Exhibit (d)(iii)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 12, 2000, by
and between CAREY INTERNATIONAL, INC., a Delaware corporation (the "Company")
and VINCENT A. WOLFINGTON, of Washington, D.C. (the "Executive").
W I T N E S S E T H T H A T:
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WHEREAS the Executive has been employed by the Company or its predecessors
in an executive capacity for approximately thirty (30) years; and
WHEREAS, the Company and the Executive desire to enter into this Employment
Agreement to set forth the terms and conditions of the Executive's employment
with the Company and to provide the Executive the ability to receive severance
benefits in certain circumstances;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Executive
hereby agree as follows:
1. Employment and Employment Period. The Company agrees to employ the
Executive and the Executive agrees to be employed by the Company, on the terms
and conditions set forth in this Agreement, for a period commencing on the date
hereof and continuing thereafter until the earlier to occur of (a) the
Executive's Normal Retirement Date under the Company's qualified retirement plan
and (b) the termination of the Executive's employment pursuant to Section 5 (the
"Employment Period").
2. Title and Duties. The Executive shall serve the Company as its Chief
Executive Officer. The Executive shall have the duties, responsibilities and
authority commensurate with such position and such other duties and
responsibilities as may be reasonably assigned to the Executive by the Board of
Directors of the Company. The Executive shall report exclusively to the Board
of Directors of the Company and shall perform his assigned duties and
responsibilities at the offices of the Company in Washington, D.C.
During the Employment Period, the Executive shall devote such working time,
attention, skill and efforts during normal working hours to the performance of
his duties as shall be reasonably necessary to carry out his duties and
responsibilities hereunder, and shall do so faithfully and to the best of his
abilities. The Company encourages participation by the Executive on community
boards and committees and in activities generally considered to be in the public
interest, but the Board of the Directors shall have the right to approve or
disapprove, in its sole discretion, the Executive's participation on such boards
and committees.
3. Compensation and Benefits. For the services rendered by the Executive
to the Company during the Employment Period, the Company shall pay to the
Executive the compensation and benefits set forth in this Section 3.
(a) Salary. As compensation for services performed under and during
the Employment Period, the Company shall pay to the Executive, in regular
periodic installments, a minimum base salary (the "Base Salary") at the rate of
Three Hundred Twenty-Five Thousand Dollars ($325,000) per year. The Executive's
Base Salary may be adjusted upward from time to time at the sole discretion of
the Board of Directors of the Company.
(b) Incentive Compensation. In addition to the Base Salary provided
for above, the Executive shall be entitled to receive each year incentive
compensation, short and/or long term, in such amount as the Board of Directors
shall determine.
(c) Benefits. At all times during the term of this Agreement, the
Executive shall be entitled to receive fringe benefits not less favorable to the
Executive than the fringe benefits to which the Executive is entitled as of the
date of this Agreement. The Company agrees that no provision of this Agreement
is intended to, or shall be deemed to be, a grant or payment to the Executive in
lieu of any rights and privileges to which the Executive may be entitled as an
executive or employee of the Company under any other executive or other
incentive plan, retirement, pension, insurance, hospitalization or other benefit
plan which may now or hereafter be in effect, it being understood that the
Executive shall have no lesser rights and privileges to participate in such
plans or benefits than any other executive or employee of the Company.
4. Expenses. Subject to the reasonable policies and procedures of the
Company, the Executive shall be entitled to be fully reimbursed for all
reasonable expenses incurred by him in the performance of his duties hereunder,
and the Company will reimburse the Executive from time to time for all such
reasonable expenses upon presentation of a written itemized account thereof
together with such vouchers, receipts and other evidence of such expenses as the
Company may reasonably deem to be necessary.
5. Termination and Termination of Benefits. The Executive's employment
with the Company shall terminate under the following circumstances:
(a) Death. In the event of the Executive's death during his
employment under this Agreement, the Executive's employment shall terminate on
the date of his death; provided, however, that, for a period of three (3) months
following the Executive's death, the Company shall pay to the Executive's
designated beneficiary (or to his estate, if he fails to make such designation)
an amount equal to the Executive's salary at the rate of his Base Salary
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in effect at the time of his death, such payments to be made on the same
periodic dates as salary payments would have been made to the Executive had he
not died.
(b) Disability. In the event that the Executive becomes disabled, as
determined under the Company's long-term disability income plan, during his
employment under this Agreement, then, at the discretion of the Board of
Directors of the Company, the Executive's employment hereunder shall terminate
as of a date specified by the Board not earlier than ten (10) days following the
Board's consideration of the matter. In such event, the Executive shall continue
to receive his Base Salary under Section 3(a), and any benefits to which he is
entitled in accordance with Section 3(c), until he becomes eligible for
disability income under the Company's long-term disability income plan or, in
the absence of a long-term disability income plan at the time of such
disability, until the commencement of disability payments in accordance with the
last sentence of this Section 5(b). Thereafter, for the period specified in
such long-term disability income plan, the Executive shall be entitled to
receive an annual disability benefit equal to the greater of (i) the amount of
disability benefit payable under the plan and (ii) an amount per year equal to
eighty (80) percent of the Executive's total compensation for the year
immediately preceding his termination less any benefit payable to the Executive
under such plan. While receiving such disability income payments, the Executive
shall not receive any Base Salary or incentive compensation under Sections 3(a)
or 3(b) (except a payment which has already been earned but is payable as of a
later date), but shall (i) continue to participate (on the terms in effect at
his date of disability) in the Company's other benefit plans and to receive
other benefits as specified in Section 3(c) until his employment under this
Agreement terminates or, if later, the date specified in such plans for
termination of participation in the event of disability, and (ii) be deemed for
purposes of the Company's retirement plans to have completed each year such
number of hours of service with the Company as shall be necessary to avoid a "1-
year break in service" within the meaning of Section 411(a)(6)(A) of the
Internal Revenue Code of 1986, as amended (the "Code"). In the absence of a
long-term disability income plan at the time of the Executive's disability, the
determination of disability shall be made as if the Company's current long-term
disability income plan were in effect at such time.
(c) Termination by the Executive Without Good Reason. The Executive
may resign from the Company at any time upon ninety (90) days prior written
notice to the Board of Directors of the Company. In the event of resignation by
the Executive under this Section 5(c), the Board of Directors may elect to waive
the period of notice, or any portion thereof and, in such event, the Company
will pay the Executive's Base Salary for the notice period (or for any remaining
portion of the period). In the event of such termination by the Executive of
his employment hereunder, the Executive shall be entitled to receive any accrued
but unpaid Base Salary through the effective date of such termination and any
accrued benefits payable to the Executive in accordance with the Company's
benefits policies or the provisions of any benefit plan in which he is then a
participant.
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(d) Termination by the Company Without Cause. The Executive's
employment under this Agreement may be terminated without cause by a vote of a
majority of the members of the Board of Directors on written notice to the
Executive. In the event of such termination, the Executive shall be entitled to
the following benefits:
(i) The Company shall pay to the Executive, in a lump sum
within five (5) days of termination, as severance pay and in addition
to any accrued but unpaid Base Salary and benefits to which he is
entitled, an amount equal to three (3) times the Executive's total
compensation received from the Company (including Base Salary and all
other amounts payable pursuant to this Agreement) during the
Executive's last full year of employment with the Company prior to
such termination;
(ii) Subject to his not becoming eligible to receive similar
benefits elsewhere on similar terms, for a period of three (3) years
following such termination or until the Executive attains age sixty-
five (65), whichever is longer, the Company shall maintain in effect
all employee welfare benefits (excluding any incentive compensation
program) to which the Executive was entitled at any time during the
six (6) months preceding such termination; and
(iii) The Executive without further action by the Executive or
the Company shall automatically become fully vested in all benefits
accrued on his behalf under any benefit programs of the Company and in
any options theretofore granted by the Company to the Executive
remaining unexercised as of the date of termination.
Any health care continuation period to which the Executive may be
entitled under Section 4980B of the Code and/or Section 601 through Section 609
of the Employee Retirement Income Security Act of 1974 and under any analogous
state or local law shall commence immediately following the period specified in
clause (ii) hereof. Upon expiration of such health care continuation period,
subject to the terms of any group health plan then in place, the Executive shall
be entitled at his own expense to convert his coverage under such plan to an
individual (or family) health care policy.
In the event that the Executive's participation in any of the
foregoing benefit plans is barred by law or otherwise, or in the event that any
such benefit plan is discontinued or the benefits thereunder are materially
reduced during such period, the Company shall provide the Executive with
benefits substantially similar to those to which the Executive was entitled
immediately prior to the date of his termination of employment.
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(e) Termination by the Executive For Good Reason. The Executive may
terminate his employment hereunder for Good Reason at any time upon thirty (30)
days prior written notice to the Board of Directors of the Company. Only the
following shall constitute "Good Reason" for such termination:
(i) Failure by the Company to perform fully the terms of this
Agreement other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and remedied by the Company
promptly (but not later than five (5) days) after receiving notice
thereof from the Executive;
(ii) Any reduction in the Executive's Base Salary from the
Company, unless such reduction is agreed upon in advance by the
Executive;
(iii) The assignment to the Executive of any duties inconsistent
in any material respect with his position or with his authority,
duties or responsibilities as Chief Executive Officer of the Company,
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 remedied by the Company promptly (but not more
than five (5) days) after receipt of notice thereof given by the
Executive;
(iv) Failure by the Company to continue in effect any benefit,
retirement or compensation plan (including all plans of any nature
described in this Agreement) in which the Executive is participating
as of the date hereof (or plans providing substantially similar or
greater benefits), or the Company takes any action which would
adversely affect the Executive's participation in or reduce the
Executive's benefits under any of such plans or deprive the Executive
of any fringe benefit or perquisite enjoyed by the Executive as of the
date hereof;
(v) Any change, without the Executive's consent, in the place
of the Executive's principal place of employment to a location more
than fifty (50) miles outside the primary metropolitan statistical
area including Washington, D.C.; or
(vi) Any failure by the Company to obtain an assumption and
agreement to perform this Agreement by a successor to the Company.
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In such event, the Executive shall have no further obligations to the Company
except his obligations under Section 7 hereof and shall be entitled to the
termination benefits set forth in Section 5(d) above.
(f) Termination by the Company For Cause. The Executive's employment
hereunder may be terminated by the Company for Cause, effective immediately, by
a vote of two-thirds (2/3) of the members of the Board of Directors of the
Company on written notice to the Executive setting forth in reasonable detail
the nature of such Cause; provided, however, that the Executive shall first have
been accorded an opportunity upon reasonable notice to appear before the Board
with counsel of his choice to discuss the basis for his proposed termination.
Only the following shall constitute "Cause" for such termination:
(i) The Executive's conviction of any felony (other than an
offense related to the operation of an automobile which results only
in a fine or other noncustodial penalty or an offense relating to any
action taken by the Executive in carrying out the Company's business
as directed by the Board of Directors of the Company) by a court of
competent jurisdiction;
(ii) The Executive's commission of an act of fraud or theft
involving the Company; or
(iii) Willful refusal or gross neglect by the Executive to
perform the duties reasonably assigned to him and consistent with his
position with the Company or otherwise to comply with the material
terms of this Agreement, which refusal or gross neglect continues for
more than twenty (20) days after the Executive receives written notice
thereof from the Company.
6. Change of Control of the Company. In the event that a Change of
Control of the Company occurs during the Employment Period, the Company shall
pay to the Executive, within ten (10) days following the Change of Control, the
sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000).
For purposes of this Agreement, "Change of Control" means (a) the
acquisition by any person or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except for an employee benefit plan sponsored by the Company, of
beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the
Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of
common stock of the Company, or (ii) the combined voting power of the then
outstanding voting securities of the Company that are entitled to vote generally
in the election of directors, (b) individuals who, as of May 12, 2000, are
members of the Company's Board of Directors or directors whose subsequent
nomination or election was approved by a vote of at least a
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majority of such incumbents, but excluding any individual whose initial
assumption of office occurs as a result of an actual or threatened solicitation
to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act
applies (or other actual or threatened solicitation of proxies or consents),
cease for any reason to constitute a majority of the Board, or (c) approval by
the Company's shareholders of a reorganization, merger, consolidation or share
exchange, unless the holders of the Company's common stock immediately prior to
the transaction own a majority of the votes entitled to be cast for the
directors immediately following such transaction, or (d) approval of the
Company's shareholders of a liquidation or dissolution, or a sale, lease,
exchange or other disposition (in one transaction or a series of transactions)
of all, or substantially all, of the assets of the Company.
Anything in this Agreement to the contrary notwithstanding, in the event it
is determined that any payment or distribution by the Company to the Executive
or for his benefit, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.
Subject to the provisions of the next following paragraph, all
determinations required to be made under this Section 6, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by the Company's principal independent accounting firm at the time such
determination is made (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive within thirty (30)
business days following the date the Change of Control occurs, or such earlier
time as is requested by the Company. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall furnish the Executive with an
opinion that the Executive has substantial authority not to report any excise
tax on his federal income tax return. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive except as provided elsewhere
in this Section 6. 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 a Gross-Up Payment which will not have been made
by the Company should have been made ("the Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to this Section 6 and the Executive 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 paid promptly by the Company to the Executive or for his
benefit.
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The Executive 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 after the Executive knows of such claim and shall apprise the
Company of the nature of the claim and the date on which the claim is requested
to be paid. The Executive shall not pay such claim prior to the expiration of
the thirty-day period following the date on which the Executive 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
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting the claim as
the Company reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
regard to the claim by an attorney selected by the Company, and
acceptable to the Executive,
(iii) cooperate with the Company (at no cost to the Executive)
in good faith in order effectively to contest the claim, and
(iv) permit the Company to participate in any proceedings
relating the 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 Executive 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
payments of costs and expenses. Without limitation on the foregoing provisions
of this Section 6, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo 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 Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive 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 determines;
provided, further, however, that (A) if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive on an
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interest-free basis and shall indemnify and hold the Executive 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 (B) any request
by the Company that the Executive extend the statute of limitations relating to
payment of taxes for his taxable year 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
Executive 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.
If, after the receipt by the Executive of an amount advanced by the Company
pursuant to this Section 6, the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of this Section 6) 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 Executive of an
amount advanced by the Company pursuant to this Section 6, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance 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.
7. Confidential Information. The Executive shall not at any time
divulge, use, furnish, disclose or make available to anyone, other than an
employee or Director of the Company with a reasonable need to know, any
knowledge or information with respect to confidential or secret data, procedures
or techniques of the Company, provided, however, that nothing in this Section 7
shall prevent the disclosure by the Executive of any such information which at
any time comes into the public domain other than as a result of the violation of
the terms of this Section 7 by the Executive or which is otherwise lawfully
acquired by the Executive or disclosure by the Executive required by law.
8. Assignment. The Executive may not assign any rights or delegate any
duties in or under this Agreement. This Agreement may be assigned, in whole but
not in part, by the Company to any successor to the Company or its business or
to any subsidiary or affiliate of the Company, provided that the assignee agrees
in writing to be bound by its terms.
9. Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any prior or
subsequent breach thereof.
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10. Amendment or Modification. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and an officer of the Company
acting on behalf of the Board of Directors of the Company.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to choice or
conflict of law principles.
12. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Notices. Any notices required or permitted to be given hereunder
shall be sufficient if in writing, and if delivered by hand, by courier, by
facsimile, or sent by certified mail, return receipt requested, prepaid, to the
addresses set forth below or such other address as either party may from time to
time designate in writing to the other and shall be deemed given as of the date
of the delivery if delivered by hand or by courier or, if mailed, three (3) days
after the date of mailing.
If to the Executive:
Vincent A. Wolfington
c/o Carey International, Inc.
4530 Wisconsin Avenue, N.W.
Washington, D.C. 20016
If to the Company:
Carey International, Inc.
4530 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attn: Chairman of the Board
14. Entire Agreement and Binding Effect. This Agreement contains the
entire agreement of the parties with respect to the subject matter hereof, and
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, permitted assigns and legal representatives.
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15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement it shall not be necessary to produce
more than one of such counterparts.
16. Headings. The Section headings appearing in this Agreement are for
reference purposes only and shall not be considered a part of this Agreement or
in any way modify, amend or affect its provisions.
17. No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise. Except as otherwise provided in Section 5(d)(ii) with respect to
certain fringe benefits, no payment provided for in this Agreement shall be
reduced by any compensation earned by the Executive as the result of employment
by another employer, or the Executive's receipt of income from any other source,
after the termination of his employment with the Company.
18. Indemnification. The Executive shall be entitled at all times to be
indemnified by the Company to the maximum extent permitted by law. The
provisions of this Section 18 shall survive termination of this Agreement.
19. Withholding. All payments made by the Company hereunder shall be
subject to withholding in accordance with applicable state and federal law.
20. Legal Fees. The Company shall pay to the Executive all reasonable
legal fees and expenses incurred by the Executive in the preparation of this
Agreement and in contesting or disputing any termination of this Agreement or in
seeking to obtain or enforce any right or benefit provided by this Agreement, so
long as the claim is not frivolous.
21. Dispute Resolution. If a dispute arises out of or relates to this
Agreement, or the breach hereof, and if such dispute is not settled within a
commercially reasonable time through negotiations, the parties shall attempt in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to arbitration,
litigation or other dispute resolution procedures. No resolution or attempted
resolution of any dispute or disagreement pursuant to this Section 21 shall be
deemed to be a waiver of any term or provision of this Agreement or a consent to
any breach or default, unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
the date first above written.
CAREY INTERNATIONAL, INC.
By: /s/ Don R. Dailey
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Name: Don R. Dailey
Title: President
EXECUTIVE:
/s/ Vincent A. Wolfington
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Vincent A. Wolfington
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