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Home My WebLink About13726 RESOLUTION NO. 13726 A RESOLUTION APPROVING A FIRST AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEWAG TRACTION CHAIN, INC., A COLORADO CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID FIRST AMENDMENT BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that good cause exists for the extension of the employment commitment date for PEWAG Traction Chain, Inc., a Colorado corporation (the “Company”). The first amendment to an employment agreement, dated June 15, 2017, a copy of which is attached hereto and incorporated herein by this reference, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver said amendment in the name of the City and the City Clerk is directed to affix the seal of the City thereto and to attest same. SECTION 2. The officers and staff of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution and the attached first amendment to an employment agreement, which are necessary or desirable to implement the transactions described therein. SECTION 3. This Resolution shall become effective immediately upon final passage. INTRODUCED July 24, 2017 BY: Ed Brown City Clerk’s Office Item # M-1 Background Paper for Proposed Resolution COUNCIL MEETING DATE: July 24, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION APPROVING A FIRST AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEWAG TRACTION CHAIN, INC., A COLORADO CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAID FIRST AMENDMENT SUMMARY: Attached is a Resolution approving and authorizing the President of City Council to sign a first amendment to an employment agreement with PEWAG Traction Chain, Inc., a Colorado corporation (the “Company”). The amendment extends the Company’s employment commitment date until July 1, 2019. PREVIOUS COUNCIL ACTION: The Company and City entered into an original employment agreement dated September 10, 2012 which provided for the advancement of funds in the amount of $950,000 to the Company in exchange for the Company’s commitment to employ, for a seven-year period, fifty-five (55) full- time employees whose annual salary would average at least $35,500. BACKGROUND: As a result of a change in its business plan and an anticipated enlargement of its Pueblo manufacturing facility, the Company has requested that the City extend the Company’s employment commitment date until July 1, 2019. The Company intends to continue to operate its manufacturing facility within the City through at least June 30, 2026. FINANCIAL IMPLICATIONS: There will be no financial impact on the City if City Council approves the extension of the Company’s employment commitment date. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If this Resolution is not approved, the Company’s employment commitment date will occur prior to the Company being able to employ fifty-five (55) full-time employees. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Resolution. Attachments: Proposed Resolution; First Amendment to Employment Agreement FIRST AMENDMENT TO EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("First Amendment") entered into this !CP` day of 4+i't-c-- , 2017 between Pueblo, a municipal corporation(the"City")and Pewag Traction Chain, Inc.,a Colorado corporation(the"Company"). WHEREAS, Company and City entered into an original Employment Agreement ("Employment Agreement") dated September 10, 2012 which provided, inter alia, for the advancement of funds in the amount of $950,000.00 to the Company in exchange for the Company's commitment to employ, for a seven (7) year period, fifty-five (55)full time employees whose annual salary would average at least $35,500.00; and WHEREAS, Company intends to continue to operate its manufacturing facility within the City through, at least, June 30, 2026; and WI-IEREAS, as a result of a change in its business plan and an anticipated enlargement of its Pueblo manufacturing facility, the Company has requested that the City extend and enlarge the Company's Employment Commitment Date. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The Company's Employment Commitment Date is enlarged and extended to July 1, 2019. 2. The Termination Date of the Company's Employment Commitment is enlarged and extended to June 30, 2026. 3. From July 1, 2019 to June 30, 2026, Company will continuously conduct its business operations at the Facility and employ, on a quarterly average, not less than fifty-five (55) Full- Time Employees at the Facility ("Employment Commitment"). Such quarterly average shall be calculated using the sum of the aggregate number of Full-Time Employees on each business day of a Quarter, divided by the sum of the aggregate business days in such Quarter. 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall fail to meet the Employment Commitment, Company shall pay to City compensating amounts calculated as follows. From July 1, 2019 to June 30, 2026 (the "Commitment Period") Company shall pay to City a compensating amount for each Quarter in the Commitment Period calculated by subtracting the number of Quarterly Employees from the commitment of fifty-five (55) Full-Time Employees and then multiplying the result by $616.88. For example, if for the second Quarter of 2020, the number of Quarterly Employees is 41 the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be(55 - 41) x $616.88 = $8,636.32. 5. The Employment Agreement between the Parties, which is incorporated herein by this reference, shall remain in full force and effect, except as amended by this First Amendment Agreement. Executed at Pueblo, Colorado, the day and year first above written. [ SEAL ] Pueblo, a Municipal. , or.oration Attest: pg� B I — _ City lerk President of the City Council CAROL inorr4commA NOTARY PUBLIC STATE OF COLORADO NOTARY 19.1t��02Z070 [ SEAL ] ira\ DNExIRESaAWtJARYB.2018 PEWAG TRACTION CHAIN, INC., a Coloraso cor oration Attest: By da/a�4/ Name: l :qz,-(i. r v N. e: hidden( a/l,tk,S4(/fr— Title: Title: 2