1
Exhibit 10.64
FIRST AMENDMENT
EMPLOYMENT AGREEMENT -
MICHAEL A. WOLF, PRESIDENT/CEO; OFFICER; DIRECTOR
FEBRUARY 9, 1998
WHEREAS, MotivePower Industries, Inc. (previously named MK Rail
Corporation), a Delaware Corporation (the "Corporation" or "Company"), and
Michael A. Wolf (the "President/CEO") have entered into an Employment Agreement
dated July 1, 1996 (the "Agreement"); and
WHEREAS, the Corporation and the President/CEO mutually desire to amend
the Agreement to modify the obligation of the Corporation in the event of a
Change of Control;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the parties hereby agree to
amend the Agreement in the following respects:
First: Clause 3.2 "Lump Sum Signing Bonus" is hereby deleted in
its entirety since the July 1, 1997 date has been
satisfied.
Second: Clause 3.4, paragraphs (a) and (b) are hereby partially
deleted and replaced with schedule incentive for
acceleration of stock options and lapsing of restrictions
providing certain defined EPS results are obtained. Such
grants shall be made under the Corporation's Stock
Incentive Plan, a copy of which has been provided to the
President/CEO.
Third: Clause 5.2, paragraphs (c) and (e) are hereby deleted in
their entirety and replaced with (c) will continue for a
period of two years substantially similar to that provided
during employment.
Fourth: Clause 5.3 (1) of the Agreement shall include "pooling" of
equities or any other action with the intent of merger.
Fifth: Clauses 5.3(3), 5.3(5), and 5.3(b)(3) are hereby deleted
as a result of the events having occurred in total and no
longer applies to the Agreement.
Sixth: Add Clause 5.3(c)(3) as follows:
The President/CEO may unilaterally terminate his
employment hereunder at any time within ninety (90)
days of a Change of Control by giving written notice
to the Corporation in which event he shall be
entitled, in lieu of
1
2
any further salary and bonus payments, to the following
amounts: (i) a lump sum payment equal to two times the sum
of (a) the President/CEO's annual base salary, at the rate
in effect immediately preceding his termination or
immediately preceding the Change in Control, whichever is
greater, and (b) the amount of the President/CEO's annual
bonus compensation inclusive of any and all discretionary
awards received either for the year prior to his
termination of employment or the year prior to the Change
of Control or the amount of the President/CEO's Max.
Target Bonus for such years, whichever of the four
possible amounts is greater and where or not compensated
in cash and/or stock awards.
Seventh: Add Clause 5.3(c)(4) as follows:
The restrictions on all shares of Restricted Stock
shall lapse immediately prior to a Change in Control
and all stock options for shares of the Corporation
and any SARS referred to in the Agreement shall vest
immediately prior to the Change in Control.
Eighth: Add Clause 5.3(c)(5) as follows:
Notwithstanding any other provision of this
Agreement, in the event that any payment or benefit
received or to be received by the President/CEO in
connection with Change of Control or the Termination
of his Employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or
agreement with the Corporation, any person whose
actions result in a Change of Control or any person
affiliated with the Corporation or the person.)(all
such payments and benefits being hereinafter
referred to as the "Total Payments") is subject (in
whole or in part) to the excise tax (the "Excise
Tax") imposed under Section 4999 of the I.R.S. Code
of 1986 as amended (the "Code") or any similar tax
imposed by any successor provisions of the income
tax laws, then the Corporation will reimburse the
President/CEO in an amount equal to the "Tax
Gross-up Amount" as defined below. The Tax Gross-up
amount is equal to the sum of the Excise Tax, any
other similar tax and the amount of any other
additional tax, including any additional Federal,
State or Local income tax arising as a result of any
payment in cash, cash equivalents or stock, which
sum may be due and payable by the President/CEO,
Spouse, Estate or withheld by the Corporation in
connection with the provisions set herein
(collectively the "Total Taxes") so that the
President/CEO, spouse or estate receives actual
payments or benefits after payment or withholding in
an amount no less than that which would have been
received if no obligation for Total Taxes had
arisen.
2
3
Ninth: Add Clause 5.3(c)(6) as follows:
If the President/CEO's employment is terminated by
the Corporation, or any successor thereto following
a Change of Control, then such termination will be
treated as if the President/CEO had otherwise
elected to terminate his employment and given notice
thereof to the Corporation pursuant to this
provision.
MotivePower Industries, Inc.
By: /s/ MOTIVEPOWER
---------------------------------
Date: 2/11/98
-------------------------------
Michael A. Wolf
By: /s/ Michael A. Wolf
---------------------------------
Date: 2/11/98
-------------------------------
3
4
FIRST AMENDMENT - SCHEDULE CLAUSE 3.4
EMPLOYMENT AGREEMENT - MICHAEL A. WOLF
(STOCK OPTIONS AND RESTRICTED STOCK EXERCISING)
PURPOSE: To have the Board of Directors recognize superior performance
since time of employment and to provide an added time-based
incentive to enhance and increase Company's earnings
performance over the next two years.
WHAT: The original 7/1/96 agreement envisioned a 5 year time frame to
maximize shareholder value supported by an approved BDP
(Business Development Plan) strategy. By accelerating by one
year the time of the awarded stock options' exercise dates for
240,000 common shares consisting of 120,000 July 1, 1999 and
120,000 July 1, 2000, and the 100,000 common stock restricted
as to their ability to be sold by providing for the
restrictions to lapse at the close of business on June 30, 1999
for 50,000 shares and June 30, 2000 or 50,000 shares
respectively.
MEASURE: The measurement will be in consideration of the actual earnings
per share achieved of $1.45/sh. Dec. 31, 1998 on the basic
common shares outstanding of 17,644,000 for 1998 and/or 1999
combined:
------------------------------------------
Years E.P.S. % Increase
-------------------------------------------------------------
Actual 1995 (2.34) N.M.
-------------------------------------------------------------
Actual 1996 $ .66 N.M.
-------------------------------------------------------------
Actual 1997 $1.16 77%
-------------------------------------------------------------
Original B.D.P. 1998 $1.25 15%
-------------------------------------------------------------
Base Incentive 1998 $1.45 25%
-------------------------------------------------------------
Base Incentive 1999 $1.95 35%
-------------------------------------------------------------
Combined Years 1998 & 1999 $3.40 30%
-------------------------------------------------------------
In the event that $1.45 is not attained in 1998 but the total
of 1998 and 1999 combined results does total $3.40 or greater,
then the acceleration will be effected accordingly for both the
remaining unexercisable stock options and the restricted stock
to July 1, 2000.