EXHIBIT 10.38
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of March 4th, 2002, by
and between Genesee & Wyoming Inc. (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Executive").
The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment, and Executive desires to accept such
employment with the Company and enter into such an agreement (the "Agreement").
In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:
1. Effectiveness: Term of Employment.
a. Effectiveness. This Agreement shall constitute a binding
agreement between the parties as of the date hereof (the "Effective Date").
b. Term of Employment. Subject to the provisions of Section 7
of this Agreement, Executive shall be employed by the Company for a period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement.
2. Position.
a. During the Employment Term, Executive shall serve as an
Executive Vice President, Government and Industry Affairs of the Company. In
such position, Executive shall have responsibilities related to federal, state
and local government affairs, securing state and federal funding; maximizing
synergies and facilitating integration of Emons into GWI, but shall not
responsible for managing Emons Transportation Group; overseeing development of
Emons' intermodal terminal in Maine; representing the Company at its industry
association, the ASLRRA; special project assignments, which might include by way
of example, responsibility for the start-up of rail-related businesses and
acquisition work including recommendations, due diligence and integration; and
such additional duties and authority as shall be determined from time to time by
the Board of Directors of the Company (the "Board") and the Chief Executive
Officer of the Company.
b. During the Employment Term, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict or
interfere with the rendition of such services either directly or indirectly,
without the prior written consent of the Board; provided, however, that nothing
herein shall preclude Executive, subject to the prior approval of the Board,
from accepting appointment to or continuing to serve on any board of directors
or trustees of any business corporation or any charitable organization;
provided, however, that in each case, and in the aggregate, such activities do
not conflict or interfere with the performance of Executive's duties hereunder
or conflict with Section 8 or 9 of this Agreement.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $250,000, payable in regular
installments in accordance with the Company's usual payment practices. In
conjunction with an annual performance review process, Executive shall be
entitled to such increases in Executive's base salary, if any, as may be
determined from time to time in the sole discretion of the Board. Executive's
annual base salary, as in effect from time to time, is hereinafter referred to
as the "Base Salary."
4. Annual Bonus. With respect to each full fiscal year during the
Employment Term, Executive shall be eligible to earn an annual bonus award (an
"Annual Bonus") of up to 50% of Executive's Base Salary (the "Target") based
upon the achievement of performance goals established under the Genesee Value
Added bonus plan consistent with the terms of the plan.
5. Employee Benefits. During the Employment Term, Executive shall be
entitled to participate in the Company's health, dental and other employee
benefit plans (other than severance pay plans) as in effect from time to time in
accordance with existing Company policy (collectively "Employee Benefits"), on
the same basis as those benefits are generally made available to other senior
executives of the Company. By way of clarification, under the plans as currently
constituted, the Company will pay for group term life insurance coverage of the
Executive in the amount of $165,000, and Executive will be eligible to
participate in the Company's 401(k) Plan as of the first quarter occurring after
the Effective Date, in accordance with the terms of such plan. Executive shall
be entitled to five weeks (25 days) of paid vacation time and 9 paid holidays
annually.
6. Business Expenses and Perquisites.
a. Expenses. During the Employment Term, reasonable business
expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.
b. Perquisites. The Company shall pay Executive an automobile
allowance of $10,000 annually, to be paid in monthly installments on the first
day of each month, for the purpose of enabling Executive to obtain the use of an
automobile for the performance of Executive's duties hereunder. In addition,
reasonable operating expenses of such vehicle will be reimbursed to Executive in
accordance with Company practice.
7. Termination. The Employment Term and Executive's employment
hereunder may be terminated by the Company at any time and for any reason or by
Executive for Good Reason; provided, however, that Executive will be required to
give the Company at least sixty (60) days advance written notice of any
resignation of Executive's employment. Notwithstanding any other provision of
this Agreement, the provisions of this Section 7 shall exclusively govern
Executive's rights upon termination of employment with the Company and its
affiliates.
a. By the Company For Cause or By Executive Resignation
Without Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company for Cause
(as defined below) and shall
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terminate automatically upon Executive's resignation
without Good Reason (as defined in Section 7(c)).
(ii) For purposes of this Agreement, "Cause" shall mean
(A) Executive's continued failure substantially to
perform Executive's duties hereunder (other than as a
result of total or partial incapacity due to physical
or mental illness) for a period of 10 days following
written notice by the Company to Executive of such
failure, (B) an act or acts on Executive's part
constituting (x) a felony under the laws of the
United States or any state thereof excluding traffic
or vehicular violations or (y) a misdemeanor
involving moral turpitude, (C) Executive's willful
malfeasance or willful misconduct in connection with
Executive's duties hereunder or any act or omission
which is injurious to the financial condition or
business reputation of the Company or any of its
subsidiaries or affiliates or (D) Executive's breach
of the provisions of Sections 8 or 9 of this
Agreement.
(iii) If Executive's employment is terminated by the
Company for Cause, or if Executive resigns without
Good Reason, Executive shall be entitled to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed fiscal year;
(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy prior
to the date of Executive's termination; and
(D) such Employee Benefits, if any, as to which Executive may
be entitled under the employee benefit plans of the Company (the
amounts described in clauses (A) through (D) hereof being referred to
as the "Accrued Rights").
Following such termination of Executive's employment by the Company for
Cause or resignation by Executive without Good Reason, except as set forth in
this Section 7(a)(iii), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
(iv) Upon notice from the Company to Executive that it is
terminating Executive's employment pursuant to a
termination for Cause, the Termination Date shall be
the date on which such notice is mailed or
hand-delivered to Executive, or such other date as
specified to Executive in the Notice of Termination
as described in Section 7(e) herein.
b. Disability or Death.
(i) The Employment Term and Executive's employment
hereunder shall terminate upon Executive's death and
may be terminated by the Company
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if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of
six (6) consecutive months or for an aggregate of
nine (9) months in any twenty-four (24) consecutive
month period to perform Executive's duties (such
incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and
the Company cannot agree shall be determined in
writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive
and the Company cannot agree as to a qualified
independent physician, each shall appoint such a
physician and those two physicians shall select a
third who shall make such determination in writing.
The determination of Disability made in writing
to the Company and Executive shall be final and
conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive's employment hereunder
for either Disability or death, Executive or
Executive's estate (as the case may be) shall be
entitled to receive:
(A) the Accrued Rights; and
(B) a pro rata portion of any Annual Bonus, if any, that
Executive would have been entitled to receive pursuant to Section 3
hereof in such year based upon the Target and the percentage of the
fiscal year that shall have elapsed through the date of Executive's
termination of employment, payable when such Annual Bonus would have
otherwise been payable had Executive's employment not terminated.
Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 7(b)(ii), Executive shall have
no further rights to any compensation or any other benefits under this
Agreement, except for payments under any disability insurance policy maintained
by the Company.
c. By the Company Without Cause or Resignation by Executive
for Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company without
Cause or by Executive's resignation for Good Reason.
(ii) For purposes of this Agreement, "Good Reason" shall
mean (A) the failure of the Company to pay or cause
to be paid Executive's Base Salary or Annual Bonus,
when due hereunder, or (B) any substantial and
sustained diminution in Executive's duties or
responsibilities from those described in Section 2
hereof; provided, however, that either of the events
described in clauses (A) and (B) of this Section
7(c)(ii) shall constitute Good Reason only if the
Company fails to cure such event within 30 days after
receipt from Executive of written notice of the event
which constitutes Good Reason; provided, further,
that "Good Reason" shall cease to exist for an
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event on the 50th day following the later of its
occurrence or Executive's knowledge thereof, unless
Executive has given the Company written notice
thereof prior to such date.
(iii) If Executive's employment is terminated by the
Company without Cause (other than by reason of death
or Disability) or if Executive resigns for Good
Reason during the Employment Term, Executive shall be
entitled to receive:
(A) the Accrued Rights; and
(B) Subject to Executive's continued compliance with the
provisions of Sections 8 and 9, continued payment of the Base Salary
and Employee Benefits until the expiration of the Employment Term
determined as if such termination had not occurred; provided that the
aggregate amount described in this clause (B) shall be reduced by the
present value of any other cash severance or termination benefits
payable to Executive under any other plans, programs or arrangements of
the Company or its affiliates.
Following Executive's termination of employment by the Company without
Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this
Section7(c)(iii), Executive shall have no further rights to any compensation or
any other benefits under this Agreement.
d. Expiration of Employment Term. Unless the parties otherwise
agree in writing, continuation of Executive's employment with the Company beyond
the expiration of the Employment Term shall be deemed an employment at-will and
shall not be deemed to extend any of the provisions of this Agreement, and
Executive's employment may thereafter be terminated at will by either Executive
or the Company; provided, however, that the provisions of Sections 8, 9 and 10
of this Agreement shall survive any termination of this Agreement or Executive's
termination of employment hereunder.
e. Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 11(h) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.
f. Board/Committee Resignation. Upon termination of
Executive's employment for any reason, Executive agrees to resign, as of the
date of such termination and to the extent applicable, from the Board (and any
committees thereof) and the Board of Directors (and any committees thereof) of
any of the Company's affiliates.
8. Non-Competition
a. Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees as follows:
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(1) During the Employment Term and, for a period of one year following
the end of the Employment Term if the Executive ceases to be employed by the
Company (the "Restricted Period"), Executive will not, whether on Executive's
own behalf or on behalf of or in conjunction with any person, company, business
entity or other organization whatsoever, directly or indirectly solicit or
assist in soliciting in competition with the Company, the business of any
existing or prospective customer, supplier, licensee or other business relation
of the Company or any subsidiary or affiliate:
(i) with whom Executive had personal contact or dealings
on behalf of the Company during the one year period
preceding Executive's termination of employment;
(ii) with whom employees reporting to Executive have had
personal contact or dealings on behalf of the Company
during the one year immediately preceding the
Executive's termination of employment; or
(iii) for whom Executive had direct or indirect
responsibility during the one year immediately
preceding Executive's termination of employment.
(2) During the Restricted Period, Executive will not directly or
indirectly, without the prior written consent of the Company:
(i) engage in any business that competes with the
business of the Company or its subsidiaries or
affiliates (including, without limitation, businesses
which the Company or its affiliates have specific
plans to conduct in the future and as to which
Executive is aware of such planning) in any
geographical area that is within 100 miles of any
geographical area where the Company or its affiliates
manufactures, produces, sells, leases, rents,
licenses or otherwise provides its products or
services (a "Competitive Business");
(ii) enter the employ of, or render any services to, any
person or entity (or any division of any person or
entity) who or which engages in a Competitive
Business;
(iii) acquire a financial interest in, or otherwise become
actively involved with, any Competitive Business,
directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent,
trustee or consultant; or
(iv) interfere with, or attempt to interfere with,
business relationships (whether formed before, on or
after the date of this Agreement) between the Company
or any of its affiliates and customers, clients, or
suppliers of the Company or its affiliates.
(3) Notwithstanding anything to the contrary in this Agreement,
Executive may, directly or indirectly own, solely as an investment, securities
of any person or entity engaged in the business of the Company or its affiliates
which are publicly traded on a national or regional stock exchange or on the
over-the-counter market if Executive (i) is not a controlling person of, or a
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member of a group which controls, such person or entity and (ii) does not,
directly or indirectly, own 5% or more of any class of securities of such person
or entity.
(4) During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly:
(i) solicit or encourage any employee of the Company or
its affiliates to leave the employment of the Company
or its affiliates; or
(ii) hire any such employee who was employed by the
Company or its affiliates as of the date of
Executive's termination of employment with the
Company or who left the employment of the Company or
its affiliates coincident with, or within one year
prior to or after, the termination of Executive's
employment with the Company.
(5) During the Restricted Period, Executive will not, directly or
indirectly, solicit or encourage to cease to work with the Company or its
affiliates any consultant then under contract with the Company or its
affiliates.
b. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this Section 8
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
9. Confidentiality. Executive will not at any time (whether during or
after Executive's employment with the Company) disclose, retain, or use for
Executive's own benefit, purposes or account or the benefit, purposes or account
of any other person, firm, partnership, joint venture, association, corporation
or other business organization, entity or enterprise other than the Company and
any of its subsidiaries or affiliates, any trade secrets, know-how, software
developments, inventions, formulae, technology, designs and drawings, or any
Company property or confidential information relating to research, operations,
finances, current and proposed products and services, vendors, customers,
advertising, costs, marketing, trading, investment, sales activities, promotion,
manufacturing processes, or the business and affairs of the Company generally,
or of any subsidiary or affiliate of the Company ("Confidential Information")
without the written authorization of the Board; provided that the foregoing
shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of
Executive's breach of this covenant or the wrongful acts of others who were
under confidentiality obligations as to the item or items involved. Executive
agrees that upon termination of Executive's employment with the Company for any
reason, Executive will return to the Company immediately all memoranda, books,
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papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company, its affiliates
and subsidiaries, except that Executive may retain only those portions of
personal notes, notebooks and diaries that do not contain Confidential
Information of the type described in the preceding sentence. Executive further
agrees that Executive will not retain or use for Executive's own benefit,
purposes or account or the benefit, purposes or account of any other person,
firm, partnership, joint venture, association, corporation or other business
designation, entity or enterprise, other than the Company and any of its
subsidiaries or affiliates, at any time any trade names, trademark, service
▇▇▇▇, other proprietary business designation, patent, or other intellectual
property used or owned in connection with the business of the Company or its
affiliates.
10. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to cease making any payments or providing
any benefit otherwise required by this Agreement and obtain equitable relief in
the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
11. Miscellaneous
a. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of laws principles thereof.
b. Arbitration. Any controversy arising out of or relating to
this Agreement shall be settled by binding arbitration in Greenwich, Connecticut
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be held before a single experienced
employment law arbitrator licensed to practice law in Connecticut and selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association. The award rendered in any such proceeding shall be
final and binding, and judgment upon the award may be entered in any court
having jurisdiction thereof. The costs of any such arbitration proceedings shall
be borne equally by the Company and Executive. Neither party shall be entitled
to recover attorneys' fee or costs expended in the course of such arbitration or
enforcement of the award rendered thereunder.
c. Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of Executive
by the Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.
d. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive
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such party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement.
e. Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
f. Assignment. This Agreement shall not be assignable by
Executive. This Agreement may be assigned by the Company to a person or entity
which is an affiliate or a successor in interest to substantially all of the
business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity.
g. Successors; Binding Agreement. This Agreement shall inure
to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees.
h. Notice. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
If to the Company:
Genesee & Wyoming Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
i. Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.
j. Prior Agreements. This Agreement supersedes all prior
agreements and understandings (including verbal agreements) between Executive
and the Company or its
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affiliates regarding the terms and conditions of Executive's employment with the
Company or its affiliates (collectively, the "Prior Agreements") .
k. Set Off. The Company's obligation to pay Executive the
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its affiliates.
l. Cooperation. Executive shall provide Executive's reasonable
cooperation in connection with any action or proceeding (or any appeal from any
action or proceeding) which relates to events occurring during Executive's
employment hereunder. This provision shall survive any termination of this
Agreement.
m. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
n. Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GENESEE & WYOMING INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Chairman and CEO
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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