in San Antonio, Texas. The Executive will undertake
normal business travel on behalf of the Company, the reasonable expenses of
which will be paid by the Company pursuant to Section 5.
1.6 The Company will provide to Executive its standard
indemnification agreement for officers and directors of the Company.
2. Term OF EMPLOYMENT. Executive's term of employment under this Agreement
will commence on August 24, 1998 (the "Start Date") and, subject to the
provisions of this Agreement, will terminate on the earlier of (i) the fifth
anniversary of the Start Date or (ii) termination of the Executive's employment
pursuant to Section 7 of this Agreement (the "Termination Date"); PROVIDED,
however, that this Agreement will be automatically renewed and the term extended
for additional one-year periods commencing on the fifth anniversary of the Start
Date, and on each anniversary date thereafter, unless the Company or Executive
provides prior written notice in accordance with Section 12.5 at least one year
and 90 days before the fifth anniversary of the Start Date or before any
anniversary date thereafter (any reference to the "Term" of this Agreement will
include the initial term and any renewal thereof).
3. COMPENSATION.
3.1 SALARY. During the Term, the Company will pay Executive an
annual base salary ("Base Salary") of not less than $400,000. Base Salary will
be payable at the times and in the manner consistent with the Company's general
policies regarding compensation of executive employees. Base Salary may be
increased (but not decreased) in the discretion of the Compensation Committee of
the Board (the "Compensation Committee") and, as so increased, will thereafter
constitute "Base Salary" hereunder.
3.2 ANNUAL INCENTIVE COMPENSATION. Executive will be eligible to
participate in the current and any future annual cash incentive and/or
management incentive plan (the "Bonus Plan") on terms commensurate with
Executive's position and level of responsibility; PROVIDED, however, that
Executive's annual target incentive will be not less than 50% of Base Salary;
and PROVIDED, further, that Executive's annual incentive award for the 1998
fiscal year will be not less than 50% of Base Salary, which amount will be
prorated to reflect Executive's actual period of service during 1998 after the
Start Date. Except as set forth in the preceding sentence, nothing in this
Section 3.2 will guarantee to the Executive any specific amount of incentive
compensation, or prevent the Compensation Committee from establishing an
additional enhanced annual incentive compensation program with performance goals
and compensation targets applicable only to the Executive.
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3.3 LONG-TERM INCENTIVE COMPENSATION. Executive will be eligible to
participate in the current and in any future long-term incentive compensation
plan on terms commensurate with his position and level of responsibility;
PROVIDED, HOWEVER, that Executive's participation in the Company's long-term
incentive program will be at a level of not less than 150% of Executive's annual
incentive award. Except as set forth in the preceding sentence, nothing in this
Section 3.3 will guarantee to the Executive any specific level or amount of
long-term incentive compensation, or prevent the Compensation Committee from
establishing an additional enhanced long-term compensation program with
performance goals and compensation targets applicable only to the Executive.
3.4 RELOCATION EXPENSES. As promptly as practicable following the
Start Date, Executive will relocate to the general area of the Company's
headquarters in San Antonio, Texas. The Company will reimburse the Executive for
(or, where possible, pay on Executive's behalf) his reasonable relocation costs,
including, without limitation, the following: (i) interest paid by Executive on
any bridge loan incurred by Executive for the period (the "Bridge Period")
between the purchase of his residence in the San Antonio, Texas area (the "New
Residence") and the sale of his existing residence; PROVIDED, HOWEVER, that the
loan amount on which interest will be reimbursed pursuant to this clause (i)
will not exceed, in the aggregate, the amount of Executive's equity in his
existing residence as of the Start Date; (ii) the mortgage payments during the
Bridge Period on the smaller of the two mortgages Executive is then carrying on
his existing residence and the New Residence; (iii) the closing costs
(including, without limitation, real estate commissions, transaction taxes,
filing fees, title and property inspections, appraisals, attorney fees, etc.)
incurred on the sale of Executive's existing residence and on the purchase of
the New Residence; (iv) the expenses (points) associated with the Executive's
mortgage on his New Residence, but not in excess of $20,000; and (v) housing
expenses in San Antonio through June 1999 or, if earlier, until Executive
completes his relocation to San Antonio. The Company will make Executive whole
for any taxes for which Executive becomes liable by reason of the reimbursements
and payments provided for in the preceding sentence. Executive agrees that (a)
the asking price for the sale of his existing residence will reasonably reflect
the relevant housing market under all of the circumstances, and (b) Executive
will consider any reasonable bona fide offer made to purchase his existing
residence. Upon request by the Compensation Committee, Executive will provide,
at the Company's expense, documentation evidencing his good faith adherence to
the terms of this Section 3.4, including, without limitation, appraisals and
other information relevant to determining the value of his existing residence.
3.5 OTHER COMPENSATION. Nothing in this Section 3 will preclude the
Compensation Committee from authorizing such additional compensation to the
Executive, in cash or in property, as the Compensation Committee may determine
in its sole discretion to be appropriate.
3.6 ANNUAL PERFORMANCE ]REVIEW. Executive will receive an annual
performance review by the Board in writing and in person within a reasonable
time following the close of the Company's fiscal year.
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4. EMPLOYEE BENEFITS.
4.1 EMPLOYEE BENEFIT PROGRAMS, PLANS AND PRACTICES. (i) During the
Term, subject to Section 3 and this Section 4, the Company will provide
Executive and his eligible dependents, subject to the terms and conditions of
the applicable plans, participation in all Company-sponsored employee benefit
plans, including all employee retirement income and welfare benefit policies,
plans, programs or arrangements in which senior executives of the Company
participate, in a manner commensurate with his position and level of
responsibility in the Company.
(ii) The Company will arrange for a supplemental disability
policy such that, in the aggregate, the disability benefits provided to
Executive will be 60% of Base Salary.
(iii) Without limiting the foregoing, during the Term,
Executive will participate in the same manner as other senior executives of the
Company in (a) the Company's 401 (k) plan and (b) the Company's split-dollar
life insurance program or alternative life insurance and retirement program
providing comparable benefits.
4.2 VACATION AND FRINGE BENEFITS. Executive will be entitled to four
weeks' vacation per year, effective on the Start Date. In addition, Executive
will be entitled to the perquisites and other fringe benefits made available to
senior executives of the Company, commensurate with his position and level of
responsibility with the Company, including, without limitation, one club
membership, tax and financial planning, and an allowance for, or, a Company car.
5. EXPENSES. The Company will promptly reimburse the Executive for all
travel and other business expenses that the Executive incurs in the course of
the performance of his duties to the Company under this Agreement in a manner
commensurate with the Executive's position and level of responsibility with the
Company and in accordance with the Company's policies and rules relating to the
reimbursement of such expenses.
6. RESTRICTED STOCK AND STOCK OPTIONS.
6.1 The Company will grant to Executive, effective on the Effective
Date, 5,000 shares of the Company's common stock (the "Restricted Stock"). The
Restricted Stock will be held in escrow and will be subject to forfeiture
(subject to Section 7.5) as set forth in the agreement evidencing the grant of
shares of Restricted Stock; PROVIDED, however, that on each of the first three
anniversary dates of the Effective Date, 5,000 shares of such Restricted Stock
will no longer be subject to forfeiture and will be released from escrow.
6.2 The Company will grant to Executive, effective on the Effective
Date, one option (the "First Option") to purchase 150,000 shares of the
Company's common stock and three options (the "Second Option," "Third Option,"
and "Fourth Option") each to purchase 50,000 shares of the Company's common
stock. (The First, Second, Third and Fourth Options will be
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referred to herein separately as an "Option" and collectively as the "Options.")
Each Option will have a 10-year term and an exercise price equal to the closing
price of the Company's common stock on the trading date immediately preceding
the Effective Date. The First Option will become exercisable in installments of
30,000 shares on each of the first five anniversary dates of the Effective Date,
provided that the Executive remains employed by the Company (subject to Sections
7.1 and 7.5) on such dates. The Second, Third and Fourth Options will become
exercisable in their entirety on the ninth anniversary date of the Effective
Date, provided that the Executive remains employed by the Company on such date;
PROVIDED, however, that the Second, Third and Fourth Options will become
exercisable earlier at the close of the first 15-consecutive trading-day period
over which the average closing price of the Company's common stock is at least
equal to a target price of-
$30 per share Second Option
$35 per share Third Option
$40 per share Fourth Option
Upon the achievement of a target price as set forth above, the Option will then
become exercisable in installments of 10,000 shares, determined retrospectively
as of each of the first five anniversary dates of the Effective Date. Thus, for
purposes of illustration only, if the target price of $30 per share were
achieved on October 1, 2000, 20,000 shares covered by the Second option would
immediately become exercisable on such date, and the remaining 30,000 shares
covered by the Second Option would become exercisable in installments of 10,000
shares on each of the third, fourth and fifth anniversary dates, respectively,
of the Effective Date, provided that the Executive remains employed by the
Company on such anniversary dates (subject to Section 7.5).
6.3 The grants of the shares of Restricted Stock and of the Options
will be made pursuant to, and subject to the terms, conditions and restrictions
set forth in, the Company's 1993 Stock Plan, as amended. The definitive terms of
the grants of the shares of Restricted Stock and the Options will be as set
forth in agreements previously provided to the Executive.
7. TERMINATION OF EMPLOYMENT. Notwithstanding the Term specified in
Section 2, the termination of the Executive's employment hereunder will be
governed by the following provisions:
7.1 DEATH. The Executive's employment will terminate upon his death
during the Term. In the event of the Executive's death during the Term, the
Company will pay to the Executive's beneficiaries or estate, as appropriate, as
soon as practicable after the Executive's death, (i) the unpaid Base Salary to
which the Executive is entitled, pursuant to Section 3. 1, and any other
compensation earned but not yet paid through the date of the Executive's
termination (,'collectively, the "Compensation Payments"), (ii) for any accrued
and/or unused vacation days (the "Vacation Payment"), (iii) the target bonus
under the Bonus Plan in respect of the fiscal year in which the Executive's
termination occurs, prorated for the number of days until Executive's
termination during such fiscal year (the "Prorated Bonus"), and (iv) any death
benefits under the employee benefit programs, plans and practices referred to in
Section 4. 1, in accordance with
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their terms. In the event of Executive's death prior to the effectiveness of the
alternative life insurance and retirement program described in Section 4. 1
(iii)(b), the First Option will become fully vested and exercisable for a period
of one year. This Section 7.1 will not limit the entitlement of the Executive's
estate or beneficiaries to any death or other benefits then available to the
Executive under any life insurance, stock ownership, stock options, or other
benefit plan or policy that is maintained by the Company for the Executive's
benefit or otherwise.
7.2 PERMANENT DISABILITY. If the Executive becomes totally and
permanently disabled (as defined in the Company's Long-Term Disability Benefit
Plan available to senior executive officers as in effect at the time Executive's
disability is incurred) ("Permanent Disability") during the Term, the Company or
the Executive may terminate Executive's employment on written notice thereof in
accordance with Section 12.5, and (a) the Company will provide to the Executive
as soon as practicable: (i) amounts payable pursuant to the terms of any
applicable disability insurance policy or policies or similar arrangement that
the Company maintains during the Term, (ii) the Prorated Bonus, (iii) the
Vacation Payment, (iv) the Compensation Payments, and (v) such payments under
applicable plans or programs, including but not limited to those referred to in
Section 4.1, to which the Executive is entitled pursuant to the terms of such
plans or programs, and (b) the Executive will retain eligibility as an employee
for the Company's medical plan until the disability ends, other insurance
providing comparable benefits is secured, or the Executive attains age 65,
whichever occurs first.
7.3 VOLUNTARY TERMINATION BY EXECUTIVE; DISCHARGE FOR CAUSE. (i)
During the Term, the Company may terminate the Executive's employment hereunder
for Cause (as defined below). In the event that during the Term the Executive's
employment is terminated by the Company for Cause or by the Executive other than
for Good Reason (as defined below) or other than as a result of the Executive's
Permanent Disability or death, the Company will pay as soon as practicable to
the Executive (or his representative) (a) the Compensation Payments and (b) the
Vacation Payment, and the Executive will be entitled to no other compensation,
except as otherwise due to him under applicable law or the terms of any
applicable plan or program. Executive will not be entitled, among other things,
to the payment of any bonus in respect of all or any portion of the fiscal year
in which such termination occurs.
(ii) For purposes of this Agreement, the Company will have
"Cause" to terminate the Executive's employment hereunder upon a finding by the
Board that (a) the Executive has been convicted by a court of competent
jurisdiction of the commission of a felony, (b) the Executive has willfully and
continuously failed to perform material assigned duties after written notice
from the Board of such failure and Executive fails to cure such failure within a
reasonable period after receipt of such notice, (c) the Executive engaged in
willful misconduct that is materially injurious to the Company, or (d) the
Executive materially breached any of the express covenants set forth in Section
10.1 or 10.5.
(iii) The Company may not terminate the Executive's employment
for Cause under this Section 7.3 unless, in the case of Section 7.3(ii)(b), the
Executive has not cured the failure in the manner specified therein, and unless
and until the Company provides the Executive with written notice in accordance
with Section 12.5 that the Company intends to
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terminate his employment for Cause. Such written notice will specify the
particular act or acts, or failure to act, that is or are the basis for the
decision to so terminate the Executive's employment for Cause. The Employee will
be given the opportunity within 30 calendar days of the receipt of such notice
to meet with the Board to defend such act or acts, or failure to act.
Thereafter, the Executive's employment by the Company may be terminated under
this Section 7.3 for Cause as of the receipt of a written notice (or, if later,
the date specific in such notice) from the Company terminating the Executive for
Cause accompanied by a copy of a resolution duly adopted by the affirmative vote
of not loss than three-quarters of the Board (excluding the Executive) finding
Cause and terminating Executive's employment for Cause. A notice of termination
for Cause given under this Section 7.3 must set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination.
7.4 TERMINATION.
(i) INVOLUNTARY TERMINATION. During the Term, the Executive's
employment hereunder may be terminated by the Company for any reason other than
Cause by delivery in accordance with Section 12.5 to the Executive at least 90
days prior to the proposed Termination Date of a notice of termination and a
copy of a resolution duly adopted by the affirmative vote of a majority of the
full number of directors constituting the Board at a meeting Of the Board called
and held for the purpose of terminating Executive's employment. The Executive
will be treated for purposes of this Agreement as having been involuntarily
terminated Other than for Cause if during the Term the Executive terminates his
employment with the Company prior to termination for Cause for any of the
following reasons (each, a "Good Reason"): without the Executive's written
consent, (a) the Company has breached any material provision of this Agreement
and within 30 days after notice thereof from the Executive, the Company fails to
cure such breach; (b) a successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company fails to assume liability under the
Agreement; (c) the failure to elect or reelect or otherwise to maintain the
Executive as President, Chief Executive Officer and as a director of the Company
(or any successor entity by operation of law or otherwise); or (d) at any time
after the Company has notified the Executive pursuant to Section 2 that the
Company does not intend to renew the Agreement and the Executive's employment
at the end of the Term (including any previous renewals) (rather than to allow
the Agreement automatically to renew).
(ii) VOLUNTARY TERMINATION. During the Term, the Executive
may voluntarily terminate the Agreement at any time upon 90 days' prior notice
to the Company as provided in Section 12.5. The Executive's death or Permanent
Disability during the Term will be deemed to constitute a voluntary termination
of employment for purposes of eligibility for termination payments and benefits
as provided in Section 7.5, but for no other purpose.
7.5 TERMINATION PAYMENTS AND BENEFITS.
(i) FORM AND AMOUNT. Upon the Executive's involuntary
termination other than for Cause pursuant to Section 7.4(i), (a) the Company
will pay or provide as soon as practicable to the Executive (1) the Prorated
Bonus, (2) the Vacation Payment, (3) the
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Compensation Payments, (4) such payments under applicable plans or programs to
which the Executive is entitled pursuant to the terms of such plans or programs,
(5) a payment equal to two times the sum of Base Salary plus two times target
annual bonus pursuant to the Bonus Plan, (6) for 24 months (the "Continuation
Period"), the continuation of employee welfare benefits set forth in Section 4.1
except as offset by benefits paid or provided by other sources as set forth in
Section 8, or as prohibited by law, and (7) outplacement services by a firm
selected by the Executive, at the expense of the Company, in an amount up to
$30,000; and (b) notwithstanding any provision to the contrary in the applicable
award agreement or in any plan, (i) all restrictions pertaining to the shares of
Restricted Stock will lapse, (ii) the First Option will become fully vested and
exercisable for one year thereafter, (iii) any of the Second, Third or Fourth
Options that otherwise became exercisable prior to the Termination Date will
become fully vested and exercisable for one year thereafter. Notwithstanding the
foregoing, in the case of a termination of employment pursuant to Section
7.4(i)(d) (Good Reason due to Company's notice of nonrenewal of the Agreement),
"one times" will be substituted for "two times" in Section 7.5(i)(a)(5) and " 12
months" will be substituted for "24 months" in Section 7.5(i)(a)(6). For
purposes of determining the period of continuation coverage to which the
Executive or any of his dependents is entitled tinder Section 4980B of the
Internal Revenue Code of 1986, as amended (or any successor provision thereto),
under any group health plan maintained by the Company or its affiliates, the
Executive will be deemed to have remained employed until the end of the
Continuation Period.
(ii) TIME AND MANNER OF PAYMENT. The cash amounts due to
Executive pursuant to Section 7.5(i)(a) will be paid by the Company within five
business days after the Executive's Termination Date by check payable to the
order of Executive or by wire transfer to an if account specified by Executive;
PROVIDED, HOWEVER, that any earned bonus included in the Compensation Payment
and any payments due under Section 7.5(i)(a)(4) will be paid in accordance with
the terms of the applicable plan or program.
(iii) MAINTENANCE OF BENEFITS. During the Continuation Period,
the Company will use its best efforts to maintain in full force and effect for
the continued benefit of the Executive all benefits referenced in Section
7.5(i)(a)(6) or will arrange to make available to the Executive benefits
substantially similar to those that the Executive would otherwise have been
entitled to receive if his employment had not been terminated. Such benefits
will be provided to the Executive on the same terms and conditions (including
employee contributions toward the premium payments) under which the Executive
was entitled to participate immediately prior to his termination at no
additional cost (including, without limitation, additional taxes thereon) to the
Executive. If the Executive decides not to continue making premium payments on
his split-dollar life insurance policy, Executive agrees that he will promptly
reassign the policy to the Company.
(iv) FORFEITURE. Notwithstanding the foregoing provisions of
Section 7.5, any right of the Executive to receive benefits under Section
7.5(i)(6) and Section 7.5(i)(7) will be forfeited to the extent of any amounts
payable or benefits to be provided after a material breach of the covenants set
forth in Section 10.1 or 10.2.
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7.6 NONDUPLICATION OF BENEFITS. To the extent, and only to the
extent, a payment or benefit that is paid or provided under this Section 7 would
also be paid or provided under the terms of the applicable plan, program,
agreement or arrangement, including, without limitation, the Executive's
Severance Agreement described in Section 9, such applicable plan, program,
agreement or arrangement will be deemed to have been satisfied by the payment
made or benefit provided under this Agreement.
7.7 RESIGNATION AS A DIRECTOR. Immediately upon Executive's
termination of employment with the Company for any reason, Executive will resign
as a member of the Board and of the board of directors of each subsidiary of the
Company. The Company's obligations to Executive under this Section 7 will be
conditioned on Executive furnishing such resignations.
8. MITIGATION AND OFFSET. The Executive is under no obligation to mitigate
damages or the amount of any payment or benefit provided for hereunder by
seeking other employment or otherwise and no amounts earned by the Executive,
whether from self-employment, as common law employee or otherwise, will reduce
the amount of any payment or benefit under any provision of this Agreement;
PROVIDED, HOWEVER, that the Executive's coverage under the Company's welfare
benefits as provided in Section 7.5(i)(a)(6) will terminate as soon as the
Executive becomes covered under any comparable employee benefit plan made
available by another employer and covering the same type of benefits. The
Executive will report to the Company any such benefits actually received by him.
9. CHANGE-IN-CONTROL PROVISIONS.
9.1 The Executive will be offered the Company's form of
change-in-control Severance Agreement (the "Severance Agreement"), to be
effective as of the Start Date and continue throughout the Term; PROVIDED,
however, that Section 3(c) of the Severance Agreement will be revised to
substitute "six-month anniversary" for "first anniversary."
9.2 Either the Executive's Severance Agreement or the agreements
evidencing the grants of the shares of Restricted Stock and the Options will
provide that upon the occurrence of a "Change in Control" (as defined in the
Severance Agreement), all restrictions pertaining to the shares of Restricted
Stock will lapse and all of the Options will become fully vested and
exercisable.
10. COVENANTS.
10.1 CONFIDENTIALITY. During the Term, the Company agrees that it
will disclose to Executive its confidential or proprietary information (as
defined in this Section 10.1) to the extent necessary for Executive to carry out
his obligations under this Agreement. The Executive hereby covenants and agrees
that he will not, without the prior written consent of the Company, during the
Term or thereafter intentionally and wrongfully disclose to any person not
employed by, representing, or engaged by, the Company or any of its
subsidiaries, or to any director of the Company or any of its subsidiaries, or
intentionally and wrongfully use in connection with engaging in competition with
the Company, any confidential or proprietary information of the
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Company. For purposes of this Agreement, the term "confidential or proprietary
information" means all material information of a confidential and proprietary
nature and in any form that is owned by the Company and that is not publicly
available (other than by Executive's breach of this Section 10.1) or generally
known to persons engaged in businesses similar or related to those of the
Company. Confidential or proprietary information may include, without
limitation, the Company's financial matters, customers, employees, industry
contracts, strategic business plans, product development (or other proprietary
product data), marketing plans, and all other secrets and all other information
of a confidential or proprietary nature. For purposes of the preceding two
sentences, the term "Company" will also include its affiliates (collectively,
the "Restricted Group"). The foregoing obligations imposed by this Section 10. 1
will not apply (i) during the Term, in the course of the business of and for the
benefit of the Company, (ii) if such confidential or proprietary information is
or will have become, through no fault of the Executive, known to the public or
(iii) if the Executive is required by law to make disclosure (after giving the
Company notice and an opportunity to contest such requirement).
10.2 NONSOLICITATION. The Executive hereby covenants and
agrees that during the Term and for one year thereafter he will not, without the
prior written consent of the Company, on his own behalf or on behalf of any
person, firm or company, directly or indirectly, solicit or attempt to solicit
any employee of the Restricted Group to give up employment with the Restricted
Group. The Company agrees that neither advertisement of employment positions,
nor contact of an employee of the Company by an executive search firm that has
not been instructed to target a Company employee, nor a contact initiated by a
Company employee regarding employment will be considered "solicitation" for
purposes of this Section 10.2.
10.3 ENFORCEMENT. Executive and the Company agree that the covenants
contained in Sections 10.1 and 10.2 are reasonable under the circumstances, and
further agree that if in the opinion of the court of competent jurisdiction any
such covenant is not reasonable in any respect, such court will have the right,
power and authority to excise or modify any provision or provisions of such
covenants as to the court will appear not reasonable and to enforce the
remainder of the covenants as so amended. Executive acknowledges and agrees that
the remedy at law available to the Company for breach of any of his obligations
under Sections 10.1 and 10.2 would be inadequate and that damages flowing from
such a breach may not readily be susceptible to being measured in monetary
terms. Accordingly, Executive acknowledges, consents and agrees that, in
addition to any other rights or remedies that the Company may have at law, in
equity or under this Agreement, upon adequate proof of his violation of any such
provision of this Agreement, the Company will be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened or
further breach, without the necessity of proof of actual damage.
10.4 POST-TERMINATION ASSISTANCE. The Executive agrees that after
his employment with the Company has terminated he will provide, upon reasonable
notice, such information and assistance to the Company as may reasonably be
requested by the Company in connection with any litigation in which it or any of
its affiliates is or may become a party; PROVIDED, however, that the Company
agrees to reimburse the Executive for any related out-of pocket expenses,
including travel expenses.
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10.5 PRIVATE PLANE. The Executive agrees that during the Term the
Executive will not fly his plane on Company business.
11. SURVIVAL. The expiration or termination of the Term will not impair
the rights or obligations of any party hereto that accrue hereunder prior to
such expiration or termination, except to the extent specifically stated herein.
In addition to the foregoing, the Executive's covenants contained in Sections
10.1, 10.2 and 10.4 and the Company's obligations under Sections 7 and 12.1 will
survive the expiration or termination of Executive's employment.
12. MISCELLANEOUS PROVISIONS.
12.1 DISPUTE RESOLUTION. Any dispute between the parties under this
Agreement will be resolved (except as provided below) through informal
arbitration (located in the city in which the Company's principal executive
offices are based) by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration will be conducted in that location
under the rules of said Association. Each party will be entitled to present
evidence and argument to the arbitrator. The arbitrate will have the right only
to interpret and apply the provisions of this Agreement and may not change any
of its provisions. The arbitrator will permit reasonable pre-hearing discovery
of facts, to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the arbitrator
will be conclusive and binding upon the parties and judgment upon the same may
be entered in any court having jurisdiction thereof The arbitrator will give
written notice to the parties stating his or their determination, and will
furnish to each party a signed copy of such determination. The expenses of
arbitration will be born equally by the Executive and the Company or as the
arbitrator otherwise equitably determines. Notwithstanding the foregoing, the
Company will not be required to seek or participate in arbitration regarding any
breach of the Executive's covenants contained in Sections 10.1, 10.2, 10.3 or
10.5, but may pursue its remedies for such breach in a court of competent
jurisdiction in the city in which the Company's principal executive offices are
based. Any arbitration or action pursuant to this Section 12.1 will be governed
by and construed in accordance with the substantive laws of the State of Texas,
without giving effect to the principles of conflict of laws of such State.
12.2 BINDING ON SUCCESSORS; ASSIGNMENT. This Agreement will be
binding upon and inure to the benefit of the Company, the Executive and each of
their respective successors, assigns, personal and legal representatives,
executors, administrators, heirs, distributees, devisees, and legatees, as
applicable; PROVIDED, however, that neither this Agreement nor any rights or
obligations hereunder will be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.
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12.3 GOVERNING Law. This Agreement will be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
Texas, without regard to conflicts of law principles.
12.4 SEVERABILITY. Any provision of this Agreement that is deemed
invalid, illegal or unenforceable in any jurisdiction will, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant will be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable.
12.5 NOTICES. For all purposes of this Agreement, all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof confirmed), or five
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three business days after
having been sent by a nationally recognized overnight courier service such as
Federal Express, UPS, or Purolator, addressed to the Company (to the attention
of the Secretary of the Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any party may
have finished to the other in writing and in accordance herewith, except that
notices of changes of address will be effective only upon receipt.
12.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same Agreement.
12.7 ENTIRE AGREEMENT. The terms of this Agreement are intended by
the parties to be the final expression of their agreement with respect to the
Executive's employment by the Company and may not be contradicted by evidence of
any prior or contemporaneous agreement. The parties further intend that this
Agreement will constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding to vary the terms of this Agreement.
12.8 AMENDMENTS; WAIVERS. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, approved by the
Company and signed by the Executive and the Company. Failure on the part of
either party to complain of any action or omission, breach or default on the
part of the other party, no matter how long the same may continue, will never be
deemed to be a waiver of any rights or remedies hereunder, at law or in equity.
The Executive or the Company may waive compliance by the other party with any
provision of this Agreement that such other party was or is obligated to comply
with or perform only through an executed writing; PROVIDED, HOWEVER, that such
waiver will not operate as a waiver of, or estoppel with respect to, any other
or subsequent failure.
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12.9 NO INCONSISTENT ACTIONS. The parties will not voluntarily
undertake or fail to undertake any action or course of action that is
inconsistent with the provisions or essential intent of this Agreement.
Furthermore, it is the intent of the parties hereto to act in a fair and
reasonable manner with respect to the interpretation and application of the
provisions of this Agreement.
12.10 HEADINGS AND SECTION REFERENCES. The headings used in this
Agreement are intended for convenience or reference only and will not in any
manner amplify, limit, modify or otherwise be used in the construction or
interpretation of any provision of this Agreement. All section references are to
sections of this Agreement, unless otherwise noted.
12.11 BENEFICIARIES. Executive will be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to "Executive"
will be deemed, where appropriate, to his beneficiary, estate or other legal
representative.
12.12 WITHHOLDING. The Company will be entitled to withhold from
payment any amount of withholding required by law.
12.13 AUTHORITY. The Company represents and warrants that it and its
signatory hereto are duly authorized and empowered to execute and enter into
this Agreement without any further action or approval.
12.14 INTERIM EMPLOYMENT. Executive agrees, if so requested by the
Company, to make himself available as a part-time employee of the Company
commencing on the Effective Date and continuing up to the Start Date. Executive
will be compensated for such service at a rate of $5,000 per month, prorated for
the period of actual service.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
/s/XXXXXX X. XXXXXXXXXXX
Xxxxxx X. Xxxxxxxxxxx
RAILTEX, INC., a Texas corporation
/s/By:XXXXX X. XXXXX
Xxxxx X. Xxxxx, Chairman of the Board
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