Document:

<PAGE>   1
                                                                    EXHIBIT 10.7

                         CONSENT AND FOURTH AMENDMENT TO
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         This CONSENT AND FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment"), is dated as of March 19, 2001, by and among AHL
SERVICES, INC. ("AHL"), ARGENBRIGHT, INC. ("Argenbright"), ARGENBRIGHT HOLDINGS
LIMITED ("U.S. Holdings"), ADI ALPHA HOLDING GMBH ("ADI Alpha"), TUJA ZEITARBEIT
GMBH & CO. KG, INGOLSTADT, ("Tuja"), EMD GESELLSCHAFT FUR
PERSONALDIENSTLEISTUNGEN GMBH & CO. KG, ASCHAFFENBURG ("EMD Aschaffenburg"), and
AHL EUROPE LIMITED ("AHL Europe Limited"; together with AHL, Argenbright, U.S.
Holdings, ADI Alpha, Tuja, and EMD Aschaffenburg, collectively referred to as
the "Borrowers"), the financial institutions listed on the signature pages
hereto as Lenders, and First Union National Bank, a national banking association
("First Union"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent").

                                    RECITALS

         WHEREAS, the Lenders, the Administrative Agent and the Borrowers are
parties to that certain Second Amended and Restated Credit Agreement dated as of
October 15, 1999, as amended by that certain First Amendment to Second Amended
and Restated Credit Agreement dated as of November 23, 1999, that certain Second
Amendment to Second Amended and Restated Credit Agreement dated as of May 24,
2000, and that certain Consent, Waiver and Third Amendment to Second Amended and
Restated Credit Agreement dated as of December 20, 2000 (as so amended, and as
may be further amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"; capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Credit
Agreement); and

         WHEREAS, at the request of the Borrowers, the Lenders and the
Administrative Agent have agreed (i) to amend certain provisions of the Credit
Agreement as set forth herein and (ii) to consent to the amendment of the Share
Mortgage over shares in AHL Europe Limited, dated December 20, 2000, between AHL
and the Security Trustee to reduce the percentage of the issued share capital of
AHL Europe Limited mortgaged in favor of the Security Trustee from one hundred
percent (100%) to sixty-five percent (65%) (the "AHL Europe Share Mortgage
Amendment"), all upon and subject to all of the terms, conditions and provisions
hereof.

         NOW, THEREFORE, in consideration of the premises and the agreements,
covenants and provisions herein contained and for TEN DOLLARS ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

<PAGE>   2

SECTION 1         AMENDMENTS TO CREDIT AGREEMENT

         Subject to the satisfaction of each of the conditions precedent set
forth in Section 5.1 of this Amendment, the Borrowers, the undersigned Lenders
and the Administrative Agent hereby agree that the Credit Agreement be, and it
hereby is, amended as follows, effective as of the Effective Date (as defined
below):

         1.1      Amendment to Section 1.1. Section 1.1 of the Credit Agreement
is hereby amended by adding the following new definitions in alphabetical order:

                  "Deemed Income Amount" means (i) for the fiscal quarter ending
         March 31, 2000, $7,666,000; (ii) for the fiscal quarter ending June 30,
         2000, $10,213,000; (iii) for the fiscal quarter ending September 30,
         2000, $13,062,000; and (iv) for the fiscal quarter ending December 31,
         2000, $4,432,000.

                  "Deemed Interest Expense Amount" means (i) for the fiscal
         quarter ending March 31, 2000, $1,926,000; (ii) for the fiscal quarter
         ending June 30, 2000, $1,854,000; (iii) for the fiscal quarter ending
         September 30, 2000, $2,124,000; and (iv) for the fiscal quarter ending
         December 31, 2000, $1,826,000.

                  "PIMMS Severance Charge" means an amount equal to the lesser
         of (i) $2,500,000 and (ii) the aggregate amount of one-time severance
         charges incurred in connection with the discontinuance of the PIMMS
         business.

         1.2      Amendment to Section 8.2.(a) Section 8.2 of the Credit
Agreement is hereby amended to read in its entirety as follows:

                  SECTION 8.2 Consolidated Total Indebtedness to Consolidated
         Pro Forma EBITDA. As of any fiscal quarter end, permit the ratio of (a)
         Consolidated Total Indebtedness of AHL and its Subsidiaries as of such
         date to (b) Consolidated Pro Forma EBITDA of AHL and its Subsidiaries
         for the period of four (4) consecutive fiscal quarters ending on or
         immediately prior to such date to exceed 2.75 to 1.00. For purposes of
         determining compliance by Borrowers with the covenant set forth in this
         Section 8.2 for any period containing any of the fiscal quarter ending
         March 31, 2000, the fiscal quarter ending June 30, 2000, the fiscal
         quarter ending September 30, 2000, or the fiscal quarter ending
         December 31, 2000, Consolidated Pro Forma EBITDA of AHL and its
         Subsidiaries for each such fiscal quarter shall be deemed to be the
         Deemed Income Amount for such fiscal quarter. For purposes of
         determining compliance by Borrowers with the covenant set forth in this
         Section 8.2 for any period containing the fiscal quarter ending March
         31, 2001, Consolidated Net Income of AHL and its Subsidiaries for such
         fiscal quarter shall be deemed to be increased by an amount equal to
         the PIMMS Severance Charge.

         1.3      Amendment to Section 8.3.(a) Section 8.3 of the Credit
Agreement is hereby

                                       2
<PAGE>   3

amended to read in its entirety as follows:

                  SECTION 8.3 Interest Coverage Ratio. As of any fiscal quarter
         end, permit the Interest Coverage Ratio to be less than 2.00 to 1.00.
         For purposes of determining compliance by Borrowers with the covenant
         set forth in this Section 8.3 for any period containing any of the
         fiscal quarter ending March 31, 2000, the fiscal quarter ending June
         30, 2000, the fiscal quarter ending September 30, 2000, or the fiscal
         quarter ending December 31, 2000, (a) Consolidated Net Income of AHL
         and its Subsidiaries for each such fiscal quarter shall be deemed to be
         the Deemed Income Amount for such fiscal quarter and (b) Interest
         Expense for each such fiscal quarter shall be deemed to be the Deemed
         Interest Expense Amount for such fiscal quarter. For purposes of
         determining compliance by Borrowers with the covenant set forth in this
         Section 8.3 for any period containing the fiscal quarter ending March
         31, 2001, Consolidated Net Income of AHL and its Subsidiaries for such
         fiscal quarter shall be deemed to be increased by an amount equal to
         the PIMMS Severance Charge.

         1.4      Amendment to Section 8.4.(a) Section 8.4 of the Credit
Agreement is hereby amended to read in its entirety as follows:

                  SECTION 8.4 Current Ratio. As of any fiscal quarter end,
         permit the ratio of Current Assets to Current Liabilities to be less
         than 1.20 to 1.00.

SECTION 2         CONSENT TO AHL EUROPE SHARE MORTGAGE AMENDMENT

         Subject to the satisfaction of each of the conditions precedent set
forth in Section 5.1 of this Amendment, the Lenders and the Administrative Agent
hereby consent to the AHL Europe Share Mortgage Amendment, in form and substance
satisfactory to the Security Trustee and the Administrative Agent.

SECTION 3         REPRESENTATIONS AND WARRANTIES

         In order to induce the Administrative Agent and the Lenders to enter
into this Amendment, each Borrower hereby represents and warrants to the Lenders
that: (a) immediately prior to the effectiveness of this Amendment, all of the
representations set forth in the Credit Agreement were accurate in all material
respects as of the date hereof, (b) after giving effect to this Amendment, all
of the representations and warranties set forth in the Credit Agreement, will be
accurate in all material respects as of the date hereof, except to the extent
that such representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall have been true and correct
on and as of such date, and (c) after giving effect to this Amendment, there
exists no Default or Event of Default under the Credit Agreement or the Loan
Documents as of the date hereof.

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<PAGE>   4

SECTION 4         CONDITIONS TO EFFECTIVENESS

         The amendments to the Credit Agreement set forth in Section 1 of this
Amendment and the consent set forth in Section 2 of this Amendment are
conditioned upon the satisfaction of each of the following conditions precedent,
and upon such satisfaction, such amendments and consent shall be deemed to be
effective as of December 31, 2000 (the "Effective Date"):

                  (a)      The Administrative Agent shall have received
         counterparts to this Amendment duly executed by each of the parties
         hereto.

                  (b)      AHL shall have executed and delivered to the
         Administrative Agent the AHL Europe Share Mortgage Amendment, in form
         and substance satisfactory to the Security Trustee and the
         Administrative Agent.

                  (c)      The Administrative Agent shall have received such
         other documents as it shall have reasonably requested, in form and
         substance satisfactory to the Administrative Agent.

SECTION 5         MISCELLANEOUS

         5.1      Counterparts. This Amendment may be executed by each party to
this Amendment upon a separate copy, and in such case one counterpart of this
Amendment shall consist of enough of such copies to reflect the signature of all
of the parties to this Amendment. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Amendment or its terms to produce or account
for more than one of such counterparts.

         5.2      General. Upon and after the Effective Date, all references to
the Credit Agreement in that document or in any other Loan Document shall mean
the Credit Agreement as amended hereby. Except as expressly provided herein, the
execution and delivery of this Amendment does not and will not amend, modify or
supplement any provision of, or constitute a consent to or a waiver of any
noncompliance with the provisions of, the Credit Agreement, and, except as
specifically provided in this Amendment, the Credit Agreement shall remain in
full force and effect and is hereby ratified and confirmed.

         5.3      Construction. This Amendment is a Loan Document executed
pursuant to the Credit Agreement and shall be construed, administered and
applied in accordance with all of the terms and provisions of the Credit
Agreement.

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<PAGE>   5

         5.4      Governing Law. This Amendment shall be governed by, construed
and enforced in accordance with the laws of the State of Georgia, without
reference to the conflicts or choice of law principles thereof.

         5.5      Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

                     [Signatures appear on following pages]

                                       5
<PAGE>   6

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers hereunder duly authorized as of the day and year
first written above.

                                     BORROWERS:

                                     AHL SERVICES, INC.

                                     By:
                                        ---------------------------------
                                     Title:
                                           ------------------------------

                                              [CORPORATE SEAL]

                                     ARGENBRIGHT, INC.

                                     By:
                                        ---------------------------------
                                     Title:
                                           ------------------------------

                                              [CORPORATE SEAL]

                                     ARGENBRIGHT HOLDINGS LIMITED

                                     By:
                                        ---------------------------------
                                     Title:
                                           ------------------------------

                                              [CORPORATE SEAL]

                                     ADI ALPHA HOLDING GMBH

                                     By:
                                        ---------------------------------
                                     Title:
                                           ------------------------------

                                              [CORPORATE SEAL]

                                       TUJA ZEITARBEIT GMBH & CO. KG,
                                       INGOLSTADT

                                       By:
                                          ---------------------------------
                                       Title:
                                             ------------------------------

                                                [CORPORATE SEAL]

                                       EMD GESELLSCHAFT FUR
                                       PERSONALDIENSTLEISTUNGEN GMBH &
                                       CO. KG, ASCHAFFENBURG

                                       By:
                                          ---------------------------------
                                       Title:
                                             ------------------------------

                                                     [CORPORATE SEAL]

                                       AHL EUROPE LIMITED

                                       By:
                                          ---------------------------------
                                       Title:
                                             ------------------------------

                                                     [CORPORATE SEAL]

                               LENDERS:

                               FIRST UNION NATIONAL BANK, as
                               Administrative Agent and Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               FIRST UNION NATIONAL BANK,
                               LONDON BRANCH, as European Swingline Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               WACHOVIA BANK, N.A., as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               SUNTRUST BANK, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               BANK OF AMERICA, N.A., as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               FLEET NATIONAL BANK, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               DRESDNER BANK AG, NEW YORK AND GRAND
                               CAYMAN BRANCHES, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               DG BANK DEUTSCHE
                               GENOSSENSCHAFTSBANK AG CAYMAN
                               ISLAND BRANCH, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               THE BANK OF NOVA SCOTIA, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               SCOTIABANK EUROPE PLC, as Lender for
                               Revolving Loans made in Alternative Currencies,
                               as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               SALOMON BROTHERS HOLDING
                               COMPANY  INC., as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               FIRSTSTAR BANK, N.A., as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               BANK ONE, NA, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               SOVEREIGN BANK, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               BANK AUSTRIA CREDITANSTALT
                               CORPORATE FINANCE INC.,
                               as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               THE FUJI BANK LIMITED, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                               BANK LEUMI LE-ISRAEL, B.M.,
                               MIAMI AGENCY, as Lender

                               By:
                                   --------------------------------------------
                               Title:
                                      -----------------------------------------

                       Signature Page - Fourth Amendment<PAGE>   1

                                                                   EXHIBIT 10(a)

================================================================================

                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                RICHARD G. SMITH

                                       AND

                       FLORIDA EAST COAST INDUSTRIES, INC.

================================================================================

                                                        DATED: DECEMBER 21, 2000

<PAGE>   2

                                                               TABLE OF CONTENTS

1.   EMPLOYMENT PERIOD..................................................     1

2.   TERMS OF EMPLOYMENT................................................     1
     (a)      Position and Duties.......................................     1
     (b)      Compensation..............................................     2

3.   TERMINATION OF EMPLOYMENT..........................................     5
     (a)      Death or Disability.......................................     5
     (b)      Cause.....................................................     5
     (c)      Good Reason...............................................     6
     (d)      Termination for Other Reasons.............................     6
     (e)      Notice of Termination.....................................     6
     (f)      Date of Termination.......................................     6

4.   OBLIGATIONS OF EMPLOYER UPON TERMINATION...........................     7
     (a)      Accelerating Event........................................     7
     (b)      Good Reason; Other than for Cause, Death or Disability....     7
     (c)      Death.....................................................     7
     (d)      Cause; Other Than for Good Reason.........................     8
     (e)      Disability................................................     8
     (f)      Nondisclosure to Media....................................     8

5.   CHANGE IN CONTROL..................................................     8
     (a)      Defined...................................................     8
     (b)      Entitlement to Benefits...................................     8
     (c)      Accelerating Event........................................     9
     (d)      Supplemental Payment to Executive.........................     9

6.   NON-EXCLUSIVITY OF EXECUTIVE'S RIGHTS..............................     9

7.   CONFIDENTIAL INFORMATION...........................................     9

8.   NON-COMPETITION ;NON-SOLICITATION..................................    10

9.   REMEDIES FOR EXECUTIVE'S BREACH....................................    11

10.  DISPUTE............................................................    11

11.  NO CONFLICTING OBLIGATIONS OF EXECUTIVE............................    11

12.  INDEMNITY OF EXECUTIVE.............................................    11

13.  SUCCESSORS.........................................................    12

14.  MISCELLANEOUS......................................................    12

<PAGE>   3

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of
December 21, 2000, between RICHARD G. SMITH, an individual (the "Executive") and
FLORIDA EAST COAST INDUSTRIES, INC. ("Employer"), a Florida corporation, recites
and provides as follows:

WHEREAS, the Board of Directors of Employer (the "Board") desires that Employer
retain the services of the Executive, and the Executive desires to be employed
with Employer, all on the terms and subject to the conditions set forth herein.

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, Employer and the Executive agree as
follows:

                  1. EMPLOYMENT PERIOD. Employer hereby agrees to employ the
Executive, and the Executive hereby agrees to accept employment by Employer, in
accordance with the terms and provisions of this Agreement, commencing January
1, 2001 (the "Effective Date") and continuing until terminated by either party
hereto (the "Employment Period").

                  2. TERMS OF EMPLOYMENT.

                           (a) POSITION AND DUTIES.

                                    (i) During the Employment Period, the
Executive shall serve as Executive Vice President and Chief Financial Officer of
Employer and shall have such authority and perform such executive duties as are
commensurate with such position and as are otherwise assigned by the Board.

                                    (ii) The Executive's services shall be
performed primarily at the headquarters of Employer and its subsidiaries in St.
Augustine, Florida and otherwise at such location(s) as Employer reasonably may
select.

                                    (iii) During the Employment Period, and
excluding any periods of vacation and leave to which the Executive is entitled,
the Executive agrees to devote his full business attention and time to the
business and affairs of Employer and, to the extent necessary to discharge the
duties assigned to the Executive hereunder, to use the Executive's reasonable
efforts to perform faithfully such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic, charitable, and professional association boards or
committees, subject to the approval of the Chairman of Employer, in each
instance, which approval shall not be unreasonably withheld, (B) deliver
lectures or fulfill speaking engagements and (C) manage personal investments, so
long as such activities do not materially interfere with the performance of the
Executive's responsibilities as an employee of EMPLOYER in accordance with the
Agreement.

<PAGE>   4

                           (b) COMPENSATION.

                                    (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Annual Base Salary"), which
shall be paid in equal installments on a semi-monthly basis, at the annual rate
of not less than Two Hundred Seventy Five Thousand Dollars ($275,000) per year.
During the Employment Period, the Annual Base Salary shall be reviewed at least
annually by the Board. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced and the term "Annual Base Salary" as
used in this Agreement shall mean the Annual Base Salary as so increased.

                                    (ii) Short-Term Incentive Bonus. In addition
to Annual Base Salary, during the Employment Period commencing January 1, 2001,
the Executive shall participate in an annual incentive bonus plan. Such plan
shall provide the Executive with the opportunity to earn a bonus based on
achievement of performance criteria. The incentive bonus plan shall be
structured such that the Executive shall receive up to fifty percent (50%) of
Annual Base Salary ("Target") for attainment of certain target performance goals
(prorated for any partial year of employment), with a maximum bonus of one
hundred percent (100%) of Target for extraordinary performance (prorated for any
partial year of employment). The Compensation Committee will establish the
performance criteria and goals in consultation with the Executive. The bonus
payable pursuant to this Section 2(b)(ii) for any fiscal year shall be paid to
the Executive no later than the 30th day following the issuance of the audited
financial statements of Employer for such year.

                                    (iii) Long-Term Incentives: Restricted
Stock. The Executive shall receive a grant of restricted stock for seven
thousand five hundred (7,500) shares of Employer's common stock issued under the
FECI Stock Incentive Plan. Such shares shall be subject to restrictions which
shall provide that the Executive shall not transfer such shares during the
restriction period and shall forfeit such shares if during the restriction
period he is discharged by Employer for Cause (as hereinafter defined in Section
3(b)) or resigns from employment with Employer without Good Reason (as
hereinafter defined in Section 3(c)). The restriction period shall lapse with
respect to such shares in five (5) equal annual installments on each of the
first through fifth anniversaries of the Effective Date. Notwithstanding the
foregoing, the restriction period shall lapse immediately as to all such shares
in the event that an Accelerating Event (as hereinafter defined in Section 4(a))
occurs. The Executive shall be entitled to receive any dividends or other
distributions payable with respect to such shares of restricted stock beginning
on the date of award of such shares. Such stock award shall be evidenced by a
written restricted stock award agreement between Employer and the Executive, the
terms of which shall be agreed to by the parties in good faith as soon as
practical.

                                    (iv) Long-Term Incentives: Basic Stock
Options. The Executive shall receive a grant of non-statutory stock options on
seventy five thousand (75,000) shares of FECI common stock issued under the FECI
Stock Incentive Plan. The options shall have a term of ten (10) years (subject
to earlier expiration as hereinafter provided), shall have an exercise price
equal to one hundred percent (100%) of the fair market value, as of the close of
trading on the next preceding business day prior to the date of this Agreement
(being $34.125 per share) of the shares of common stock of EMPLOYER, and shall
vest and become exercisable in

                                       2
<PAGE>   5

five (5) equal annual installments on the first through fifth anniversaries of
the Effective Date; provided, however, that such stock options shall vest
immediately and become exercisable in their entirety in the event that an
Accelerating Event (as hereinafter defined in Section 4(a)) occurs. To the
extent not previously exercised, all such stock options shall expire immediately
following the Date of Termination (as hereinafter defined in Section 3(f));
provided, however, that the Executive, or his heirs or legal representatives in
the event of the Executive's death, may exercise all or any part of such stock
options as were exercisable as of the close of business on the Date of
Termination for a period of two (2) years following such Date of Termination in
the event (i) an Accelerating Event (as hereinafter defined in Section 4(a))
occurs; or (ii) the Executive retires at normal retirement age under any
retirement plan of Employer. Such stock options shall include a provision for
adjustment in the option price to reflect an extraordinary distribution made
with respect to the common stock during the term of the options. In the event of
a capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, spin off, a combination or exchange of
shares or other transaction having a similar substantive effect, the number
shares of stock subject to the stock options and the option price shall be
equitably adjusted. Such stock options shall be evidenced by a written stock
option award agreement between Employer and the Executive, the terms of which
shall be agreed to by the parties in good faith as soon as practical.

                                    (v) Long-Term Incentives: Subsequent Option
Grants. During the Employment Period, the Executive shall be entitled to
participate in long-term equity incentive plans and programs applicable
generally to other peer executives of Employer. Such participation shall
commence with respect to Employer's 2001 fiscal year. Such plans and programs
shall be structured such that the Executive shall receive option grants with
targeted annual grant value (using valuation methods consistent with those used
by Employer for financial reporting purposes) between seventy-five (75%) and one
hundred percent (100%) of Annual Base Salary for attainment of certain target
performance goals (prorated for any partial year of employment). The Employer
will establish the performance criteria and goals in consultation with the
Executive.

                                    (vi) Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to participate in all
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of Employer.

                                    (vii) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family and dependents,
as the case may be, shall be eligible for participation in and shall receive all
benefits under all welfare benefit plans, practices, policies and programs
provided by Employer (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of Employer.

                                    (viii) Expenses. The Executive shall be
entitled to receive prompt reimbursement for all employment-related expenses
incurred by the Executive during the Employment Period in accordance with the
most favorable policies, practices and procedures of Employer as in effect
generally from time after the Effective Date with respect to other peer
executives of Employer.

                                       3
<PAGE>   6

                                    (ix) Fringe Benefits. During the Employment
Period, the Executive and/or the Executive's family and dependents shall be
entitled to fringe benefits in accordance with the most favorable plans,
practices, programs and policies of Employer as in effect generally from time to
time after the Effective Date with respect to other peer executives of Employer.

                                    (x) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office and support
staff at the Employer's headquarters at least equal to the most favorable of the
foregoing provided generally from time to time after the Effective Date with
respect to other peer executives of Employer.

                                    (xi) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of Employer as in effect
generally from time to time after the Effective Date with respect to other peer
executives of Employer.

                                    (xii) Car Allowance. During the Employment
Period, the Executive shall be entitled to a car allowance in accordance with
Employer's car allowance policy, in lieu of expenses associated with the
operation of his automobile.

                                    (xiii) Relocation Expense. Employer shall
make the Executive whole by reimbursing him for all reasonable costs associated
with his relocation from the Marietta, Georgia area to the St. Augustine,
Florida area whether incurred before or after the Effective Date, but only to
the extent that such costs are incurred prior to the first anniversary of the
Effective Date. Such costs shall include, without limitation, closing costs
associated with the sale of the Executive's Marietta, Georgia residence and
closing costs associated with the Executive's purchase and financing of a new
primary residence in the St. Augustine area. For purpose of this Section,
"closing costs" shall mean loan origination fees, appraisal fees, credit report
fees, assumption fees, settlement or closing fees, title examination fees, title
insurance binder, document preparation fees, notary fees, attorneys' fees, real
estate brokers' commissions, title insurance fees, recording fees, tax stamps,
transfer taxes, survey fees and costs of pest, radon and home inspections.
Employer shall also arrange for and pay for the move of the Executive's
household goods and personal effects (including packing, reasonable storage
charges and unpacking charges) from his Marietta, Georgia residence to his new
primary residence in Florida. Employer shall pay for the Executive's reasonable
temporary living costs in the St. Augustine area for a period as necessary to
accomplish the relocation but not later than April 1, 2001 (or such later time
as may be requested by the Executive and approved by the Chairman of Employer,
which approval shall not be unreasonably withheld) until Executive is moved into
his new residence in Florida. Employer will pay the costs associated with a
reasonable number of trips to St. Augustine for the Executive and his spouse to
look for a new residence. In addition, in the event that the Executive's
Marietta, Georgia residence is placed on the market for sale at a reasonable
price and is not sold within ninety (90) days after being placed on the market,
at the Executive's request Employer shall provide the Executive with an
interest-free bridge loan for a term of up to twelve (12) months for an amount
up to the asking price of the Marietta, Georgia residence, which loan shall be
repayable upon the earlier of five (5) days following the closing of the sale of
the Marietta, Georgia residence or the first anniversary of the making of such
loan. In addition, Employer shall pay the Executive an amount determined by its
accountants equal to the Executive's federal, state and local taxes on the
foregoing reimbursement and imputed

                                       4
<PAGE>   7

interest under the aforesaid loan (the "Tax Gross-up") and the federal, state
and local taxes on the Tax Gross-up, all to the end that the Executive be held
harmless, on an after-tax basis, from the tax impact thereof.

                                    (xiv) Golden Parachute Excise Tax. If any
amounts payable under this Agreement are subject to the excise tax imposed under
Section 4999 of the Internal Revenue Code on "excess parachute payments,"
Employer will in good faith compute the excise tax imposed under Code Section
4999 and shall pay that amount to the Executive, including any federal, state,
local and exercise taxes imposed on the foregoing payment under this Section
2(b)(xiv). The determination will be made before the taxes are due and payable
by the Executive, to the extent possible. The calculation under this Section
will be made in a manner consistent with the requirements of Code Section 280G
and 4999, as in effect at the time the calculations are made.

                                    (xv) Right to Change Plans. Executive shall
not be obligated to institute, maintain or refrain from changing, amending or
discontinuing any benefit plan, program, or perquisite referred to in Sections
2(b)(vi), 2(b)(vii), 2(b)(ix) and 2(b)(xii), so long as such changes are
similarly applicable to other executives of Employer.

                  3. TERMINATION OF EMPLOYMENT.

                           (a) DEATH OR DISABILITY. The Executive's employment
shall terminate automatically upon the Executive's death during the Employment
Period. If Employer determines in good faith that the Disability of the
Executive has occurred (pursuant to the definition of disability set forth
below), it may give to the Executive notice of its intention to terminate the
Executive's employment. In such event, the Executive's employment with Employer
shall terminate upon a date selected by Employer and set forth in such notice
(the "Disability Effective Date"), provided that, prior to such date, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with Employer on a full-time basis for
one hundred eighty (180) consecutive business days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a
physician selected by Employer or its insurers and acceptable to the Executive
or the Executive's legal representative (such agreement as to acceptability not
to be withheld unreasonably).

                           (b) CAUSE. Employer may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" shall mean (i) a
material breach by the Executive of the Executive's obligations under this
Agreement (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such breach is
in the best interests of Employer and which is not remedied in a reasonable
period of time after receipt of notice from Employer specifying such breach;
(ii) the conviction of the Executive for committing an act of fraud,
embezzlement, theft or other act constituting a felony or the guilty or nolo
contendere plea of the Executive to such a felony; (iii) insubordination or the
willful engaging by Executive in gross misconduct or the willful violation of an
Employer policy which results in material and demonstrable injury to Employer;
or (iv) a material act of dishonesty or breach of trust on the part of the
Executive resulting or intending to result directly or indirectly in material
personal gain or enrichment at the expense of Employer. Any act, or failure to
act,

                                       5
<PAGE>   8

based upon authority given pursuant to a resolution duly adopted by the Board or
based upon the advice of counsel for Employer shall be conclusively presumed to
done, or omitted to be done, by the Executive in good faith and in the best
interests of Employer.

                           (c) GOOD REASON. The Executive may terminate his
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, in the absence of the consent of the Executive, a reasonable determination
by the Executive that any of the following has occurred:

                                    (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 2(a) of this Agreement, or
any other action by Employer which results in a material diminution of such
position, authority, duties or responsibilities, excluding for this purpose an
isolated and insubstantial action not taken in bad faith and which is remedied
by Employer promptly after receipt of notice thereof given by the Executive; or

                                    (ii) any failure by Employer to comply with
any of the provisions of this Agreement applicable to it, other than any
isolated and insubstantial failure not occurring in bad faith and which is
remedied promptly after notice thereof from the Executive.

                           (d) TERMINATION FOR OTHER REASONS. Employer may
terminate the employment of the Executive without Cause by giving notice to the
Executive, which notice shall set forth the Date of Termination. The Executive
may resign from his employment without Good Reason hereunder by giving notice to
Employer at least thirty (30) days prior to the Date of Termination.

                           (e) NOTICE OF TERMINATION. Any termination shall be
communicated by Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" means a notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) in the case
of a termination under Section 3(b) or 3(c), to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated (the failure by the Executive or Employer to set forth in the Notice
of Termination any fact or circumstance shall not waive any right of the
Executive or Employer hereunder or preclude the Executive or Employer from
asserting such fact or circumstance in enforcing the Executive's or Employer's
rights hereunder), 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 not be more than fifteen (15) days after the giving of such
notice, unless otherwise required by Section 3(f)).

                           (f) DATE OF TERMINATION. "Date of Termination" shall
mean (i) if the Executive's employment is terminated by Employer due to the
Executive's Disability, the Date of Termination shall be the Disability
Effective Date, (ii) if the Executive's employment is terminated by reason of
the Executive's death, the Date of Termination shall be the date of death of the
Executive, and (iii) in all other case, the date of receipt of the Notice of
Termination or any permitted later date specified therein, as the case may be.

                                       6
<PAGE>   9

                  4. OBLIGATIONS OF EMPLOYER UPON TERMINATION.

                           (a) ACCELERATING EVENT. As used in this Agreement,
the term "Accelerating Event" shall mean any of the following: (i) the
Executive's employment terminates under the circumstances described in Section
3(a), (ii) the Executive is discharged without Cause, (iii) the Executive
resigns with Good Reason, or (iv) a Change in Control Entitlement (as defined in
Section 5(b)) occurs.

                           (b) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR
DISABILITY. If, during the Employment Period, Employer shall terminate the
Executive's employment other than for Cause, death or Disability or the
Executive shall terminate employment for Good Reason:

                                    (i) Employer shall pay to the Executive in a
lump sum in cash within thirty (30) days after the Date of Termination the sum
of (A) the Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid; (B) to the extent not theretofore paid, any annual
bonus payable to the Executive for any prior completed fiscal year; (C) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid; and (D) any
accrued vacation pay, expenses reimbursement and any other entitlements accrued
by the Executive under Section 2(b) to the extent not theretofore paid (the sum
of the amount described in clauses (A), (B), (C) and (D) shall be hereinafter
referred to as the "Accrued Obligations"); and

                                    (ii) Employer shall pay to the Executive in
eighteen (18) monthly installments beginning thirty (30) days following the Date
of Termination an amount equal to the sum of one hundred fifty percent (150%) of
the Executive's Annual Base Salary plus fifty percent (50%) of the payment made
under Section 2(b)(ii), if any, with respect to the most recently completed
fiscal year of Employer; and

                                    (iii) For eighteen (18) months following the
Date of Termination, or such longer period as any plan, program, practice or
policy may provide, Employer shall continue benefits to the Executive and/or the
Executive's family and dependents at least equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 2(b)(vii) if the Executive's employment had not been
terminated, in accordance with the most favorable plans, practices, programs or
policies of Employer as in effect generally at any time thereafter with respect
to other peer executives of Employer and their families ("Welfare Benefit
Continuation"). If the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under any other
employer-provided plan, the medical and other welfare benefits herein shall be
secondary to those provided under such other plan during such applicable period
of eligibility.

                           (c) DEATH. If the Executive's employment is
terminated by reason of the Executive's death, this Agreement shall terminate
without further obligation to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within thirty (30) days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation.

                                       7
<PAGE>   10

                           (d) CAUSE: OTHER THAN FOR GOOD REASON. If the
Executive's employment shall be terminated for Cause or the Executive terminates
his employment without Good Reason, this Agreement shall terminate without
further obligation to the Executive other than the obligation to pay to the
Executive the Accrued Obligations (which shall be paid in cash within thirty
(30) days of the Date of Termination).

                           (e) DISABILITY. If the Executive's employment shall
be terminated by reason of the Executive's Disability, this Agreement shall
terminate without further obligation to the Executive, other than for payment of
Accrued Obligations and the timely payment or provision of the Welfare Benefit
Continuation. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within thirty (30) days of the Date of Termination. The Executive shall
be entitled after the Disability Effective Date to receive disability and other
benefits as in effect at the Disability Effective Date with respect to other
peer executives of Employer and their families.

                           (f) NONDISCLOSURE TO MEDIA. After the Date of
Termination, the Executive and Employer agree that they will not discuss the
Executive's employment and resignation or termination (including the terms of
this Agreement) with any representatives of the media, either directly or
indirectly, without the consent of the other party hereto.

                  5. CHANGE IN CONTROL.

                           (a) DEFINED. For purposes of this Agreement, a
"Change in Control" of Employer shall be deemed to have occurred as of the first
day that any one or more of the following conditions shall have occurred:

                                    (i) Any corporation, partnership or other
entity other than an Affiliate of Employer, becomes the owner either in a single
transaction or in a series of transactions, directly or indirectly, of at least
fifty percent (50%) or more of Employer's operating assets or fifty percent
(50%) or more of the stock of FECI; provided that a Change in Control shall not
have occurred if a change in ownership of the stock of Employer occurs in
connection with a distribution of the shares of Employer to the owners of any
Employer affiliate, in a broad public distribution or in a transaction the
result of which the shares of Employer are distributed to the shareholders of
Employer's majority owner.

                                    (ii) Employer's Board of Directors (the
"Board") approves; (a) a plan of complete or substantial liquidation of
Employer; or (b) a merger, consolidation or reorganization, as defined under
Florida state law, of Employer with or into another corporation, partnership or
entity other than an Employer Affiliate.

                           (b) ENTITLEMENT TO BENEFITS. The Executive shall be
entitled to certain additional benefits upon a Change in Control if:

                                    (i) within two (2) years following a Change
in Control, either (A) the Employer substantially reduces the duties or
responsibilities of the Executive from those in effect immediately prior to such
occurrence or (B) the Employer terminates the Executive's

                                       8
<PAGE>   11

employment other than for Cause, Death or Disability, or (c) the Executive
resigns with Good Reason; or

                                    (ii) within the period which is the last
ninety (90) days of the first year after the occurrence of a Change in Control,
the Executive voluntarily resigns his employment hereunder for any reason.

The accrual of such entitlements is referred to herein as "Change in Control
Entitlement."

                           (c) ACCELERATING EVENT. A Change in Control
Entitlement shall be an Accelerating Event as defined in Section 4(a).

                           (d) SUPPLEMENTAL PAYMENT TO EXECUTIVE. Upon the
accrual of Change in Control Entitlement, Employer shall pay to the Executive in
a lump sum in cash within thirty (30) days of the date of such Change in
Control, an amount equal to two (2) times the Annual Base Salary.

                  6. NON-EXCLUSIVITY OF EXECUTIVE'S RIGHTS. Except as provided
in Sections 4(b)(iii), 4(c) and 4(e), nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by Employer and for which the Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as the Executive
may have under any contract or agreement with Employer. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with Employer at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

                  7. CONFIDENTIAL INFORMATION.

                           (a) The Executive shall hold in a fiduciary capacity
for the benefit of Employer all secret or confidential information, knowledge or
data relating to Employer or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by Employer or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with Employer, the Executive
shall not, without the prior written consent of Employer or except as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than Employer and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 7 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

                           (b) All records, files, memoranda, reports, price
lists, customer lists, drawings, designs, proposals, plans, sketches, documents,
computer programs, CAD systems, CAM systems, disks, computer printouts and the
like (together with all copies thereof) relating to the business of Employer,
which Executive shall use or prepare or otherwise have in his possession in the
course of, or as a result of, his employment hereunder shall, as between the
parties hereto, remain the sole property of Employer. Executive shall use such
materials solely for the benefit of Employer and shall not divulge any such
materials other than in furtherance of

                                       9
<PAGE>   12

Employer's interests. Executive hereby agrees that he will return all such
materials, including copies, to Employer upon demand, or upon the cessation of
his employment.

                           (c) Any termination of the Executive's employment
hereunder or of this Agreement shall have no effect on the continuing operation
of this Section 7.

                  8. NON-COMPETITION ; NON-SOLICITATION.

                           (a) In consideration of Employer undertaking to
employ the Executive under the terms provided for herein, including, without
limitation, the grant of the substantial number of shares of restricted stock
options provided for in Section 2(b), and to protect the Employer's valuable
trade secrets and other business and professional information and its
relationships with existing and prospective customers and suppliers, the
Executive agrees that, except as is set forth below, for a period commencing on
the Effective Date hereof and ending on the first anniversary of the date the
Executive ceases to be employed by Employer (the "Non-Competition Period"), the
Executive shall not, directly or indirectly, either for himself or any other
person, own, manage, control, materially participate in, invest in, permit his
name to be used by, act as consultant or advisor to, render material services
for (alone or in association with any person, firm, corporation or other
business organization) or otherwise assist in any manner, any business which is
a competitor of a substantial portion of the Employer's business at the date the
Executive ceases to be employed by the Employer (a "Competitor").
Notwithstanding the foregoing, the restrictions set forth above shall
immediately terminate and shall be of no further force or effect (i) in the
event of a default by Employer of the performance of any of the obligations
hereunder, which default is not cured within ten (10) days after notice thereof,
or (ii) if the Executive's employment has been terminated by Employer other than
for Cause, or (iii) if the Executive resigns for Good Reason. Nothing herein
shall prohibit the Executive from being a passive owner of not more than five
percent (5%) of the equity securities of an enterprise engaged in such business
which is publicly traded, so long as he has no active participation in the
business of such enterprise.

                           (b) During the Non-Competition Period, the Executive
shall not, directly or indirectly, (i) induce or attempt to induce or aid others
in inducing an employee of Employer to leave the employ of Employer, or in any
way interfere with the relationship between Employer and an employee thereof
except in the proper exercise of the Executive's authority, or (ii) in any way
interfere with the relationship between Employer and any customer, supplier,
licensee or other business relation thereof.

                           (c) If, at the time of enforcement of this Section 8,
a court shall hold that the duration, scope, area or other restrictions stated
herein are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope, area or other restrictions reasonable under
such circumstances shall be substituted for the stated duration, scope, area or
other restrictions.

                           (d) The covenants made in this Section 8 shall be
construed as an agreement independent of any other provisions of this Agreement,
and shall survive the termination of this Agreement. Moreover, the existence of
any claim or cause of action of the Executive against Employer or any of its
affiliates, whether or not predicted upon the terms of this Agreement, shall not
constitute a defense to the enforcement of these covenants.

                                       10
<PAGE>   13

                  9. REMEDIES FOR EXECUTIVE'S BREACH. In the event Executive
violates any provisions of Section 7 or 8 and such violation continues after
notice thereof to the Executive and the expiration of a reasonable opportunity
to cure, then Employer may thereafter terminate the payment of any
post-termination benefits hereunder, and Employer will have no further
obligation to Executive under this Agreement. The parties acknowledge that any
violation of Section 7 or 8 can cause substantial and irreparable harm to
Employer. Therefore, Employer shall be entitled to pursue any and all legal and
equitable remedies, including but not limited to any injunctions.

                  10. DISPUTE. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by binding arbitration, which
shall be the sole and exclusive method of resolving any questions, claims or
other matters arising under this Agreement or any claim that Employer has in any
way violated the non-discrimination and/or other provisions of Title VII or the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act
of 1967, as amended; the American with Disabilities Act; the Family and Medical
Leave Act; the Employee Retirement Income Security Act of 1974, as amended; and,
in general, any federal law or the law of the State of Florida. Such proceeding
shall be conducted by final and binding arbitration before a panel of one or
more arbitrators under the administration of the American Arbitration
Association, and in a location mutually agreed to by the Executive and Employer.
The Federal and State courts located in the United States of America are hereby
given jurisdiction to render judgment upon, and to enforce, each arbitration
award, and the parties hereby expressly consent and submit to the jurisdiction
of such courts. Notwithstanding the foregoing, in the event that a violation of
the Agreement would cause irreparable injury, FECI and the Executive agree that
in addition to the other rights and remedies provided in this Agreement (and
without waiving their rights to have all other matters arbitrated as provided
above) the other party may immediately take judicial action to obtain injunctive
relief.

                  11. NO CONFLICTING OBLIGATIONS OF EXECUTIVE. Executive
represents and warrants that he is not subject to any duties or restrictions
under any prior agreement with any previous employer or any other person, and
that he has no rights or obligations expect as previously disclosed to Employer
which may conflict with the interests of Employer or with the performance of the
Executive's duties and obligations under this Agreement. Executive agrees to
notify Employer immediately if any such conflicts occur in the future.

                  12. INDEMNITY OF EXECUTIVE. Employer shall indemnify and
defend the Executive against all claims relating to the performance of his
duties hereunder to the fullest extent permitted by Employer's Articles of
Incorporation and Bylaws, the relevant provisions of which shall not be amended
in their application to the Executive to be any less favorable to him than as at
present, except as required by law. During the continuance of the Executive's
employment hereunder, Employer shall maintain in effect uninterrupted standard
directors and officers liability insurance coverage insuring the Executive
against such claims, with limits of coverage of not less than Ten Million
Dollars ($10,000,000) per occurrence, which insurance shall include a standard
SEC coverage endorsement.

                                       11
<PAGE>   14

                  13. SUCCESSORS.

                           (a) This Agreement is personal to the Executive and
without the prior consent of Employer shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

                           (b) This Agreement shall inure to the benefit of and
be binding upon Employer and its successors and assigns.

                           (c) Employer 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform if it no such succession had taken
place. As used in this Agreement, "Employer" shall mean Employer as herein
before 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.

                  14. MISCELLANEOUS.

                           (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, 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 deliver to the other party or by
registered or certified mail, return receipt requested, postage prepaid, or by
telecopier, or by courier, addressed as follows:

         If to the Executive to:            If to Employer to:

         Richard G. Smith                   Florida East Coast Industries, Inc.
         303 Chase Lane                     Attention:  Corporate Secretary
         Marietta, GA  30068                One Malaga St.
                                            St. Augustine, FL  32085
                                            Facsimile:  904/826-2379

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) This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto including, without
limitation, that certain Confidentiality Agreement between the Employer and
Executive dated December 22, 2000.

                                       12
<PAGE>   15

                           (d) In the event of a dispute arising out of this
Agreement, any party receiving any monetary or injunctive remedy, whether at law
or in equity, which is final and not subject to appeal shall be entitled to its
reasonable attorneys' fees and costs incurred with respect to obtaining such
remedy from the other party.

                           (e) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

                           (f) Employer 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.

                           (g) The Executive's or Employer's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or Employer may have
hereunder, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.

                           (h) Any entitlements to the Executive under Section
2(b) shall be contract rights to the extent not prohibited by law, except as
provided in Section 2(b)(xv).

        IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, Employer has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                                    COMPANY:

                                    FLORIDA EAST COAST INDUSTRIES, INC.

                                    By /s/ Robert W. Anestis
                                       -----------------------------------------
                                           Robert W. Anestis
                                           Chairman and Chief Executive Officer

                                    EXECUTIVE:

                                    By /s/ Richard G. Smith
                                       -----------------------------------------
                                           Richard G. Smith

                                       13

<PAGE>   16

                          BASIC STOCK OPTION AGREEMENT

                                     Between

                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       and

                                RICHARD G. SMITH

                                                        Dated: December 21, 2000

<PAGE>   17

         THIS AGREEMENT, dated December 21, 2000 between Florida East Coast
Industries, Inc. ("FECI") ("Company"), and Richard G. Smith (the "Employee") is
made pursuant to the provisions of Section 2(b)(iv) of that certain Employment
Agreement of even date herewith between the Company and the Employee (the
"Employment Agreement").

         In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:

                  1. Non-Statutory Option. Under the Company's Stock Incentive
         Plan, as amended (the "Plan"), the Company hereby grants the Employee a
         non-statutory option ("NSO") to purchase from the Company seventy-five
         thousand 75,000 shares of the Company's Common Stock. The exercise
         price of the NSO is $34.125 per share, being the fair market value of
         the Company's Common Stock on the next preceding business day prior to
         the date of this Agreement.

                  2. Entitlement to Exercise the NSO. The grant of the NSO is
         subject to the following terms and conditions:

                           (a) Vesting. One-fifth of the NSO, 15,000 shares,
                  shall vest on and may be exercised at any time on or after
                  December 20, 2001. Another one-fifth of the NSO, 15,000
                  shares, shall vest on and may be exercised at any time on or
                  after December 20, 2002. Another one-fifth of the NSO, 15,000
                  shares, shall vest and may be exercised at any time on or
                  after December 20, 2003. Another one-fifth of the NSO, 15,000
                  shares, shall vest on and may be exercised at any time on or
                  after December 20, 2004. The remaining one-fifth of the NSO,
                  15,000

                                       2
<PAGE>   18

                  shares shall, vest on and may be exercised at any time on or
                  after December 20, 2005. In addition, all of the NSO shall
                  vest on and may be exercised at any time on or after an
                  Accelerating Event (as defined in Section 4(a) of the
                  Employment Agreement). The vesting of any portion of the NSO
                  is conditioned on the Employee's continued employment by the
                  Company or a parent or subsidiary of the Company as of the
                  relevant vesting date.

                           (b) Exercise Period. Except as otherwise stated in
                  this Agreement, the vested portion of the NSO may be
                  exercised, in whole or in part, from the dates described in
                  subsections (a) above until the earliest of (i) December 20,
                  2010, (ii) two years following the effective date that the
                  Employee's employment terminates by reason of an Accelerating
                  Event (as defined in Section 4(a) of the Employment Agreement)
                  or normal retirement (as determined under any retirement plan
                  of the Company), or (iii) the effective date that the Employee
                  terminates employment for any other reason (but in no event
                  earlier than two years following the accrual of Change in
                  Control Entitlement (as defined in Section 5(b) of the
                  Employment Agreement).

                           (c) Exercise Following Death. If the Employee dies
                  while employed by the Company or a parent or subsidiary
                  corporation, then the person to whom the Employee's rights
                  under the NSO shall have passed by will or by the laws of
                  distribution may exercise any of the NSO within two years
                  after the Employee's death.

                                       3
<PAGE>   19

                  3. Payment Under NSO. Payment of the NSO price may be made in
         cash, in shares of the Company's Common Stock, or in any combination
         thereof. If shares of the Company's Common Stock are delivered to make
         any such payment, the shares shall be valued at the fair market value
         (as defined below) thereof on the date of exercise of the NSO. For
         purposes of this Agreement, "fair market value" means, as of any given
         date, the closing price of the Company's Common Stock on such date as
         quoted in the NYSE Composite Transactions Reporting the Wall Street
         Journal. If there were no sales reported as of a particular date, fair
         market value will be computed as of the last date preceding such date
         on which a sale was reported.

                  4. Limited Transferability of NSO. The NSO is not transferable
         (other than by will or by the laws of descent and distribution) and,
         except as otherwise stated in this Agreement, may be exercised during
         the Employee's lifetime only by the Employee.

                  5. Adjustments. The NSO shall be equitably adjusted with
         respect to the exercise price to reflect any extraordinary distribution
         made with respect to the Company's Common Stock during the term of the
         options. In the event of a capital adjustment resulting from a stock
         dividend, stock split, reorganization, merger, consolidation, spinoff,
         a combination or exchange of shares or other transaction having a
         similar substantive effect, the number of shares of stock subject to
         the NSO and the exercise price shall be equitably adjusted.

                  6. Exercise. The vested portion of the NSO may be exercised in
         whole or in part, but only with respect to whole shares of the
         Company's Common Stock, and may be exercised more than once until all
         shares which are subject to the NSO have been

                                       4
<PAGE>   20

         purchased. An NSO may be exercised by deliver to the Company of written
         notice stating the number of shares elected to be purchased, and by
         payment to the Company as described in paragraph 3.

                  7. Withholding. By signing this Agreement, the Employee agrees
         to make arrangements satisfactory to the Company to comply with any
         income tax withholding requirements that may apply upon the exercise of
         the NSO or the disposition of the Company's Common Stock received upon
         the exercise of the NSO. The Employee will be entitled to elect to
         satisfy his tax withholding obligation by the withholding by the
         Company, at the appropriate time, of shares of the Company's Common
         Stock otherwise issuable to the Employee under this Agreement in a
         number sufficient, based upon the fair market value (as defined above)
         of such Common Stock on the relevant date, to satisfy such tax
         withholding requirements.

                  8. Delivery of Certificates. The Company may delay delivery of
         the certificate for shares purchased pursuant to the exercise of an NSO
         until (i) the admission of such shares to listing on any stock exchange
         on which the Company's Common Stock may then be listed, (ii) completion
         of any registration or other qualification of such shares under any
         state or federal law regulation that the Company's counsel shall
         determine as necessary or advisable, and (iii) receipt by the Company
         of advice by counsel that all applicable legal requirements have been
         complied with.

                  9. Dispute Resolution. Any dispute or controversy arising
         under on in connection with this Agreement shall be settled by binding
         arbitration, which shall be the sole and exclusive method of resolving
         any questions, claims or other matters arising

                                       5
<PAGE>   21

         under this Agreement. Such proceeding shall be conducted by final and
         binding arbitration before a panel of one or more arbitrators under the
         administration of the American Arbitration Association, and in a
         location mutually agreed to by the Employee and the Company. The
         Federal and State courts located in the United States of America are
         hereby given jurisdiction to render judgment upon, and to enforce, each
         arbitration award, and the parties hereby expressly consent and submit
         to the jurisdiction of such courts.

                  10. Miscellaneous.

                           (a) This Agreement shall be governed by and construed
                  in accordance with the laws of the State of Florida, 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) This Agreement and Section 12 of the Employment
                  Agreement constitute the entire agreement between the parties
                  with respect to the subject matter hereof. In the event of any
                  inconsistency between the provision of this Agreement and the
                  provisions of the Plan, the provisions of this Agreement shall
                  govern.

                           (c) All notice and other communications hereunder
                  shall be in writing and shall be given by hand deliver to the
                  other party or by registered or certified mail, return receipt
                  requested, postage prepaid, or by telecopier, or by courier,
                  addressed as follows:

                                       6
<PAGE>   22

                   If to the Employee to:    If to the Company to:
                   ---------------------     --------------------
                   Richard G. Smith          Florida East Coast Industries, Inc.
                   303 Chase Lane.           One Malaga Street
                   Marietta, Georgia 30068   St. Augustine, FL  32084
                                             Facsimile:  904/826-2379

                  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.

                           (d) In the event of a dispute arising out of this
                  Agreement, any party receiving any monetary or injunctive
                  remedy, whether at law or in equity, which is final and not
                  subject to appeal shall be entitled to its reasonable
                  attorneys' fees and costs incurred with respect to obtaining
                  such remedy from the other party.

                           (e) The invalidity or unenforceability of any
                  provision of this Agreement shall not affect the validity or
                  enforceability of any other provision of this Agreement.

                           (f) The Employee's or the Company's failure to insist
                  upon strict compliance with any provision hereof or any other
                  provision of this Agreement or the failure to asset any right
                  the Employee or the Company may have hereunder, shall not be
                  deemed to be a waiver of such provision or right or any other
                  provision or right of this Agreement.

                                       7
<PAGE>   23

                                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       By /s/ Robert W. Anestis
                                          ------------------------------------
                                          Robert W. Anestis
                                          Chairman and Chief Executive Officer

Agreed and Accepted:

/s/ Richard G. Smith
--------------------
Richard G. Smith

                                       8
<PAGE>   24

                           RESTRICTED STOCK AGREEMENT

                              (Long Term Incentive)

                                     between

                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       and

                                RICHARD G. SMITH

                                                               December 21, 2000

<PAGE>   25

         THIS AGREEMENT, dated December 21, 2000 between Florida East Coast
Industries, Inc.("FECI") (the "Company"), and Richard G. Smith (the "Employee")
is made pursuant to the provisions of Section 2(b)(iii) of that certain
Employment Agreement of even date herewith between the Company and the Employee
(the "Employment Agreement").

         In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:

         1. Grant of Restricted Stock. Under the Company's Stock Incentive Plan,
         as amended (the "Plan"), the Company hereby grants to the Employee,
         subject to the terms and conditions herein set forth, seven thousand
         five hundred (7,500) shares of the Company's Common Stock (the
         "Restricted Stock").

         2. Terms and Conditions. The Restricted Stock is subject to the
         following terms and conditions:

                  (a) Limited Nontransferability. This Restricted Stock shall be
         nontransferable during the term of the Restrictions (as hereinafter set
         forth) except by will or by the laws of descent and distribution.

                                       2
<PAGE>   26

                  (b) Restrictions and Lapse of Restrictions. The Restricted
         Stock shall be subject to the Employee's continued employment by the
         Company or a parent or subsidiary corporation (the "Restrictions"),
         which shall lapse according to the following schedule as of the stated
         yearly anniversaries of the date hereof (each an "Anniversary Date"):

                                 ANNIVERSARY                UNRESTRICTED
                                     DATE                    PERCENTAGE
                                 -----------                ------------
                                 First                       20%

                                 Second                      40%

                                 Third                       60%

                                 Fourth                      80%

                                 Fifth                      100%

         Notwithstanding the foregoing, upon the occurrence of an Accelerating
         Event (as defined in Section 4(a) of the Employment Agreement), all
         Restrictions shall lapse upon the date of such Accelerating Event.

         3. Forfeiture of Restricted Stock Upon Termination of Employment. The
         rights of the Employee and his successors in interest in Restricted
         Stock on which the Restrictions have not lapsed pursuant to paragraph
         2(b) shall terminate in full when the Employee's employment with the
         Company or a parent or subsidiary corporation is terminated by the
         Company for Cause (as defined in Section 3(b) of the Employment
         Agreement) or by the Employee without Good Reason (as defined in
         Section 3(c) of the Employment Agreement).

                                       3
<PAGE>   27

         4. Dividends/Distributions. The Company shall pay to the Employee any
         dividends or other distributions payable with respect to the Restricted
         Stock, notwithstanding the Restrictions, beginning on the date hereof
         but not beyond the date of any forfeiture thereof pursuant to the
         provisions of paragraph 3.

         5. Withholding. The Employee agrees to make arrangements satisfactory
         to the Company to comply with any income tax withholding requirements
         that may apply upon the lapse of the Restrictions on the Restricted
         Stock. The Employee will be entitled to elect to satisfy his tax
         withholding obligation by the withholding by the Company, at the
         appropriate time, of shares of the Company's Common Stock from the
         Restricted Stock in a number sufficient, based upon the fair market
         value (as defined below) of such Common Stock on the relevant date, to
         satisfy such tax withholding requirements. For purposes of this
         Agreement, "fair market value" means, as of any given date, the closing
         price of the Company's Common Stock on such date as quoted in the NYSE
         Composite Transactions Report in the Wall Street Journal. If there were
         no sales reported as of a particular date, fair market value will be
         computed as of the last date preceding such date on which a sale was
         reported.

         6. Delivery of Certificates. The Company may delay delivery of the
         certificate for shares granted hereunder until (i) the admission of
         such shares to listing on any stock exchange on which the Company's
         Common Stock may then be listed, (ii) completion of any registration or
         other qualification of such shares under any state or federal law
         regulation that the Company's counsel shall determine as necessary or
         advisable, and (iii)

                                       4
<PAGE>   28

         receipt by the Company of advice by counsel that all applicable legal
         requirements have been complied with.

         7. Dispute Resolution. Any dispute or controversy arising under or in
         connection with this Agreement shall be settled by binding arbitration,
         which shall be the sole and exclusive method of resolving any
         questions, claims or other matters arising under this Agreement. Such
         proceeding shall be conducted by final and binding arbitration before a
         panel of one or more arbitrators under the administration of the
         American Arbitration Association, and in a location mutually agreed to
         by the Employee and the Company. The Federal and State courts located
         in the United States of America are hereby given jurisdiction to render
         judgement upon, and to enforce, each arbitration award, and the parties
         hereby expressly consent and submit to the jurisdiction of such courts.

         8. Miscellaneous.

                  (a) This Agreement shall be governed by and construed in
         accordance with the laws of the State of Florida, 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) This Agreement and Section 12 of the Employment Agreement
         constitute the entire agreement between the parties with respect to the
         subject matter hereof. In the

                                       5
<PAGE>   29

         event of any inconsistency between the provisions of this Agreement and
         the provisions of the Plan, the provisions of this Agreement shall
         govern.

                  (c) 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, or by telecopier, or by courier, address as follows:

                 If to the Employee to:      If to the Company to:
                 ----------------------      ---------------------
                 Richard G. Smith            Florida East Coast Industries, Inc.
                 303 Chase Lane              One Malaga Street
                 Marietta, Georgia  30068    St. Augustine, FL  32084
                                             Facsimile:  904/826-2379

         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.

                  (d) In the event of a dispute arising out of this Agreement,
         any party receiving any monetary or injunctive remedy, whether at law
         or in equity, which is final and not subject to appeal shall be
         entitled to its reasonable attorneys' fees and costs incurred with
         respect to obtaining such remedy from the other party.

                  (e) The invalidity or unenforceability of any provision of
         this Agreement shall not affect the validity or enforceability of any
         other provision of this Agreement.

                  (f) The Employee's or the Company's failure to insist upon
         strict compliance with any provision hereof or any other provision of
         this Agreement or the failure to assert any right the Employee or the
         Company may have hereunder, shall not be deemed to be a waiver of such
         provision or right or any other provision or right of this Agreement.

                                       6
<PAGE>   30

                                      FLORIDA EAST COAST INDUSTRIES, INC.

                                      By: /s/ Robert W. Anestis
                                          ------------------------------------
                                          Robert W. Anestis
                                          Chairman and Chief Executive Officer

Agreed and Accepted:

/s/ Richard G. Smith
--------------------
Richard G. Smith

                                       7

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