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EXHIBIT 10.6
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") made as of the
1st day of March, 1994, between RailAmerica, Inc., a Delaware corporation (the
"Company"), having an office at 000 Xxxxxx Xxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxxxx
00000, and Xxxx X. Xxxxxx ("Executive").
WHEREAS, the Company believes it is in the best interests of the
Company and its subsidiaries and affiliates (collectively, the "Consolidated
Group") to employ Executive, and Executive desires to be employed by the
Company; and
WHEREAS, the Board of Directors of the Company has approved of the
terms of this Agreement as of the date set forth above; and
WHEREAS, the Company and Executive desire to set forth the terms and
conditions on which Executive shall be employed by the Company and provide his
services to the Consolidated Group.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Employment. The Company hereby employs Executive, and
Executive hereby accepts such employment, all upon the terms and conditions
hereinafter set forth.
2. Term. Unless sooner terminated pursuant to the provisions of
this Agreement, the initial term of employment under this Agreement shall be for
a period commencing as of March 1, 1994 and ending February 28, 1998 (the
"Employment Period"). The Employment Period shall be extended automatically for
one (1) year periods after the initial term under this Agreement and the end of
each one-year period thereafter, so that there shall be successive one-year
terms of employment under this Agreement commencing on March 1, 1998, unless the
Company or Executive gives written notice of non-extension to the other party
not less than one hundred eighty (180) days prior to the end of the Employment
Period. References herein to the "Employment Period" shall refer to both such
initial term and each such successive term.
3. Base Salary. Executive shall be entitled to receive a base
salary from the Company during the Employment Period (the "Base Salary") at the
rate of One Hundred Fifty Thousand Dollars ($150,000.00) per annum from March 1,
1994 through August 31, 1994; One Hundred Seventy-Five Thousand Dollars
($175,000.00) per annum from September 1, 1994 through December 31, 1994; and
Two Hundred Thousand Dollars ($200,000.00) per annum from January 1, 1995
through December 31, 1995. The Base Salary shall be payable in accordance with
the current normal payroll policies of the Company, which policies may be
changed by the Company from time to time in its sole discretion, and shall be
subject to all appropriate withholding taxes. Effective each January 1 during
the Employment Period, commencing with January 1, 1996, the Base Salary shall be
increased by such percentage as corresponds to any annual percentage increase in
the consumer price index reported in "U.S. City Average: All items," under the
table entitled "Consumer Price Index for All Urban Consumers' (1967 equals 100),
as published by the U.S. Department of Labor, Bureau of Labor Statistics (the
"Index"), calculated by multiplying the Base Salary for the immediately
preceding year by a fraction, the numerator of which is the Index number for
October 1 of the next preceding year. In addition to any annual increases in the
Base Salary as a result of changes in the Index, the Base Salary shall be
subject to annual reviews and upward adjustments, effective each January 1
during the Employment Period, commencing with January 1, 1996, in the sole
discretion of a majority of the members of the Company's Board of Directors,
other than Executive (the "Board"), based upon the recommendation of the Audit
and Compensation Committee of the Board (the "Committee"), with Executive
recusing himself from any discussion and vote by the Committee on the matter if
he is, at the time, a member of the Committee (the action of a
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majority of such Board members based upon such recommendation of the Committee
shall hereinafter be referred to as action by the "Disinterested Members"). The
Disinterested Members shall meet and determine the upward adjustment, if any, to
the Base Salary no later than the December 15 immediately preceding each January
1 during the Employment Period. An adjustment to the Base Salary shall not be
deemed a modification, amendment or waiver of this Agreement except as the term
"Base Salary" is used in this Agreement; all other provisions of this Agreement
shall, in that case, remain in full force and effect.
4. General Bonuses.
(a) Executive shall participate, with respect to each
full fiscal year during the Employment Period, beginning with the fiscal year
ending December 31, 1995, in the Company's Corporate Senior Executive Bonus
Plan, which shall remain in effect during the entire Employment Period, subject
to such amendments, modifications, supplements or other changes as shall be
determined at any time, or from time to time, by the Disinterested Members.
(b) Executive shall, in the sole discretion of the
Disinterested Members, be eligible to receive a bonus for his contribution to
the Consolidated Group for the fiscal year ending December 31, 1994, and the
Disinterested Members shall determine such bonus by June 7, 1995 and pay such
bonus by June 30, 1995.
5. Signing Bonus. As an additional inducement to Executive to
enter into this Agreement, the Company shall, upon execution of this Agreement,
issue or causes to be issued to Executive fifty thousand (50,000) shares of
common stock of the Company, $.01 par value per share ("Common Stock"), free of
any conditions of forfeiture or restrictions on transfer other than those
required by federal or state securities laws. Executive agrees to execute such
documentation and make such representations and acknowledgments as may be
reasonably necessary to permit the issuance of the shares of Common Stock in
compliance with federal and state securities laws.
6. Option Grants. The Company hereby confirms, as of November
11, 1994, the grant to Executive of options to purchase three hundred fifty
thousand (350,000) shares of Common Stock with the following terms:
Amount Date First Exercisable Exercise Price Per Share
------ ---------------------- ------------------------
87,500 November 11, 1994 $3.10
87,500 March 1, 1995 $3.40
87,500 March 1, 1996 $3.75
87,500 March 1, 1997 $4.15
The options shall have a term of ten (10) years and such additional
terms and conditions as set forth in an option agreement between the Company and
Executive in the form attached hereto as Exhibit "A" (the "Stock Option
Agreement").
7. Other Bonus or Incentive Payments. Executive shall, at all
times during the Employment Period, be eligible to receive, in addition to the
Base Salary, bonuses and other benefits provided for hereunder, additional
bonuses, stock options or grants, stock appreciation rights or other incentive
payments to be determined as to the amount and time of payment by the
Disinterested Members upon consideration of the performance of the Consolidated
Group and Executive's contribution to such performance.
8. Benefits.
(a) Vacation. For each twelve-month period from January 1
to December 31 during the Employment Period, Executive shall be entitled to four
(4) weeks of vacation without loss of compensation or other benefits to which he
is entitled under this Agreement, to be take at such times as Executive may
select and the affairs of the Consolidated Group may permit.
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(b) Executive Benefit Programs. Without limiting the
compensation or other benefits to which Executive may be entitled pursuant to
any other provision of this Agreement, during the Employment Period Executive
shall be entitled to participate in any pension, retirement, insurance or other
employee benefit plan that is maintained at that time by the Company for its
employees generally, including, without limitation, programs of life,
disability, basic medical and dental and supplemental medical and dental
insurance. Executive shall be entitled to the benefits under this Section on
terms as favorable as those granted to other employees of the Consolidated
Group. Notwithstanding the foregoing, during the Employment Period Executive
shall at all times be entitled to the following minimum benefits:
(i) Medical and dental insurance for himself and
his family, including supplemental coverage for any co-payments and deductibles;
provided, however, that the annual premiums, fees and other costs paid by the
Company for such insurance for Executive and his family shall not exceed Ten
Thousand Dollars ($10,000.00);
(ii) Long-term disability insurance for himself;
provide, however, that the annual premiums, fees and other costs paid by the
Company for such insurance for Executive shall not exceed Seven Thousand Dollars
($7,000.00) at a Base Salary of Two Hundred Thousand Dollars ($200,000.00) per
annum, plus such additional proportional amount, if any, as may be necessary to
ensure that the benefits provided by Executive's long-term disability insurance
increase proportionally as the Base Salary increases above Two Hundred Thousand
Dollars ($200,000.00), it being the intent of the parties that Executive's
long-term disability benefits approximate sixty-seven percent (67%) of the
then-current Base Salary at all times during the Employment period if such
long-term disability insurance in such amount is then reasonably available for
an annual premium fees and other costs paid by the Company not to exceed Seven
Thousand Dollars ($7,000.00) plus such additional proportional amount;
(iii) Term Life insurance on the life of Executive
in the benefit amount of One million Dollars ($1,000,000.00), with the
beneficiaries thereof designated by Executive;
(iv) Directors' and Officers' Liability
Insurance, if reasonably available, provided that the terms and amounts of such
insurance shall be subject to approval by the Board;
(v) Indemnification by the Company to the
fullest extent permitted by law;
(vi) Advancement or reimbursement of funds for
all reasonable travel, entertainment and miscellaneous expenses incurred by
Executive in connection with the performance of his duties under this Agreement;
provided, however, that Executive properly accounts for such expenses to the
Company in accordance with the Company's practices.
(vii) An automobile allowance of Six Hundred
Dollars ($600.00) per month through December 31, 1994; commencing January 1,
1995, the automobile allowance shall be increased, effective each January 1, by
such percentage as corresponds to any percentage increase in the Index, as
calculated in accordance with the procedures set forth in Section 3;
(viii) An annual payment to be made by the Company
to or on behalf of Executive each January 1 during the Employment Period,
commencing with January 1, 1995, in an amount equal to ten percent (10%) of the
then-current Base Salary, for purposes of funding an individual deferred
compensation, salary continuation, annuity or other retirement arrangement for
Executive in lieu of a group plan or plans adopted by the Board providing
retirement benefits for the Company's employees generally, including Executive
comparable to those provided by other similarly-sized publicly-traded companies;
and
(ix) Within thirty (30) days after executive of
this Agreement, payment on behalf of or reimbursement to Executive for legal
fees and expenses incurred by him in connection with the negotiation and
execution of this Agreement and the Stock Option Agreement; provided, however,
that the amount paid by the Company for such payment or reimbursement shall not
exceed Twelve Thousand Dollars ($12,000.00).
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9. Duties. During the Employment Period:
(a) Executive agrees to serve as Chief Executive Officer
of the Company, and to serve in such other positions with the Company and the
other members of the Consolidated Group with such other titles as the Board may
from time to time determine. Executive shall exercise such powers and comply
with and perform such directions and duties in relation to the business and
affairs of the Consolidated Group as may from time to time be vested in or
requested by the Board and shall use his best efforts to improve and extend the
businesses of the Consolidated Group. Executive shall at all times report to,
and his activities shall at all times be subject to the direction and control
of, the Board.
(b) Executive shall devote all of his business and
professional time, energy and skill to the service of the Consolidated Group and
the promotion of its interests and shall use his best efforts in the performance
of his duties hereunder. Subject to the restrictions of Section 14, Executive
may, however, devote an appropriate amount of time to directorships in other
profit and non-profit corporations, participation in professional organizations,
management of purely passive personal and family investments (including, without
limitation, in the capacity of a trustee, executor or guardian for family
members) and participation in community, civic and charitable activities;
provided, however, that these matters and the amount of time devoted to them
shall not conflict with or impair Executive's performance of his duties to the
Consolidated Group and shall not in the aggregate, on average, involve more than
five (5) hours of Executive's time per week. Executive agrees to abide by all
By-laws, rules and regulations established from time to time by the Company, a
majority of its shareholders and/or the Board; and all commissions, fees or
other income earned and received by Executive, in furtherance of the business of
the Consolidated Group, from any person other than the Company shall be accepted
by Executive for the amount of the Company.
10. Confidentiality. In the course of Executive's relationship
with the Consolidated Group, some or all of the members of the Consolidated
Group have disclosed or made known, or may disclose or make known, to Executive,
and Executive has been or may be given access to or may become acquainted with,
certain information, trade secrets or both, relating to or useful in one or more
of the businesses of the Consolidated Group (collectively "Information"), and
which the Company considers proprietary and desires to maintain confidential.
As a material inducement to the Company to enter into this Agreement,
Executive covenants and agrees that, during the Employment Period and at all
times thereafter, Executive shall not in any manner, either directly or
indirectly, divulge, disclose or communicate to any person or entity, except to
or for the benefit of the Consolidated Group or as directed by the Board, any of
the Information which he may have acquired in the course of or as an incident to
his relationship with any member of the Consolidated Group, including, without
limitation, pursuant to his employment hereunder, the parties agreeing that such
Information affects the successful and effective conduct of the businesses of
the Consolidated Group and its goodwill, and that any breach of the terms of
this Section is a material breach of this Agreement. All equipment, documents,
memoranda, reports, records, computer software, disks, tapes, other means of
electronic data storage, files, materials, samples, books, correspondence,
lists, other written and graphic records and the like (collectively, the
"Materials"), affecting or relating to one or more of the businesses of the
Consolidated Group, which Executive shall prepare, use, construct, observe,
possess or control shall be and remain the sole property of the Consolidated
Group and/or in its exclusive custody and control, and must not be removed from
the premises of a member of the Consolidated Group or given to any person or
entity except for the benefit of the Consolidated Group or as directed by the
Board. Promptly upon termination of the Employment Period for any reason, the
Materials, Information and all copies thereof in the custody or control of
Executive shall be delivered promptly to the Company.
11. Change in Control.
(a) For the purposes of this Agreement, a "Change in
Control" shall be deemed to have taken place if: (i) any person, including a
"group" as defined in either Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended, becomes the beneficial owner of the
Company securities, after the ate of this Agreement, having twenty-five percent
(25%) or more of the combined voting power of the then-outstanding securities of
the Company that may be cast for the election of directors of the Company (other
than as a result of an issuance of securities specifically approved by Executive
and specifically excluded from the provisions of this Section 11 by subsequent
written agreement or Executive); or (ii) the persons who were directors of the
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Company before the occurrence of any of the following transactions shall cease
to constitute a majority of the Board of Directors of the Company, or the board
of directors of any successor to the Company, as the direct or indirect result
of, or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election or any combination of
the foregoing transactions.
(b) The Company and Executive hereby agree that, if after
a Change in Control occurs (the "Change in Control Date") during the Employment
Period, Executive is requested and, in his sole and absolute discretion,
consents to change his principal business location, the Company shall reimburse
Executive for his relocation expenses, and those of his family, including,
without limitation, moving expenses, temporary living and travel expenses for a
time while arranging to move his residence to the changed location and closing
costs, if any, associated with the sale of his then-existing residence and the
purchase of a replacement residence at the changed location, plus an additional
amount representing a gross-up of any state or federal taxes payable by the
Executive as a result of any such reimbursements. If in such a case Executive
shall not consent to change his business location, Executive may continue to
perform the duties required of him hereunder in Boca Raton, Florida, and the
Company shall continue to maintain an office for Executive at that location
commensurate with the Company's office prior to the Change in Control Date.
(c) During the remaining Employment Period after the
Change in Control Date, the Company shall: (i) continue to honor the terms of
this Agreement, including, without limitations, as to Base Salary and bonus
compensation; and (ii) continue employee benefit programs as to Executive no
less favorable than those in effect on the Change in Control Date (but subject
to such reductions as may be required to maintain such plans in compliance with
applicable federal law and regulation of employee benefit programs).
12. Termination of Employment Period.
(a) Termination for Judicially-Determined Cause. The
Board may terminate the Employment Period pursuant to the terms of this Section
12(a) for cause at the time by giving written notice to Executive. Such
termination shall become effective upon the giving of such notice, except that
termination based upon Section 12(a)(iv) below shall not become effective unless
Executive shall fail to correct such breach within thirty (30) days after
receipt of written notice thereof as provided in the preceding sentence. Upon
any such termination for cause, Executive shall have no right tot he Base
Salary, bonuses or other payments under Sections 3, 4 and 7, or to participate
in any employee benefit programs under Section 8, as of the effective date of
termination. For purposes of this Section 12(a), "cause" shall mean: (i)
Executive is convicted of a felony; (ii) a judicial determination is made that
Executive, in carrying out his duties hereunder, has exhibited willful gross
negligence or willful gross misconduct resulting, in either case, in material
harm to any member of the Consolidated Group; (iii) Executive is convicted of
otherwise defrauding the Consolidated Group; or (iv) a judicial determination is
made that Executive has materially breached any provision of Section 9, 10 of 14
resulting in material harm to any member of the Consolidate Group.
(b) Other "For Cause" Termination.
(i) The Board may terminate the Employment
Period pursuant to the terms of this Section 12(b) for cause if, as a result of
Executive's willful personal dishonesty, gross misconduct, breach of fiduciary
duty involving personal profit, gross negligence or failure to perform this
duties as set forth in Section 9, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or material
breach of any provision of this Agreement, there is material harm to any member
of the Consolidated Group. For purposes of this Section 12(b), no act, or
failure to act, on Executive's part shall be considered "willful" unless done,
or omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interests of the Consolidated Group;
provided, however, that any act or omission to act on Executive's part in
reliance upon an opinion of counsel to the Company or at the direction of the
Board shall not be deemed to be willful. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for cause under this
Section 12(b) unless and until there shall have been delivered to him a copy of
a certification by the Board finding, after reasonable notice to Executive and
an opportunity for him, together with his counsel, to be heard by the Board,
that, in the good faith opinion of the Board, Executive was guilty of conduct
which is deemed to be cause within the meaning of this Section 12(b)(i) and
specifying the particulars thereof in detail. In the event that the Board
delivers such a certification of termination to Executive under Section
12(b)(i), and Executive does not elect to challenge
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such termination in accordance with Section 12(b)(ii), the Employment Period
shall terminate twenty-one (21) days after Executive receives such
certification.
(ii) Executive may elect to challenge any
termination for cause by the Company of the Employment Period under Section
12(b)(i) by providing written notice of such election to the Company within
twenty-one (21) days after Executive receives the certification of termination.
Any such challenge shall be first determined by arbitration to be conducted in
Palm Beach County, Florida, in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The decision of the arbitrator(s) (the
"Arbitration Decision") may be appealed by Executive as set forth below. In the
event Executive challenges his termination for cause, pending the Arbitration
Decision Executive shall continue to be paid the Base Salary under Section 3 and
continue to participate in any employee benefit programs under Section 8 that
were being paid or provided immediately prior to the Board's certification of
termination, but Executive shall not be required to perform any duties pursuant
to Section 9 or to otherwise report for work to the Company. If the Arbitration
Decision determines that Executive was properly terminated for cause, Executive
shall, subject to his rights upon a successful judicial appeal of the
Arbitration Decision as set forth below, have no further rights from the date of
such Arbitration Decision to Base Salary or to participate in any employee
benefit programs, and the Employment Period shall be considered to have
terminated for purposes of the non-compete and non-solicit provisions of Section
14 as of the date of the Arbitration Decision. If the Arbitration Decision
determines that Executive was properly terminated for cause, and Executive does
not appeal the Arbitration Decision to a court having jurisdiction thereof
within thirty (30) days after the date of the Arbitration Decision, then the
Arbitration Decision shall be considered final and binding on the parties. If
(A) the Arbitration Decision determines that Executive was improperly terminated
for cause, or (B) the Arbitration Decision determines that Executive was
properly terminated for cause, Executive appeals the Arbitration Decision to a
court having jurisdiction thereof within the thirty-day period and Executive
successfully demonstrates to the court or to the final reviewing court on
further appeal that he was improperly terminated for cause, then in either such
case the Employment Period shall be deemed to have been terminated without cause
under Section 12(e)(i) as of the date on which Executive received the
certification of termination, and Executive shall be entitled to the remedies
provided pursuant to that Section and shall not thereafter be subject to the
non-compete and non-solicit provisions of Section 14.
(c) Death or Disability. The Employment Period shall
terminate upon the death or disability of Executive. For purposes of this
Section 12(c), "disability" shall mean that, for a period of six (6) months in
any twelve-month period, Executive is incapable of substantially fulfilling the
duties set forth in Section 9 because of physical, mental or emotional
incapacity re-resulting from injury, sickness or disease as determined by an
independent physician mutually acceptable to the Board and Executive. Upon any
such termination for death or disability, the Company shall pay Executive or his
legal representative, as the case may be, the Base Salary under Section 3
through the date of such termination of the Employment Period, plus any bonus
earned but not yet paid under the Corporate Senior Executive Bonus Plan, any
other bonus or incentive payments earned but not yet paid under any other bonus
or incentive plan under Section 7 and any benefits under Section 8 which have
accrued through such date. In addition, in the case of termination for
disability, the Company shall continue to pay Executive or his legal
representative, as the case may be, the Base Salary under Section 3 until
Executive begins to receive payments under the long-term disability policy paid
for by the Company pursuant to Section 8(b)(ii); provided, however, that, in no
event, shall the Company continue to pay the Base Salary for more than ninety
(90) days after the date of such termination for disability. Lastly, for a
period of eighteen (18) months after the date of termination for death or
disability, the Company shall continue to provide medical and dental insurance
coverage to Executive and his family in the form or forms provided under Section
8(b) immediately prior to the date of such termination.
(d) Voluntary Termination. Executive may, on not less
than one hundred eighty (180) prior written notice to the Company specifically
setting forth the effective date thereof, terminate the Employment Period prior
to the end of the initial term or any successive term of the Employment Period
under Section 2. Upon any such termination, the Company shall pay Executive the
Base Salary under Section 3 Through the effective date of such termination of
the Employment Period, plus any bonus earned but not yet paid under the
Corporate Senior Executive Bonus Plan, any other bonus or incentive payments
earned but not yet paid under any other bonus or incentive plan under Section 7
and any benefits under Section 8 which have accrued through such date.
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(e) Termination Without Cause.
(i) Prior to a Change in Control, if the
Employment Period is terminated by the Company other than pursuant to Section
12(a), 12(b) or 12(c), the Company shall be in breach of this Agreement, and, in
lieu of any other damages or recoveries, the Executive shall be entitled to
continue to receive the Base Salary under Section 3 and benefits under Section 8
for the remainder of the then-current initial or successive term of the
Employment Period, as the case may be, payable in accordance with the normal
payroll and benefit program policies of the Company. In addition, Executive
shall be deemed to have been employed by the Company at all times during such
term of the Employment Period for purposes of determining his entitlement to a
bonus under the Corporate Senior Executive Bonus Plan, for purposes of
determining his entitlement to any other bonus or incentive payments under
Section 7 and for purposes of his options under Section 6, and all such options
shall be immediately exercisable as of the Company's termination of the
Employment Period. Notwithstanding the foregoing, in the event that such Company
termination occurs within less than one-hundred eighty (180) days before the
expiration of the then-current initial or successive term of the Employment
Period, the references to the then-current initial or successive term of the
Employment Period in the first two sentences of this Section 12(e)(I) shall be
read as referring also to the next-succeeding successive term of the Employment
Period following such termination.
(ii) Subsequent to a Change in Control, if (A)
the Employment Period is terminated by the Company other than pursuant to
Section 12(a), 12(b) or 12(c), or (B) there shall have occurred material
reduction in Executive's compensation or employment-related benefits, a change
in Executive's compensation or employment-related benefits, a change in
Executive's status as Chief Executive Officer of the Company, working conditions
or management responsibilities or a material change in the business objectives
or investment policies of the Company, and Executive voluntarily elects to
immediately terminate the Employment Period by giving notice of termination
within sixty (60) days after any such occurrence, or the last in a series of
such occurrences, then in either such case Executive shall be entitled to
receive, in lieu of the Base Salary, bonuses and other payments and benefits
under this Agreement, and subject to the provisions of subparagraph (y) below, a
lump-sum payment in cash equal to one hundred fifty percent (150%) of
Executive's "base period income" as determined under subparagraph (x) below.
Such amount shall be paid to Executive within fifteen (15) days after the date
of termination of the Employment Period, and all options under Section 6 shall
be immediately exercisable as of such termination.
(iii) Executive's "base period income" shall be
the Base Salary paid, bonuses paid or payable and any other compensation paid to
him with respect to the last full fiscal year preceding the date of termination.
(iv) Any amounts payable to Executive upon or as
a result of a Change in Control that would be considered an "excess parachute
payment" under Internal Revenue Code ss.280G, and regulations thereunder, shall
be reduced to the extent necessary so that such amounts do not exceed two
hundred ninety-nine percent (299%) of Executive's "base amount" (as computed in
accordance with Internal Revenue Code provisions and regulations) for
determining whether Executive has received an "excess parachute payment."
13. Termination of Executive Services Agreement. Upon the
execution of this Agreement, Executive hereby waives all rights, if any, that he
may have had under that certain Executive Services Agreement, dated as of March
20, 1992 and effective as of April 7, 1992, between Huron Transportation Group,
Inc. and its shareholders or their assigns.
14. Non-Competition and Non-Solicitation.
(a) General. Executive acknowledges that he has performed
services or will perform services hereunder, and will acquire Information and
access to Materials, that will directly affect the businesses of the Consolidate
Group. Accordingly, the parties deem it necessary to provide protective
non-competition and non-solicitation provisions in this Agreement.
(b) Non-Compete and Non-Solicit. Executive agrees with
the Company that, during the term set forth in Section 14(c), without the prior
written consent of the Board:
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(i) Executive shall not, directly or indirectly,
perform any services or duties in any capacity, whether as a consultant,
independent contractor agent, director, officer, manager, supervisor or
employee, for any person or entity engaged in any business in the United States
that was engaged in by any member of the Consolidate Group at any time during
the Employment Period; provided, however, that, for purposes of this Section
14(b)(i), (A) in no event shall a purely passive personal or family investment
of less than five percent (5%) of the equity of any entity, without more, be
construed as the performance of duties or services for such entity; (B) a
business which is first engaged in by the Consolidated Group after the execution
of this Agreement shall be considered to be a business that was engaged in
during the Employment Period by the Consolidated Group only if and to the extent
that Executive agrees in writing at the time of the Consolidated Group's
commencement or acquisition of such business that it will be so considered; and
(C) after the termination of the Employment Period, Executive may become
involved with (x) a short-line freight railroad, if such railroad does not
operate track within fifty (50) miles of track operated by any member of the
Consolidated Group, and (y) a motor freight carrier business, if such business
does not have an office or terminal within two hundred (200) miles of any motor
freight carrier office or terminal operated by any member of the Consolidated
Group; and
(ii) Executive shall not employ or attempt to
employ or assist in employing, any employees of any member of the Consolidated
Group (whether or not such employment is full-time or part-time or pursuant to a
written contract), other than his personal secretary, for the purpose of having
such employee perform services for another person or entity within the United
States.
(c) Term. The covenants of Executive set forth in Section
14(b) shall apply at all times (i) during the Employment Period, including any
period for which Executive is receiving the Base Salary and benefits pending an
Arbitration Decision pursuant in Section 12(b), and (ii), in the event of
termination of the Employment Period pursuant to Section 12(a), 12(b) or 12(d),
or an election by Executive not to extend the Employment period pursuant to
Section 2, for a period to twelve (12) months after termination of the
Employment Period.
15. Injunctive Relief. The covenants of Executive set forth in
Sections 10 and 14 are separate and independent covenants, for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
hereby acknowledged by Executive, and which have been made by Executive to
induce the Company to enter into this Agreement. Each of the aforesaid covenants
may be availed of, or relied upon, by the Company in any court of competent
jurisdiction, and each shall form the basis of injunctive relief and damages,
including expenses of litigation (including, without limitation, reasonable
attorneys' fees upon trial and appeal), suffered by the Company arising out of
any breach of any of the aforesaid covenants by Executive. The covenants of
Executive set forth in Sections 10 and 14 are cumulative to each other and to
all other covenants of Executive in favor of the Company contained in this
Agreement. Should any covenant, term or condition in Section 10 or 14 become or
be declared invalid or unenforceable by a court of competent jurisdiction, then
the parties request that such court judicially modify such unenforceable
provision consistent with the intent of Section 10 and 14 so that it shall be
enforceable as modified.
16. Entire Agreement. This Agreement, the Stock Option Agreement
and the other documents, plans and instruments contemplated herein represent the
entire understanding and agreement between the parties with respect to the
subject matter hereof, and supersede all other negotiations, understandings and
representations, if any, made by and between such parties.
17. Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
the party as to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to this Agreement.
18. Assignments. Executive shall not assign his rights and/or
obligations hereunder. The Company may assign its rights and/or obligations
hereunder to any person or entity which purchases all or substantially all of
the assets of the Consolidated Group, subject to Executive's termination rights
under Section 12(e)(ii).
19. Binding Effect. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
8
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20. Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service or mailed (airmail if international) by registered
or certified mail (postage prepaid), return receipt requested, addressed to:
If to Executive: With a copy to:
Xxxx X. Xxxxxx Naason, Gildan, Xxxxxx, Xxxxxx & White, P.A.
0000 Xxxxx Xxxxx Xxxxx Xxxxxx National Bank Tower
Xxxx Xxxxx, Xxxxxxx 00000 0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Licoce, Esq.
And
000 Xxxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
If to the Company: With a copy to:
RailAmerica, Inc. Gunster, Yoakley, Xxxxxx-Xxxxx &
000 Xxxxxx Xxxx Xxxxxxx, P.A.
Suite 000 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000 000 Xxxxx Xxxxxxx Xxxxx
Attention: Chairman, Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Audit and Compensation Committee Attention: Xxxxxxx X. Xxxxxx, Esq.
Or to such other address as any party may designate by notice complying
with the terms of this Section. Each such notice shall be deemed delivered on
the date delivered if by personal delivery, or on the date upon which the return
receipt is signed or delivery is refused or the notice is designated by the
postal authorities as not deliverable, as the case may be, if mailed.
21. Waivers. The failure or delay of any party at any time to
require performance by the other party of any provision of this Agreement shall
not affect the right of such party to require performance of that provisions or
to exercise any right, power or remedy hereunder, and any waiver by any party of
any breach of any provision of this Agreement shall not be construed as a waiver
of any continuing or succeeding breach of such provision, a waiver of the
provision itself or a waiver of any right, power or remedy under this Agreement.
No notice to or demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or other
circumstances.
22. Jurisdiction and Venue. The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida, and
that, therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (a) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the courts of record of the State of Florida in Palm
Beach County or the court of the United States, Southern District of Florida;
(b) consents to the jurisdiction of each such court in any such suit, action or
proceeding; (c) waives any objection which it or he may have to the laying of
venue of any suit, action or proceeding in any of such courts; and (d) agrees
that service of any court papers may be effected on such party by mail, as
provided in this Agreement, or in such other manner as may be provided under
applicable laws or court rules in such courts.
23. Enforcement Costs. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection
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with any provisions of this Agreement, the ultimately successful or prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and other
expenses, even if not taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeals), incurred in that action,
arbitration or other proceeding, in addition to any other relief to which such
party may be entitled.
24. Remedies Cumulative. No remedy herein conferred upon any party
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity, whether by statute,
rule or otherwise. No single or partial exercise by any party of any right,
power or remedy hereunder shall preclude any other or further exercise thereof.
25. Governing Law. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of Delaware without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxxx RAILAMERICA, INC.
-------------------------
Xxxxxx X. Xxxxxxxx
Secretary
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxx, Chairman Audit and
Compensation Committee
/s/ Xxxx X. Xxxxxx
-----------------------------------------
/s/ Xxxx Xxxxxxx Xxxx X. Xxxxxx
-------------------------
Witness
/s/ Xxxxxxx Xxxxxx
-------------------------
Witness
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EXHIBIT A
RAILAMERICA, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), made as of the 11th day of
November, 1994, between RailAmerica, Inc., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxx (the "Optionee").
WHEREAS, the Company has retained the Optionee to render certain
services to the Consolidated Group pursuant to the terms of that certain
Executive Employment Agreement, dated as of March 1, 1994, between the Company
and. the Optionee (the "Employment Agreement"); and
WHEREAS, pursuant to the terms of the Employment Agreement, the Company
and the Optionee have provided for the grant to the Optionee of certain options
to purchase shares of the Common Stock, all as more particularly set forth
herein (the "Options");
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Options Subject to Employment Agreement. The Options are being
granted pursuant to the Employment Agreement, to which this Agreement is
attached as Exhibit A, and are subject to all of the terms and conditions of the
Employment Agreement. Capitalized terms used in this Agreement but not defined
herein are used as defined in the Employment Agreement, except that, for
purposes of this Agreement, Common Stock shall include such other securities,
cash or other property into which shares of Common Stock or such other
securities, cash or other property may be adjusted pursuant to the provisions of
Section 9.
2. Grant of Options conditions set forth in this Agreement, the
Company hereby grants to the Optionee Options to purchase three hundred fifty
thousand (350,000) shares of Common Stock. Subject to the provisions of Sections
9 and 10, of the total Options granted to the Optionee, Options to purchase
eighty-seven thousand five hundred (87,500) shares of Common Stock shall: be
immediately exercisable at an exercise price of $3.10 per share; Options to
purchase eighty-seven thousand five hundred (87,500) shares of Common Stock
shall became exercisable on March 1, 1995 at an exercise price of $3.40 per
share; Options to purchase eighty-seven thousand five hundred (87,500) shares of
Common Stock shall become exercisable on March 1, 1996 at an exercise price of
$3.75 per share; and the remaining Options to purchase eighty-seven thousand
five hundred (87,500) shares of Common Stock shall become exercisable on March
1, 1997 at exercise price of $4.15 per share. Subject to earlier termination as
provided in Sections 9 and 10, the term of each Option shall be the period
commencing on the date of this Agreement and ending on the tenth (10th)
anniversary of this Agreement; the Options shall be of no further force and
effect and shall not be exercisable to any extent after such term expires.
3. Grant as Non-Qualified Stock Options. The Options are not
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 198G. as amended. The Options are in addition to any other
options heretofore or hereafter granted to the Optionee by the Company.
4. Non-Transferability. Except as provided below, the Options
shall not be assignable or transferable by the Optionee other than by will or
the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee. Notwithstanding the foregoing, the
Options shall be assignable and transferable by the Optionee to family members,
and to partnerships, trusts and other entities for the exclusive benefit of
family members, for estate planning purposes if and to the extent such
assignments or transfers are then permitted by Securities and Exchange
Commission ("SEC") Rule l6b-3 and Form S-8.
5. Partial Exercise. Exercise of the Options may be made in
part at any time and from time to time within the limits set forth in Section 2
above, except that the Options may not be exercised for a fraction of a share.
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6. Registration of Option Exercise: Purchase for Investment, The
Company shall use its best efforts to file a registration statement on SEC Form
S-8 under the Securities Act of 1933, as amended (the "1933 Act"), relating to
the exercise of the Options and to keep such registration statement effective
and current at all times during which any of the Options is exercisable. If for
any reason the registration statement is not effective and current when the
Optionee elects to exercise any Options, the Optionee agrees (1) that his
purchase of shares of Common Stock upon such exercise will not be made with a
view toward their distribution, as defined in the 1933 Act; (ii) that such
shares of Common Stock may not be transferred or hypothecated unless, in the
opinion of counsel to the Company, such transfer or hypothecation would be in
compliance with the registration provisions of the 1933 Act and relevant state
securities laws, or pursuant to exemptions therefrom; and (iii) to sign a
certificate to such effect at the time of exercising the Options and that the
certificate for the shares so purchased may be inscribed with a legend to ensure
compliance with the 1933 Act and relevant state securities laws.
7. Method of Exercising Options. Subject to the terms and
conditions of this Agreement, the Options may be exercised by written notice to
the Company, at the principal executive office of the Company. Such notice shall
state the election to exercise the Options and the number of shares in respect
of which they are being exercised and shall be signed by the Optionee. Such
notice shall be accompanied by the payment of the full purchase price for such
shares, which shall be payable (i) in cash; (ii) by certified check or bank
cashier's check payable to the order of the Company in the amount of such
purchase price; (iii) by delivery to the Company of shares of Common Stock
having a fair market value (as defined in Section 9.B) equal to such purchase
price, provided that such shares have been owned by the Optionee for at least
six (6) months or such other period as the company may determine is necessary to
avoid adverse accounting treatment by the Company; (iv) in the event that the
exercise of the Options is covered by an effective registration statement, by
the delivery from a broker to the Company of an amount of loan proceeds
necessary to pay such purchase price, pursuant to the Optionee's instructions to
the broker to sell some or all of the shares of Common Stock to be issued upon
exercise of the Options and to repay the loan from the proceeds of the sale, to
deliver the remaining cash proceeds, less commissions, brokerage fees and
interest charges, to the Optionee and to deliver any remaining shares to the
Optionee; or (v) by any combination of the methods of payment described in (i)
through (iv) above. The Company shall deliver a certificate or certificates
representing the shares purchased as soon as practicable after the notice and
payment shall be received. The certificate or certificates for the shares
purchased shall, except as otherwise instructed in the case of an exercise
pursuant to (iv) above, all be registered in the name of the Optionee arid shall
be delivered to the Optionee. All shares purchased upon the exercise of Options
shall be fully paid and non-assessable. The Optionee shall not have the rights
of a stockholder with respect to the shares covered by the Options until the
date of issuance of a stock certificate to him for such shares. Except as
expressly provided in Section 9, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
8. No Obligation To Exercise Options. The grant and acceptance
of the Options imposes no obligation on the Optionee to exercise the Options.
9. Adjustments. Upon the occurrence of any of the following
events, the Optionee's rights with respect to unexercised Options shall be
adjusted as hereinafter provided:
A. Stock Dividends and Stock Splits. If the shares of
Common Stock shall be subdivided or combined into a greater or smaller
number of shares, or if the Company shall issue any shares of Common
Stock as a stock dividend on its outstanding Common Stock, the number
of shares of Common Stock deliverable upon the exercise of Options
shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share
to reflect such subdivision, combination or stock dividend.
B. Acquisition of the Company. If the Company is to be
consolidated with or acquired by another entity, in a merger, sale of
all or substantially all of the Company's assets or otherwise, in a
transaction in which the Company is not the surviving parent entity (an
"Acquisition"), the Board (or the board of directors of the entity
assuming the obligations of the Company hereunder (the "Successor
Board")) shall, with respect to outstanding Options, take one or more
of the following actions: (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for
the shares of Common stock then subject to such Options the
consideration payable with respect to the outstanding shares of Common
Stock in connection with the Acquisition; (ii) accelerate the date of
exercise
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of such Options or of any installment of such Options; (iii) upon
written notice to the Optionee, provide that all Options must be
exercised, the extent then exercisable, within a specified number of
days after the date of such notice, at the end of which period the
Options shall terminate; or (iv) terminate all Options in exchange for
a cash payment equal to the excess of the fair market value of the
shares subject to such Options (to the extent then exercisable) over
the exercise price thereof. For purposes of this Agreement, "fair
market value" shall be determined as of the last business day for which
the prices or quotes discussed in this sentence are available prior to
the date of determination and shall mean (a) the average (on that date)
of the high and low sales prices of the Common Stock on the principal
national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange, or
in the Nasdaq National Market, if the Common Stock is then quoted in
such market; or (b) the average of the high and low bid prices (on that
date) by an established quotation service (including for these purposes
the Nasdaq Small-Cap Market) for over-the-counter securities, if the
Common Stock is not traded or quoted on a national securities exchange
or in the Nasdaq National Market. However, if the Common Stock is not
publicly traded on the date of determination, "fair market value" shall
be deemed to be the fair value of the Common Stock as determined by the
Board (or the Successor Board) after taking into consideration all
factors which it deems appropriate, including, without limitation,
recent sale and bid prices of the Common Stock in private transactions
negotiated at arm's length.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than in a
transaction described in subparagraph A or B above) pursuant to which
securities of the Company or of another entity are issued with respect
to the outstanding shares of Common Stock, the Optionee upon exercising
the Options shall be entitled to receive for the purchase price paid
upon such exercise the securities that he would have received if he had
exercised the Options prior to such recapitalization or reorganization.
D. Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Options shall
terminate immediately prior to the consummation of such proposed
action, or at such other time and subject to such other conditions as
shall be determined by the Board.
E. Issuance of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or exercise price of shares subject to the Options.
F. Fractional Shares. No fractional shares shall be
issued upon exercise of the Options, and the Optionee shall receive
from the Company cash in lieu of such fractional shares.
10. Termination or Acceleration of Options.
Subject to the last sentence of Section 2 and the provisions of
Section 9:
A. In the event that the Employment Period is terminated
pursuant to Section 12(a), 12(b) or 12(d) of the Employment Agreement,
the Options that have not become exercisable as of such termination
shall terminate, and the Optionee shall not have any right to exercise
any of such Options. In the event that the Employment Period is
terminated pursuant to Section 12(a) or (b) of the Employment
Agreement, the Options which have become exercisable as of such
termination shall immediately terminate at the time of such
termination, and there shall exist no further right to exercise any of
such Options. In the event that the Employment Period is terminated
pursuant to Section 12(d) of the Employment Agreement, or the
Employment Period terminates because it is not extended pursuant to a
notice given by the Optionee pursuant to Section 2 of the Employment
Agreement, the Options which have become exercisable as of such
termination shall be exercisable for a period of ninety (90) days after
such termination. Upon the expiration of such 90-day period, the
Options shall terminate, and there shall exist no further right to
exercise any of such Options.
B. In the event that the Employment Period is terminated
pursuant to Section 12(c) of the Employment Agreement, the Options that
have not become exercisable as of such termination shall
3
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terminate, and the Optionee shall not have any right to exercise any of
such Options. The Options which have become exercisable as of such
termination shall be exercisable for a period of one (1) year after
such termination. Upon the expiration of such one-year period, the
Options shall terminate, and there shall exist no further right to
exercise any of such Options.
C. In the event that the Employment Period is terminated
pursuant to Section 12(e) of the Employment Agreement, all Options
shall become immediately exercisable as of such termination and shall
be exercisable for the full 10-year term of the Options.
D. In the event that the Employment Period terminates
because it is not extended pursuant to a notice given by the Company
pursuant to Section 2 of the Employment Agreement, the Options shall be
exercisable for a period of one (1) year after such termination. Upon
the expiration of such one-year period, the Options shall terminate,
and there shall exist no further right to exercise any of such Options.
11. Entire Agreement. This Agreement and the Employment
Agreement represent the entire understanding and agreement between the parties
with respect to the subject: matter hereof, and supersede all other
negotiations, understandings and representations, if any, made by and between
such parties.
12. Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
the party as to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to this Agreement.
13. Assignments. Except as otherwise provided herein, no party
shall assign his or its rights and/or obligations hereunder without the prior
written consent of the other party to this Agreement.
14. Binding Effect. All of the terms and provisions of this
Agreement, whether so expressed or riot, shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns.
15. Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service or mailed (airmail if international) by registered
or certified mail (postage prepaid), return receipt requested, addressed to:
IF TO THE OPTIONEE: WITH COPY TO:
Xxxx X. Xxxxxx Xxxxx, Cildan, Xxxxxx,
3735 Devon Court South Gerson & White, P.A.
Xxxx Xxxxx, Xxxxxxx 00000 United National flank Tower
1645 Palm Beach Xxxxx Xxxxxxxxx Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000 Attention; Xxxxxxxx X. Xxxxx, Esq.
AND
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
IF TO THE COMPANY: WITH A COPY TO;
RailAmerica, Inc. Gunster, Yoakley, Xxxxxx-Xxxxx &
000 Xxxxxx Xxxx Xxxxxxx, P.A.
Xxxxx 0000 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000 000 Xxxxx Xxxxxxx Xxxxx
Attention: Chairman, Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Audit and Compensation Committee Attention: Xxxxxxx X. Xxxxxx, Esq.
4
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or to such other address as any party may designate by notice complying with the
terms of this Section. Each such notice shall be deemed delivered on the date
delivered if by personal delivery or on the date upon which the return receipt
is signed or delivery is refused or the notice is designated by the postal
authorities as not deliverable, as the case may be, if mailed.
16. Headings. The headings contained in this Agreement are for
convenience of reference only, and shall not limit or otherwise affect in any
way the meaning or interpretation of this Agreement.
17. Severability. If any part of this Agreement is contrary to,
prohibited by or deemed invalid under applicable law or regulation, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given full force and effect so far as possible.
18. Waivers. The failure or delay of any party at any time to
require performance by the other party of any provision of this Agreement shall
not affect the right of such party to require performance of that provision or
to exercise any right, power or remedy hereunder, and any waiver by any party of
any breach of any provision of this Agreement shall not be construed as a waiver
of any continuing or succeeding breach of such provision, a waiver of the
provision itself or a waiver of any right, power or remedy under this Agreement.
No notice to or demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or other
circumstances.
19. Jurisdiction, and Venue. The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida, and
that, therefore, without limiting the jurisdiction or venue of any other federal
or state courts, each of the parties irrevocably and unconditionally (i) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the courts of record of the State of Florida in Palm
Beach County or the court of the United States, Southern District of Florida;
(ii) consents to the jurisdiction of each such court in any suit, action or
proceeding; (iii) waives any objection which he or it may have to the laying of
venue of any such suit, action or proceeding in any of such courts; and (iv)
agrees that service of any court papers may be effected on such party by mail,
as provided in this Agreement, or in such other manner as may be provided, under
applicable laws or court rules in such courts.
20. Enforcement Costs. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the ultimately successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, costs and other
expenses, even if not taxable as court costs (including, without limitation, all
such Lees, costs and expenses incident to appeals), incurred in that action,
arbitration or other proceeding, in, addition to any other relief to which such
party may be entitled.
21. Remedies Cumulative. No remedy herein conferred upon any party
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or' hereafter existing at law or in equity, whether by statute
or otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
22. Governing Law. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of Delaware without regard to
principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxxx RAILAMERICA, INC.
----------------------------
Xxxxxx X. Xxxxxxxx
Secretary
/s/ Xxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxxx
---------------------------- -------------------------------------
Witness Xxxxxxx Xxxxxxxx, Chairman Audit and
Compensation Committee
/s/ Xxxxxxx Xxxxxx
----------------------------
Witness /s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
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FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT to that certain Executive Employment Agreement (the
"Agreement"), dated as of March 1, 1994, by and between RAILAMERICA, INC., a
Delaware corporation (the "Company"), and XXXX X. XXXXXX (the "Executive"), is
dated as of November 4, 1996.
WHEREAS, the parties hereto desire to amend the Agreement to add
provisions relating to a loan and an additional bonus; and
WHEREAS, the parties hereto desire that all of the other terms and
conditions of the Agreement remain the same.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Section 7 is hereby amended by deleting the current Section 7
in its entirety and substituting the following therefor:
"7 Other Bonus or Incentive Payments.
(a) Effective as of November 4, 1996, the Company sold Twenty
Thousand (20,000) shares of common stock of the Company to the
Executive in exchange for a Promissory Note in the principal
amount of Ninety-Five Thousand Dollars ($95,000) dated as of
the date hereof (the "Note"). On May 22, 1997 and May 22,
1998, the Company shall pay bonuses (the "Loan Bonuses") to
the Executive, if he is employed by the Company on that date,
equal to the amount payable by the Executive to the Company on
that date under the Note. In lieu of making actual payment of
these Loan Bonuses to the Executive, the Company may apply the
bonus amount, less any applicable withholding taxes, against
the amount due under the Note.
(b) In the event that the Executive's employment with the
Company terminates by reason of the Executive's death or
disability as described under Section 12(c) hereof, is
terminated by the Company without Cause under Section 12(e)
hereof, is terminated under Section 11 hereof after a Change
in Control for any reason other than by the Company for Cause
under Sections 12(a) or 12(b) hereof, or terminates upon the
expiration of the Employment Period if the Company has not
offered the Executive to extend the term of the Agreement on
substantially the same terms, then the Company shall pay to
the Executive, within 45 days of such termination, a bonus
(the "Final Loan Bonus") equal to the outstanding principal
and accrued interest on the Note. In lieu of making actual
payment of this Final Loan Bonus to the Executive, the Company
may apply the amount for the Final Loan Bonus, less any
applicable withholding taxes, to pay accrued interest and then
prepay outstanding principal, under the Note.
(c) Executive shall, at all times during the Employment
Period, be eligible to receive, in addition to the Base
Salary, bonuses and other benefits provided for hereunder,
additional bonuses, stock options or grants, stock
appreciation rights or other incentive payments to be
determined as to the amount and time of payment by the
Disinterested Members upon consideration of the performance of
the Consolidated Group and Executive's contribution to such
performance."
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2. Subsection 12(e)(ii) is hereby amended by deleting the current
subsection 12(e)(ii) in its entirety and substituting the following therefor:
"(ii) Subsequent to a Change in Control, if (A) the Employment
Period is terminated by the Company other than pursuant to
Section 12(a), 12(b) or 12(c), or (B) there shall have
occurred a material reduction in Executive's compensation or
employment-related benefits, a change in Executive's status as
Chief Executive Officer of the Company, working conditions or
management responsibilities or a material change in the
business objectives or investment policies of the Company, and
Executive voluntary elects to immediately terminate the
Employment Period by giving notice of termination within sixty
(60) days after any such occurrence, or the last in a series
of such occurrences, then in either such case Executive shall
be entitled to receive, in lieu of the Base Salary, bonuses
and other payments and benefits under this Agreement, and
subject to the provisions of subparagraph (y) below, a
lump-sum payment in cash equal to one hundred fifty percent
(150%) of Executive's "base period income" as determined under
subparagraph (x) below, plus the Final Loan Bonus under
Section 7(b). Such amount shall be paid to Executive within
fifteen (15) days after the date of termination of the
Employment Period, and all options under Section 6 shall be
immediately exercisable as of such termination."
3. This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be the same document.
4. Except as specifically amended hereby, all of the other terms
and conditions of the Agreement remain the same.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above set forth.
THE COMPANY:
RAILAMERICA, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Executive Vice President
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EXECUTIVE:
/s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
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