June 30, 1997
Xxxxxxx X. Xxxxxxx
0 Xxx X'Xxxxxxx Xxxx
Xxxx Xxxxxxxxxx, XX 00000
RE: EMPLOYMENT AGREEMENT WITH FIRST AMERICAN
RAILWAYS, INC. (THE "COMPANY")
Dear Xxxxxxx:
This letter confirms that the Company agrees to employ you, and you agree to
accept such employment, upon the terms and conditions set forth below beginning
July 1, 1997 and continuing for a period of eighteen months. The term of your
employment shall be automatically renewed for two consecutive additional
one-year periods unless and until you or the Company give the other party
written notice, received not later than 90 days prior to the then current
expiration date of your employment, of your or the Company's intention to
terminate your employment hereunder.
During the period of your employment you will serve as Vice President, Financial
Relations & Corporate Development of the Company. You agree that, during the
period of your employment under this Agreement, you will serve the Company
faithfully, diligently and to the best of your ability under the direction and
supervision of the President of the Company, and you will devote your full time,
energy and skill to such employment. You further agree to perform, from time to
time, such services and to act in such capacities as the President of the
Company shall request without further compensation other than that for which
provision is made in this Agreement. You will be allowed to participate in
various entities so long as the nature and scope of such participation is
approved in advance in writing by the President.
During this term of your employment, the Company shall pay you a salary (in
accordance with the Company's regular payroll practices) as follows:
Xx. Xxxxxxx X. Xxxxxxx
June 30, 1997
1997:
(7/1/97 - 12/31/97) $52,500 base compensation
(which represents an annual rate of
$105,000) along with a target bonus
of 20% of salary received in 1997
($102,500),pro-rated, but not less
than 7 1/2 % of 1997 base
compensation, to be paid in January,
1998, as determined by the President
of the Company consistent with your
attainment of pre-determined
individual and corporate objectives.
Calendar 1998:
(1/1/98 - 12/31/98) $109,200 per annum base compensation
along with a target bonus of 20% of
base compensation but not less than
10% of 1998 base compensation, to be
paid in January, 1999, as determined
by the President of the Company
consistent with your attainment of
pre-determined individual and
corporate objectives.
Calendar 1999:
(1/1/99 - 12/31/99) Base compensation, target bonus,
and future stock options to be
evaluated and determined by the
President.
The Company agrees to grant you on July 1, 1997 and thereafter on each of the
first and second anniversaries of that date (so long as this agreement has not
otherwise been terminated except as otherwise provided herein) non-qualified,
ten-year stock options to purchase 10,000 shares of common stock (subject to
standard anti-dilution protections) at an exercise price which is equal to the
then current market price, each of such 10,000-share options shall vest in
one-third increments (3,333 shares) annually, with the initial vesting beginning
on the date granted; provided, however, that any such options which remain to be
granted and/or vested hereunder shall be immediately and fully granted and
vested in their entirety upon your election to terminate this Agreement by
reason of a "change in control" of the Company as hereafter defined.
In the event that you are incapacitated by reason of mental or physical
disability during the period of your employment so that you are prevented from
performing your principal duties and services to the Company for a period of 120
consecutive days or for shorter periods aggregating 120 days during any 12-month
period, the Company shall have the right to terminate your employment by
delivering or telecopying written notice of such
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June 30, 1997
termination to you or to your legal representative, as the case may be. Upon
such termination or in the event of your death, the Company shall be relieved of
any further obligations under this Agreement with the exception of the
obligation to pay to you or your estate, as the case may be, any accrued and
unpaid salary earned by you, and all granted but unvested options shall become
fully vested. Further, in the event of termination pursuant to this paragraph,
the Company will pay the health and life insurance premiums in connection with
the coverage contemplated hereby for the six-month period following such
termination.
The Company shall have the right to terminate your employment for "cause" at any
time by reason of one or more of the following occurrences: (i) your conviction,
by a court of competent and final jurisdiction, of any crime (but only in the
event such crime involves the Company or directly relates to your duties
thereto) which constitutes a felony in such jurisdiction; or (ii) your
commission of a material act of malfeasance, fraud, dishonesty or breach of
trust against the Company; or (iii) your material violation of the terms of this
Agreement; or (iv) your failure to devote sufficient time, e.g., averaging 40
hours per week (taking into account vacation and holiday time) to the Company's
business. In the event the Company elects to terminate your employment for
"cause," the Company shall deliver or telecopy written notice to you informing
you of such election and setting forth the action or omission constituting the
reason for terminating your employment for "cause."
You shall be entitled to paid sick days and paid vacation days commensurate with
that due to an executive at your level of employment, with no more than two
weeks of which to be consecutive.
The Company will continue to provide you with "standard" medical insurance. You
shall also be entitled to participate to the same extent as other employees of
the Company of a like capacity and position in any profit sharing plan,
executive non-qualified deferred compensation plan or incentive compensation
plan that the Board of Directors of the Company shall determine to make
available to such employees. The Company will pay you a car allowance of $300
per month.
Subject to the provisions of the subsequent paragraph, in the event your
employment with the Company is terminated (i) for "cause" (as defined above),
you will be entitled to receive 90 days' worth of your then current base
compensation along with any applicable bonus, or (ii) other than for "cause" you
will be entitled to the full benefits hereunder through the existing term
hereof.excluding any unanticipated extensions.
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Xx. Xxxxxxx X. Xxxxxxx
June 30, 1997
In the event there is a "change in control" of the Company (as defined below)
and (i) within 12 months of such "change in control" you terminate your
employment hereunder, or (ii) your employment hereunder is terminated by the
Company for any reason or no reason within 12 months of such "change in
control", then in either case you shall, within fifteen days of such
termination, receive as severance pay a payment in cash of an amount equal to
one year's worth of your then current base compensation plus applicable bonus
(if any), along with the above-described acceleration of the granting and
vesting of your stock options (the "Termination Benefits"). For purposes of this
Agreement, a "change in control" of the Company shall occur when more than 50%
of the Company's voting capital stock is acquired by any "individual," "entity"
or "group" as those terms are defined in the Securities Exchange Act of 1934.
It is expressly understood and agreed that your employment must terminate in
order for the provisions of the preceding paragraph (which provides for the
payment of Termination Benefits to you in certain circumstances) to be
operative.
You have already executed the Company's standard confidentiality and
noncompetition agreement and the compliance of which will become a part of this
agreement.
This Agreement represents the entire understanding and agreement between us with
respect to your employment by the Company and supersedes all prior negotiations,
representations and agreements made by and between us. No alteration, amendment
or modification of any of the terms or provisions of this Agreement shall be
valid unless made pursuant to an instrument in writing and signed by each of us.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Florida.
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Xx. Xxxxxxx X. Xxxxxxx
June 30, 1997
Kindly indicate below that the foregoing represents our mutual agreement with
respect to the matters described in this Agreement by signing and returning a
copy of this Agreement, whereupon this Agreement shall constitute an agreement
between us.
Very truly yours,
FIRST AMERICAN RAILWAYS, INC.
By: /s/ XXXXXXX XXXXXXXXXX
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Xxxxxxx Xxxxxxxxxx, President
and Chief Operating Officer
Agreed to and Accepted this
8th day of July, 1997
/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
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