EXHIBIT 10.23
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of April 17,
2000, by and between Motor Coach Industries International, Inc., a Delaware
corporation (the "Company"), and Xxxxx Xxxxxxxxx (the "Executive").
WHEREAS, the Company, through its subsidiaries and affiliates,
is engaged in the business of (i) designing, manufacturing, assembling, and
marketing of coaches of monocoque or unitized construction configuration, and
(ii) distribution of replacement parts to the intercity coach and transit bus
markets (the "Business"); and
WHEREAS, the Company desires that the Executive serve as Vice
President of Marketing of the Company and the Executive desires to hold such
position under the terms and conditions of this Agreement; and
WHEREAS, the parties desire to enter into this Agreement
setting forth the terms and conditions of the employment relationship of the
Executive with the Company.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. Employment. The Company hereby employs the Executive, and
the Executive hereby accepts employment with the Company, upon the terms and
subject to the conditions set forth herein.
2. Term. Subject to earlier termination pursuant to Section 10
hereof, the term of the employment by the Company of the Executive pursuant to
this Agreement (the "Term") shall commence on April 17, 2000 (the "Effective
Date"), and terminate on the second anniversary thereof.
3. Position. During the Term, the Executive shall serve as the
Vice President of Marketing of the Company, and shall perform such other duties
as the Board of Directors of the Company (the "Company Board") or the Company's
Chief Executive Officer shall from time to time determine.
4. Duties. During the Term, the Executive shall devote his
full time and attention during normal business hours to the business and affairs
of the Company, except for vacations in accordance with the Company's policies
and for illness or incapacity, in accordance with Section 9 hereof.
5. Salary and Bonus.
(a) During the Term, the Company shall pay to the Executive a
Base Salary at the rate of $175,000.00 per year. Commencing on the first
anniversary of the Effective Date, the Company Board shall review the Base
Salary annually and shall make such adjustments from time to time as it may deem
advisable. The Base Salary shall be payable to the Executive in substantially
equal installments in accordance with the Company's normal payroll practices.
(b) For the Company's fiscal year ending December 31, 2000,
and for each fiscal year thereafter during the Term, the Executive shall be
eligible to receive an annual cash bonus at the discretion of the Company Board
in accordance with the [Management Bonus Program] or other incentive
compensation plan established by the Company Board for the Company's executive
officers.
6. Stock Option Plan. During the Term, the Executive shall be
eligible to participate in the MCII Holdings (USA), Inc. Management Stock Option
Plan or other stock option plan established by the Company Board for the
Company's executive officers and may be granted options thereunder at the
discretion of the Board and as set forth in Exhibit A hereto.
7. Vacation, Holidays and Sick Leave. During the Term, the
Executive shall be entitled to paid vacation, paid holidays and sick leave in
accordance with the Company's standard policies for its senior executive
officers.
8. Business Expenses. The Executive shall be reimbursed for
all reasonable and necessary business expenses incurred by him in connection
with his employment (including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company) upon
timely submission by the Executive of receipts and other documentation as
required by the Internal Revenue Code of 1986, as amended (the "Code"), and in
accordance with the Company's normal expense reimbursement policies.
9. Other Benefits. During the Term, the Executive shall be
eligible to participate fully in all health and other employee benefit
arrangements available to senior executive officers of the Company generally.
10. Termination of Agreement. The Executive's employment by
the Company pursuant to this Agreement shall not be terminated prior to the end
of the Term hereof except as set forth in this Section 10.
(a) By Mutual Consent. The Executive's employment
pursuant to this Agreement may be terminated at any time by the mutual written
agreement of the Company and the Executive.
(b) Death. The Executive's employment by the Company
pursuant to this Agreement shall be terminated upon the death of the Executive,
in which event the Executive's spouse or heirs shall receive, when the same
would have been paid to the Executive, (i) all Base Salary and benefits to be
paid or provided to the Executive under this Agreement through the Date of
Termination (as defined in Section 10(f) hereof) and (ii) the Base Salary and
health benefits to be paid or provided to the Executive under this Agreement
until the earlier of (x) six months following the Date of Termination and (y)
the expiration of the Term.
(c) Disability. The Executive's employment by the
Company pursuant to this Agreement may be terminated by written notice to the
Executive by the Company or to the Company by the Executive in the event that
(i) the Executive becomes unable to perform his normal duties by reason of
physical or mental illness or accident for any six (6) consecutive month period,
or (ii) the Company receives written opinions from both a physician for the
Company and a physician for the Executive that the Executive will be so
disabled. In the event that this Agreement is terminated pursuant to this
Section 10(c), the Executive shall be entitled to receive, when the same would
have been paid to the Executive, (i) all Base Salary and benefits to be paid or
provided to the Executive under this Agreement through the Date of Termination
and (ii) the Base Salary and health benefits to be paid or provided to the
Executive under this Agreement until the earlier of (x) six months following the
Date of Termination and (y) the expiration of the Term.
(d) By the Company for Cause. This Agreement may be
terminated by the Company by written notice to the Executive ("Notice of
Termination") upon the occurrence of any of the following events (each of which
shall constitute "Cause" for termination): (i) the Executive commits any act of
gross negligence, incompetence, fraud or wilful misconduct causing harm to the
Company, (ii) the conviction of the Executive of a felony that could
adversely affect the Company or its reputation, (iii) the Executive
intentionally obtains personal gain, profit or enrichment at the expense of the
Company or from any transaction in which the Executive has an interest which is
adverse to the interest of the Company unless the Executive shall have obtained
the prior written consent of the Company Board, (iv) the Executive acts in a
manner which is materially detrimental or damaging to the Company's reputation,
business operations or relations with its employees, suppliers or customers, or
(v) any material breach by the Executive of this Agreement, including, without
limitation, a material breach of Section 13 hereof, which breach remains
uncorrected for a period of fifteen (15) days after receipt by the Executive of
written notice from the Company setting forth the breach. In the event the
Executive's employment by the Company is terminated pursuant to this Section
10(d), the Executive shall be entitled to receive all Base Salary and benefits
to be paid or provided to the Executive under this Agreement through the Date of
Termination.
(e) By the Company Without Cause. The employment by
the Company of the Executive pursuant to this Agreement may be terminated by the
Company at any time without Cause by delivery of a Notice of Termination to the
Executive. In the event that the employment by the Company of the Executive
pursuant to this Agreement is terminated by the Company without Cause pursuant
to this Section 10(e), the Executive shall be entitled to receive, when the same
would have been paid to the Executive, the greater of (i) the Base Salary and
benefits to be paid or provided to the Executive under this Agreement through
the Term, and (ii) the Base Salary and benefits to be paid or provided to the
Executive under this Agreement for twelve (12) months after the Date of
Termination.
(f) Date of Termination. The Executive's Date of
Termination shall be (i) if the Executive's employment by the Company is
terminated pursuant to Section 10(b), the date of his death, (ii) if the
Executive's employment by the Company is terminated pursuant to Section 10(c),
the last day of the six-month period referred to in Section 10(c), (iii) if the
Executive's employment by the Company is terminated pursuant to Section 10(d),
the date on which a Notice of Termination is given, and (iv) if the Executive's
employment is terminated pursuant to Section 10(e), the date set forth in the
Notice of Termination.
11. Representations.
(a) The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the Company
and is a valid and binding agreement of the Company enforceable against it in
accordance with its terms.
(b) The Executive represents and warrants that he is
not a party to any agreement or instrument which would prevent him from entering
into or performing his duties in any way under this Agreement.
12. Assignment; Binding Agreement. This Agreement is a
personal contract and the rights and interests of the Executive hereunder may
not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him,
except as otherwise expressly permitted by the provisions of this Agreement.
This Agreement shall inure to the benefit of and be enforceable by the Executive
and his personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder had the Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his devisee, legatee, or
other designee or, if there is no such designee, to his estate.
13. Confidentiality; Non-Competition; Ownership of Works.
(a) Executive acknowledges that: (i) the Business is
intensely competitive and that Executive's employment by the Company will
require that Executive have access to and knowledge of confidential information
of the Company, including, but not limited to, the identity of the Company's
customers, the identity of the representatives of customers with whom the
Company has dealt, the kinds of services provided by the Company to customers
and offered to be performed for potential customers, the manner in which such
services are performed or offered to be performed, the service needs of actual
or prospective customers, pricing information, information concerning the
creation, acquisition, or disposition of products and services, creative ideas
and concepts, computer software applications and other programs, research data,
personnel information and other trade secrets (the "Confidential Information");
(ii) the direct or indirect disclosure of any such Confidential Information
would place the Company at a competitive disadvantage and would do damage,
monetary or otherwise, to the Company's business; and (iii) the engaging by
Executive in any of the activities prohibited by this Section 13 may constitute
improper appropriation and/or use of such Confidential Information. Executive
expressly acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectable business
interest of the Company. Accordingly, the Company and Executive agree as
follows:
(b) For purposes of this Section 13, the Company
shall be construed to include the Company and its parents and subsidiaries
engaged in the Business, including any divisions managed by Executive.
(c) During Executive's employment with the Company,
and at all times after the termination of Executive's employment by expiration
of the Term or otherwise, Executive shall not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner, employee, principal,
or agent of any business, or in any other capacity, make known, disclose,
furnish, make available, or utilize any of the Confidential Information, other
than in the proper performance of the duties contemplated herein, or as
expressly permitted herein, or as required by a court of competent jurisdiction
or other administrative or legislative body; provided that, prior to disclosing
any of the Confidential Information as required by a court or other
administrative or legislative body, Executive shall promptly notify the Company
so that the Company may seek a protective order or other appropriate remedy.
Executive agrees to return all documents or other materials containing
Confidential Information, including all photocopies, extracts and summaries
thereof, and any such information stored electronically on tapes, computer disks
or in any other manner, to the Company at any time upon request by the Company
and immediately upon the termination of his employment for any reason.
(d) During Executive's employment with the Company,
Executive shall not engage in "Competition" with the Company. For purposes of
this Agreement, Competition by Executive shall mean Executive's engaging in, or
otherwise directly or indirectly being employed by or acting as a consultant or
lender to, or being a director, officer, employee, principal, agent,
stockholder, member, owner or partner of, or permitting his name to be used in
connection with the activities of, any other business or organization anywhere
in the Western Hemisphere which competes, directly or indirectly, with the
Business of the Company.
(e) For a period of two (2) years following the
termination of Executive's employment, whether upon expiration of the Term or
otherwise, Executive shall not engage in Competition, as defined above, with the
Company in any locality or region of the Western Hemisphere in which the Company
had operations at the time of, or within six (6) months prior to, Executive's
termination, or in which, during the six (6) month period prior to Executive's
termination, the Company had made substantial plans with the intention of
establishing operations in such locality or region; provided that, it shall not
be a violation of this sub-paragraph for Executive to become the registered or
beneficial owner of up to one percent (1%) of any class of the capital stock of
a competing corporation registered
under the Securities Exchange Act of 1934, as amended, provided that Executive
does not actively participate in the business of such corporation until such
time as this covenant expires.
(f) For a period of two (2) years after he ceases to
be employed hereunder by the Company, whether upon expiration of the Term or
otherwise, Executive agrees that he will not, directly or indirectly, for his
benefit or for the benefit of any other person, firm or entity, do any of the
following:
i solicit from any customer doing business
with the Company as of Executive's termination, business of the same or
of a similar nature to the business of the Company with such customer;
ii solicit from any known potential customer
of the Company business of the same or of a similar nature to that
which has been the subject of a known written or oral bid, offer, or
proposal by the Company, or of substantial preparation with a view to
making such a bid, proposal, or offer, within six (6) months prior to
Executive's termination;
iii recruit or solicit the employment or
services of, or hire, any person who was known to be employed by the
Company upon termination of Executive's employment, or within six (6)
months prior thereto; or
iv otherwise knowingly interfere with the
business or accounts of the Company.
(g) The Executive will make full and prompt
disclosure to the Company of all inventions, improvements, formulas, data,
programs, processes, ideas, concepts, discoveries, methods, developments,
software, and works of authorship, whether or not copyrightable, trademarkable,
or patentable, which are created, made, conceived, or reduced to practice by the
Executive, either alone, under his direction or jointly with others during the
period of his employment with the Company, whether or not during normal working
hours or on the premises of the Company, which (i) relate to the actual or
anticipated business, activities, or research of the Company, or (ii) result
from or are suggested by work performed by the Executive for the Company, or
(iii) result, to any extent, from use of the Company's premises or property (all
of which are collectively referred to in this Agreement as "Works"). All Works
shall be the sole property of the Company, and, to the extent that the Company
is not already considered the owner thereof as a matter of law, the Executive
hereby assigns to the Company, without further compensation, all his right,
title, and interest in and to such Works and any and all related intellectual
property rights (including, but not limited to, patents, patent applications,
copyrights, copyright applications, and trademarks) in the Western Hemisphere
and elsewhere. Notwithstanding the foregoing, this Agreement does not apply to
any invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on the
Executive's own time, unless: (A) the invention relates (X) to the Business of
the Company, or (Y) to the Company's actual demonstratively anticipated research
or development; or (B) the invention results from any work performed by the
Executive for the Company.
(h) Executive acknowledges that the services to be
rendered by him to the Company are of a special and unique character, which
gives this Agreement a peculiar value to the Company, the loss of which may not
be reasonably or adequately compensated for by damages in an action at law, and
that a breach or threatened breach by him of any of the provisions contained in
this Section 13 will cause the Company irreparable injury. Executive therefore
agrees that the Company shall be entitled, in addition to any other right or
remedy, to a temporary, preliminary, and permanent injunction, without the
necessity of proving the inadequacy of monetary damages or the posting of any
bond or security, enjoining or restraining Executive from any such violation or
threatened violations.
(i) Executive further acknowledges and agrees that
due to the uniqueness of his services and confidential nature of the information
he will possess, the covenants set forth herein are reasonable and necessary for
the protection of the business and goodwill of the Company.
(j) If any one or more of the provisions contained in
this Agreement shall be held to be excessively broad as to duration, activity,
or subject, such provisions shall be construed by limiting and reducing them so
as to be enforceable to the fullest extent permitted by law.
14. Entire Agreement. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred to
herein, and supersedes any other undertakings and agreements, whether oral or in
writing, previously entered into by them with respect thereto. The Executive
represents that, in executing this Agreement, he does not rely and has not
relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter or effect of this Agreement or
otherwise.
15. Amendment or Modification, Waiver. No provision of this
Agreement may be amended or waived, unless such amendment or waiver is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time, or any subsequent time.
16. Notices. Any notice to be given hereunder shall be in
writing and shall be deemed given when delivered personally, sent by courier or
facsimile or registered or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or to
such other address as such party may subsequently give notice hereunder in
writing:
To the Executive at:
Xxxxx Xxxxxxxxx
000 X. Xxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
To the Company at:
Motor Coach Industries International, Inc.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Vice President & General Counsel
Any notice delivered personally or by courier under this
Section 16 shall be deemed given on the date delivered and any notice sent by
facsimile or registered or certified mail, postage prepaid, return receipt
requested, shall be deemed given on the date transmitted by facsimile or mailed.
17. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.
18. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
19. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Illinois, without regard
to the principles of conflicts of law thereof.
20. Headings. All descriptive headings of sections and
paragraphs in this Agreement are intended solely for convenience, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
21. Withholding. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state, or local law.
22. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement on April 17, 2000, to be effective as of the Effective
Date.
MOTOR COACH INDUSTRIES INTERNATIONAL, INC.
By: /s/R. Xxxxxxx Xxxxxxx
-----------------------------
Name: R. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
/s/Xxxxx Xxxxxxxxx
------------------
XXXXX XXXXXXXXX
EXHIBIT A
Executive will be granted a number of stock options with an exercise price of
$204.918 per share which, based upon the current three-five year projections for
the Company are intended to provide Executive with $1-$2 million of equity value
over the same period. Company will revisit the number of options granted to
Executive in connection with its 2001 Budget and long-term forecast process,
with the intention of confirming that the options granted to Executive are still
expected to reasonably yield the aforementioned value is such long-term
forecasts are achieved. The options will vest ratably over five years.
Company will loan to Executive up to the amount of one annual Base Salary to
purchase shares of common stock of the Company, at a purchase price of $204.918
per share. The loan will be full recourse to Executive, secured by the stock
purchased with the proceeds thereof, and payable in full at the end of five
years from the issuance or 90 days after termination of Executive's employment,
whichever is earlier (except in the event of termination as a result of
Executive's death or disability, in which event the loan will be due at the end
of five years from issuance). Interest on the loan will be payable annually at
the Applicable Federal Rate (currently around 6%). Executive shall use 50% of
his annual bonus payments to re-pay the loan until paid in full. All shares of
common stock purchased by Executive (including shares issued upon exercise of
options) will be subject to transfer restrictions contained in the Stockholder
Agreement.
In the event of any conflict between any of the foregoing provisions and the
terms and conditions of the MCII Holdings (USA), Inc. Management Stock Option
Plan, as the same may be amended from time to time, the latter will control.
