FORM OF MANAGEMENT SHAREHOLDER AWARD AGREEMENT
Exhibit 10.5
This Management Shareholder Award Agreement (this “Agreement”) is entered into as of
September ___, 2009, by and between RailAmerica, Inc., a Delaware corporation (the
“Company”), and [ ] (the “Management Investor”).
WHEREAS, in connection with the services the Management Investor provides to the Company, the
Management Investor purchased a number of shares of the common stock of the Company, par value
$0.01 (the “Common Stock”) pursuant to the Management Shareholder Agreement entered into
between the Company and the Management Investor as of [ ] (the “Original
Agreement”);
WHEREAS, in connection with entering into the Original Agreement, the Company granted to the
Management Investor certain restricted shares of Common Stock subject to the terms and conditions
set forth therein (the “Restricted Shares”); and
WHEREAS, effective upon and in connection with the initial public offering of the Common Stock
(the “Effective Date”), the Company and the Management Investor desire to terminate the
Original Agreement and enter into this Agreement restating the terms and conditions applicable to
the Restricted Shares.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Purchase and Grant of Common Stock
(a) The Company granted to the Management Investor [ ] Restricted Shares (as adjusted
for the 90-1 split of the Common Stock on September 22, 2009). Subject to the terms of Section
1(b) and the other terms and provisions of this Agreement, ten percent (10%) of the Restricted
Shares vested or shall vest on [ ], fifteen percent (15%) of the Restricted Shares vested or
shall vest on [ ], and twenty-five percent (25%) vested or shall vest on each of
[ ],[ ], and [ ] (each of such five dates, a “Restricted Share Vesting
Date”), in each case provided that the Management Investor is still employed by the Company on
such vesting date.
(b) Without limiting any of the other terms and provisions of this Agreement, the Restricted
Shares shall be subject to the following terms:
(i) If (A) the Management Investor’s employment is terminated by the Company other than
for Cause or the Management Investor terminates his employment with the Company for Good
Reason and (B) a waiver and general release reasonably acceptable to the Company is executed
by the Management Investor within thirty (30) days after the date of such termination and
becomes effective in accordance with its
terms, the Management Investor will immediately vest (upon the effectiveness of such
waiver and general release) as the owner of the percentage of each tranche of Restricted
Shares that would have vested under Section 1(a) on the next succeeding Restricted Share
Vesting Date (provided that, if such percentage is less than twenty-five percent (25%), then
twenty-five percent (25%) shall be substituted for such percentage).
(ii) If the Management Investor’s employment is terminated by reason of the Management
Investor’s death or Disability, the Management Investor will immediately vest as the owner
of the percentage of each tranche of Restricted Shares that would have vested under Section
1(a) on the next succeeding Restricted Share Vesting Date (provided that, if such percentage
is less than twenty-five percent (25%), then twenty-five percent (25%) shall be substituted
for such percentage).
(iii) In the event the Management Investor’s employment is terminated by the Company
other than for Cause, or the Management Investor terminates his employment with the Company
for Good Reason, within twelve (12) months after a Change in Control (as defined below), the
Management Investor shall immediately vest as the owner of all Restricted Shares that have
not theretofore vested prior to the date of such termination.
(iv) Except as provided in clauses (i), (ii), and (iii) of this Section 1(b), all of
the unvested Restricted Shares shall be automatically forfeited upon the Management Investor
ceasing to be an employee of the Company (whether as a result of termination for Cause,
termination other than for Cause, resignation (whether for Good Reason or otherwise), death,
Disability or otherwise).
(v) For purposes of clarification, except as otherwise expressly provided in this
Agreement, the Management Investor will have all of the rights of a shareholder with respect
to all of the Restricted Shares granted hereunder, including, without limitation, the right
to vote such shares (subject to Section 1(b)(vii) below) and the right to receive all
dividends or other distributions with respect to such shares, both prior to and after the
lapse and removal of the vesting restrictions set forth herein.
(vi) Upon vesting in accordance with the terms of this Agreement, the Restricted Shares
shall be issued to the Management Investor free and clear of all liens, other than
restrictions and legends required pursuant to federal and state securities laws and the
terms of this Agreement.
(vii) To the fullest extent permitted by applicable law, the Management Investor hereby
appoints Fortress Fund IV as its proxy with respect to all unvested Restricted Shares of
which the Management Investor may be the record holder of from time to time to (A) attend
all meetings of the holders of the Common Stock, with full power to vote and act for the
Management Investor with respect to such Restricted Shares in the same manner and extent
that the Management Investor might were the Management Investor personally present at such
meetings, and (B) execute and deliver, on behalf of the Management Investor, any written
consent in lieu of a meeting of the holders of the Common Stock in the same manner and
extent that the Management Investor might but for the proxy granted pursuant to this
sentence. The proxies hereby
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granted by the Management Investor are coupled with an interest and are, and shall be,
irrevocable by the Management Investor until any such unvested Restricted Shares vest in
accordance with the terms of this Agreement, in which case such proxy shall automatically
terminate with respect to such vested Restricted Shares. Fortress Fund IV shall have full
power to substitute another person as the Management Investor’s proxy and to revoke the
appointment of any such substitute proxy. Concurrently herewith, the Management Investor is
hereby executing and delivering to the Company an irrevocable proxy in the form of
Exhibit A attached hereto, and the Management Investor hereby agrees that it shall
execute and deliver any further instrument, and take all other actions, reasonably requested
by Fortress Fund IV from time to time to evidence or otherwise give effect to the provisions
of this Section 1(b)(vii).
(c) In connection with the payment of any dividends, distributions or other type of payment to
the Management Investor in respect of the Restricted Shares, the Company shall be entitled to
deduct any taxes or other amounts required by any governmental authority to be withheld and paid
over to such authority for the Management Investor’s account.
(d) For the purposes of this Agreement, the following terms have the respective meanings set
forth below:
(i) “Act” means the Securities Act of 1933, as amended.
(ii) An “Affiliate” of, or a person “affiliated” with, a specified
person, is a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person specified.
(iii) A termination for “Cause” shall mean (A) the Management Investor commits
any act of fraud, intentional misrepresentation or serious misconduct in connection with the
business of the Company, any of its subsidiaries, or any Affiliate of the Company (excluding
the Company and its subsidiaries) that engages the Management Investor as an employee or
consultant (collectively, “Affiliated Engagers”), including, but not limited to,
falsifying any documents or agreements (regardless of form); (B) the Management Investor
materially violates any rule or policy of the Company or any subsidiary (1) for which
violation an employee may be terminated pursuant to the written policies of the Company or
any subsidiary reasonably applicable to such an employee, (2) which violation results in
damage to the Company or any subsidiary or (3) which, after written notice to do so, the
Management Investor fails to correct within a reasonable time; (C) the Management Investor
materially violates any rule or policy of an Affiliated Engager applicable to the Management
Investor which violation results in material damage to such Affiliated Engager or which,
after written notice to do so, the Management Investor fails to correct within a reasonable
time; (D) other than solely due to Disability, the Management Investor willfully breaches or
habitually neglects any material aspect of the Management Investor’s duties assigned to the
Management Investor by the Company or any of its subsidiaries or any Affiliated Engager,
which assignment was reasonable in light of the Management Investor’s position with the
applicable entity (all of the foregoing duties, “Duties”); (E) other than solely due
to Disability, the Management Investor fails, after written notice from, as applicable, the
Company, its
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subsidiary or an Affiliated Engager, adequately to perform any Duties and such failure
is reasonably likely to have a material adverse impact upon such entity or its operations;
provided, that, for purposes of this clause (E), such a material adverse
impact will be solely determined with reference to the Management Investor’s Duties and his
annual compensation, or consultant compensation, as applicable; (F) the Management Investor
materially fails to comply with a direction from the Chief Executive Officer of the Company,
the Board of Directors of the Company (the “Board”) or a senior officer or the board
of directors of any subsidiary of the Company or any Affiliated Engager with respect to a
material matter, which direction was reasonable in light of the Management Investor’s
position with the applicable entity; (G) while employed by or providing services to the
Company or any of its subsidiaries, and without the written approval of the Board, the
Management Investor performs services for any other corporation or person which competes
with the Company or any of its subsidiaries or otherwise violates Section 4 hereof, or,
while performing services for any Affiliated Engager, without the written approval of such
Affiliated Engager, the Management Investor takes any action which violates any restrictive
covenant contained in any agreement between the Management Investor and such Affiliated
Engager; (H) the Management Investor is convicted by a court of competent jurisdiction of a
felony (other than a traffic or moving violation) or any crime involving dishonesty; (I) the
Management Investor engages in any other action that may result in termination of an
employee for cause pursuant to any generally applied standard, of which standard the
Management Investor knew or reasonably should have known, adopted in good faith by the Board
or the board of directors of any of the Company’s subsidiaries from time to time but prior
to such action or condition; or (J) any willful breach by the Management Investor of his
fiduciary duties as a director of the Company, any of its subsidiaries, or any Affiliated
Engager. In the event that there is a dispute between the Management Investor and the
Company as to whether “Cause” for termination exists: (x) such termination shall nonetheless
be effective and (y) such dispute shall be subject to arbitration in Jacksonville, Florida
using the commercial rules of the American Arbitration Association.
(iv) “Change in Control” shall be deemed to have occurred if an event set forth
in any one of the following paragraphs shall have occurred:
(A) any person other than any Permitted Transferee (as defined below) is or
becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such person any
securities acquired directly from the Company or any Affiliate thereof) representing
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities; or
(B) the following individuals cease for any reason to constitute a majority of
the number of directors then serving on the Board: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened election
contest, including, but not limited to, a consent solicitation, relating to the
election of directors of the Company) whose appointment or
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election by the Board or nomination for election by the Company’s shareholders
was approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or
(C) there is consummated a merger or consolidation of the Company or any
subsidiary thereof with any other corporation, other than a merger or consolidation
immediately following which the individuals who comprise the Board immediately prior
thereto constitute at least a majority of the Board of the entity surviving such
merger or consolidation or, if the Company or the entity surviving such merger is
then a subsidiary, the ultimate parent thereof; or
(D) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than (A) a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least fifty percent (50%) of the combined
voting power of the voting securities of which are owned by shareholders of the
Company following the completion of such transaction in substantially the same
proportions as their ownership of the Company immediately prior to such sale or (B)
a sale or disposition of all or substantially all of the Company’s assets
immediately following which the individuals who comprise the Board immediately prior
thereto constitute at least a majority of the board of directors of the entity to
which such assets are sold or disposed or, if such entity is a subsidiary, the
ultimate parent thereof.
For each Restricted Share that constitutes deferred compensation under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), a Change in Control shall be
deemed to have occurred hereunder with respect to such Restricted Share only if a change in
the ownership or effective control of the Company or a change in ownership of a substantial
portion of the assets of the Company shall also be deemed to have occurred under Section
409A of the Code.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated transactions
immediately following which the holders of Common Stock immediately prior to such
transaction or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
(v) “Disability” means, as determined by the Board in good faith, the
Management Investor’s inability, due to Disability or incapacity, to perform all of the
Management Investor’s duties hereunder on a full-time basis for (A) periods aggregating one
hundred eighty (180) days, whether or not continuous, in any continuous period of three
hundred and sixty five (365) days or, (B) where the Management Investor’s absence is
adversely affecting the performance of the Company in a significant manner, periods
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greater than ninety (90) days and the Management Investor is unable to resume the
Management Investor’s duties on a full time basis within ten (10) days after receipt of
written notice of the Board’s determination under this clause (v).
(vi) “Fortress Fund IV” means Fortress Fund IV GP L.P., a Delaware limited
partnership, and its successors and assigns.
(vii) “Good Reason” means the occurrence, without the express prior written
consent of the Management Investor, of any of the following circumstances, unless such
circumstances are fully corrected by the Company within thirty (30) days following written
notification by the Management Investor (which written notice must be delivered within
thirty (30) days following the date the Management Investor becomes aware of the occurrence
of such circumstances) that the Management Investor intends to terminate the Management
Investor’s employment for one of the reasons set forth below: (A) any material reduction in
the Management Investor’s title, duties, authorities, or responsibilities; (B) any material
breach by the Company of any agreement between the Company and the Management Investor; (C)
any failure by the Company to pay the Management Investor the Base Salary or Annual Bonus
when required to be so paid pursuant to the terms of the employment agreement (if any) by
and between the Company and the Management Investor (the “Employment Agreement”);
(D) any material reduction in the Base Salary (including, once the Management Investor’s
Base Salary is increased, any material reduction in the Management Investor’s Base Salary
below such increased amount) other than, in each case, an across-the-board reduction that
applies to all employees or solely to senior executives of the Company; (E) during the one
(1) year period following any Change in Control, the failure of any successor to the Company
(if any), whether direct or indirect and whether by merger, acquisition, consolidation or
otherwise, to assume in a writing delivered to the Management Investor, the obligations of
the Company under this Agreement, provided that the Management Investor was willing and able
to execute a new contract providing for the same terms and conditions as those in the
Employment Agreement; (F) any relocation of the Management Investor’s principal place of
employment to a location more than fifty (50) miles outside the Jacksonville, Florida
metropolitan area or (G) the delivery of a notice of non-renewal by the Company pursuant to
Section 2 of the Employment Agreement.
(viii) “Permitted Transferee” means (A) any Affiliate (a “FIG
Affiliate”) of Fortress Investment Group LLC, a Delaware limited liability company
(“FIG”), (B) any managing director, general partner, director, limited partner,
officer or employee of any FIG Affiliate, (C) any investment fund or other entity managed
directly or indirectly by FIG or any Affiliate thereof (each, a “FIG Fund”), or (D)
any general partner, limited partner, managing member or person occupying a similar role of
or with respect to any FIG Fund.
2. Transfers of Stock. Until such time as the Restricted Shares are fully vested in
accordance with Section 1 hereof, no purported sale, assignment, mortgage, hypothecation, transfer,
charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or
creation of a security interest in or lien on, any of the Restricted Shares or any agreement or
commitment to do any of the foregoing (each, a “Transfer”) by any holder thereof in
violation
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of the provisions of this Agreement will be valid, except with the prior written consent of
the Board, which consent may be granted or withheld in the sole discretion of the Board. Any
purported Transfer of Restricted Shares or any economic benefit or interest therein in violation of
this Agreement shall be null and void ab initio, and shall not create any obligation or liability
of the Company, and any person purportedly acquiring any Restricted Shares or any economic benefit
or interest therein transferred in violation of this Agreement shall not be entitled to be
recognized as a holder of such Shares.
3. Management Investor Representations; Legends on Certificates.
(a) The Management Investor acknowledges and agrees that nothing herein, shall be construed as
an agreement by the Company or any of its Affiliates, express or implied, to (A) employ the
Management Investor or contract for the Management Investor’s services, (B) restrict the right of
the Company to discharge the Management Investor or cease contracting for the Management Investor’s
services or (C) modify, extend or otherwise affect in any manner whatsoever the terms of the
Employment Agreement or any contract for services which may exist (on the date hereof or in the
future) between the Management Investor and the Company or any of its Affiliates.
(b) Legend on Certificates. Each share certificate issued to the Management Investor
upon written request to the Company representing Common Stock issued hereunder shall bear the
following (or substantially equivalent) legends on the face or reverse side thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MANAGEMENT
SHAREHOLDER AGREEMENT DATED AS OF [ ], 2009, BETWEEN [ ] AND
RAILAMERICA, INC. (THE “COMPANY”), A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY, AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE VOTED,
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
SUCH VOTING, TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
COMPLIES WITH THE PROVISIONS OF SUCH AGREEMENT.
Any share certificate issued at any time in exchange or substitution for any certificates bearing
such legends shall also bear such (or substantially equivalent) legends, unless the Common Stock
represented by such certificate is no longer subject to the provisions of this Agreement and, in
the opinion of counsel for the Company, the Common Stock represented thereby need no longer be
subject to restrictions pursuant to the Act or applicable state securities law. The Company shall
not be required to transfer on its books any certificate for Common Stock in violation of the
provisions of this Agreement.
4. Restrictive Covenants. By virtue of the Management Investor’s employment with the
Company, the Management Investor acknowledges that, during the period of his employment with the
Company, he shall have access to trade secrets and other valuable confidential business and
professional information, knowledge and data relating to the Company and its Affiliates and their
respective businesses, will meet and develop relationships with prospective and existing
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suppliers, financing sources, clients, customers and employees of the Company and its
Affiliates and will receive extraordinary or specialized training in the short-line railroad
business.
(a) Noncompetition; Nonsolicitation. The Management Investor agrees that during the
period of his employment with the Company or any of its subsidiaries and for the one (1) year
period immediately following termination of such employment for any reason, the Management Investor
shall not:
(i) directly or indirectly (whether as principal, agent, independent contractor,
partner, member, manager, officer, director or otherwise) own, manage, operate, control,
participate in, perform services for, make any investment in or otherwise carry on, any
business that is competitive with any business engaged in the operation of short-line
railroads anywhere in North America that has revenues of at least $200 million per year; or
(ii) directly or indirectly, engage in the recruiting, soliciting or inducing of any
nonclerical employee or employees of the Company or its Affiliates to terminate their
employment with, or otherwise cease their relationship with, the Company or any of its
Affiliates, or in hiring or assisting another person or entity to hire any nonclerical
employee of the Company or any of its Affiliates or any person who within six months before
had been a nonclerical employee of the Company or any of its Affiliates and were recruited
or solicited for such employment or other retention while an employee of the Company (other
than any of the foregoing activities engaged in with the prior written approval of the
Company); or
iii) directly or indirectly solicit, induce or encourage or attempt to persuade any
agent, supplier or customer of the Company or any subsidiary of the Company to terminate
such agency or business relationship.
Nothing contained in this Agreement shall limit or otherwise affect the ability of the Management
Investor to own not more than one percent (1.0%) of the outstanding capital stock of any entity
that is engaged in a business competitive with the Company or any of its subsidiaries, provided
that such investment is a passive investment and such Management Investor is not directly or
indirectly involved in the management or operation of such business or otherwise providing
consulting services to such business.
(b) Disparaging Comments. The Management Investor agrees that during the period of
his employment with the Company or any of its subsidiaries and thereafter, the Management Investor
shall not make any disparaging or defamatory comments regarding the Company or any of its
subsidiaries or, after termination of his employment relationship with the Company or any of its
subsidiaries, make any comments concerning any aspect of the termination of their relationship.
The Company agrees that during the period of the Management Investor’s employment with the Company
or any of its subsidiaries and thereafter, members of the Company’s senior management shall be
prohibited from making disparaging or defamatory comments regarding the Management Investor or,
after termination of the Management Investor’s employment relationship with the Company or any of
its subsidiaries, and from making any comments concerning any aspect of the termination of their
relationship. The
8
obligations of the parties under this subparagraph shall not apply to disclosures required by
applicable law, regulation or order of any court or governmental agency.
Nothing contained in this Section 4 shall limit any common law or statutory obligation that the
Management Investor may have to the Company or any of its Affiliates. For purposes of this Section
4 and Section 1, “the Company” refers to the Company and any incorporated or unincorporated
Affiliates of the Company, including any entity which becomes the Management Investor’s employer as
a result of any transaction, reorganization or restructuring of the Company for any reason. The
Company shall be entitled, in connection with its tax planning or other reasons, to terminate a
Management Investor’s employment (which termination shall not be considered a termination without
Cause for purposes of this Agreement or otherwise) in connection with an invitation from another
Affiliate of the Company to accept employment with such Affiliate.
(c) Confidentiality. During employment and at all times following termination of
employment, the Management Investor will hold and keep confidential all secret and confidential
information, knowledge or data relating to the Company and its Affiliates, and their respective
businesses, including any confidential information as to customers of the Company and its
Affiliates (i) obtained by the Management Investor during employment by the Company or its
Affiliates and (ii) not otherwise public knowledge or known within the applicable industry. The
Management Investor shall not, without prior written consent of the Company, unless compelled
pursuant to the order of a court or other governmental or legal body having jurisdiction over such
matter, communicate or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In the event the Management Investor is compelled by order of
a court or other governmental or legal body to communicate or divulge any such information,
knowledge or data to anyone other than the foregoing, the Management Investor will promptly notify
the Company of any such order and will cooperate fully with the Company in protecting such
information to the extent possible under applicable law. Upon termination of employment with the
Company and its Affiliates, or at any time as the Company may request, the Management Investor will
promptly deliver to the Company, as requested, all documents (whether prepared by the Company, an
Affiliate of the Company, the Management Investor or a third party) relating to the Company, an
Affiliate of the Company or any of their businesses or property which the Management Investor may
possess or have under the Management Investor’s direction or control other than documents provided
to the Management Investor as a participant in any employee benefit plan, policy or program of the
Company or any agreement by and between the Management Investor and the Company or any of its
Affiliates with regard to the Management Investor’s employment or severance.
(d) Acknowledgment. The Management Investor agrees and acknowledges that each
restrictive covenant in this Section 4 is reasonable as to duration, terms and geographical area
and that the same protects the legitimate interests of the Company and its Affiliates, imposes no
undue hardship on the Management Investor, is not injurious to the public, and that,
notwithstanding any provision in this Agreement to the contrary, any violation of this restrictive
covenant shall be specifically enforceable in any court of competent jurisdiction. The Management
Investor agrees and acknowledges that a portion of the compensation provided to the Management
Investor under this Agreement will be provided in consideration of the covenants contained in this
Section 4, the sufficiency of which consideration is hereby
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acknowledged. If any provision of this Section 4 as applied to the Management Investor or to
any circumstance is adjudged by a court with competent jurisdiction to be invalid or unenforceable,
the same shall in no way affect any other circumstance or the validity or enforceability of any
other provisions of this Section 4. If the scope of any such provision, or any part thereof, is
too broad to permit enforcement of such provision to its full extent, the Management Investor
agrees that the court making such determination shall have the power to reduce the duration and/or
area of such provision, and/or to delete specific words or phrases, and in its reduced form, such
provision shall then be enforceable and shall be enforced. The Management Investor agrees and
acknowledges that the breach of this Section 4 will cause irreparable injury to the Company and
upon breach of any provision of this Section 4, the Company shall be entitled to injunctive relief,
specific performance or other equitable relief by any court with competent jurisdiction without the
need to prove the inadequacy of monetary damages or post a bond; provided, however,
that this shall in no way limit any other remedies which the Company may have (including, without
limitation, the right to seek monetary damages). Each of the covenants in this Section 4 shall be
construed as an agreement independent of any other provisions in this Agreement.
5. Notices. All notices or other communications required or permitted under this
Agreement shall be made in writing and shall be deemed given if delivered personally or sent by
nationally recognized overnight courier service. Any notice or other communication shall be deemed
given on the date of delivery or on the date one (1) business day after it shall have been given to
a nationally recognized overnight courier service. All such notices or communications shall be
delivered to the recipient at the addresses indicated below:
To the Company:
RailAmerica, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
To the Management Investor:
at the address as it appears in the Company’s books and records or at such other
place as the Management Investor shall have designated by notice as herein provided
to the Company.
6. Specific Performance, Forfeiture, Right to Repurchase.
(a) Specific Performance. Because damages to the Company and its Affiliates will be
difficult to ascertain and remedies at law to the Company and its Affiliates will be inadequate and
for other reasons, the Company and its Affiliates will be irreparably damaged in the event that
this Agreement is not specifically enforced. In the event of a breach or threatened breach of the
terms, covenants and/or conditions of this Agreement by the Management Investor, the Company and
its Affiliates shall, in addition to all other remedies, be entitled (without any bond or other
security being required) to a temporary and/or permanent injunction, without showing any actual
damage or that monetary damages would not provide an
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adequate remedy, and/or a decree for specific performance, in accordance with the provisions
hereof.
(b) Forfeiture, Right to Repurchase. The Management Investor acknowledges that if
(x) the Management Investor breaches any term or condition contained in Section 4 of this Agreement
and (y) the Company provides the Management Investor with written notice of such breach, all of the
Restricted Shares that have not vested prior to the date of such notice shall be automatically
forfeited.
7. Miscellaneous.
(a) This Agreement constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be modified or amended except by a written agreement signed by the
Company and the Management Investor. As of the Effective Date, this Agreement shall supersede any
other agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party or any Affiliate thereof, including,
without limitation, the Original Agreement.
(b) In the event any capital stock of the Company or any other corporation shall be
distributed on, with respect to, or in exchange for shares of Common Stock of the Company as a
stock (or share) dividend, stock (or share) split, spin-off, reclassification or recapitalization
in connection with any merger, amalgamation, continuation into another jurisdiction or
reorganization, the restrictions, rights and options set forth in this Agreement shall apply with
respect to such other capital stock to the same extent as they are, or would have been applicable,
to the Common Stock acquired hereunder on, or with respect to, which such other capital stock was
distributed.
(c) No waiver of any breach or default hereunder shall be considered valid unless in writing,
and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or
similar nature. Anything in this Agreement to the contrary notwithstanding, any waiver, consent or
other instrument under or pursuant to this Agreement signed by, or binding upon, the Management
Investor shall be valid and binding upon any and all persons or entities (other than the Company
and its Affiliates) who may, at any time, have or claim any rights under or pursuant to this
Agreement in respect of the Restricted Shares.
(d) Except as otherwise expressly provided herein, this Agreement shall be binding upon and
inure to the benefit of the Company and its Affiliates and their respective successors and assigns
and the Management Investor and the Management Investor’s heirs, personal representatives,
successors and assigns; provided, however, that nothing contained herein shall be
construed as granting the Management Investor the right to Transfer any of the Restricted Shares,
except in accordance with this Agreement.
(e) Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the fullest extent permitted by applicable law, the parties hereby
11
waive any provision of law that may render any provision hereof prohibited or unenforceable in
any respect.
(f) The obligations of the Company and the Management Investor under this Agreement which by
their nature may require either partial or total performance after the Management Investor’s
employment by the Company is terminated shall survive such termination of employment.
(g) Should any party to this Agreement be required to commence any litigation concerning any
provision of this Agreement or the rights and duties of the parties hereunder, the prevailing party
in such proceeding shall be entitled, in addition to such other relief as may be granted, to the
reasonable attorneys’ fees and court costs incurred by reason of such litigation.
(h) The Section headings contained herein are for the purposes of convenience only and are not
intended to define or limit the contents of said Sections.
(i) Words in the singular shall be read and construed as though in the plural and words in the
plural shall be read and construed as though in the singular in all cases where they would so
apply. Words herein of any gender are deemed to include each other gender.
(j) This Agreement may be executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same agreement, and all signatures need not appear on any one counterpart.
(k) The Management Investor hereby irrevocably consents and agrees that (except as otherwise
set forth in the definition of “Cause” in Section 1(d)(iii) hereof), any legal action, suit or
proceeding against it with respect to its obligations or liabilities or any other matter under or
arising out of or in connection with this Agreement shall be brought in the United States District
Court for the Middle District of Florida or in the courts of the State of Florida, sitting in
Jacksonville, and, by execution and delivery of this Agreement, the Management Investor, to the
fullest extent permitted by applicable law, hereby (i) irrevocably accepts and submits to the
exclusive jurisdiction of each of the aforesaid courts, in person, generally and unconditionally
with respect to any such action, suit or proceeding, (ii) agrees not to commence any such action,
suit or proceeding in any jurisdiction other than those of the aforesaid courts, (iii) waives any
objection to the laying of venue of any such action, suit or proceeding therein, (iv) agrees not to
plead or claim that such action, suit or proceeding has been brought in an inconvenient forum and
(v) consents to service of process in connection with an such action, suit or proceeding by the
delivery of notice to such Management Investor’s address set forth in this Agreement.
(l) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware, without regard to any choice-of-law rules thereof which might apply the
laws of any other jurisdiction. This provision does not affect a party’s right to bring an action
under this Agreement in the United States District Court for the Middle District of Florida.
12
(m) The parties agree that this Agreement will be administered in accordance with the
requirements of Section 409A of the Code, to the extent applicable, and will be amended to the
extent and at the time required by Section 409A and regulations issued thereunder.
(n) WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.
EACH PARTY ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS
WAIVER, BE REQUIRED OF SUCH PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MIGHT BE FILED IN ANY COURT AND THAT MAY RELATE TO THE SUBJECT MATTER OF
THIS AGREEMENT, INCLUDING ALL COMMON LAW AND STATUTORY CLAIMS. EACH PARTY FURTHER REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, MODIFICATIONS, SUPPLEMENTS OR RESTATEMENTS HEREOF.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
[signature page follows]
13
IN WITNESS WHEREOF, the parties have executed this Management Shareholder Agreement as of the
first date written above.
| RAILAMERICA, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Name: | ||||||
[Signature Page to Management Shareholder Agreement]
Exhibit A
Irrevocable Proxy pursuant to
Section 1(b)(vii) of the Management
Shareholder Agreement
Dated September , 2009 (the “Agreement”)
Section 1(b)(vii) of the Management
Shareholder Agreement
Dated September , 2009 (the “Agreement”)
Proxy
RailAmerica, Inc. (the “Company”)
As of the Effective Date of the Agreement (as defined in the Agreement), I, [ ], being a
shareholder of the Company, HEREBY APPOINT Fortress Fund IV GP L.P. to be my proxy for and in my
name, place and xxxxx to attend all meetings of the shareholders of the Company and to vote any and
all shares in the Company at the time standing in my name and to exercise all consensual rights in
respect of such shares (including, without limitation, giving or withholding written consents of
shareholders and calling special general meetings of shareholders) within the scope and pursuant to
terms set out in Section 1(b)(vii) of the Agreement.
Signed this ____ day of September, 2009
