EXHIBIT 10.2
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AGREEMENT
This Agreement is entered into between Wisconsin Central Transportation
Corporation, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx
("Executive"), this 7th day of July, 1999. Executive has been employed as
Chairman, President and Chief Executive Officer of the Company and has served as
a director of the Company, as well as chief executive officer and a director of
subsidiaries that are directly or indirectly wholly owned by the Company
("Subsidiaries"). The purpose of this Agreement is to reflect the agreement
between the Company and Executive with respect to his resignation as an officer,
director and employee of the Company and its Subsidiaries and other related
matters. Accordingly, the Company and Executive hereby agree as follows:
1. Effective Date. The effective date of Executive's separation from all
positions and employment with the Company and its Subsidiaries is August 31,
1999 (the "Effective Date"). Executive has today submitted his resignation as a
director and officer of the Company and its Subsidiaries (a copy of which is
attached to this Agreement), effective August 31, 1999, and the Company's Board
of Directors has accepted the resignation and approved this Agreement. Executive
has likewise today submitted his resignation as chairman and a director of Tranz
Rail Holdings Limited ("TRHL") and Australian Transport Network Limited ("ATN")
effective August 31, 1999 and as an officer and director of English Welsh &
Scottish Railway Holdings Limited ("EWS") effective July 22, 1999.
2. Payment. In consideration of the agreements and subject to Executive's
performance of the undertakings set forth in this Agreement, the Company, in
full and final settlement of all of Executive's stated and unstated claims,
including any claim for severance, reimbursement of vacation or sick pay,
incentive compensation under the Company's management incentive compensation
plan for the year 1999 or otherwise, agrees to make the following payments to
Executive:
a. The Company shall pay Executive the amount of earned and previously unpaid
salary for the period ending on the Effective Date in accordance with its
customary practice.
b. The Company shall make a $1,311,000 cash payment to Executive on the
Effective Date.
c. The Company shall make regular cash payments, at the same time as it makes
salary payments to its officers, at the rate of $36,417 per month, for the
36-month period commencing on the Effective Date and ending August 31,
2002.
3. Expense Reimbursement. The Company will reimburse Executive for business
expenses he incurred or incurs on its behalf during the period ending on the
Effective Date, subject to compliance with the Company's existing expense
reimbursement policies; provided that any such request for reimbursement shall
be made prior to September 30, 1999.
4. Withholding. All amounts otherwise payable under this Agreement shall be
subject to customary tax withholding and other employment taxes and shall be
subject to such other withholding as may be required in accordance with
applicable law.
5. Benefit Plans; Automobile. The Company shall take such steps, whether
pursuant or supplemental to its existing employee benefit plans, to provide to
Executive, from the date of this Agreement until he attains age 65, the same or
comparable insurance and welfare benefit arrangements in which he currently
participates. The Company shall provide Executive, until he attains age 65, an
automobile allowance comparable to that currently provided, which will permit
him to lease one new automobile comparable to that currently leased for his
benefit.
6. Stock Options. Executive currently holds options to purchase Company
common stock under the Company's Director Stock Option Plan and its Long Term
Incentive Plan. All such options are currently exercisable and will expire as
provided under the terms of the respective plan. The Company will take such
action as it deems appropriate to assure that Executive is provided with the
economic benefits of his current options under the Long Term Incentive Plan for
the period ending on the first anniversary of the Effective Date.
7. Holding and Disposition of Shares. In order to permit Executive to
effect an orderly disposition of his shares of Company common stock, within 10
days after the date of this Agreement, the Company and Executive shall enter
into a registration rights agreement with customary terms and generally
comparable to the Company's original shareholders' agreement, providing for two
demand rights as well as piggyback rights. The Company shall pay the expenses
incurred in connection with the registration rights agreement (other than
underwriting and brokerage commissions and any fees of legal counsel for
Executive). The Company will purchase Executive's EWS shares and options within
30 days after the date of this Agreement at the same price and on the same terms
on which it purchased EWS securities from another former director in June 1999.
8. Non-Competition. For the period beginning on the date of this Agreement
and ending on August 31, 2002, Executive agrees that he will not (other than on
behalf of one of the Class 1 railroads in the United States or Canada) directly
or indirectly engage in, assist, perform services for, establish, or have any
equity interest (other than ownership of 1% or less of the outstanding stock of
any corporation listed on the New York or American Stock Exchanges or included
in the Nasdaq National Market System) in, whether as an employee, officer,
director, agent, security holder, creditor, consultant or otherwise, any entity
or person which conducts rail operations in the State of Wisconsin, the Upper
Peninsula of Michigan, the Chicago Switching District, the Minneapolis-St. Xxxx
Switching District, the Province of Ontario, the United Kingdom, New Zealand,
Australia or Jordan.
9. Corporate Opportunity. For the period beginning on the date of this
Agreement and ending on February 28, 2001, without the Company's prior written
consent, Executive agrees that he will not directly or indirectly interfere or
compete with the Company's opportunity to make an investment in or acquire
either of the two freight railroad or railroad holding companies that the
Company has actively considered acquiring in the United States within one year
prior to the date of this Agreement. The Company shall assign to Executive its
interest in a proposed venture in Estonia.
10. Protective Covenant. For the period beginning on the date of this
Agreement and ending on August 31, 2002, without the Company's prior written
consent, Executive shall not solicit to employ or solicit to engage as a
consultant any person who is then, or who during the preceding 12 months was, an
employee of the Company or any Subsidiary or any of the Company's affiliated
entities (i.e., TRHL, EWS and ATN and their respective subsidiaries (together,
"Affiliates")).
11. Covenants Generally. The parties agree and acknowledge that the
duration, scope and geographic areas applicable to the covenant set forth in
paragraphs 8 through 10 hereof are fair, reasonable and necessary and that
adequate compensation has been received by Executive for these obligations. If,
however, for any reason any court determines that the restrictions in this
Agreement are not reasonable, that the consideration to Executive therefor is
inadequate or that Executive has been prevented from earning a livelihood, such
restrictions shall be deemed without further action by the parties to be
interpreted, modified or rewritten to include as much of the duration, scope and
geographic area of such restrictions as are valid and enforceable.
12. Confidentiality. Executive agrees that he will not, without the prior
written consent of the Company, during the period after the date of this
Agreement, directly or indirectly disclose to any individual, corporation or
other entity (other than the Company, its Subsidiaries or Affiliates or their
respective officers, directors or employees entitled to such information) or use
for his own or such another's benefit, any information, whether or not reduced
to written or other tangible form, which (a) is not generally known to the
public or in the industry; (b) has been treated by the Company or any of its
Subsidiaries or Affiliates as confidential or proprietary; and (c) is of
competitive advantage to the Company or any of its Subsidiaries or Affiliates
(such information being referred to in this paragraph as "Confidential
Information"). Confidential Information which becomes generally known to the
public without violation of this Agreement shall cease to be subject to the
restrictions of this paragraph.
13. Non-Disparagement.
a. Executive agrees that he shall not make any disparaging statements about
the Company, its Subsidiaries or Affiliates or the directors, officers or
employees of any of them; provided that the provisions of this clause shall
not apply to truthful testimony as a witness, compliance with other legal
obligations, or truthful assertion of or defense against any claim of
breach of this Agreement, or to his truthful statements or disclosures to
officers or directors of the Company, and shall not require Executive to
make false statements or disclosures; and provided further that, if at May
31, 2000, and for so long thereafter as, Executive has not sold or
otherwise disposed of shares constituting at least 90% of the Company's
common stock held by him at the date of this Agreement, he may, in good
faith, make fair and truthful comment about the Company, its Subsidiaries
or Affiliates or the directors, officers or employees or any of them with
respect to events arising or circumstances existing after the Effective
Date.
b. The Company agrees that neither the directors nor the officers of the
Company or its Subsidiaries nor any spokesperson for any of them shall make
any disparaging statements about Executive; provided that the provisions of
this clause shall not apply to truthful testimony as a witness, compliance
with other legal obligations, truthful assertion of or defense against any
claim of breach of this Agreement or truthful statements or disclosures to
Executive, and shall not require false statements or disclosures to be
made; and provided further that the Company may, in good faith, make fair
and truthful comment in response to any statements that may be made by
Executive pursuant (or purportedly pursuant) to the last proviso of
paragraph 13(a) hereof.
14. Publicity. After the execution and delivery of this Agreement, the
Company shall issue a press release in the form attached as Exhibit 1. Neither
Executive nor the Company or its Subsidiaries or Affiliates or any of their
officers, directors or spokespersons shall make any public statement
inconsistent with the statements made in the press release. Prior to the
Effective Date, Executive plans to speak with members of the Board of Directors
of the Company and its Affiliates and with vice presidents and other senior
executive officers of the Company and its Affiliates. After the date of this
Agreement, Executive shall have no substantive contact, relating to the Company
or its Subsidiaries or Affiliates or the directors, officers or employees of any
of them, with securities analysts, with governmental agencies (other than as
required by law), with labor unions, with representatives of any of the
foregoing or with employees of the Company or its Subsidiaries or Affiliates
(other than (i) contacts with employees not otherwise in violation of this
Agreement and (ii) communications with members of the Board of Directors of the
Company or its Affiliates or vice presidents or more senior executive officers
of the Company and its Affiliates). All subsequent public disclosures by the
Company with respect to the termination of Executive's employment and this
Agreement shall be consistent with the statements in the press release. The
Company shall make only such disclosure with respect to the terms of this
Agreement as reasonably required by applicable securities laws, including in
particular the Securities and Exchange Commission rules with respect to
information to be disclosed in Company proxy statements, or the rules of the
Nasdaq National Market System.
15. Releases. Except for a claim based upon a breach of this Agreement and
except as provided in paragraph 20 hereof, Executive hereby releases the
Released Parties (as defined below), and the Company hereby releases Executive,
from any and all claims, suits, demands, actions or causes of action of any kind
or nature whatsoever, whether the underlying facts are known or unknown, which
Executive or the Released Parties has or now claims, or might have or claim,
pertaining to or arising out of Executive's employment by the Company or his
separation therefrom or under any local, state or federal common law, statute,
regulation or ordinance, including without limitation those claims dealing with
employment discrimination, including without limitation, Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. ss. 2000e et seq., 42 U.S.C. ss. 1981,
Americans with Disabilities Act, the Illinois Human Rights Act or claims for
breach of contract, for misrepresentation, for defamation, for wrongful
discharge under the common law of any state, for infliction of emotional
distress or for any other tort under the common law of any state. This release
shall run to and be binding upon the Company and each of its Subsidiaries and
Affiliates, and all predecessors, successors and assigns thereof and each of
their members, trustees, shareholders, partners, principals, members, directors,
officers, trustees, employees, agents and attorneys, past or present, and all
predecessors, successors, heirs and assigns thereof (collectively, "Released
Parties"). This release shall also run to and be binding upon Executive and his
heirs and assigns. In exchange for this general release and waiver hereunder,
Executive hereby acknowledges that he has received separate consideration beyond
that which he is otherwise entitled to under the Company's policy or applicable
law. Executive acknowledges that he has consulted with an attorney of his
choosing prior to executing this Agreement which contains a general release and
waiver.
16. Covenant Not to Xxx. To the maximum extent permitted by law, the
Company and Executive covenant not to xxx or to institute or cause to be
instituted any action in any federal, state or local agency or court against the
other party regarding the matters covered by the release contained in paragraph
15 above (except to enforce the terms of this Agreement). If either the Company
or Executive breaches the terms of the release and covenant not to xxx, then the
other party shall be entitled to recover its costs, including reasonable
attorneys' fees incurred in defending such action.
17. Specific Enforcement. Executive agrees that any breach by him of
paragraphs 8 through 14 of this Agreement will cause the Company great injury
which will be difficult, if not impossible, to measure and that such injury will
be immediate and irreparable for which the Company will have no adequate remedy
at law. Consequently, Executive agrees that any material breach by Executive of
the foregoing paragraphs 8 through 14 of this Agreement shall entitle the
Company to injunctive relief, and shall entitle the Company to cancel its
obligations under this Agreement, provided that if a material breach occurs, the
Company shall notify Executive of such breach and Executive may, if possible,
attempt to cure such material breach. Executive agrees that, in the event of a
breach by Executive of the foregoing provisions of this Agreement the Company
would be more harmed by the denial of an injunction or other equitable relief
than Executive would be harmed by the issuance of an injunction or other
equitable relief and that the public interest would be furthered by the issuance
of an injunction or other equitable relief to prevent further or additional
breach of the foregoing provisions of this Agreement.
18. Third Party Legal Proceedings. Executive agrees to cooperate, at
reasonable times and on reasonable notice, with the Company in the truthful and
honest prosecution or defense of any claim in which the Released Parties may
have an interest (subject to reasonable limitations concerning time and place),
which may include without limitation making himself available to participate in
any proceeding involving any of the Released Parties, allowing himself to be
interviewed by representatives of the Company, appearing for depositions and
testimony without requiring a subpoena, and producing and providing any
documents or names of other persons with relevant information.
19. No Mitigation. Executive shall have no obligation to seek or accept
employment, and any compensation earned or provided to Executive from any person
or entity other than the Company and its Subsidiaries for the performance of
such employment or other services shall not reduce or otherwise affect the
amount due to Executive from the Company in accordance with this Agreement, so
long as such employment or service does not violate Executive's obligations
under paragraphs 8 through 10 of this Agreement.
20. Indemnification; Insurance. Executive shall continue to be eligible for
indemnification from the Company with respect to acts or omissions on or prior
to the Effective Date pursuant to the indemnification provisions of the
Company's charter and/or bylaws to the same extent as other current or former
directors and officers of the Company. Executive shall be entitled to coverage
with respect to acts or omissions on or prior to the Effective Date under the
directors and officers liability insurance coverage maintained by the Company
(at the Effective Date and as may be in effect from time to time thereafter) to
the same extent as other current or former officers and directors of the
Company.
21. Company Property. After the Effective Date, Executive shall return any
material personal property to the Company or its Subsidiary or Affiliate, as the
case may be, except that Executive may retain the Company fax machine and laptop
computer that he has been using; provided, however, that his retention of the
laptop computer is subject to his obligations under paragraph 12 hereof with
respect to any Confidential Information contained therein.
22. Miscellaneous. This Agreement shall be construed in accordance with the
laws of the State of Illinois. This Agreement may be signed in multiple
counterparts, each of which shall be deemed to be an original for all purposes.
Executive agrees that neither this Agreement nor performance hereunder
constitutes an admission by the Company of any violation of any federal, state
or local law, regulation, common law, of any breach of any contract or any other
wrongdoing of any type. This instrument constitutes the entire agreement between
the parties. No modification of this Agreement shall be valid unless signed by
the party against whom such modification is sought to be enforced. If any
provision, section, subsection or other portion of this Agreement shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable in whole or in part, and such determination shall become final,
such provision or portion shall be deemed to be severed or limited, but only to
the extent required to render the remaining provisions and portions of this
Agreement enforceable. This Agreement as thus amended shall be enforced so as to
give effect of the intention of the parties insofar as that is possible. In
addition, the parties hereby expressly empower a court of competent jurisdiction
to modify any term or provision of this Agreement to the extent necessary to
comply with existing law and to enforce this Agreement as modified. If any
payment to be made under this Agreement by the Company is not paid within 30
days after it has become due, the Company will pay interest on such unpaid
amount at the Company's then cost of borrowings. Executive acknowledges that he
has carefully read and fully understands the terms and provisions of this
Agreement and all of his rights and obligations thereunder, has had an
opportunity to be represented by legal counsel of his choosing and that his
execution of this Agreement is voluntary.
23. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or such other addresses as shall be specified by the parties by
like notice). Such notices, demands, claims and other communications shall be
deemed given:
a. in the case of delivery by overnight service with guaranteed next day
delivery, the next day or the day designated for delivery;
b. in the case of certified or registered U.S. mail, five days after deposit
in the U.S. mail; or
c. in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service are to be delivered to
the addresses set forth below:
If to the Company:
Wisconsin Central Transportation Corporation
One X'Xxxx Centre, Suite 9000
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Power, Jr.
Phone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Phone: 000-000-0000
Facsimile: 312-258-5600
and
McLachlan, Xxxxxxx & Doll
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx / Xxxx X. Xxxx
Phone: 000-000-0000
Facsimile: 000-000-0000
If to Executive:
Xxxxxx X. Xxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: (Same number, call first.)
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx / Xxxxx Xxxxx
Phone: 000-000-0000
Facsimile: 312-876-7934
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
WISCONSIN CENTRAL TRANSPORTATION
CORPORATION
By:
Name:
Its:
EXECUTIVE
Name: Xxxxxx X. Xxxxxxxxx
EXHIBIT 1
TEXT OF PRESS RELEASE
Wisconsin Central Transportation Corporation announced today that Xxxxxx X.
Xxxxxxxxx, 60, its Chairman, President and CEO, has resigned his director and
officer positions with the Company and its Affiliates, effective as of August 31
to establish an independent railway investment and consulting firm operating
internationally. Xx. Xxxxxxxxx was one of the Company's founders, and has served
as its President and CEO for the past 12 years. During his tenure, the Company
grew from a start-up regional railroad in the upper Midwest to a global
transportation holding company with interests in the UK, Canada, New Zealand and
Australia.
Xxxxxx X. Power, Jr., 58, will succeed Xx. Xxxxxxxxx as the Company's President
and CEO. Mr. Power is a 31-year veteran of the transportation industry. Mr.
Power was also one of the founders of the Company and has served as its
Executive Vice President and Chief Financial Officer for the past 12 years. Mr.
Power is a member of the Board of Directors of English Welsh & Scottish Railway
Holdings Limited, Tranz Rail Holdings Limited, and Australian Transport Network
Limited. Mr. Power began his railroad career at the New York Central Railroad,
and served as Chief Financial Officer and later Chief Executive Officer at the
Chicago, Milwaukee, St. Xxxx and Pacific Railroad before founding the Company
with Xx. Xxxxxxxxx.
Mr. Power said, "Xx Xxxxxxxxx has built a strong foundation for WCTC, both
domestically and internationally. It is my plan to build on this foundation to
deliver greater shareholder value in the months and years ahead."
Wisconsin Central also announced that X. Xxxxxx XxXxxxxx will be promoted to
President and Chief Executive Officer of all of the Company's North American
operating subsidiaries, succeeding Xx. Xxxxxxxxx in those roles. Xx. XxXxxxxx
said that, "We intend to continue the Company's long- standing policy of
providing superior customer service and competing vigorously in the
transportation markets we serve."
RESIGNATION
I, Xxxxxx X. Xxxxxxxxx, do hereby resign from the following positions:
1. Effective August 31, 1999, as chairman, director, officer and employee of
Wisconsin Central Transportation Corporation and each of its subsidiaries;
2. Effective July 22, 1999, as chairman, director and officer of English Welsh
& Scottish Railway Holdings Limited and each of its subsidiaries;
3. Effective August 31, 1999, as chairman and director of Tranz Rail Holdings
Limited and each of its subsidiaries; and
4. Effective August 31, 1999, as chairman and director of Australian Transport
Network Limited and each of its subsidiaries.
Dated July 7, 1999
Xxxxxx X. Xxxxxxxxx
