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EXECUTION COPY
Exhibit
10.1
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of
May 30, 2007, by and between GENESEE & WYOMING
INC. , a Delaware corporation, whose principal place of
business is 66 Field Point Road, Greenwich, CT 06830 (the “
Company ”), and MORTIMER B. FULLER III (the
“ Executive ”).
WHEREAS, the Executive is
currently the Chief Executive Officer of the Company, and will
remain in such position through May 30, 2007, after which he
shall cease to provide services to the Company in that
capacity;
WHEREAS, the Company has
determined to continue to employ the Executive, and the Executive
has agreed to be so employed by the Company, in accordance with the
terms and provisions set forth herein;
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1. Employment and
Duties .
(a) General . During
the Employment Period (as hereinafter defined), the Executive shall
serve as Executive Chairman of the Company, reporting exclusively
to the Board of Directors (the “ Board ”) of the
Company. None of the Company’s employees shall report to the
Executive, save his executive assistant, except as otherwise
determined by the Board from time to time. During the Employment
Period, the Executive shall have all of the duties and
responsibilities commensurate with the Executive’s position
as may be assigned to the Executive from time to time by the Board.
The Executive’s place of employment shall be the principal
offices of the Company in Greenwich, Connecticut, provided ,
however , that the Executive understands and agrees that he
may be required to travel from time to time for business reasons
consistent with past practice. The Company agrees to use its best
efforts to cause the Executive to be elected to the Board, subject
to nomination by the Board (in accordance with the recommendations
of the Governance Committee of the Board) and to re-election by the
shareholders of the Company.
(b) Exclusive Services
. For so long as the Executive is employed by the Company, the
Executive shall devote his full working time, which, with the
Board’s concurrence may be less than 40 hours per week but is
expected to be a substantial commitment and may be project based,
to his duties hereunder ( provided that if the
Executive’s employment is extended beyond the Initial
Employment Period (as hereinafter defined) the Company and the
Executive may agree to a lesser time commitment), shall diligently
and faithfully serve the Company, shall properly perform his duties
and exercise his powers, comply with the Company policies
applicable to him from time to time regarding business conduct,
conflicts of interest, confidentiality and otherwise, and shall use
his best efforts to promote and serve the interests of the Company.
Further, the Executive shall not, directly or indirectly, render
services for remuneration or otherwise to any other person or
organization or otherwise engage in activities that would interfere
with the faithful performance of his duties hereunder.
Notwithstanding the foregoing, the Executive may (i) serve on
civic or charitable boards or engage in civic and charitable
activities, (ii) serve on the boards of directors of any
company to the extent permitted
under guidelines developed by the
Governance Committee of the Board, (iii) have other business
interests ( provided such interests do not conflict in any
way with the interests of the Company) and (iv) manage
personal investments, in each case, as long as any such activity
singularly or together with any other activity does not interfere
with the Executive’s performance of his duties and the
meeting of his obligations hereunder.
2. Term of Employment
. The Executive’s employment with the Company pursuant to the
terms of this Agreement shall commence on June 1, 2007 (the
“ Effective Date ”), and shall continue until
December 31, 2009 (the “ Initial Employment
Period ”), unless renewed prior to such December 31
(or any subsequent December 31, as the case may be) by the
mutual agreement of the Executive and the Company for an additional
period of one calendar year (with each such additional period, a
“ Renewal Employment Period ”) or terminated
earlier than the scheduled end of the Initial Employment Period or
any Renewal Employment Period in accordance with Section 4 of
this Agreement. The period from the Effective Date until the
termination of the Executive’s employment hereunder in
accordance with the terms of this Agreement is hereinafter referred
to as the “ Employment Period .”
3. Compensation and Other
Benefits . Subject to the provisions of this Agreement, the
Company shall pay and provide the following compensation and other
benefits to the Executive during the Employment Period as
compensation for services rendered:
(a) Base Salary . The
Company shall pay to the Executive an annual salary (the “
Base Salary ”) at the rate of $665,000 for calendar
year 2007, which rate shall be retroactive to January 1, 2007,
and subject to appropriate adjustment in accordance with the
cost-of-living policies generally applicable to all employees of
the Company for calendar years 2008 and 2009, payable in
substantially equal installments in accordance with the ordinary
payroll practices of the Company as established from time to time.
In the event that the Executive’s employment hereunder should
continue after December 31, 2009, the Base Salary shall be
appropriately adjusted pursuant to negotiation to reflect the scope
of the Executive’s authority, duties and expected time
commitment with respect to periods of employment after calendar
year 2009.
(b) Annual Bonus . In
addition to the amounts to be paid to the Executive pursuant to
Sections 3(a) and (c), the Executive shall be eligible to earn an
annual cash bonus (the “ Annual Bonus ”) in
accordance with and the subject to the terms of the Genesee Value
Added methodology under the Omnibus Plan (as defined below) or such
successor incentive plan or program as may be in effect from time
to time and applicable to other senior executive officers of the
Company (the “ GVA Plan ”). Payment of the
Annual Bonus shall be based upon the successful achievement of one
or more annual performance objectives applicable to such senior
executive officers generally. The target amount of the Annual Bonus
for the Executive for calendar year 2007 shall be 60% of the Base
Salary in effect for such calendar year; for each calendar year
following 2007 during the Initial Employment Period the target
Annual Bonus shall be 50% of the amount of the Base Salary in
effect for each such calendar year. In the event that the
Executive’s employment hereunder should continue after
December 31, 2009, the target amount of the Annual Bonus shall
be appropriately adjusted pursuant to negotiation to reflect the
scope of the Executive’s authority, duties and expected time
commitment.
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(c) Equity Awards and
Stock Options . In addition to the amounts to be paid to the
Executive pursuant to Sections 3(a) and (b), the Executive shall
continue to be eligible to receive discretionary annual grants of
equity incentive awards on the same basis as such grants are made
to other senior executive officers of the Company (the “
Annual Equity Grants ”) in accordance with and subject
to the terms of the Company’s 2004 Omnibus Incentive Plan or
such successor incentive plan as may be in effect from time to time
and applicable to other senior executive officers (the “
Omnibus Plan ”) and the terms of any award agreement
issued thereunder; provided , however , for grants
made in respect of any Renewal Employment Period, such basis for
granting awards shall be subject to appropriate adjustment to
reflect any changes to the scope of the Executive’s
authority, duties and expected time commitment for such
periods.
(d) Pension Benefit
Plans . The Executive shall be eligible to participate in the
Company 401(k) plan and any other defined contribution or defined
benefit retirement plan, or any successor thereto, maintained or
contributed to by the Company, or any subsidiary thereof, and
providing pension benefits, including, without limitation, any such
plan established for the purpose of providing such benefits for
employees of the railroad industry, in accordance with and subject
to the terms of such plans, as they may be amended from time to
time.
(e) Welfare Benefit
Plans . The Executive and/or his eligible dependents shall be
eligible to participate in the Company’s welfare benefit
plans and programs generally applicable to other senior executive
officers of the Company, in accordance with and subject to the
terms of the plans, as they may be amended from time to
time.
(f) Deferred Compensation
Plan . During the Employment Period, the Executive shall be
eligible to continue to participate in the Company’s Deferred
Compensation Plan or any similar or successor deferred compensation
plan, program or arrangement, if any, maintained by the Company and
generally applicable to other senior executive officers of the
Company, in accordance with and subject to the terms of the plans,
as they may be amended from time to time.
(g) Life Insurance .
Unless the Executive dies, is disabled (as defined in
Section 4(d) hereof), is terminated for Cause or resigns
without Good Reason prior to the end of the period specified below,
the Company shall continue to pay the Executive an amount equal to
the sum of (i) the annual premium payable on the life
insurance policies currently maintained by the Company for the
Executive plus (ii) a tax gross-up payment in an amount
equal to any taxes that are due on account of such premium
payments, with the sum of such amounts to be payable each year, at
the same time such payments are made for any other senior
executives for whom such insurance is maintained by the Company.
Such payments shall continue to be made for the period beginning
with calendar year 2007 through and including the calendar year in
which the Executive attains age 70. The foregoing notwithstanding,
at Company’s option after consultation with the Executive,
the Company, in lieu of such program, may provide a program with
substantially the same economic benefits.
(h) Business and Travel
Expenses . The Company shall reimburse the Executive for
reasonable business travel expenses and other business-related
expenses properly incurred by the Executive in the fulfillment of
his duties hereunder upon presentation of written documentation
thereof, in accordance with and subject to the applicable expense
reimbursement
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policies and procedures of the Company
as in effect from time to time; provided , however ,
that such expenses reported in such written documentation shall be
reviewed by the Compensation Committee of the Board on a quarterly
basis, and shall be subject to the approval of such Compensation
Committee.
(i) Matching Program for
Charitable Gifts . The Executive shall be eligible to
participate in the Company’s program for matching charitable
contributions by employees. Subject to the limits under such
program, the Company will match all such charitable gifts by the
Executive for any calendar at a rate or amount no lower than the
rate or amount applicable to the chief executive officer of the
Company or to members of the Board for such year, whichever is
higher.
(j) Vacation . The
Executive shall be entitled to receive vacation and paid-off time
as may be available generally to other senior executive officers of
the Company, subject to the terms of any applicable plan or policy
and to proration in the event the Executive’s employment
terminates other than at calendar year end.
(k) Physical Exams for
Executives . The Executive will be eligible to participate in
the Company’s annual physical examination program for its
executive officers on the same basis as the other executive
officers. To the extent permitted under such plan, the Executive
shall be entitled to select the physician who will conduct the
examination.
(l) Office Support and
Staff . During the Employment Period, the Company shall provide
the Executive with an office, office furnishings and secretarial
and other administrative support in a manner commensurate with his
status. Such office and support shall be at the Company’s
principal offices and the assistant shall be assigned to Executive
on a dedicated basis, but the assistant may have other duties also.
Initially, such assistant shall be the Executive’s current
assistant; in the event of her departure, the Company shall assign
to the Executive another assistant subject to the Executive’s
consent, which shall not be unreasonably withheld or
delayed.
(m) Indemnification .
During the Employment Period the Company will not take any action
that would lessen Executive’s eligibility for indemnification
under applicable law, Company organizational documents, contracts,
and insurance, compared with the eligibility of other senior
executive officers in effect from time to time. The
Executive’s post-termination rights to indemnification also
shall be no less favorable than those applicable from time to time
to other former officers and directors of the Company.
(n) Perquisites .
During the Employment Period, the Executive shall be entitled to
perquisites and executive benefits consistent with those made
available to other senior executive officers of the Company from
time to time.
4. Termination of
Employment during the Employment Period .
(a) Termination of
Employment in General; Notice . Subject to the further
provisions of this Section 4, during the Initial Employment
Period or any subsequent Renewal Employment Period the Company may
terminate the Executive’s employment, and the Executive may
resign his employment with the Company, at any time for any reason
or for no stated
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reason. In no event shall the failure or
unwillingness of the Company to agree to a renewal of the
Executive’s employment pursuant to the terms of this
Agreement in accordance with the terms of Section 2 hereof
constitute a termination by the Company of the Executive’s
employment hereunder for purposes of this Section 4, and any
rights to any payments or benefits the Executive may have following
such expiration of the Initial Employment Period or any subsequent
Renewal Employment Period shall not arise under or be governed by
the terms of this Agreement. During the Employment Period, the
following amounts shall be paid or provided to the Executive (or in
the event of the Executive’s death, to his estate or
beneficiary) if his employment with Company ends for any reason
(collectively, the “ Accrued Amounts ”):
(i) payment of any unpaid Base Salary for the period of the
Employment Period through and including the applicable date of
termination or resignation; (ii) the amount of any Annual
Bonus accrued but unpaid with respect to any completed fiscal year
of the Company as of the date such termination or resignation
occurs; (iii) a cash payment for the amount of any earned but
unused vacation time in accordance with Company policies;
(iv) a cash payment for all properly incurred but unreimbursed
amounts for reasonable business travel and other business-related
expenses in accordance with the terms of Section 3(h) hereof;
and (v) any other amounts or benefits required to be paid or
provided by law or under the terms of any applicable pension,
welfare or equity compensation plan of the Company. The Accrued
Amounts shall be paid to the Executive at the applicable time or
times otherwise contemplated by Section 3 of this Agreement
or, if no time is contemplated by Section 3, within 30 days
following the date of such termination or resignation.
(b) Termination for Cause;
Resignation Without Good Reason . During the Initial Employment
Period or any subsequent Renewal Employment Period, the Company may
terminate the Executive’s employment immediately for Cause
(as hereinafter defined), and the Executive may resign his
employment with the Company without Good Reason (as hereinafter
defined), in either of which event the Executive shall be entitled
to the Accrued Amounts. The Executive shall have no further right
to receive any other compensation or benefits after such
termination or resignation of employment.
(c) Termination Without
Cause; Resignation for Good Reason . During the Initial
Employment Period or any subsequent Renewal Employment Period, the
Company shall give the Executive not less than 30 days prior
written notice of its intention to terminate his employment without
Cause, and the Executive shall give the Company not less than 30
days’ prior written notice of his intention to resign his
employment for Good Reason. If, during the Initial Employment
Period or any subsequent Renewal Employment Period, the
Executive’s employment is terminated by the Company without
Cause or if the Executive resigns from his employment for Good
Reason, in lieu of all other amounts that otherwise may be due to
the Executive in such events, the Company shall pay the Executive
the Accrued Amounts. In addition, subject to the Executive’s
execution and delivery of a general release of claims in the form
attached hereto as Exhibit A, the Executive shall be entitled to
(i) a cash lump sum payment in an amount equal to three
hundred percent (300%) of the Base Salary in effect on the
date of such termination or resignation; (ii) full vesting of
all stock options, restricted stock awards and other equity awards
outstanding as of the date of such termination or resignation to
the extent provided for under existing plans and award agreements,
provided , however , that any unvested restricted
stock awards granted on June 2, 2006 as bonuses to the
Executive in connection with the 2006 sale and disposition of the
operations and other assets of the Australian Railroad Group Pty.
Ltd. to Queensland Rail and Babcock & Brown Limited and
related transactions shall fully
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vest notwithstanding any contrary
provisions in the applicable plan or award agreement;
(iii) payment by the Company of all annual premiums (and
related tax gross-up payments) for the Executive’s life
insurance coverage (as described in Section 4(g)) due for the
period beginning with the year that includes the date of such
termination or resignation through and including the year in which
the Executive attains age 70; and (iv) payment by the Company
of all premiums payable with respect to the Medicare supplemental
insurance for the Executive and his dependents for the period
beginning on the date of such termination or resignation and ending
on the third anniversary thereof (all such payments and benefits
together, the “ Severance Obligations ”). The
Company shall pay the cash payment portion the Severance
Obligations to the Executive no later than 30 days following the
date of the Executive’s termination or resignation of
employment, and shall pay the insurance premium payment portion of
the Severance Obligations in accordance with the Company’s
ordinary practice with respect to such payments. The Executive
shall not be obligated to seek other employment or take any other
employment or take any other action by way of mitig
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