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EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the 18 day of September, 1995, to be effective May 15, 1995 (the
"Effective Date"), by and between GREYHOUND LINES, INC. (together with its
successors, the "Company") and XXXX XXXXXX XXXXXXXXX (the "Executive").
WHEREAS, the Executive has considerable experience, expertise and
training in management related to the types of services offered by the Company;
and
WHEREAS, the Company desires and intends to employ the Executive as
the Executive Vice President and Chief Operating Officer of the Company
pursuant to the terms and conditions set forth in this Agreement; and
WHEREAS, both the Company and the Executive have read and understood
the terms and provisions set forth in this Agreement, and have been afforded a
reasonable opportunity to review this Agreement with their respective legal
counsel.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Employment Agreement, the Executive and the Company agree as
follows:
1. COMPENSATION: During his employment pursuant to this Agreement, the
Company agrees to provide the Executive the following compensation:
a. BASE SALARY: From the Effective Date until changed as
provided in this section, the Company agrees to pay the Executive an annual
salary of $225,000 (the "Base Salary"), payable in at least equal monthly
installments in accordance with the Company's ordinary payroll policies and
procedures for executive compensation. The Company and the Executive
acknowledge that during the employment of the Executive pursuant to this
Agreement, the Executive's Base Salary will be subject to an annual review and
adjustment by the Board of Directors of the Company (the "Board of Directors")
but, in no event, will the Executive's annual Base Salary be less than the
amount set forth in this section.
b. BUSINESS EXPENSES: The Company agrees that the Executive
shall be entitled to reimbursement by the Company for all reasonable expenses
that the Executive may incur in the performance of his duties and obligations
under this Agreement, consistent with the Company's policies for documentation,
reimbursement and payment.
c. FIRST TRANSITION BONUS: The Company agrees that, upon the
date of execution of this Agreement, the Executive shall be paid a lump sum
bonus of $125,000.00.
d. SECOND TRANSITION BONUS: On or before February 1, 1996 the
Executive will be paid an additional lump sum transition bonus of $64,000.00.
This amount will reduce any Management Incentive Plan ("MIP") Award payment
earned for calendar year 1995, as set forth below at subsection 1(e)(1).
e. INCENTIVE BONUS:
(1) Commencing on the first day of the Executive's
employment he will be entitled to participate in the 1995 MIP. The MIP Target
Award will be 45% of the Base Salary paid during 1995. However, any MIP Award
for 1995 will be reduced by the $64,000.00 Second Transition Bonus, and the
Executive shall receive only the difference between the applicable 1995 MIP
Award and the $64,000.00 Second Transition Bonus, if any.
(2) During each subsequent year of his employment
pursuant to this Agreement, the Executive will be entitled to participate in
the MIP for the respective year, with a Target Award of at least 45% of Base
Salary for each such respective year.
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f. EMPLOYEE BENEFITS: The parties acknowledge and agree that
certain employee benefits will be provided to the Executive incident to his
employment as Chief Operating Officer of the Company. Except as specifically
modified by this section, these employee benefits shall be governed by the
applicable plan documents. The Company agrees, however, that the following
provisions shall, to the extent not prohibited by law, apply to any employee
benefits provided by the Company:
(1) 401K PLAN: For purposes of the Greyhound Lines, Inc.
and Affiliated Companies Master Salaried Employees' Cash or Deferred Profit
Sharing Plan (the "401k Plan") (whether qualified or unqualified), the
Executive's prior service with Greyhound Lines, Inc. shall be deemed to be
service with the Company such that, upon execution of this Agreement, the
Executive shall be immediately eligible to participate in the 401k Plan and
shall be immediately 100% vested with respect to all employer contributions
made by the Company in accordance with the terms of the 401k Plan.
(2) MEDICAL PLAN: For purposes of the Greyhound Lines,
Inc. Medical Plan (the "Medical Plan"), the following shall apply:
(a) The Executive and his dependents, as defined
in the Medical Plan ("Dependents"), shall immediately be provided coverage
under the Medical Plan under the option elected by the Executive, with all
monthly contributions by the Executive waived.
(3) SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN: For purposes
of the Greyhound Lines, Inc. Supplemental Employee Retirement Plan (the
"SERP"), all of the Executive's prior service with Greyhound Lines, Inc. will
be credited for all purposes under the SERP, and the Executive shall be a
designated person eligible for coverage and benefits under the SERP as of the
Effective Date.
(4) AUTOMOBILE ALLOWANCE: During the term of his
employment with the Company, the Executive shall be entitled to an automobile
allowance, of not less than $1,000.00 per month, commencing on the Effective
Date of this Agreement.
(5) LIFE INSURANCE: At all times during his employment
with the Company, the Executive will be provided with Company-paid life
insurance which will provide death benefits in the event of his death in an
amount of at least $1,500,000.00 payable to the beneficiary or beneficiaries
named by the Executive. The Company shall have the right to purchase insurance
to fund its obligations to the Executive under this section; provided, however,
that any insurance company or companies selected by the Company to fund its
obligations under this section must be the company or companies that underwrite
life insurance benefits covering other officers of the Company.
(6) PHYSICAL EXAMINATIONS: At least once a year, the
Executive will be entitled to a Company-paid physical examination at a clinic
or doctor mutually acceptable to the Executive and the Company.
(7) COUNTRY CLUB DUES: The Company agrees to pay all
monthly membership dues on behalf of the Executive at a country club mutually
selected by the Executive and the Company.
(8) ESTATE, TAX AND FINANCIAL PLANNING: During the term
of his employment with the Company, the Executive shall be entitled to a
maximum of $10,000.00 per year for estate, tax and financial planning as of the
Effective Date of this Agreement. Such reimbursement payments shall be paid by
the Company within a reasonable time after such expenses are incurred by the
Executive.
(9) OTHER BENEFITS: For purposes of any and all other
benefits provided by the Company to its Chief Operating Officer, the Executive
shall be eligible for such benefits immediately on the Effective Date.
Additionally, for purposes of determining eligibility, funding or vesting with
respect to any other benefits, the Executive's prior service with Greyhound
Lines, Inc. shall be deemed to be prior service with the Company.
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g. LEGAL FEES AND EXPENSES: The Company agrees that the
Executive shall be entitled to reimbursement from the Company for those
reasonable legal expenses incurred by the Executive in preparing, drafting and
negotiating this Agreement, not to exceed $10,000.00.
2. DURATION: The duration of this Agreement shall be defined and
determined as follows:
a. INITIAL TERM: This Agreement shall continue in full force and
effect for two (2) years (the "Initial Term"), commencing on the Effective Date
and expiring on May 14, 1997 (the "Expiration Date"), unless terminated prior
to the Expiration Date in accordance with Section 2(c).
b. RENEWAL: Notwithstanding Section 2(a), this Agreement shall
automatically renew for a period of two (2) years (the "Renewal Term") on the
Expiration Date unless either party gives effective written notice to the other
party of the party's intention not to renew this Agreement ("Notice of
Non-Renewal"), with or without Good Cause, at least ninety (90) days prior to
the Expiration Date. Thereafter, this Agreement shall automatically renew for
additional one (1) year extensions (the "Extensions"), unless and until either
party terminates the Agreement in accordance with Section 2(c).
c. TERMINATION AND NON-RENEWAL: This Agreement may be terminated
as follows:
(1) DEATH: The Company shall be entitled to terminate
this Agreement in the event of the Executive's death, provided, however, that
the Executive's estate shall be paid the Base Salary that the Executive would
have earned for the then current calendar month and the Incentive Bonus that
the Executive would have earned for the remainder of the then current calendar
year, in the time and manner in which the Executive would have been paid such
compensation. In addition, the Executive's designated beneficiaries shall be
entitled to receive any life insurance benefits provided to the Executive in
accordance with the applicable plan documents and/or insurance policies
governing such benefits, including but not limited to, the Life Insurance
benefits set forth in Section 1(f)(5) of this Agreement.
(2) DISABILITY: The Company shall be entitled to
terminate this Agreement in the event the Executive becomes "disabled," as that
term is defined in the Greyhound Lines, Inc. Employee Long Term Disability Plan
("the LTD Plan"), and is unable to perform the essential functions of his
position, with reasonable accommodation, for a period of one hundred eighty
(180) consecutive days.
(3) GOOD CAUSE:
(a) The Company shall be entitled to terminate
this Agreement by providing the Executive with written notice that the Company
is terminating the Agreement for Good Cause, as defined herein ("Notice of
Termination for Good Cause") at any time during his employment.
(b) The Company shall be entitled to terminate
this Agreement by communicating Notice of Non-Renewal for Good Cause, as
defined herein, at least ninety (90) days prior to the Expiration Date, or at
least ninety (90) days prior to the expiration of any Renewal Term or
Extension.
(c) For purposes of this Agreement, "Good Cause"
shall be defined as follows:
i) Any act or omission constituting
fraud under the law of the State of Texas; or
ii) Conviction of, or a plea of nolo
contendere to, a felony; or
iii) Use of illegal drugs; or
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iv) Embezzlement of Company property or funds; or
v) The material breach of any provision of this
Agreement; or continued gross neglect of his duties under
this Agreement; or unauthorized competition with the Company
during his employment pursuant to this Agreement; or
unauthorized use of Confidential Information (as defined in
Section 9);which is materially detrimental to the Company;
(d) In the event the Company believes "Good Cause" exists
for terminating this Agreement pursuant to subsection (c)(v), the Company
shall be required to give the Executive written Notice of the acts or
omissions constituting "Good Cause" ("Cause Notice").
(e) No Notice of Termination for Good Cause or Notice of
Non-Renewal for Good Cause pursuant to subsection (c)(v) shall be communicated
by the Company unless and until the Executive fails to cure such acts or
omissions within thirty (30) days after receipt of the Cause Notice.
(f) In the event the Company communicates a Notice of
Termination For Good Cause or Notice of Non-Renewal for Good Cause pursuant to
this section, the Executive shall have the right to a hearing before the
President/Chief Executive Officer, on a date determined by the President/Chief
Executive Officer not later than thirty (30) days after the date such Notice is
received, to contest the alleged "Good Cause" for the Notice of Termination or
Notice of Non-Renewal. The President/Chief Executive Officer shall provide the
Executive with written notice of his decision resolving any contest under this
section, and no termination or non-renewal of this Agreement shall be deemed to
be effective until such written notice is received by the Executive. In the
event that the President/Chief Executive Officer affirms the "Good Cause" for
termination or non-renewal, the Executive shall have the right to give
Arbitration Notice under Section 10(a) within fifteen (15) days after such
termination or non-renewal becomes effective.
(4) WITHOUT GOOD CAUSE:
(a) The Company shall be entitled to terminate this
Agreement by providing a written Notice of Termination "Without Good Cause" at
any time during his employment, or by providing a written Notice of Non-
Renewal "Without Good Cause," as defined herein, at least ninety (90) days
prior to the Expiration Date or at least ninety (90) days prior to the
expiration of any Renewal Term or Extension. Provided, however, that in the
event of any Notice of Termination Without Good Cause or Notice of Non-Renewal
Without Good Cause, the Company shall be required to pay Severance Pay in
accordance with the SEVERANCE provisions in Section 5.
(b) Any termination or non-renewal of this Agreement which
is not for "Good Cause," as defined above in Section 2(c)(3), or which does not
result from the death of the Executive, or the disability of the Executive,
shall be deemed to be a termination or non-renewal "Without Good Cause."
Furthermore, in the event that the Company communicates a Notice of Termination
for Good Cause or a Notice of Non-Renewal for Good Cause, and either the
President/Chief Executive Officer [under Section 2(c)(3)(f)] or the arbitrators
[under Section 10(c)] determine that no Good Cause exists or existed for the
Notice of Termination or Notice of Non-Renewal that was originally
communicated, then such Notice of Termination or Notice of Non-Renewal shall be
deemed to have been communication of a Notice of Termination Without Good Cause
or Notice of Non-Renewal Without Good Cause, as appropriate, for all purposes
under this Agreement.
(5) RESIGNATION: The Executive shall be entitled to terminate
this Agreement by providing the Company with a written Notice of Resignation at
least ninety (90) days prior to his intended resignation date, subject to the
following provisions:
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(a) RESIGNATION FOR GOOD REASON: The Executive shall have
the right to resign for any "Good Reason," as defined herein, and such
resignation shall be deemed to be a termination "Without Good Cause" as defined
in Section 2(c)(4) for all purposes under this Agreement, including the CHANGE
OF CONTROL provisions set forth in Section 4 and the SEVERANCE provisions set
forth in Section 5. For purposes of this Section, the term "Good Reason" shall
be defined as:
i) The Company's failure to perform any material
provision of this Agreement; or
ii) Any material changes by the Company or the
Board of Directors in the duties and responsibilities
of the Executive under this Agreement, without the
written consent of the Executive, other than a
termination or non-renewal for "Good Cause," as defined
herein; or
iii) Any request by the Board of Directors that the
Executive perform, assist, abet or approve any act which is
or could be construed to be illegal under any federal, state
or local law; or
iv) Any requirement by the Board of Directors that
the Executive relocate from the Dallas, Texas, metropolitan
area without his consent.
v) In the event the Company fails to maintain
adequate liability insurance coverage in accordance with
Section 8 of this Agreement, without the written consent of
the Executive.
(b) OPPORTUNITY TO CURE: In the event he believes "Good
Reason" exists for his resignation, the Executive shall be required to give the
President/Chief Executive Officer of the Company written notice of the acts or
omissions constituting Good Reason, and no Notice of Resignation with Good
Reason shall be communicated to the Company unless and until the Company fails
to cure such acts or omissions within thirty (30) days after receipt of the
notice described in this sentence. Any Notice of Resignation with Good Reason
shall be deemed to be effective immediately, and no other notice or opportunity
to cure shall be required.
(c) RESIGNATION WITHOUT GOOD REASON: Any
resignation by the Executive for any reason other than "Good Reason," as
defined above, shall be deemed to be a resignation "Without Good Reason." In
the event of a Resignation Without Good Reason, the CHANGE OF CONTROL
provisions in Section 4 and the SEVERANCE provisions in Section 5 shall be
inapplicable.
3. RESPONSIBILITIES: The Executive acknowledges and agrees that he shall
be employed as Executive Vice President and Chief Operating Officer of the
Company. The Executive covenants and agrees that he will faithfully devote his
best efforts and full time, attention and skill to the business of the Company
as is necessary to perform his obligations under this Agreement. The Executive
shall have or perform no other business responsibilities or obligations during
the term of this Agreement without the prior written approval of the President
of the Company.
4. CHANGE OF CONTROL: The parties acknowledge that the Executive has
agreed to assume the position of Executive Vice President and Chief Operating
Officer and to enter into this Agreement based upon his confidence in the
current shareholders of the Company and the support of the Board of Directors
for the development of a new strategy for the Company. Accordingly, if the
Company should undergo a "Change of Control" while the Executive is employed by
the Company or any parent or subsidiary corporation of the Company, the parties
agree as follows:
a. VESTING OF STOCK OPTIONS: In the event of a Change of
Control, as defined in this section, all Stock Options provided in Section 6 of
this Agreement shall immediately become vested and exercisable, effective on
the date of the Change of Control.
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b. COMPENSATION: In the event of any termination, non-renewal or
resignation at any time within twenty four (24) months after the date of a
Change of Control, as defined in this section, except for a Termination For
Good Cause, the Company agrees to pay the Executive as follows:
(1) If such Change of Control occurs on or prior to the
end of the Initial Term or Renewal Term of this Agreement, as defined
in Section 2(a) and (b), the Executive will receive a lump sum payment
equal to two (2) times the sum of: (x) an amount equal to the
Executive's then current, annualized Base Salary, and (y) an amount
equal to the sum of all of the Incentive Bonus payments received by
the Executive in the twelve (12) calendar months preceding and, in the
calendar month of, the date of the termination, non-renewal or
resignation, which payment shall be paid within thirty (30) days after
the effective date of termination, non- renewal or resignation. In
addition, the Company agrees to continue any and all Employee Benefits
received by the Executive during his employment with the Company, as
modified pursuant to the terms of Section 1(f), for twenty-four (24)
months after the effective date of termination, non-renewal or
resignation; or
(2) If such Change of Control occurs during any Extension
of this Agreement, the Executive will receive an additional lump sum
payment equal to one and one-half (1.5) times the sum of: (x) an
amount equal to the Executive's then current, annualized Base Salary,
and (y) an amount equal to the sum of all of the Incentive Bonus
payments received by the Executive in the twelve (12) calendar months
preceding and, in the calendar month of, the date of the termination,
non-renewal or resignation, which payment shall be paid within thirty
(30) days after the effective date of termination, non-renewal or
resignation. In addition, the Company agrees to continue any and all
Employee Benefits received by the Executive during his employment with
the Company, as modified pursuant to the terms of Section 1(f), for
twenty-four (24) months after the effective date of termination,
non-renewal or resignation.
c. DEFINITIONS: For purposes of this Agreement, a "Change of
Control" shall be deemed to exist in the event that any of the following
occurs:
(1) the acquisition, directly or indirectly, by a person
(other than the Company or an employee benefit plan established by the
Board of Directors) of beneficial ownership of 30% or more of the
Company's securities with voting power in the next meeting to elect
the directors;
(2) a majority of the directors elected at any meeting of
the holders of the Company's voting securities who are persons who
were not nominated by the Company's then current Board of Directors or
an authorized committee thereof;
(3) the approval by the stockholders of the Company of a
merger or consolidation with another person, other than a merger or
consolidation in which the holders of the Company's voting securities
issued and outstanding immediately before such merger or consolidation
continue to hold voting securities in the surviving or resulting
corporation (in the same relative proportions to each other as existed
before such event) comprising 80% or more of the voting power for all
purposes of the surviving or resulting corporation; or
(4) the approval by the stockholders of the Company of a
transfer of substantially all of the assets of the Company to another
person other than a transfer to a transferee, 80% or more of the
voting power of which is owned or controlled by the Company or by the
holders of the Company's voting securities issued and outstanding
immediately before such transfer in the same relative proportions to
each other as existed before such event.
A Change of Control shall include any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of Section 4(c).
d. In the event a definition of CHANGE OF CONTROL is adopted
which is more favorable to the Executive than the definition set forth in
Subsection 4(c), in any stock option plan or in employment agreements applying
to
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any Company executives, other than the President and Chief Executive Officer,
at the option of the Executive, such language will immediately supersede and
replace the language set forth in Section 4(c).
e. TAX LIABILITY: In the event that any compensation payable
under this section (the "Payment") is determined to be an "excess parachute
payment" under section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") or any successor provision, subject to the excise tax imposed by
section 4999 of the Code or any successor provision (the "Excise Tax"), the
Company agrees to pay to the Executive an additional sum (the "Gross Up") in an
amount such that the net amount retained by the Executive, after receiving both
the Payment and the Gross Up and after paying: (i) any Excise Tax on the
Payment and the Gross Up, and (ii) any Federal, state and local income taxes on
the Gross Up, is equal to the amount of the Payment.
For purposes of determining the Gross Up, the Executive shall be
deemed to pay state and local income taxes at the highest marginal rate of
taxation in his filing status for the calendar year in which the Payment is to
be made based upon the Executive's domicile on the date of the Change of
Control. The determination of whether such Excise Tax is payable and the
amount of such Excise Tax shall be based upon the opinion of tax counsel
selected by the Company subject to the approval of the Executive. If such
opinion is not finally accepted by the Internal Revenue Service, then
appropriate adjustments shall be calculated (with Gross Up, if applicable) by
such tax counsel based upon the final amount of Excise Tax so determined. The
final amount shall be paid, if applicable, within thirty (30) days after such
calculations are completed.
5. SEVERANCE: Severance shall be paid as follows:
a. NON-RENEWAL WITHOUT GOOD CAUSE. In the event that this
Agreement is not renewed by the Company (except where the nonrenewal is for
Good Cause):
(1) At the end of the Initial Term or Renewal Term, as
defined at Section 2(a) and (b), the Company agrees to pay the Executive a lump
sum severance payment equal to two (2) times the sum of: (i) an amount equal to
his then current, annualized Base Salary, and (ii) the greater of: (x) the
applicable Incentive Bonus set forth in Section 1(e), or (y) $51,000.00.
(2) At the end of any subsequent Extension, as defined in
Section 2(b), the Company agrees to pay the Executive a lump sum severance
payment equal to one and one-half (1.5) times the sum of (i) an amount equal to
his then current, annualized Base Salary, and (ii) the greater of: (x) the
applicable Incentive Bonus set forth in Section 1(e), or (y) $51,000.00.
b. RESIGNATION FOR GOOD REASON OR TERMINATION WITHOUT GOOD CAUSE.
In the event the Company terminates this Agreement without "Good Cause," as
defined in Section 2(c)(3), or the Executive resigns for "Good Reason," the
Executive shall be entitled to receive the following severance payments:
(1) In the event such Termination Without Good Cause or
Resignation for Good Reason occurs on or prior to the end of the Initial Term
or Renewal Term of this Agreement, as defined in Section 2(a) and (b), the
Executive shall also receive a lump sum payment equal to two (2) times the sum
of: (i) an amount equal to his then current, annualized Base Salary, and (ii)
the greater of: (x) the applicable Incentive Bonus for the then current bonus
year, as provided in Section 1(e), or (y) $51,000.00; or
(2) In the event a Termination Without Good Cause or
Resignation Without Good Reason occurs during any Extension of this Agreement,
the Executive shall also receive a lump sum payment equal to one and one-half
(1.5) times the sum of: (i) an amount equal to his then current, annualized
Base Salary, and (ii) the greater of: (x) the applicable Incentive Bonus for
the then current bonus year, as provided in Section 1(e), or (y) $51,000.00.
c. TERMS OF PAYMENT: Severance Pay required pursuant to this
section shall be payable in cash in full within thirty (30) days after the
termination date, non-renewal date or resignation date of the Executive's
employment; provided, however, that with respect to any severance payment under
Section 5(a) or Section 5(b) which is required
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to be calculated based upon the amount of any Incentive Bonus under Section
1(e), the Company agrees to pay to the Executive an initial lump sum severance
payment equal to two (2) times [or where applicable, one and one-half (1.5)
times] the sum of: (i) an amount equal to his then current, annualized Base
Salary, and (ii) $51,000.00, within thirty (30) days of the termination date,
non-renewal date or resignation date of the Executive's employment; and an
additional lump sum payment equal to two (2) times [or where applicable, one
and one-half (1.5) times] the difference between (x) the applicable Incentive
Bonus, and (y) $51,000.00, payable within thirty (30) days after the applicable
Incentive Bonus is calculated.
d. CONTINUATION OF BENEFITS: In the event of a
Non-Renewal Without Good Cause or a Termination Without Good Cause or a
Resignation For Good Reason, the Company agrees to continue any and all
Employee Benefits received by the Executive during his employment with the
Company, as modified pursuant to the terms of Section 1(f), for twenty-four
(24) months after the effective date of termination, non-renewal or
resignation.
e. EXCEPTIONS: Severance Pay shall not be payable under this
section in any of the following circumstances:
(1) In the event that this Agreement is terminated as a
result of the death or disability of the Executive, as provided in Sections
2(c)(1)-(2); or
(2) In the event that this Agreement is terminated
pursuant to a Notice of Termination For Good Cause or a Notice of Non-Renewal
for Good Cause communicated by the Company, as provided in Section 2(c)(3), and
such termination or non-renewal is affirmed by both the President/Chief
Executive Officer (if applicable), and by the arbitrators after an arbitration
proceeding under Section 10(c), if either party requests arbitration in
accordance with the Arbitration procedures set forth in Section 10 of this
Agreement; or
(3) In the event the provisions of Section 4 are
applicable as a result of a "Change of Control" having occurred, and the
payments provided for in Section 4 are paid by the Company; or
(4) In the event that the Executive communicates Notice
of Resignation Without Good Reason as defined in Section 2(c)(5).
f. EXCLUSIVITY: The Company and the Executive acknowledge and
agree that the Severance Payments required under this section are intended to
be exclusive and to supersede any severance pay plans or policies adopted by
the Company and that the Executive shall not be entitled to any additional
severance compensation under any other severance plan or policy adopted by the
Company.
6. STOCK OPTIONS: In addition to the other compensation set forth in
this Agreement, the Company agrees to grant the Executive a non-qualified
option (as used in the Greyhound Lines, Inc. 1993 Management Stock Option Plan)
under the Greyhound Lines, Inc. 1993 Management Stock Option Plan, using the
form attached to this Agreement as Exhibit A, to purchase the Company's common
stock (the "Option") under the following terms:
x. XXXXX OF OPTIONS: Subject to the terms and provisions of this
Agreement, the Company agrees to grant the Executive an Option to purchase from
the Company an aggregate of three hundred thousand (300,000) shares of the
Company's common stock (the "Option Stock") at a price per share equal to "2
3/8" (the "Option Price"). The Grant Date for purposes of this Option shall be
March 31, 1995.
b. VESTING AND EXERCISE OF OPTIONS: The Executive shall have the
right to exercise the Option with respect to all or part of any portion of the
Option Stock that has vested in accordance with the following vesting schedule,
immediately upon its vesting:
(1) On May 14, 1996, the Executive's Option to purchase
one hundred twenty thousand (120,000) shares of the Option Stock, at the Option
Price, shall vest.
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(2) On May 14, 1997, the Executive's Option to purchase
an additional one hundred twenty thousand (120,000) shares of the Option Stock,
at the Option Price, shall vest.
(3) On May 14, 1998, the Executive's Option to purchase
an additional sixty thousand (60,000) shares of the Option Stock, at the Option
Price, shall vest.
(4) In the event that a Change of Control (as defined in
Section 4(c) of this Agreement) occurs at any time during the Executive's
employment, or in the event of a termination or non-renewal Without Good Cause
or a valid Notice of Resignation for Good Reason prior to May 14, 1998, the
Executive's Option to purchase all three hundred thousand (300,000) shares of
the Option Stock, at the Option Price, shall, to the extent not already fully
vested, immediately become fully vested and exercisable on the date the Change
of Control occurs, or on the effective date of his termination or resignation.
c. EXERCISE OF OPTIONS:
(1) The Executive shall have the right to exercise his
Option to purchase all or part of the Option Stock after such Option has vested
in accordance with the vesting provisions set forth in Section 6(b). Any
exercise by the Executive of his Option to purchase all or part of the Option
Stock shall be in writing addressed to the Corporate Secretary of the Company
at its principal place of business (a copy of the form of exercise to be used
will be available upon written request to the Secretary), and shall be
accompanied by a certified or bank check to the order of the Company in the
full amount of the Option Price of the whole number of Option Stock so
purchased. In no event shall the Executive exercise the Option for a fraction
of a share of Option Stock.
(2) The Option may not be exercised after the tenth (10th)
anniversary of the Grant Date. The unexercised portion of the Option, if any,
will automatically, and without notice, terminate and become null and void upon
the expiration of ten (10) years from the Grant Date. If, however, the
Executive's employment with the Company terminates before the expiration of ten
(10) years from the Grant Date, the Option will terminate on the applicable
date as described in Section 6(c)(3) below.
(3) Upon the termination of the Executive's employment with
the Company, the Option shall automatically terminate and become null and void
as to shares of Option Stock not vested either immediately prior to the date of
the Executive's termination or as a result of his termination, and as to shares
of Option Stock vested for any reason on the date of his termination, shall to
the extent not previously exercised, be exercisable and then terminate only as
follows:
(a) if the Executive dies while in the employ of the
Company, the Executive's estate may, until the earlier of: (x) six (6)
months after the date of death, or (y) the expiration of ten (10)
years from the Grant Date, exercise the Option with respect to all or
any part of the Option Stock which the Executive was entitled to
purchase immediately prior to the date of his death;
(b) in the case of termination of the Executive's
employment due to Disability, the Executive may, until the earlier of:
(x) six (6) months after the date his employment terminates, or (y)
the expiration of ten (10) years from the Grant Date, exercise the
Option with respect to all or any part of the Option Stock which the
Executive was entitled to purchase immediately prior to the date of
his termination;
(c) in the case of a Termination Without Good Cause
or a Non-Renewal Without Good Cause, or the event the Executive
communicates Notice of Resignation for Good Reason, as that term is
defined in Section 2(c)(5), the Executive may, until the earlier of:
(x) one (1) year after the date the Executive's employment terminates,
or (y) the expiration of ten (10) years from the Grant Date, exercise
the Option with respect to all or any part of the Option Stock which
the Executive was entitled to purchase immediately prior to the time
of such termination, non-renewal or resignation; and
(d) in the case of termination or resignation for
any reason other than those specified in (a), (b) or (c) above, the
Executive may, until the earlier of: (x) thirty (30) days after the
date of his termination from employment or (y) the expiration of ten
(10) years from the Grant Date, exercise his
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Option with respect to all or any part of the Option Stock which the
Executive was entitled to purchase immediately prior to the time of
such termination or resignation; provided, however, that if the
Executive is terminated for Good Cause, as defined in Section 2(c)(3),
the Executive shall forfeit his rights under the Option, except as to
those shares of Option Stock already purchased.
d. REGISTRATION: The Option shall specifically provide: (i) an
agreement from the Company to at all times maintain an effective registration
on Form S-8 covering the registration of the Option Stock under the Securities
Act of 1933, as amended ("the Act"); (ii) the Option Stock shall be issued free
of all restrictions (except those imposed by law), legends and stop transfer
instructions; and, (iii) the Option Stock shall not constitute "restricted
securities" within the meaning of Rule 144 of the Securities and Exchange
Commission. Concurrently with the execution of this Agreement, the Company
shall enter into a Registration Rights Agreement with the Executive, in the
form attached hereto as Exhibit "B," pursuant to which the Company shall grant
certain rights to the Executive to include the Option Stock on any registration
statement filed by the Company under the Act relating to a public offering of
any equity or debt securities by the Company.
e. STATUS OF THE EXECUTIVE: The Executive shall not be
considered a stockholder of the Company with respect to any shares of Option
Stock subject to the Option, except to the extent that the shares of Option
Stock have been purchased by and transferred to the Executive.
7. SUCCESSORS AND ASSIGNS: The parties acknowledge and agree that this
Agreement may not be assigned by either party without the written consent of
the other party. In the event of a "Change of Control" as defined in Section
4(c), the Company shall be entitled to assign this Agreement to any successor
or assignee; provided, however, that such assignment shall not or be construed
to, in any way whatsoever, release, limit or excuse the Company from the
performance of its obligations and the payment of its liabilities under this
Agreement, regardless of whether such obligations or liabilities accrued or
accrue before, after or as a result of such assignment, and regardless of
whether such obligations or liabilities are or were assumed by any successor or
assignee. In the event of the Executive's death, this Agreement shall be
enforceable by the Executive's estate, executors or legal representatives, but
only to the extent that such persons may collect any compensation (including
stock options) due to the Executive under this Agreement.
8. INDEMNIFICATION: During and after the employment of the Executive
pursuant to this Agreement, the Company shall indemnify the Executive against
all judgments, penalties, fines, assessments, losses, amounts paid in
settlement and reasonable expenses (including, but not limited to, attorneys'
fees) for which the Executive may become liable as a result of his performance
of his duties and responsibilities pursuant to this Agreement, to the fullest
extent permissible under the laws of the State of Delaware. In addition, the
Company agrees to purchase liability insurance for any such judgments,
penalties, fines, assessments, losses, amounts paid in settlement and
reasonable expenses (including, but not limited to, attorneys' fees) for which
the Executive may become liable as a result of his performance of his duties
and responsibilities pursuant to this Agreement in an amount not less than the
amount of director and officer liability insurance in effect on the Effective
Date of this Agreement, and consistent with coverage provided to other officers
of the Company.
9. NON-COMPETITION AND NON-DISCLOSURE: The Company and the Executive
agree as follows:
a. During and after his employment by the Company, the Executive
agrees that he shall not directly or indirectly disclose any Confidential
Information, as defined in this section, unless such disclosure is: (i) to an
employee of the Company or its subsidiaries; or (ii) to a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance of his duties as an executive of the Company; or (iii) authorized
in writing by the Board of Directors; or (iv) required by any Court or
administrative agency.
b. In the event that this Agreement is terminated for any reason,
the Executive agrees that he shall promptly return all records, files,
documents, materials and copies relating to the business of the Company or its
subsidiaries which came into the possession of the Executive during his
employment pursuant to this Agreement; provided, however, that nothing in this
section shall be construed as any limitation on the Executive's right to retain
any documents or other information which was in the possession of the Executive
prior to the Effective Date of this Agreement.
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c. For purposes of this Agreement, the term "Confidential
Information" shall be defined as any information relating to the business of
the Company or its subsidiaries which is not generally available to the public
and which the Company takes affirmative steps to maintain as confidential. The
term shall not include any information that the Executive was aware of prior to
the Effective Date of this Agreement, information that is a matter of any
public record, information contained in any document filed or submitted to any
governmental entity, any information that is common knowledge in any industry
in which the Company does business, any information that has previously been
made available to persons who are not employees of the Company or any
information that is known to the Company's competitors.
d. Both the Company and the Executive recognize that in his
employment at the Company, the Executive will be provided with Confidential
Information, as defined above. Both the Company and the Executive recognize
that the disclosure of such Confidential Information to a competitor of the
Company could place the Company at a competitive disadvantage. Accordingly, in
consideration of the Company agreeing to provide Confidential Information to
him, and to prevent the disclosure or use of such information to the
competitive disadvantage of the Company, the parties agree that in the event
that the Executive's employment with the Company is terminated as a result of
either: (i) Notice of Termination for Good Cause or Notice of Non-Renewal for
Good Cause, as defined in Section 2(c)(3); or (ii) the resignation of the
Executive "Without Good Reason," as defined by Section 2(c)(5), the Executive
covenants and agrees not to compete with the Company for twelve (12) calendar
months subsequent to such termination, non-renewal or resignation from
employment, in the business of providing inter-city transport of passengers or
cargo by automobile or motorbus in any city in which the Company engaged in
such business during the twelve (12) calendar months prior to such termination,
non-renewal or resignation. This provision shall not apply in the event that
the employment of the Executive is terminated for any reason other than "Good
Cause" or in the event of a "Resignation for Good Reason."
e. Unless the Board of Directors provides prior written approval,
for one (1) year following the termination of the Executive's employment by the
Company, the Executive shall not, directly or indirectly:
(1) solicit, entice, persuade or induce any employee of
the Company, or its subsidiaries, to terminate his/her employment with the
Company, or its subsidiaries, or to become employed by any Person other than
the Company, or its subsidiaries; or
(2) approach any such employee for any of the foregoing
purposes; or
(3) authorize or assist in the taking of such actions by
any third party.
10. ARBITRATION: The Company and the Executive agree as follows:
a. Any claim or controversy arising out of or relating to this
Agreement, or any breach of this Agreement, shall be settled by final and
binding arbitration in the city of Dallas, Texas in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date the claim or controversy arises. The Executive and the Company
agree that either party must request arbitration of any claim or controversy on
or before the earlier of: (i) the fifteenth (15th) business day after the
termination or non-renewal of this Agreement becomes effective; or (ii) the
sixtieth (60th) business day after the date the claim or controversy first
arises, by giving written notice of the party's request for arbitration
("Arbitration Notice"). Failure to effectively communicate the Arbitration
Notice within the time limitation set forth in this section shall constitute a
waiver of the claim or controversy.
b. In the event that any dispute arising under this Agreement
concerns any payment required to be made under any provision of this Agreement,
either party agrees to deposit the amount of the disputed payment in an
interest bearing account with a financial institution acceptable to the other
party within five (5) days after either party effectively communicates its
Arbitration Notice. In the event that any dispute arising under this Agreement
concerns the amount of any payment required to be made under any provision of
this Agreement, either party agrees to pay the undisputed portion of the
payment to the other party and deposit the disputed portion of the payment in
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an interest bearing account with a financial institution acceptable to the
other party within five (5) days after either party effectively communicates
its Arbitration Notice.
c. All claims or controversies subject to arbitration under this
Agreement shall be submitted to an arbitration hearing within thirty (30) days
after the Arbitration Notice is communicated. All claims or controversies
shall be resolved by a panel of three (3) arbitrators selected in accordance
with the applicable Commercial Arbitration Rules. Either party may request
that the arbitration proceeding be stenographically recorded by a Certified
Shorthand Reporter. The arbitrators shall issue a written decision with
respect to all claims or controversies submitted under this section within
thirty (30) days after the completion of the arbitration hearing. The parties
are entitled to be represented by legal counsel at any arbitration hearing and
each party shall be responsible for its own attorneys' fees. The Company shall
be responsible for paying for all of the arbitrators' fees and expenses in the
event of any arbitration under this section, except that in the event an
arbitration panel finds against the Executive, he may be required to reimburse
the Company for up to one-half (1/2) of the arbitrators' fees and expenses.
d. The parties agree that this section may be specifically
enforced by either party, and submission to arbitration compelled, by any court
of competent jurisdiction. The parties further acknowledge and agree that the
decision of the arbitrators may be specifically enforced by either party in any
court of competent jurisdiction.
11. RULES OF CONSTRUCTION: The following provisions shall govern the
interpretation and enforcement of this Agreement:
a. SEVERABILITY: The parties acknowledge and agree that each
provision of this Agreement shall be enforceable independently of every other
provision. Furthermore, the parties acknowledge and agree that, in the event
any provision of this Agreement is determined to be unenforceable for any
reason, the remaining covenants and/or provisions will remain effective,
binding and enforceable.
b. WAIVER: The parties acknowledge and agree that the failure of
either to enforce any provision of this Agreement shall not constitute a waiver
of that particular provision, or of any other provisions, of this Agreement,
except as otherwise stated in this Agreement.
c. CHOICE OF LAW: The parties acknowledge and agree that except
as specifically provided otherwise in this Agreement, the law of Texas will
govern the validity, interpretation and effect of this Agreement and any other
dispute relating to, or arising out of, the employment relationship between the
Company and the Executive.
d. MODIFICATION: The parties acknowledge and agree that this
Agreement constitutes the complete and entire agreement between the parties;
that the parties have executed this Agreement based upon the express terms and
provisions set forth herein; that the parties have not relied on any
representations, oral or written, which are not set forth in this Agreement;
that no previous agreement, either oral or written, shall have any effect on
the terms or provisions of this Agreement; and that all previous agreements,
either oral or written, are expressly superseded and revoked by this Agreement.
In addition, the parties acknowledge and agree that the provisions of this
Agreement may not be modified by any subsequent agreement unless the modifying
agreement (i) is in writing (ii) contains an express provision referencing this
Agreement (iii) is signed by the Executive and (iv) is approved by the Board of
Directors.
e. EXECUTION: The parties agree that this Agreement may be
executed in multiple counterparts, each of which shall be deemed an Original
for all purposes.
f. HEADINGS: The parties agree that the subject headings set
forth at the beginning of each section in this Agreement are provided for ease
of reference only, and shall not be utilized for any purpose in connection with
the construction, interpretation or enforcement of this Agreement.
12. LEGAL CONSULTATION: The parties acknowledge and agree that both
parties have been accorded a reasonable opportunity to review this Agreement
with legal counsel prior to executing the agreement.
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13. NOTICES: The parties acknowledge and agree that any and all Notices
required to be delivered under the terms of this Agreement shall be forwarded
by personal delivery or certified U.S. mail. Either party may change their
respective address for the purpose of receiving notices only by providing
written notification via certified mail, five (5) days in advance of such
change. Notices shall be deemed to be communicated and effective on the day of
receipt. Such Notices shall be addressed to each party as follows:
Xxxx Xxxxxx Xxxxxxxxx Greyhound Lines, Inc.
17824 Cedar Creek Canyon 00000 Xx. Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxxx, Esq. Xxxxx Xxxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000 President and Chief Executive Officer
Xxxxxx, Xxxxx 00000 Greyhound Lines, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Xxxx Xxxxxxxxx
General Counsel
Greyhound Lines, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
EXECUTED on this 18th day of September, 1995.
---- ---------
XXXX XXXXXX HAUGSLAND
/s/ Xxxx Xxxxxx Xxxxxxxxx
--------------------------
GREYHOUND LINES, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Title: President
-------------------
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT
BETWEEN GREYHOUND LINES, INC. AND XXXX X. XXXXXXXXX
OPTION AGREEMENT
October 11, 1995
Xx. Xxxx X. Xxxxxxxxx
00000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
RE: GRANT OF NON-QUALIFIED STOCK OPTION
Dear Xx. Xxxxxxxxx:
On March 26, 1993, the Board of Directors of Greyhound Lines,
Inc. (the "Company") adopted the Company's 1993 Management Stock Option Plan
(the "Plan"). A copy of the Plan is annexed to this Option Agreement and shall
be deemed a part of this Option Agreement as if fully set forth herein. Unless
the context otherwise requires, all terms defined in the Plan shall have the
same meaning when used herein.
I. THE GRANT
The Company hereby grants to you, effective as of March 31,
1995 (the "Grant Date"), as a matter of separate inducement and not in lieu of
any salary or other compensation for your services, the right and option to
purchase (the "Option") an aggregate of 300,000 shares of Common Stock of the
Company (the "Option Shares") at a price per share equal to $2.3125 (the "Option
Price"), in accordance with the terms of, and subject to the limitations set
forth in, this Option Agreement, your Executive Employment Agreement (the
"Employment Agreement") and the Plan. This Option is not intended to be an
incentive stock option within the meaning of section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). It is intended to be a
non-qualified stock option, within the purview of section 83 of the Code,
granted under Paragraph 6 of the Plan.
II. VESTING AND EXERCISE
(a) The Option shall vest as to the right to purchase,
and simultaneously become immediately exercisable, as follows:
(i) 40% of the Option Shares (120,000 shares) on
May 14, 1996 pursuant to your Employment
Agreement;
(ii) 40% of the Option Shares (120,000 shares) on
May 14, 1997 pursuant to your Employment
Agreement; and
(iii) 20% of the Option Shares (60,000 shares) on
May 14, 1998, pursuant to your Employment
Agreement.
No further vesting of the Option shall occur following termination of your
employment; provided, however, that in the event of: (i) a "Change of
Control," as defined in Section 4(c) of your Employment Agreement, at any time
during your employment; or (ii) in the event that your employment is terminated
or not renewed by the Company without "Good Cause," as defined in Section
2(c)(3) of your Employment Agreement, prior to May 14, 1998; or, (iii)
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you communicate a valid Notice of Resignation for "Good Reason," as defined in
Section 2(c)(5)(a) of your Employment Agreement, prior to May 14, 1998, then
your Option to purchase all three hundred thousand (300,000) shares of the
Option Stock at the Option Price shall, to the extent not already fully vested,
immediately become fully vested and exercisable on the date the Change of
Control occurs, or on the effective date of your termination or resignation.
(b) The Option may not be exercised after the tenth
(10th) anniversary of the Grant Date. The unexercised portion of the Option,
if any, will automatically, and without notice, terminate and become null and
void upon the expiration of ten (10) years from the Grant Date. If, however,
your employment with the Company terminates before the expiration of ten (10)
years from the Grant Date, the Option will terminate on the applicable date as
described in Paragraph IV below.
(c) Any exercise by you of the Option shall be in writing
addressed to the Corporate Secretary of the Company at its principal place of
business (a copy of the form of exercise to be used will be available upon
written request to the Secretary), and shall be accompanied by a certified or
bank check to the order of the Company in the full amount of the Option Price
of the whole number of Option Shares so purchased, or in such other manner as
described in the Plan. In no event shall you exercise the Option for a
fraction of an Option Share.
III. DEFINITIONS
(a) For purposes of this Option Agreement, the term
"Change of Control" shall mean that one of the events set forth at Section 4(c)
of your Employment Agreement occurs, or any other transaction or series of
related transactions occur which have substantially the same effect as any one
of the events set forth at Section 4(c) of your Employment Agreement.
(b) For purposes of this Option Agreement, the term
"Without Good Cause" shall mean that your Employment Agreement is terminated or
not renewed by the Company without "Good Cause," as defined in Section
2(c)(3)(c) of your Employment Agreement, or your employment is terminated by
the Company by communicating a Notice of Termination for Good Cause or Notice
of Non-Renewal for Good Cause, and either the President/Chief Executive Officer
[under Section 2(c)(3)(f) of your Employment Agreement] or the arbitrators
[under Section 10(c) of your Employment Agreement] thereafter determine that
no Good Cause exists or existed for the termination or non-renewal.
(c) For purposes of this Option Agreement, the term "Notice
of Resignation for Good Reason" shall mean that you communicate at least ninety
(90) days notice of your intention to resign from your position with the
Company, for any reason constituting "Good Reason" under Section 2(c)(5)(a) of
your Employment Agreement.
IV. TERMINATION OF EMPLOYMENT
Upon the termination of your employment with the Company, this
Option shall automatically terminate and become null and void as to Option
Shares not vested as to the right to purchase and not then exercisable either
immediately prior to the date of your termination or as a result of your
termination. With respect to any and all Option Shares vested as to the right
to purchase and exercisable for any reason on the date of your termination,
shall to the extent not previously exercised, be exercisable and then terminate
only as follows:
(a) DEATH: If you die while in the employ of the Company,
your estate may, until the earlier of: (x) six (6) months after the
date of death or (y) the expiration of ten (10) years from the Grant
Date, exercise the Option with respect to all or any part of the
Option Shares which you were entitled to purchase immediately prior to
the date of your death;
(b) DISABILITY: In the case of termination of your
employment due to Disability (as defined in Section 2(c)(2) of your
Employment Agreement), you may, until the earlier of: (x) six (6)
months after the date your employment terminates, or (y) the
expiration of ten (10) years from the Grant Date, exercise the Option
with respect to all or any part of the Option Shares which you were
entitled to purchase immediately prior to the date of your
termination;
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(c) TERMINATION WITHOUT GOOD CAUSE: In the event that your
employment is terminated by the Company without "Good Cause," as
defined in Section 2(c)(3) of your Employment Agreement, you may,
until the earlier of: (x) one (1) year after the date your employment
terminates; or (y) the expiration of ten (10) years from the Grant
Date, exercise the option with respect to all or any part of the
Option Shares which you were entitled to purchase immediately prior to
or as a result of such termination;
(d) NON-RENEWAL WITHOUT GOOD CAUSE: In the event that your
Employment Agreement is not renewed by the Company, without "Good
Cause," as defined in Section 2(c)(3) of your Employment Agreement,
you may, until the earlier of: (x) one (1) year after your employment
terminates as a result of the Company's non-renewal; or (y) ten (10)
years from the Grant Date, exercise the Option with respect to all or
any part of the Option Shares you were entitled to purchase at the
time your employment terminated as a result of the Company's
non-renewal;
(e) RESIGNATION FOR GOOD REASON: In the event you resign
from employment for "Good Reason," as that term is defined in Section
2(c)(5)(a) of your Employment Agreement, you may, until the earlier
of: (x) one (1) year after the date your employment terminates; or (y)
the expiration of ten (10) years from the Grant Date, exercise the
Option with respect to all or any part of the Option Shares which you
were entitled to purchase immediately prior to or as a result of such
resignation; and
(f) RESIGNATION WITHOUT GOOD REASON: In the case of a
resignation for any reason other than "Good Reason," as that term is
defined in Section 2(c)(5)(a) of your Employment Agreement, you may,
until the earlier of (x) thirty (30) days after the date of your
resignation from employment or (y) the expiration of ten (10) years
from the Grant Date, exercise your Option with respect to all or any
part of the Option Shares which you were entitled to purchase at the
time of such resignation.
(g) GOOD CAUSE: If you were terminated for Good Cause (as
defined in Section 2(c)(3) of your Employment Agreement), you shall
forfeit your rights under the Option, except as to those Option Shares
already purchased.
V. CHANGE OF CONTROL
Upon the occurrence of an event constituting a Change of
Control (as that term is defined in Section 4(c) of your Employment Agreement)
while you are employed by the Company or any parent corporation or subsidiary
corporation of the Company, the Option will become immediately fully vested, to
the extent not already fully vested, and immediately exercisable in full,
effective on the date of the Change of Control.
VI. TRANSFERABILITY
The Option is not transferable by you otherwise than by will
or the laws of descent and distribution and is exercisable, during your
lifetime, only by you. The Option may not be assigned, transferred (except by
will or the laws of descent and distribution), pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar proceeding. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of this Option contrary to
the provisions hereof or of the Plan, and the levy of any attachment or similar
proceeding upon the Option, shall be null and void and without effect. The
continuing validity of the Option shall not be impaired by this provision, by
the attempted assignment, transfer, pledge, hypothecation or other disposition
or by the voided levy or similar proceeding.
By your acceptance of this Option Agreement, you agree that
you will not sell or otherwise dispose of the Option, any common stock acquired
pursuant to the Option or any other "derivative security" (as defined by Rule
16a- 1(c) under the Securities Exchange Act of 1934, as amended) during the
period ending six months from the date hereof.
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VII. REGISTRATION
(a) REGISTRATION OF OPTIONS SHARES: The Company
represents and warrants to you that the Plan is covered by an effective
registration statement on Form S-8 filed with the Securities and Exchange
Commission relating to the Option Shares issuable upon exercise of this Option,
and the Option Shares issuable upon exercise of this Option are and shall
continue at all times to be registered under the Securities Act of 1933, as
amended (the "Act") and the Option Shares issuable upon exercise of this Option
shall be issued free of any and all restrictive legends and stop transfer
instructions. Without limitation upon the generality of the foregoing, the
Option Shares issuable upon exercise of this Option shall not constitute
"restricted securities" with the meaning of Rule 144 under the Act, and shall
be freely transferable by you in the open market and otherwise. The Company
agrees that so long as this Option is outstanding, it shall at all times
maintain an effective registration statement under the Act covering the
issuance of the Option Shares to you.
(b) OBLIGATIONS OF THE COMPANY: Concurrently with the
execution of this Agreement, the Company shall enter into a Registration Rights
Agreement with the Executive, in the form attached hereto as Exhibit "B,"
pursuant to which the Company shall grant certain rights to the Executive to
include the Option Shares on any registration statement filed by the Company
under the Act relating to a public offering of any equity or debt securities by
the Company.
VIII. WITHHOLDING TAXES
By your acceptance hereof, and in accordance with Section
10(d) of the Plan, you agree that in the case of issuance of Option Shares
hereunder, the Company, as a condition of such issuance, may require the
payment (through withholding from any payment otherwise due you from the
Company or any parent corporation or subsidiary corporation of the Company,
reduction of the number of Option Shares to be issued hereunder, or otherwise)
of any federal, state, local or foreign taxes required by law to be withheld
with respect to such issuance.
IX. MISCELLANEOUS
(a) This Option Agreement is subject to all the terms,
conditions, limitations and restrictions contained in the Plan, except as
specifically modified by this Option Agreement and your Employment Agreement.
In the event of any conflict between this Option Agreement, your Employment
Agreement and/or the Plan, the terms of this Option Agreement shall be
controlling.
(b) This Option Agreement is not a contract of employment
and the terms of your employment shall not be affected hereby or by any
agreement referred to herein except to the extent specifically so provided
herein or therein. Nothing herein shall be construed to impose any obligation
on the Company or on any parent corporation or subsidiary corporation of the
Company to continue your employment, and it shall not impose any obligation on
your part to remain in the employ of the Company or of any parent corporation
or subsidiary corporation of the Company.
(c) SUCCESSORS: The obligations of this Option Agreement
shall bind the corporate successors of the Company, and the corporate
successors of such successors.
(d) NO IMPAIRMENT: The Company will not, by amendment
of its certificate of incorporation or through reorganization, consolidation,
merger, dissolution, issue or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Option, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate in order to protect the rights of the holders of the
Options against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable upon the exercise of the Option above the amount payable
therefore upon such exercise and (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable stock. The Company agrees that the shares
issuable upon exercise of this Option shall be duly authorized, fully paid and
non-assessable shares, free of pre-emption rights.
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(e) RESERVATION OF STOCK ISSUABLE ON EXERCISE OF OPTIONS:
The Company covenants and agrees that during the period within which the rights
represented by this Option may be exercised, the Company will at all times have
authorized, and in reserve, solely for issuance and delivery upon the exercise
of this Option, all such shares of Common Stock and other stock, securities and
property as from time to time shall be receivable upon the exercise of this
Option.
X. ARBITRATION
(a) Any claim or controversy arising out of or relating to
this Option Agreement, or any breach of this Option Agreement, shall be settled
by final and binding arbitration in the city of Dallas, Texas in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
in effect on the date the claim or controversy arises. The Executive and the
Company agree that either party must request arbitration of any claim or
controversy within sixty (60) days of the date the claim or controversy first
arises, by giving written notice of the party's request for arbitration
("Arbitration Notice"). Failure to effectively communicate the Arbitration
Notice within the time limitation set forth in this section shall constitute a
waiver of the claim or controversy.
(b) In the event that any dispute arising under this
Option Agreement concerns any payment required to be made under any provision
of this Option Agreement, either party agrees to deposit the amount of the
disputed payment in an interest bearing account with a financial institution
acceptable to the other party within five (5) days after either party
effectively communicates its Arbitration Notice. In the event that any dispute
arising under this Option Agreement concerns the amount of any payment required
to be made under any provision of this Option Agreement, either party agrees to
pay the undisputed portion of the payment to the other party and deposit the
disputed portion of the payment in an interest bearing account with a financial
institution acceptable to the other party within five (5) days after either
party effectively communicates its Arbitration Notice.
(c) All claims or controversies subject to arbitration
under this Option Agreement shall be submitted to an arbitration hearing within
thirty (30) days after the Arbitration Notice is communicated. All claims or
controversies shall be resolved by a panel of three (3) arbitrators selected in
accordance with the applicable Commercial Arbitration Rules. Either party may
request that the arbitration proceeding be stenographically recorded by a
Certified Shorthand Reporter. The arbitrators shall issue a written decision
with respect to all claims or controversies submitted under this section within
thirty (30) days after the completion of the arbitration hearing. The parties
are entitled to be represented by legal counsel at any arbitration hearing and
each party shall be responsible for its own attorneys' fees. The Company shall
be responsible for paying for all expenses in the event of any arbitration
under this section.
(d) The parties agree that this section may be
specifically enforced by either party, and submission to arbitration compelled,
by any court of competent jurisdiction. The parties further acknowledge and
agree that the decision of the arbitrators may be specifically enforced by
either party in any court of competent jurisdiction.
Please indicate your acceptance of all the terms and
conditions of the Option and the Plan by signing and returning a copy of this
Option Agreement.
Very truly yours,
GREYHOUND LINES, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
XXXXX X. XXXXXXXX, PRESIDENT AND CEO
ACCEPTED:
XXXX X. XXXXXXXXX
/s/ X. X. Xxxxxxxxx
-----------------------------
Date: November 1, 1995
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