Document:

EX-10.1

 Exhibit 10.1 
  

 
 January 19, 2016 

Mr. Matthew S. Kohnke 
 1 Steven Court 

Bordentown, NJ 08505 
 Re: Terms of
Employment 
 Dear Matt: 
 This letter
agreement (“letter”) sets forth the terms of your employment with FreightCar America, Inc. (the “Company”). Commencing February 29, 2016, you will be employed as the Company’s Vice President, Finance,
Chief Financial Officer and Treasurer, based at the Company’s offices in Chicago, Illinois, and reporting to Joseph E. McNeely, the Company’s President and Chief Executive Officer. You will have all of the duties and responsibilities
commensurate with such position under the Company’s by-laws and consistent with the duties and responsibilities of chief financial officers of similar businesses as the Company. During your employment, you will devote your full-time business
attention to the Company and will use your best efforts to discharge your responsibilities. You may, however, engage in civic and charitable activities and, with the prior consent of the Company’s Board of Directors (“Board”),
corporate boards, provided that these activities do not interfere with your duties to the Company. 
 You must successfully complete all
required employment documentation, a post-offer drug screening, physical examination, background check and reference checks. The Company will work with you to successfully and quickly complete all of these required processes. This letter and your
employment is for no specific term. Your employment may be terminated at any time for any reason (or no reason), subject to the terms of this letter below, by the Company or you upon notice to the other such party. 

The Company will provide you with relocation assistance to support your move from your current location to the Chicago, IL area. The
Company’s relocation services provider, NRI Relocation, will be assigned to assist you with the process. Relocation support available to you is attached to this letter as Exhibit A. On an exception basis, the Company will reimburse you for the
real estate broker fee, not to exceed $20,000, associated with the sale of your primary residence in New Jersey. This payment will be made upon submission of the closing statement, be considered taxable income and not be grossed up. Should you
voluntarily terminate your employment with the Company within two years of your start date, you will be required to reimburse the Company for the full cost of any relocation assistance provided to you. 

Two North Riverside Plaza 

Suite 1300 
 Chicago, IL 60606 USA

 312.928.0850 
 Fax 312.928.0890

 www.freightcaramerica.com 

 

 
  
 1. Salary. Beginning
February 29, 2016, you will receive an annual base salary in the amount of $270,000 (“Salary”), paid in accordance with payroll practices applicable to all salaried employees. Your Salary will be reviewed by the Company
annually and may be increased (not decreased without your written consent) in the Company’s discretion. 
 2. Bonus. You will be
entitled to participate in the Company’s annual cash incentive plan applicable to all senior executives (the “Bonus Plan”) effective 2/29/2016, and to earn a bonus (“Bonus”) for each fiscal year of the Company ending
during your employment. The measurement period for the annual cash incentive plan runs concurrent with the Company’s fiscal calendar which concludes on December 31st of each year. Your
target Bonus is 50% of your Salary, upon achievement of a target level of performance set forth in the Bonus Plan, payable in cash or securities of the Company, as may be determined under the Bonus Plan, within two and one-half months after the end
of the fiscal year to which it relates. Should there be Bonus payments for 2016 under the Bonus Plan, you will be eligible, on an exception basis, for consideration for a full year Bonus payment for 2016 as if you were a participant as of 1/1/2016.

 3. Sign-On Award. On your start date with the Company, you will be granted 2,000 restricted shares of Company common stock under
the Company’s 2005 Long Term Incentive Plan, having such terms and conditions as are set forth in the restricted share award agreement attached to this letter as Exhibit B. 

4. Long-Term Incentive and Other Executive Compensation Plans. You will be eligible to participate in all of the Company’s
equity-based and cash-based long-term incentive and other executive compensation plans on a basis no less favorable than other similarly situated executives. Any awards under these plans may be made from time to time in the sole discretion of the
Compensation Committee of the Board or the Board. 
 5. Benefits; Business Expenses. During your employment, you will be entitled to
participate in each of the Company’s employee retirement, savings, welfare and fringe benefit plans, and perquisites, offered to similarly situated executives, as in effect from time to time. On an exception basis, you will be entitled to four
(4) weeks of paid vacation days per year. Further paid vacation will be earned in accordance with applicable Company policy. On an exception basis, you will be immediately eligible for thirteen (13) weeks of pay under the Company’s
severance plan. Further severance eligibility will be in accordance with the plan. You are not eligible for severance benefits if you are terminated for cause. You will be reimbursed for all business, including entertainment, expenses incurred by
you in connection with your duties, subject to the Company’s policy for substantiating such expenses. 
 6. Termination. Upon a
termination of your employment for any reason, you will be entitled to (i) your accrued Salary and accrued and unused vacation through the date of termination, and (ii) any accrued and vested benefits and unreimbursed expenses incurred and
unpaid on the date of termination in accordance with Section 5. 

 

 
  
 7. Restrictive Covenants 

(a) Confidential Information. You understand that the Company possesses and will possess Confidential Information that is important to
its business. The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business and the Company diligently maintains the secrecy and
confidentiality of its Confidential Information. For this purpose, “Confidential Information” is information that was or will be developed, created, or discovered by or on behalf of the Company, or that became or will become known by, or
was or is conveyed to the Company, which has commercial value in the Company’s business. Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. Confidential Information also
includes any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, (i) information relating to the
Company’s past and existing customers and vendors and development of prospective customers and vendors, including without limitation specific customer product requirements, pricing arrangements, payment terms, customer lists and other similar
information; (ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; (iii) the Company’s proprietary programs, processes
or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including
programs and documentation in incomplete stages of design or research and development; (iv) the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress,
manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and (v) other confidential and proprietary information or documents
relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. 

You understand that the Company possesses or will possess “Company Materials” that are important to its business. For this purpose, “Company
Materials” are documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, whether such documents have been
prepared by you or by others. In consideration of your employment by the Company, the compensation received by you from the Company, and the Company’s agreement to give you access to certain Confidential Information, you agree as follows: 

 

 
  
 (i) All Confidential
Information and trade secret rights, and other intellectual property and rights (collectively “Rights”) in connection therewith will be the sole property of the Company. At all times, both during your employment by the Company and after
its termination for any reason, you will keep in confidence and trust and will not use or disclose any Confidential Information or anything relating to it without the prior written consent of a then current officer of the Company except as may be
necessary and appropriate in the ordinary course of performing your duties to the Company. 
 (ii) All Company Materials will
be the sole property of the Company. You agree that during your employment by the Company, you will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the
Company, except as you are required to do so in connection with performing the duties of your employment. You further agree that, immediately upon the termination of your employment by you or by the Company for any reason, or during your employment
if so requested by the Company, you will return all Company Materials, apparatus, equipment and other physical property, or any reproduction of such property. 

(b) Noncompetition and Non-solicitation. While employed by the Company and for a period of twelve (12) consecutive months
thereafter, you will not, directly or indirectly: 
 (i) Contact, solicit, interfere with, or divert, or induce or attempt to
contact, solicit, interfere with or divert, any of the Company’s customers; 
 (ii) Participate or engage in (as an
owner, partner, employee, officer, director, independent contractor, consultant, advisor or in any other capacity calling for the rendition of services, advice, or acts of management, operation or control) any business engaged in the manufacture of
railcars in North America; and 
 (iii) Solicit or induce or attempt to solicit or induce, by or for yourself, or as the
agent of another, or through others as an agent in any way, any person who is employed by the Company for the purpose of encouraging that employee to join you as a partner, agent, employee or otherwise in any business activity which is competitive
with the Company. 
 (c) Forfeitures. In the event that you materially breach any of the restrictions in this Section 7, you
shall forfeit all of the applicable payments and benefits described in this letter, and the Company shall have the right to recapture and seek repayment of any such applicable payments and benefits under this Agreement. 

(d) Intellectual Property. “Inventions” includes all improvements, inventions, designs, formulas, works of authorship, trade
secrets, technology, computer programs, compositions, ideas, processes, techniques, know-how and data, whether or not 

 

 
  
 patentable, made or conceived or reduced to practice
or developed by you, either alone or jointly with others, during the term of your employment, including during any period prior to the date of this letter. Except as defined in this letter all Inventions that you make, conceive, reduce to practice
or develop (in whole or in part, either alone or jointly with others) during your employment will be the sole property of the Company to the maximum extent permitted by law. You agree to assign such Inventions and all Rights in them to the Company.
Exemptions from this agreement to assign may be authorized in those circumstances where the mission of the Company is better served by such action, provided that overriding obligations to other parties are met and such exemptions are not
inconsistent with other Company policies. Further, you may petition the Company for license to make, market or sell a particular Invention. 

(e) Injunction. You acknowledge that monetary damages will not be an adequate remedy for the Company in the event of a breach of this
Section 7, and that it would be impossible for the Company to measure damages in the event of such a breach. Therefore, you agree that, in addition to other rights and remedies that the Company may have, the Company is entitled to an injunction
preventing you from any breach of this Section 7, and you hereby waive any requirement that the Company post any bond in connection with any such injunction. You further agree that injunctive relief is reasonable and necessary to protect a
legitimate, protectible interest of the Company. 
 (f) Blue Pencil. If any court determines that the covenants contained in this
Section 7, or any part hereof, are unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, to as close to the terms
hereof as shall be enforceable and, in its reduced form, such provision shall then be enforceable. 
 (g) Survival. The restrictive
covenants contained in this Section 7 shall survive the termination of your employment. 
 8. Section 409A. Anything in
this Agreement to the contrary notwithstanding, if any payment(s) or benefit(s) under this Agreement would be subject to the provisions of Section 409A of the Internal Revenue Code of 1986 (the “Code”) at the time they become
payable or benefits due you, to the extent required to comply with Section 409A of the Code any such payments or benefits will be delayed for six (6) months or such other earliest day on which such payments could be made or benefits
provided in compliance with Section 409A of the Code and the regulations thereunder (at which point all payments so delayed will be provided or reimbursed to you in one lump sum, without interest, within two and one-half months after the date
they then become so payable or due to you). 
 9. Miscellaneous. 

(a) Entire Agreement. Except as otherwise contemplated herein, this letter contains the entire agreement between you and the Company
with respect to the subject matter hereof. No amendment, modification or termination of this letter may be made orally, but must be made in writing and signed by you and the Company. 

 

 
  
 (b) Survival. The provisions
of Section 7 shall survive any termination of your employment. 
 (c) Successors; Assignment. Neither party hereto may assign
any rights or delegate any duties under this letter without the prior written consent of the other party; provided, however, that (a) this letter will inure to the benefit of and be binding upon the successors and assigns of the Company upon
any sale of all or substantially all of the Company’s stock and/or assets, or upon any merger, consolidation or reorganization of the Company with or into any other corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company; and (b) this letter will inure to the benefit of and be binding upon your heirs, assigns or designees to the extent of any payments due to them hereunder. 

(d) Governing Law. This letter will be governed by and construed in accordance with the law of the State of Illinois, and not its
choice of law rules, applicable to contracts made and to be performed entirely within that State. 
 (e) No Set-off or Mitigation.
Your rights to payments under this letter will not be affected by any set-off, counterclaim, recoupment or other right the Company may have against you or anyone else. You do not need to seek other employment or take any other action to mitigate any
amounts owed to you under this letter, and those amounts will not be reduced if you do obtain other employment. 
 (f) Notices. All
notices, requests, demands and other communications under this letter must be in writing and will be deemed given (i) when hand-delivered, (ii) on the first business day after the business day sent from within the United States, if
delivered by a nationally recognized overnight courier or (iii) on the third business day after the business day sent if delivered by registered or certified mail, return receipt requested, in each case to the following address (or to such
other address as may be specified by notice that conforms to this Section 9(f)): 
 If to the Company, to: 

FreightCar America, Inc. 
 Two
North Riverside Plaza 
 Suite 1300 

Chicago, Illinois 60606 

Attention: Secretary 
 If to
you, to your last address shown on the payroll records of the Company. 

 

 
  
 (g) Counterparts. This letter
may be executed in counterparts, each of which will constitute an original and all of which, taken together, will constitute one and the same instrument. 

Very truly yours, 
  

			
	FreightCar America, Inc.
		
	By:	 	 /s/ Thomas P. McCarthy

		 	Senior Vice President – Human Resources

  

	
	Accepted and agreed:
	
	 /s/ Matthew S. Kohnke

	Matthew S. Kohnke

 

 
  
 EXHIBIT A 

RELOCATION SERVICES DESCRIPTION 

 

 
  
 EXHIBIT B 

RESTRICTED SHARE AWARD AGREEMENTex4-1.htm

Exhibit 4.1

MODIFICATION AGREEMENT

 

This Agreement is made and entered into as of this 25th day of January, 2016 by and between Medovex Corporation, a Nevada corporation with its principal offices at 3729 Hardee Avenue, Atlanta, Georgia 30341 (the “MDVX” or the “Company”) and  Steven Gorlin, an individual with an address of 1234 Airport Rd, #105, Destin, FL 32541(“Gorlin”). Gorlin and the Company are collectively referred to as the “Parties”.

 

WHEREAS, Gorlin purchased from the Company $1.0 million of the Company’s 5.5% Convertible Promissory Notes due November 9, 2017 (the “Maturity Date”), on November 9, 2015 (the “Note”); and

 

WHEREAS, pursuant to the terms of the Note, the Note is convertible into the common stock, par value $-.—per share of the Company (the “Common Stock”), at a price of $2.00 per share (the “Conversion Price)”;

 

WHEREAS, the Company believes that it is in the interest of the Company to (A) reduce its indebtedness under the Note and increase its common shareholder’s equity by encouraging Gorlin to convert the note prior to the Maturity Date by reducing the Conversion Price to $1.75 per share of Common Stock in connection with the immediate conversion of the Note; (B)  obtain Gorlin’s commitment to invest an additional $1.0 million within 60 days of the date hereof at a purchase price of $1.75 per share in lieu of the present obligation of Gorlin to purchase an additional $1.0 million Note from the Company which obligation will be eliminated; and (C) elect Gorlin co-chairman of the Board of Directors of the Company.

 

Terms not otherwise defined herein shall have the meanings ascribed to such terms in the Note.

 

NOW, THEREFORE, in consideration of the mutual terms and covenants contained herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

 

1.           Modification of Note and Conversion.

 

(a) Section 2(a) of the Note is hereby amended to  replace the Conversion Price with the price of $1.75 per share.

 

(b) Section --- of the Note requiring Gorlin to loan $1.0 million to the Company is hereby deleted in its entirety..(c) Gorlin hereby exercises his right to convert the $1.0 million original principal amount of the Note into 571,429 shares (the “Conversion Shares”) of Common Stock of the Company and the Company agrees to cause its transfer agent, Interwest Transfer Company, to issue the Conversion Shares to Gorlin.  Gorlin acknowledges that the Conversion Shares will not be registered under the Securities Act of 1933, as amended (the “Act”) and shall bear the following legend:

 

  

  

  

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT IS AVAILABLE.

2.           Elimination of Debt Obligation.  Gorlin hereby acknowledges that hereof upon issuance of the Conversion Shares (and the payment of any accrued but unpaid interest which at the option of the Company may be converted into Common Stock on the same terms as the Note), owed as of the date hereof, the Company shall have no further obligations under the Note and the Note shall be deemed to be satisfied in full, except that the piggy back registration rights referenced in Section 11 of the Note shall remain in force with respect to the Conversion Shares and the Additional Shares as defined herein.

 

3.           Agreement to Purchase Common Stock.  Gorlin hereby irrevocably agrees to purchase and the Company agrees to sell 571,429 (the “Additional Shares”) restricted shares of Common Stock at a purchase price of $1.75 per share ($1,000,000) (the “Purchase Price”), on or prior to the 60 day anniversary of the date of this Agreement .  The Additional Shares shall bear the same legend as the legend set forth in Section 1 above.  The Purchase Price shall be subject to standard anti-dilution protection in the event that the Company does any of the following prior to the purchase of the Additional Shares.

 

 (i) subdivides or combines its capital stock, the Purchase Price shall be proportionately decreased in the case of a subdivision or increased in the case of combination; or

 

 (ii) pays a dividend generally with respect to its capital stock payable in shares of its capital stock, or makes any other distribution of its capital stock with respect to such capital stock, then the Purchase Price shall be adjusted, effective from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Purchase Price in effect immediately prior to such date of determination by a fraction, (A) the numerator of which shall be the total number of shares of its capital stock outstanding immediately prior to such dividend or distribution (determined on a fully diluted, as converted basis) and (B) the denominator of which shall be the total number of shares of such capital stock outstanding immediately after such dividend or distribution (determined as aforesaid).

 

Other than above, there shall be no anti-dilution protection with the respect to the Purchaser Price.

 

4.           Consent to serve as Co-Chairman of the Company’s Board of Directors.  Effective immediately, the Company hereby agrees to appoint Gorlin (and Gorlin consents to such appointment).

 

5.           Modification of Warrant Exercise Price.  The Company hereby agrees to lower the exercise price of the warrant issued to Gorlin on November 9, 2015 (the “Warrants”) from an exercise price of $2.20 per share of Common Stock to $2.00 per share of Common Stock.

 

6.           SEC Reports.  The Company agrees not later than the 1st business day following the execution of this Agreement to file with the SEC a Current Report on Form 8-K announcing the matters set forth in Paragraph 1 hereto and Gorlin agrees to file a Form 4 amendment reporting the conversion of the Notes no later than 2 business days following the date of this Agreement.

7.           Notices.  All communications hereunder will be in writing and, except as otherwise expressly provided herein, sent by overnight mail, to the Company at:  3729 Hardee Avenue Atlanta, Georgia 30341 and to Gorlin at: 1234 Airport Road, 3105, Destin, FL 32541.

8.           Parties in Interest.  This Agreement is made solely for the benefit of Gorlin and the Company, and their respective controlling persons, directors and officers, and their respective successors, assigns, executors and administrators.  No other person shall acquire or have any right under or by virtue of this Agreement.

9.           Headings.  The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.

 

10.           Applicable Law; Venue and Jurisdiction; Injunctive Relief.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict of law principles.  Any action arising out of this agreement shall be brought exclusively in a court of competent jurisdiction located in New York County, New York, and the parties hereby irrevocably submit to the personal jurisdiction of such courts, and waive any objection they now or hereafter may have to the laying of venue in such courts. Nothing herein shall limit Company’s right to pursue any remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Gorlin’s failure to satisfy the obligations set forth in paragraph 3 hereof as required pursuant to the terms hereof.

 

11.           Counterparts.  This Agreement may be executed in any number of counterparts, each of which together shall constitute one and the same instrument.

 

12.           Authority.  This Agreement has been duly authorized, executed and delivered by and on behalf of the Company and Gorlin.

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

 

	
MEDOVEX CORPORATION 

 

	 
	 By:	
Jarrett Gorlin                         

Name: Jarret Gorlin

Its: Chief Executive Officer        

	

/s/ Steve Gorlin                

Steve Gorlin

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