Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Railamerica, Inc. 85 425K
2: EX-2.2 Merger Agreement 45 247K
3: EX-2.3 Stock Purchase Agreement 43 230K
4: EX-2.4 Letter Agreement 5 25K
5: EX-4.11 Warrant to Purchase/Stonegate 9 39K
6: EX-4.12 Warrant to Purchase/Railamerica 8 39K
7: EX-4.13 First Supplemental Indenture Dated 2/13/02 8 24K
8: EX-4.14 Second Supplemental Indenture Dated 1/24/02 8 25K
9: EX-10.79 Waiver and Amendment No. 3 to Credit Agreement 87 127K
10: EX-10.80 Change in Control Service Agreement 15 70K
11: EX-10.81 Service Agreement Dated 4/4/01 8 27K
12: EX-10.82 Amend. & Restated Employment Agreement (Marino) 13 62K
13: EX-10.83 Amend. & Restated Employment Agreement (Redfearn) 12 53K
14: EX-10.84 Executive Employment Agreement (Gary Spiegel) 12 53K
15: EX-21.1 Subsidiaries of the Company 2 14K
16: EX-23.1 Consent of Pricewaterhousecoopers 1 9K
17: EX-23.2 Consent of Langton Clarke Limitada 1 9K
EXHIBIT 10.80
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") is made and
entered into as of the ___ day of _________, 200_ by and between RAILAMERICA,
INC., a Delaware corporation (the "Company"), and [name of officer] (the
"Officer").
RECITALS:
The Board of Directors of the Company (the "Board"), has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Officer, notwithstanding
the possibility, threat, or occurrence of a Change of Control (as defined below)
of the Company.
The Board believes it is imperative to diminish the inevitable distraction
of the Officer by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Officer's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Officer with
compensation arrangements upon a Change of Control which provide the Officer
with individual financial security and which are competitive with those of other
corporations and, in order to accomplish these objectives, the Board has caused
the Company to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions
(a) The "Effective Date" shall be the first date during the "Change of
Control Period" (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Officer's employment with the Company is terminated prior to the date on which a
Change of Control occurs, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control, or (ii) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination; provided that if the Officer's employment with the
Company is terminated within the six months immediately preceding the date on
which a Change in Control occurs, then the termination of employment shall be
presumed to have arisen in anticipation of a Change of Control unless shown to
the contrary by clear and convincing evidence.
(b) The "Change of Control Period" is the period commencing on the date
hereof and ending on the earlier to occur of (i) the third anniversary of such
date, and (ii) the first day of the month next following the Officer's normal
retirement date at age 65 ("Normal Retirement Date"); provided, however, that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate on the earlier of (x) three
years from such Renewal Date, or (y) the first day of the month coinciding with
or next following the Officer's Normal Retirement Date, unless at least sixty
(60) days prior to the Renewal Date the Company shall give written notice to the
Officer that the Change of Control Period shall not be so extended.
2. Change of Control
For the purpose of this Agreement, a "Change of Control" shall mean:
(i) The acquisition (other than from the Company), by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33 1/3%
or more of either the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereafter referred to as the
ownership of a "Controlling Interest"), excluding, for this purpose, any
acquisitions by (1) the Company or any of its subsidiaries, (2) any person,
entity or "group" that as of the date hereof owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a Controlling
Interest; or (3) any employee benefit plan of the Company or any of its
subsidiaries.
(ii) The nine (9) individuals who, as of the date hereof, constitute
the Board of Directors (as of the date hereof the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more than 66 2/3% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's (or entity's) then outstanding
voting securities in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, or
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consolidation, (2) a liquidation or dissolution of the Company, or (3) the sale
of all or substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
3. Employment Period
If and only in the event that the Officer is an officer, elected or
otherwise designated by the Board, of the Company or one of its subsidiaries as
of the Effective Date, the Company hereby agrees to continue the Officer in its
employ, and the Officer hereby agrees to remain in the employ of the Company,
for the period commencing on the Effective Date and ending on the earlier to
occur of (i) the third anniversary of such date, or (ii) the first day of the
month coinciding with or next following the Officer's Normal Retirement Date
(the "Employment Period"). In the event that the Officer is not an officer,
elected or otherwise designated by the Board, of the Company or one of its
subsidiaries as of the Effective Date, then this Agreement shall immediately
terminate and no longer have any force or effect. Notwithstanding anything to
the contrary herein, in the event that the Officer ceases to be an officer,
elected or otherwise designated by the Board, within the six (6) months
immediately preceding the Effective Date, then the Officer shall be deemed to be
an officer, elected or otherwise designated by the Board, of the Company or one
of its subsidiaries as of the Effective Date unless the Company demonstrates by
clear and convincing evidence that such cessation was not in connection with or
in anticipation of a Change in Control.
4. Terms of Employment
(a) Position and Duties.
(i) During the Employment Period, (1) the Officer's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 180-day period immediately preceding the Effective Date, and (2)
the Officer's services shall be performed at the location where the Officer was
employed immediately preceding the Effective Date or any office or location less
than 50 miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Officer is entitled, the Officer agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Officer hereunder, to use the Officer's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Officer to (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (3) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Officer's responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been
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conducted by the Officer prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Officer's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Officer shall
receive a base salary ("Base Salary") at a monthly rate at least equal to the
highest monthly base salary paid or payable to the Officer by the Company during
the twelve-month period immediately preceding the month in which the Effective
Date occurs. During the Employment Period, the Base Salary shall be reviewed at
least annually and shall be increased at any time and from time to time as shall
be substantially consistent with increases in base salary awarded in the
ordinary course of business to other key Officers of the Company and its
subsidiaries. Any increase in Base Salary shall not serve to limit or reduce any
other obligation to the Officer under this Agreement. Base Salary shall not be
reduced after any such increase.
(ii) Annual Bonus. In addition to Base Salary, the Officer shall be
awarded, for each fiscal year during the Employment Period, an annual bonus (an
"Annual Bonus") (either pursuant to any then-established incentive compensation
plan(s) of the Company or otherwise) in cash at least equal to the greater of
(x) the average of the bonuses payable to the Officer from the Company and its
subsidiaries in the three fiscal years inmiediately preceding the fiscal year in
which the Effective Date occurs, or (y) the bonus that would be payable for the
fiscal year if such bonus was determined based upon the same formula, terms, and
conditions as was used to determine the Officer's bonus for the fiscal year
immediately preceding the fiscal year in which the Effective Date occurs.
Nothing in this Agreement shall require the payment of an Annual Bonus prior to
the Effective Date.
(iii) Incentive, Savings and Retirement Plans. In addition to Base
Salary and Annual Bonus payable as hereinabove provided, the Officer shall be
entitled to participate during the Employment Period in all incentive, savings
and retirement plans, practices, policies and programs applicable to similar key
Officers of the Company (including its successors or assigns) and its
affiliates, in each case comparable to those in effect on the Effective Date or
as subsequently amended. Such plans, practices, policies and programs, in the
aggregate, shall provide the Officer with compensation, benefits and reward
opportunities at least as favorable as the most favorable of such compensation,
benefits and reward opportunities provided by the Company for the Officer under
such plans, practices, policies and programs as applicable to the Officer at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Officer, as provided at any time thereafter.
(iv) Welfare Benefit Plans. During the Employment Period, the
Officer and/or the Officer's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its subsidiaries
(including, without limitation, medical, prescription, dental,
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disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs), at least as favorable as the most
favorable benefits applicable to the Officer under such plans, practices,
policies and programs in effect at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Officer
and/or the Officer's family, as in effect at any time thereafter.
(v) Expenses. During the Employment Period, the Officer shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Officer in connection with the business of the Company in accordance with
the most favorable policies, practices and procedures of the Company and its
subsidiaries in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Officer, as in effect
at any time thereafter with respect to other key Officers.
(vi) Fringe Benefits. During the Employment Period, the Officer
shall be entitled to fringe benefits, in accordance with the benefits applicable
to the Officer under the most favorable plans, practices, programs and policies
of the Company and its subsidiaries in effect at any time during the 180-day
period immediately preceding the Effective Date or, if more favorable to the
Officer, as in effect at any time thereafter with respect to other key Officers.
(vii) Office and Support Staff. During the Employment Period, the
Officer shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Officer by the Company
and its subsidiaries at any time during the 180-day period immediately preceding
the Effective Date or, if more favorable to the Officer, as provided at any time
thereafter with respect to other key Officers of the Company and its
subsidiaries.
(viii) Vacation. During the Employment Period, the Officer shall be
entitled to paid vacation in accordance with the benefits applicable to the
Officer under the most favorable plans, policies, programs and practices of the
Company and its subsidiaries as in effect at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Officer,
as in effect at any time thereafter.
5. Termination
(a) Death or Disability. This Agreement shall terminate automatically upon
the Officer's death. If the Company determines in good faith that the Disability
of the Officer has occurred (pursuant to the definition of "Disability" set
forth below), it may give to the Officer written notice of its intention to
terminate the Officer's employment. In such event, the Officer's employment with
the Company shall terminate effective on the later of (i) the 30th day after
receipt of such notice by the Officer (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Officer shall not have
returned to full-time performance of the Officer's duties or (ii) the Officer is
eligible to receive disability benefits under the Company's long-term disability
plan (if any) then in effect, then the date on which the Officer begins
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receiving such disability benefits (the "Disability Effective Date"). For
purposes of this Agreement, "Disability" means a mental or physical incapacity,
illness or disability which renders the Officer unable to perform his duties and
responsibilities for the Company and which, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Officer or the Officer's legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) Cause. The Company may terminate the Officers employment for "Cause."
Any termination for Cause pursuant to this Section 5(b) shall be made in writing
to the Officer, which shall set forth in detail all acts or omissions upon which
the Company is relying for such termination (the "Notice"). For purposes of this
Agreement, "Cause" shall mean (i) an act or acts of personal dishonesty taken by
the Officer and intended to result in substantial personal enrichment of the
Officer at the expense of the Company, (ii) repeated violations by the Officer
of the Officer's obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Officer's part and which are
materially harmful to the Company and which are not remedied in a reasonable
period of time after receipt of written notice from the Company to the Officer,
or (iii) the conviction of the Officer of a felony crime. Nothing herein shall
limit the right of the Officer or his beneficiaries to contest the validity or
propriety of any such determination.
(c) Good Reason. The Officer's employment may be terminated by the Officer
for "Good Reason". For purposes of this Agreement, "Good Reason" means:
(i) the assignment to the Officer of any duties inconsistent in any
respect with the Officer's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Officer;
(ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Officer;
(iii) the Company's requiring the Officer to be based at any office
or location other than that described in Section 4(a)(i)(2) hereof, except for
travel reasonably required in the performance of the Officer's responsibilities
consistent with practices in effect prior to the Effective Date;
(iv) any purported termination by the Company of the Officer's
employment otherwise than as expressly permitted by this Agreement; or
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(v) any failure by the Company to comply with and satisfy Section
9(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, a termination
by the Officer for any reason during the 30-day period immediately following the
first anniversary of the Effective Date shall be deemed to be a termination for
Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause or by
the Officer for Good Reason shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 10(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Officer's employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen (15) days after the giving of such
notice). The failure by the Officer to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason shall not
waive any right of the Officer hereunder or preclude the Officer from asserting
such fact or circumstance in enforcing his rights hereunder.
(e) Date of Termination. "Date of Termination" means the date of receipt
of the Notice of Termination or any later date specified therein, as the case
may be; provided, however, that (i) if the Officer's employment is terminated by
the Company other than for Cause or Disability, the Date of Termination shall be
the date on which the Officer receives the Company's notice of such termination,
and (ii) if the Officer's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Officer or
the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination
(a) Death. If during the Employment Period the Officer's employment is
terminated by reason of the Officer's death, this Agreement shall terminate
without further obligation to the Officer's legal representatives under this
Agreement, other than those obligations accrued or eared and vested (if
applicable) by the Officer as of the Date of Termination, including, for this
purpose (i) the Officer's full Base Salary through the Date of Termination at
the rate in effect on the Date of Termination or, if higher, at the highest rate
in effect at any time from the 180-day period preceding the Effective Date
through the Date of Termination (the "Highest Base Salary"), (ii) the product of
the Annual Bonus paid to the Officer for the last full fiscal year and a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365, and
(iii) any compensation previously deferred by the Officer (together with any
accrued interest thereon) and not yet paid by the Company and any accrued
vacation pay not yet paid by the Company (such amounts specified in clauses (i),
(ii) and (iii) are
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hereinafter referred to as "Accrued Obligations"). All such Accrued Obligations
shall be paid to the Officer's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination. Anything in this
Agreement to the contrary notwithstanding, the Officer's family shall be
entitled to receive benefits at least equal to the most favorable benefits
provided by the Company and any of its subsidiaries to surviving families of
similar Officers of the Company and such subsidiaries under such plans,
programs, practices and policies relating to family death benefits, if any, in
accordance with the most favorable plans, programs, practices and policies of
the Company and its subsidiaries in effect at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Officer
and/or the Officer's family, as in effect on the date of the Officer's death
with respect to other similar key Officers of the Company and its subsidiaries
and their families.
(b) Disability. If during the Employment Period the Officer's employment
is terminated by reason of the Officer's Disability, this Agreement shall
terminate without further obligations to the Officer, other than those
obligations accrued or earned and vested (if applicable) by the Officer as of
the Date of Termination, including for this purpose, all Accrued Obligations.
All such Accrued Obligations shall be paid to the Officer in a lump sum in cash
within 30 days of the Date of Termination. Anything in this Agreement to the
contrary notwithstanding, the Officer shall be entitled after the Disability
Effective Date to receive disability and other benefits at least equal to the
most favorable of those provided by the Company and its subsidiaries to similar
disabled employees and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, in accordance
with the most favorable plans, programs, practices and policies of the Company
and its subsidiaries in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Officer and/or the
Officer's family, as in effect at any time thereafter with respect to other
similar key Officers and their families.
(c) Cause: Other than for Good Reason. If during the Employment Period,
the Officer terminates his employment other than for Good Reason, or the
Officer's employment is terminated by the Company for Cause, this Agreement
shall terminate without further obligation to the Officer, other than those
obligations accrued or earned and vested (if applicable) by the Officer through
the Date of Termination, including for this purpose, all Accrued Obligations.
All amounts required to be paid to the Officer pursuant to this Section 6(c)
shall be paid to the Officer in a lump sum in cash within 30 days of the Date of
Termination.
(d) Good Reason: Other Than for Cause or Disability. If, during the
Employment Period, the Company shall terminate the Officer's employment other
than for Cause, Disability or death, or if the Officer shall terminate his
employment for Good Reason, then:
(i) the Company shall pay to the Officer in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
1 to the extent not theretofore paid, the Officer's Highest
Base Salary through the Date of Termination; and
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2 the product of (x) the Annual Bonus paid to the Officer for
the last full fiscal year (if any) ending during the Employment Period or, if
higher, the Annual Bonus paid to the Officer for the last full fiscal year prior
to the Effective Date (as applicable, the "Recent Bonus") and (y) a fraction,
the numerator of which is the number of days in the current fiscal year through
the Date of Termination and the denominator of which is 365; and
3 the product of (x) _____ (_), and (y) the sum of (i) the
Highest Base Salary and (ii) the Recent Bonus; and
4 in the case of compensation previously deferred by the
Officer, all amounts previously deferred (together with any accrued interest
thereon) and not yet paid by the Company, and any accrued vacation pay not yet
paid by the Company; and
5 all other amounts accrued or earned by the Officer through
the Date of Termination and amounts otherwise owing under the then existing
plans and policies at the Company; and
(ii) for the remainder of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the Company shall
continue benefits to the Officer and/or the Officer's family at least equal to
those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 4(b)(iv) of this Agreement
if the Officer's employment had not been terminated, including health, dental,
disability insurance and life insurance, in accordance with the most favorable
plans, practices, programs or policies of the Company and its subsidiaries
during the 180-day period immediately preceding the Effective Date or, if more
favorable to the Officer, as in effect at any time thereafter with respect to
similar Officers and their families and, for purposes of eligibility for retiree
benefits pursuant to such plans, practices, programs and policies, the Officer
shall be considered to have remained employed until the end of the Employment
Period and to have retired on the last day of such period.
(e) Termination Before or After Employment Period. If the Officer's
employment with the Company terminates or is terminated either before or after
the Employment Period, then the provisions of paragraphs (a) through (d) of this
Agreement shall not apply, and the rights and obligations of the Officer and the
Company relating to such termination of employment shall be determined without
regard thereto.
(f) Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Officer's continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices provided by the
Company or any of its subsidiaries and for which the Officer may qualify, nor
shall anything herein limit or otherwise affect such rights as the Officer may
have under any stock option or other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Officer is
otherwise entitled to receive under any plan, policy, practice or program of the
Company or any of its subsidiaries at
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or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program.
(g) No Set-off or Mitigation; Payment of Legal Fees and Expenses. The
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Officer or others. In no event shall the
Officer be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Officer under any of the provisions of
this Agreement. The Company agrees to pay, to the full extent permitted by law,
all legal fees and expenses which the Officer may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company (including its
successors, assigns or affiliates) or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Officer about
the amount of any payment pursuant to Section 7 of this Agreement), plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2)
of the Code.
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment, distribution or other action by
the Company to or for the benefit of the Officer (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, (including any additional payments required under this Section 7) (a
"Payment") would be subject to an excise tax imposed by Section 4999 (or its
successor or other provision which imposes a similar excise tax) of the Internal
Revenue Code of 1986, as amended (the "Code"), any excise tax that may be
imposed by a state and/or local law, or any interest or penalties incurred by
the Officer with respect to any such excise taxes (such excise taxes, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), the Company shall make a payment to the Officer (a
"Gross-Up Payment") in an amount such that after payment by the Officer of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Officer
retains (or has had paid to the Internal Revenue Service on his behalf) an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed
upon the Payments and (y) the product of any deductions disallowed because of
the inclusion of the Gross-Up Payment in the Officer's adjusted gross income and
the highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, the Officer shall be deemed to (i) pay
federal income taxes at the highest marginal rates of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest marginal rate of taxation
for the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.
(b) Subject to the provisions of paragraph (c) of this Section 7, all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in
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arriving at such determination, shall be made by Price Waterhouse Coopers LLP
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Officer within 15 business days of the receipt of
notice from the Officer that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Officer shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 7, shall be paid by the Company to the
Officer within five days of the receipt of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable by the Officer,
it shall furnish the Officer with a written opinion that failure to report the
Excise Tax on the Officer's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Officer. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 7 and the Officer thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Officer.
(c) The Officer shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Officer is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. The Officer shall not
pay such claim prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Officer in writing prior to the expiration of such period
that it desires to contest such claim, the Officer shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
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(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Officer harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Officer to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Officer agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Officer to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Officer, on an interest-free basis, and shall indemnify and hold
the Officer harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Officer with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Officer shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Officer of an amount advanced by the
Company pursuant to Section 7(c), the Officer becomes entitled to receive any
refund with respect to such claim, the Officer shall (subject to the Company's
complying with the requirements of Section 7(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Officer of an amount
advanced by the Company pursuant to Section 7(e), a determination is made that
the Officer shall not be entitled to any refund with respect to such claim and
the Company does not notify the Officer in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
8. Confidential Information
The Officer shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its subsidiaries, and their respective businesses, which
shall have been obtained by the Officer
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during the Officer's employment by the Company or any of its subsidiaries and
which shall not be or become public knowledge (other than by acts by the Officer
or his representatives in violation of this Agreement). After termination of the
Officer's employment with the Company, the Officer shall not, without the prior
written consent of the Company, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this Section 8
constitute a basis for deferring or withholding any amounts otherwise payable to
the Officer under this Agreement.
9. Successors
(a) This Agreement is personal to the Officer and without the prior
written consent of the Company shall not be assignable by the Officer otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Officer's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and; agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
10. Miscellaneous
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Officer:
[name of officer]
RailAmerica, Inc.
5300 Broken Sound Boulevard, NW
2nd Floor
Boca Raton, Florida 33487
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If to the Company:
RailAmerica, Inc.
5300 Broken Sound Boulevard, NW
2nd Floor
Boca Raton, Florida 33487
Att: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(e) The Officer's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(f) This Agreement contains the entire understanding of the Company and
the Officer with respect to the subject matter hereof.
(g) The Officer and the Company acknowledge that, except as set forth in
any written employment agreement between the Officer and the Company and
effective from and after the date hereof, the employment of the Officer by the
Company is "at will," and, prior to the Effective Date, may be terminated by
either the Officer or the Company at any time. Upon a termination of the
Officer's employment prior to the Effective Date, there shall be no further
rights of the Officer under this Agreement.
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IN WITNESS WHEREOF, the Officer has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused this agreement
to be executed in its name on its behalf, all as of the day and year first above
written.
________________________________________
[name of officer]
RAILAMERICA, INC., a Delaware corporation,
By: ____________________________________
[Download Table]
Executive: Section 6(d)(i)(iii)
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Gary O. Marino three
Donald D. Redfearn three
Bennett Marks two
Gary M. Spiegel two
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