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EXHIBIT 10.2
MARK R. HOLDEN
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of
January
18, 2005 (the "Effective Date"), by and between American Commercial
Lines Inc.,
a Delaware corporation (the "COMPANY"), and Mark R. Holden (the
"EXECUTIVE").
WHEREAS, the Company wishes to offer employment to the
Executive,
and the Executive wishes to accept such offer, on the terms set
forth below.
WHEREAS, the Executive acknowledges and understands that, during
the
course of his employment by the Company, the Executive will become
familiar with
certain Confidential Information (as defined below) of the Company
and its
subsidiaries and affiliates which is exceptionally valuable to the
Company and
vital to the success of the Company's Business (as defined
below).
WHEREAS, the Company and Executive desire to protect such
Confidential Information from disclosure to third parties or use of
such
information to the detriment of the Company.
Accordingly, the parties hereto agree as follows:
1.
Term. The Company hereby employs the Executive, and the Executive
hereby
accepts such employment for an initial term commencing as of the
date hereof and
ending on the third anniversary of the Effective Date, unless
sooner terminated
in accordance with the provisions of Section 4 or Section 5 (the
period during
which the Executive is employed hereunder being hereinafter
referred to as the
"Term"). The Term shall be subject to one-year renewals at the
written election
of the Company. In the event that the Company elects to renew this
Agreement,
notice shall be provided to the Executive in accordance with
Section 8.4 hereof
at least ninety (90) days prior to the end of any such Term.
Notwithstanding the
employment of the Executive by the Company, the Company shall be
entitled to pay
the Executive from the payroll of any subsidiary of the
Company.
2.
Duties. During the Term the Executive shall serve as President and
Chief
Executive Officer of the Company and President and Chief Executive
Officer of
each of the operating companies that are subsidiaries or controlled
affiliates
of the Company. The Executive shall be nominated for election to
the Board of
Directors of the Company (the "Board") and shall be appointed as a
member of the
board of directors or managers of each of the operating companies
that are
subsidiaries or controlled affiliates of the Company. The Executive
shall not be
entitled to additional compensation for serving as an officer (or
similar
function) or a member of the Board or the board of directors or
managers of any
subsidiary or affiliate of the Company. The Executive shall
faithfully perform
for the Company the duties of said offices and shall perform such
other duties
of an executive, managerial or administrative nature consistent
with those of
the most senior executive officer as shall be specified and
designated from time
to time
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by the Board. The Executive agrees to devote his entire business
time, attention
and energies to the business and interests of the Company during
the Term of
this Agreement and any extension thereof. Executive shall not
engage in any
activities which will interfere with the performance of his duties
with the
Company or which knowingly present a conflict of interest. During
the
Executive's employment with the Company, Executive may serve on the
boards of
directors of up to three (3) other entities and may pursue passive
investments;
provided that such activities do not unreasonably interfere with
his duties and
responsibilities hereunder or create a conflict of interest with
the Company;
and further provided that, with respect to serving on the boards of
directors of
entities other than charitable organizations and not-for-profit
corporations,
the Executive shall obtain the prior written consent of the Board
or authorized
committee thereof. The Board may delegate its authority to take any
action under
this Agreement to the Compensation Committee of the Board (the
"Compensation
Committee").
3.
Compensation.
3.1 Salary. The Company shall pay to the Executive during the Term
a
base salary at no less than the rate of $450,000 per annum (the
"Base Salary"),
in accordance with the customary payroll practices of the Company
applicable to
senior executives generally. The Base Salary shall be reviewed
annually,
commencing with the first anniversary of the Effective Date, and
may be
increased (but not decreased) to such greater amount as may be
approved by the
Board (after consideration of the recommendation of the
Compensation Committee)
and, upon such increase, the increased amount shall thereafter be
deemed to be
the Base Salary for purposes of this Agreement.
3.2 Bonus. The Compensation Committee shall review Executive's
performance at least annually during each year of the Term and
cause the Company
to award Executive a cash bonus with a target of 75% of his Base
Salary which
the Compensation Committee shall reasonably determine as fairly
compensating and
rewarding Executive for services rendered to the Company and/or as
an incentive
for continued service to the Company. The amount of Executive's
cash bonus shall
be determined upon approval by the Board (after consideration of
the
recommendation of the Compensation Committee) and shall be
dependent upon, among
other things, the achievement of certain performance targets
mutually agreed by
the Executive and the Board (after consideration of the
recommendation of the
Compensation Committee).
3.3 Equity Awards.
(a) Restricted Stock. Pursuant to the American Commercial
Lines Inc. Equity Award Plan for Employees, Officers and Directors,
adopted by
the Board on January 10, 2005, the Company shall grant to the
Executive 56,076
shares of common stock (the "Restricted Stock"), representing one
per cent (1%)
of the issued and outstanding shares of common stock of the Company
("Common
Stock") as of the Effective Date. The Restricted Stock shall be
restricted and
non-transferable, as set forth in the Restricted Stock Award
Agreement, in the
form attached hereto as Exhibit A. Executive shall be entitled only
to such
rights with respect to the Restricted Stock, as are set forth in
the Restricted
Stock Award Agreement. The restrictions upon the Restricted Stock
shall lapse
and Executive shall acquire "ownership" of the Restricted Stock on
a pro rata
basis over a period of three (3) years from the
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date of grant. Any future awards of restricted stock, if any, shall
be subject
to performance-based vesting requirements.
(b) Stock Options. Pursuant to the American Commercial Lines
Inc. Equity Award Plan for Employees, Officers and Directors,
adopted by the
Board on January 10, 2005, the Company shall grant to the Executive
options to
purchase 56,076 shares of Common Stock (the "Options"),
representing one per
cent (1%) of the issued and outstanding shares of Common Stock as
of the
Effective Date with an exercise price per share equal to the fair
market value
of a share of Common Stock on the Effective Date. For purposes
hereof, as
determined by the bankruptcy court, upon emergence from Chapter 11
proceedings,
the "fair market value" of the Common Stock means $16.65 per share.
The Options
shall be restricted and non-transferable, as set forth in the Stock
Option
Agreement, in the forms attached hereto as Exhibits B-1 and B-2. To
the extent
permitted by applicable law, the Options shall be incentive stock
options in
each year and, with respect to any Options that are vested, shall
be exercisable
for the applicable periods set forth in the Stock Option Agreement.
The term of
the Options shall be for a period of ten (10) years following the
date of the
grant of the Options hereunder, shall vest on a pro rata basis over
a period of
three (3) years following the date of grant, shall be exercisable,
to the extent
vested, for a period of twelve (12) months following termination,
and shall be
subject to such other terms and conditions not inconsistent with
the terms of
this Agreement as are set forth in the Stock Option Agreement to be
executed by
the Company and Executive and as determined by the Compensation
Committee.
Executive shall not be entitled to any rights with respect to the
Common Stock
underlying the Options, including the right to vote or receive
dividends or
distributions with respect to any of the Common Stock underlying
the Options,
until such Options (or any portion thereof) have been exercised.
Any future
awards of options, if any, shall be subject to performance-based
vesting
requirements.
3.4 Return and/or Forfeiture of Performance-Based Payments or
Awards. Notwithstanding any other provision in this Agreement or in
the Stock
Option Agreement or Restricted Stock Award Agreement, to the extent
applicable
and in the event that pursuant to the terms or requirements of
the
Sarbanes-Oxley Act of 2002 or of any applicable laws, rules or
regulations
promulgated by the Securities and Exchange Commission or any
listing
requirements of any stock exchange or stock market on which any
securities of
the Company trade, from time to time, and in the event any bonus
payment, stock
award or other payment is based upon the satisfaction of financial
performance
metrics which are subsequently reversed due to a restatement or
reclassification
of financial results of the Company or any subsidiary or affiliate,
then any
payments made or awards granted shall be returned and forfeited to
the extent
required and as provided by applicable laws, rules, regulations or
listing
requirements. The awards made as of the date of this Agreement
pursuant to
Section 3.3 of this Agreement are not subject to this Section 3.4.
This Section
3.4 shall survive any expiration or termination of this Agreement
for any
reason.
3.5 Benefits - In General. The Executive shall be permitted
during
the Term to participate in any group life, hospitalization or
disability
insurance plans, health programs, pension and profit sharing plans
and similar
benefits that may be available to other senior executives of the
Company
generally, on the same terms as may be applicable to such other
executives.
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3.6 Vacation. During the Term, the Executive shall be entitled
to
vacation of not less than four (4) weeks per year.
3.7 Disability and Life Insurance Benefits. During the Term,
the
Executive shall be entitled to long-term disability coverage
providing benefits
(to continue for such period as is provided in the applicable
disability plan or
program, as amended from time to time) equal to 60% of Base Salary
up to a
maximum of $20,000 per month in the case of a covered disability
(with up to
$15,000 per month payable under the applicable disability plan or
program and up
to $5,000 per month payable by the Company), and term life
insurance policy with
a face amount equal to $5 million, of which one-half will be
payable to the
Company and one-half payable to the Executive. The Company shall
use
commercially reasonable efforts to obtain such policies as soon as
is reasonably
practicable following execution of this Agreement.
3.8 Expenses. The Company shall pay or reimburse the Executive
for
all travel, lodging, meals, entertainment or any other similar
expenses incurred
by Executive in connection with the performance of Executive's
duties hereunder
upon receipt of documentation therefor in accordance with the
Company's regular
reimbursement procedures and practices in effect from time to
time.
3.9 Relocation Expenses. The Company shall reimburse the
Executive
for the customary and reasonable relocation expenses that he and
his family
incur in moving his residence to the Jeffersonville, Indiana area.
Without
limiting the generality of the foregoing, the Company agrees that
it will pay
the reasonable costs of relocating the Executive and his family
from his
existing residence in Lafayette, Indiana (the "Lafayette Home") to
the
Jeffersonville, Indiana area. Such costs shall include: (a) the
cost of having a
nationally-recognized moving company with an existing agreement
with the Company
move the household items and automobiles of the Executive and his
family, such
costs to be grossed up so that the Executive pays no federal or
state income
taxes for such move and storage; (b) the closing costs, including
real estate
commission, transfer taxes, title searches, survey costs, and
reasonable
attorneys' fees, incurred by the Executive in selling his Lafayette
Home; and
(c) the closing costs, including transfer taxes, title searches,
survey costs,
reasonable points (consistent with the marketplace and Company
policy) for a
mortgage, inspection fees, and reasonable attorneys' fees, incurred
by the
Executive in purchasing a residence in the Jeffersonville, Indiana
area. Until
the sale of the Lafayette Home is consummated, but not later than
December 31,
2005, the Company shall provide the Executive, at the Company's
expense
(including utilities), with lodging at a hotel, apartment,
townhouse, or house
mutually agreeable to the Executive and the Company, within
reasonable commuting
distance of the Jeffersonville, Indiana area. Until the sale of the
Lafayette
Home is consummated, the Company shall also reimburse the
Executive, in
accordance with the Company's travel reimbursement policy, for the
reasonable
travel expenses he incurs in commuting on weekends between the
Jeffersonville,
Indiana area and his Lafayette Home so that the Executive may make
periodic
visits to his wife and family and assist in the sale of the
Lafayette Home. The
Company shall also reimburse the Executive's wife for the travel
expenses she
incurs for up to two "house hunting" and relocation trips from the
Lafayette
Home to the Jeffersonville, Indiana area. Prior to the date hereof,
the
Executive shall cause an appraisal of the fair market value ("Fair
Market
Value") of the Lafayette Home, reasonably acceptable to the
Company, to be
conducted. In the event that the Executive sells the Lafayette Home
at any time
prior to December 31, 2005, then if the sale price of the Lafayette
Home is (i)
less than the Fair
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Market Value, the Company shall pay to the Executive an amount
equal to the
difference between the Fair Market Value and the sale price (the
"Sale
Protection Payment"); provided, however, that in no event shall the
Sale
Protection Payment be greater than 10% of the Fair Market Value
(the "Sale
Protection Maximum Payment"); or (ii) greater than or equal to the
Fair Market
Value, then the Company shall pay to the Executive an amount equal
to 50% of the
Sale Protection Maximum Payment.
4. Termination upon Death or Disability. If the Executive dies
during the Term, the obligations of the Company to or with respect
to the
Executive shall terminate in their entirety except as otherwise
provided under
this Section 4. If the Executive becomes eligible for disability
benefits under
the Company's long-term disability plans and arrangements (or, if
none apply,
would have been so eligible under the most recent plan or
arrangement), the
Company shall have the right, to the extent permitted by law, to
terminate the
employment of the Executive upon notice in writing to the Executive
and such
termination in and of itself shall not be, nor shall it be deemed
to be, a
breach of this Agreement; provided, that, the Company will have no
right to
terminate the Executive's employment if, in the opinion of a
qualified physician
reasonably acceptable to the Company, it is reasonably certain that
the
Executive will be able to resume the Executive's duties on a
regular full-time
basis within 90 days of the date the Executive receives notice of
such
termination.
Upon death or other termination of employment by virtue of
disability, (i) the Executive (or the Executive's estate or
beneficiaries in the
case of the death of the Executive) shall have no right to receive
any
compensation or benefit hereunder on and after the Effective Date
of the
termination of employment other than Base Salary and other
benefits, including
payment for accrued but unused vacation (but excluding any bonuses
except as
provided in the bonus plan or in clause (ii) below) earned and
accrued under
this Agreement prior to the date of termination (and reimbursement
under this
Agreement for expenses incurred but not paid prior to the date of
termination);
(ii) all equity awards held by the Executive shall become fully
vested and
exercisable; and (iii) this Agreement shall otherwise terminate
upon such death
or other termination of employment and there shall be no further
rights with
respect to the Executive hereunder (except as provided in Section
7.8). For the
avoidance of doubt, the Executive acknowledges and agrees that the
payments set
forth in this Section 4 constitute liquidated damages for
termination of his
employment during the Term upon death.
5.
Other
Terminations of Employment.
5.1 Termination for Cause; Termination of Employment by the
Executive Without Good Reason.
(a) For purposes of this Agreement, "Cause" shall mean that
the Executive has:
(i) been convicted of, or plead nolo contendere
to, a felony or crime involving moral turpitude or an
indictment for any felony or misdemeanor involving moral
turpitude, if such indictment is not discharged or otherwise
resolved within 18 months; or
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(ii) committed an act of personal dishonesty or
fraud involving personal profit in connection with the
Executive's employment by the Company; or
(iii) committed a material breach of any material
covenant, provision, term, condition, understanding or
undertaking set forth in this Agreement, including, without
limitation, the provisions contained in Sections 7.1, 7.2, 7.3
or 7.4 hereof; or
(iv) committed an act which the Board has found to
have involved willful misconduct or gross negligence on the
part of the Executive; or
(v) failed or refused to substantially perform the
lawful duties of his employment in any material respect; or
(vi) failed to comply with the lawful material
written rules and material policies of the Company in any
material respect, as determined by the Board of Directors;
provided, however, that no termination under clause (iii), (iv),
(v) or
(vi)
above shall be effective unless Executive shall have first
received
written notice describing in reasonable detail the basis for
the
termination and within fifteen (15) days following delivery of such
notice
Executive shall have failed to cure such alleged behavior
constituting
"cause"; provided, further, that this notice requirement prior
to
termination shall be applicable only if such behavior or breach is
capable
of
being cured.
(b) "Good Reason" shall mean the resignation of the Executive
from employment with the Company following the occurrence of one or
more of the
events set forth in clauses (i) through (iv) below without the
prior written
consent of the Executive, provided that, in connection with any
event or events
specified in clauses (i) through (v) below, (1) Executive delivers
written
notice to the Company of his intention to resign from employment
due to one or
more of such events, which notice specifies in reasonable detail
the
circumstances claimed to provide the basis for such resignation,
and (2) such
event or events are not cured by the Company within fifteen (15)
days following
delivery of such written notice:
(i) any reduction in Executive's annual rate of
Base Salary;
(ii) any removal by the Company of Executive from
his position indicated in Section 2 or the assignment to
Executive of duties and responsibilities materially
inconsistent and adverse with the duties indicated in Section
2, except in connection with termination of Executive's
employment
