EXHIBIT 10.15
September 1, 1996
Ms. Pamela S. Petcash
221 N.E. 12th Avenue
Ft. Lauderdale, Florida 33301
RE: EMPLOYMENT AGREEMENT WITH FIRST AMERICAN
RAILWAYS, INC. (THE "COMPANY")
Dear Pamela:
This letter confirms that the Company agrees to employ you and you
agree to accept such employment, upon the terms and conditions set forth below
beginning September 1, 1996, and continuing for a period of three years.
During the period of your employment, you will serve as Vice President,
Customer Care and Entertainment of the Company. You agree that, during the
period of your employment under this Agreement, you will serve the Company
faithfully, diligently and to the best of your ability, under the direction and
supervision of the President of the Company, and you will devote your full time,
energy and skill to such employment. You further agree to perform, from time to
time, such services and to act in such capacities as the President of the
Company shall request without further compensation other than that for which
provision is made in this Agreement.
During the initial term of your employment, the Company shall pay you a
salary (in accordance with the Company's regular payroll practices) as follows:
1996:
(9/1/96-12/31/96) $33,333 base compensation (which represents
an annual rate of $100,000) along with a
target bonus of 25% of base compensation (pro-
rated) as determined by the President of the
Company consistent with your attainment of
pre-determined individual and corporate
objectives.
Ms. Pamela S. Petcash
September 1, 1996
Page 2
Calendar 1997: $100,000 per annum base compensation along
(1/1/97-12/31/97) with a target bonus of 25% of base compen-
sation as determined by the President of the
Company consistent with your attainment of
pre-determined individual and corporate
objectives. (If your employment is not
renewed as provided hereunder effective
September 1, 1997, you will only be entitled
to receive the prorated amount of your base
compensation for calendar year 1997 for the
period of your actual employment.)
Calendar 1998: Base compensation, bonus, and future stock
(1/1/98-12/31/98) options, all to be evaluated and determined by
the President.
The Company agrees to grant you on September 1, 1996 ten-year,
non-qualified stock options to purchase 10,000 shares of common stock (subject
to standard anti-dilution protections) at an exercise price which is equal to
the then current market price, with such 10,000-share option vesting in
one-third increments (so long as this Agreement has not otherwise been
terminated except as otherwise provided herein) with the initial vesting of
3,333 shares on the date of grant, the second 3,333-share increment vesting on
the first anniversary of the date of grant, and the remaining 3,334-share
increment vesting on the second anniversary of the date of grant; provided,
however, that any such options which remain to be vested hereunder shall be
immediately and fully vested upon your election to terminate this Agreement by
reason of a "change in control" of the Company as hereafter defined.
In the event that you are incapacitated by reason of mental or physical
disability during the period of your employment so that you are prevented from
performing your principal duties and services to the Company for a period of 120
consecutive days or for shorter periods aggregating 120 days during any 12-month
period, the Company shall have the right to terminate your employment by sending
or telecopying written notice of such termination to you or to your legal
representative, as the case may be. Upon such termination or in the event of
your death, the Company shall be relieved of any further obligations under this
Agreement with the exception of the obligation to pay to you or your estate, as
the case may be, any accrued and unpaid salary earned by you, and all granted
but unvested options shall become fully vested. Further, in the event of
termination pursuant to this paragraph, the Company will pay the health and life
insurance premiums in connection with
Ms. Pamela S. Petcash
September 1, 1996
Page 3
the coverage contemplated hereby for the six-month period following
such termination.
The Company shall have the right to terminate your employment for
"cause" at any time by reason of one or more of the following occurrences: (i)
your conviction, by a court of competent and final jurisdiction, of any crime
(but only in the event such crime involves the Company or directly relates to
your duties thereto) which constitutes a felony in such jurisdiction; or (ii)
your commission of a material act of malfeasance, fraud, dishonesty or breach of
trust against the Company; or (iii) your material violation of the terms of this
Agreement; or (iv) your failure to devote sufficient time, e.g., averaging 40
hours per week (taking into account vacation and holiday time) to the Company's
business. In the event the Company elects to terminate your employment for
"cause," the Company shall send or telecopy written notice to you informing you
of such election and setting forth the action or omission constituting the
reason for terminating your employment for "cause."
You shall be entitled to paid sick days and paid vacation days
commensurate with that due to an executive at your level of employment, with no
more than two weeks of which to be consecutive.
Until the establishment by the Company of a health insurance plan for
its executives, which is contemplated to be done on or before January 15, 1997,
the Company will pay you up to $300 per month to reimburse you for maintaining
your own health insurance coverage; you will provide the Company with receipts
to document your expenditure for such coverage. Thereafter, it is anticipated
that beginning on January 15, 1997, the Company shall provide you with
"standard" medical insurance. You shall also be entitled to participate to the
same extent as other employees of the Company of a like capacity and position in
any profit sharing plan, executive non-qualified deferred compensation plan or
incentive compensation plan that the Board of Directors of the Company shall
determine to make available to such employees. Beginning on January 1, 1997, the
Company will pay you a car allowance of $300 per month.
Subject to the provisions of the subsequent paragraph, in the event
your employment with the Company is terminated (i) for "cause" (as defined
above), you will be entitled to receive 90 days' worth of your then current base
compensation along with any applicable bonus, or (ii) other than for "cause" you
will be entitled to the full benefits hereunder through the existing term
hereof.
Ms. Pamela S. Petcash
September 1, 1996
Page 4
In the event there is a "change in control" of the Company (as defined
below) and (i) within 12 months of such "change in control" you terminate your
employment hereunder, or (ii) your employment hereunder is terminated by the
Company for any reason or no reason within 12 months of such "change in
control", then in either case you shall, within fifteen days of such
termination, receive as severance pay a payment in cash of an amount equal to
one year's worth of your then current base compensation plus applicable bonus
(if, along with the above-described acceleration of the granting and vesting of
your stock options (the "Termination Benefits"). For purposes of this Agreement,
a "change in control" of the Company shall occur when more than 50% of the
Company's voting capital stock is acquired by any "individual," "entity" or
"group" as those terms are defined in the Securities Exchange Act of 1934.
It is expressly understood and agreed that your employment must
terminate in order for the provisions of the preceding paragraph (which provides
for the payment of Termination Benefits to you in certain circumstances) to be
operative.
You agree that you will execute the Company's standard confidentiality
and noncompetition agreement upon your acceptance of employment with the
Company.
For the sixty-day period commencing September 1, 1996, the Company
agrees to sell to you up to 10,000 shares of its common stock for a per share
price equal to the current public market price of the Company's common stock.
This Agreement represents the entire understanding and agreement
between us with respect to your employment by the Company and supersedes all
prior negotiations, representations and agreements made by and between us. No
alteration, amendment or modification of any of the terms or provisions of this
Agreement shall be valid unless made pursuant to an instrument in writing and
signed by each of us. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
Ms. Pamela S. Petcash
September 1, 1996
Page 5
Kindly indicate below that the foregoing represents our mutual
agreement with respect to the matters described in this Agreement by signing and
returning a copy of this Agreement, whereupon this Agreement shall constitute an
agreement between us.
Very truly yours,
FIRST AMERICAN RAILWAYS, INC.
By: /S/ RAYMOND MONTELEONE
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Raymond Monteleone, President
and Chief Operating Officer
Agreed to and Accepted this
30th day of September, 1996
/s/ PAMELA S. PETCASH
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Pamela S. Petcash