Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 18, 1999
(the "Execution Date"), by and between PS GROUP, INC., a Delaware corporation
(the "Company"), and Xxxxxxxx X. Xxxxx ("Employee").
WHEREAS, PS Group Holdings, Inc., a Delaware corporation,
Heritage Air Holders Statutory Trust, a Connecticut statutory trust ("Parent"),
and PSG Acquisition, Inc., a Delaware corporation ("Merger Sub"), are
concurrently herewith entering into an Agreement and Plan of Merger, dated as of
December 18, 1999 (the "Merger Agreement"), pursuant to which Merger Sub shall
merge with and into the Company (the "Merger"); and
WHEREAS, in connection with the Merger, the parties hereto desire to
enter into this Agreement, to be effective at the Effective Time (as defined in
the Merger Agreement);
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties agree as follows:
1. Employment. The Company offers Employee employment in the position
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of Vice President-Finance and Chief Financial Officer or other position mutually
agreed to on the terms and conditions set forth herein (the "Offer"). The Offer
shall expire on the thirtieth day following the Execution Date (the "Offer
Expiration Date"). Employee may accept the Offer by delivering written notice of
such acceptance to the Company at any time prior to the Offer Acceptance Date
(the "Employment Election"). Employee may reject the Offer at any time prior to
the Offer Acceptance Date by delivering written notice of such rejection to the
Company (the "Non-Employment Election"). If Employee fails to make the
Employment Election prior to the Offer Expiration Date, he shall be deemed to
have made the Non-Employment Election. In the event that the Non-Employment
Election is made, this Agreement shall be null and void.
2. Term. Subject to Section 9, the term of this Agreement (the "Term")
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shall be one year from the Effective Time; provided, however, that the Term may
be extended from time to time by a written instrument signed by both parties. In
the event that the Merger Agreement is terminated pursuant to its terms or
Employee does not continue his services as an employee of the Company during the
period from the date hereof until the Effective Time, this Agreement shall be
null and void.
3. Duties of Employee. During the Term, Employee shall have the duties
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and authority normally associated with the position of Vice President-Finance
and
Chief Financial Officer; provided, however, that the Company at its discretion
may from time to time assign additional duties and authority to Employee as are
mutually agreed. In addition, during the Term, Employee shall work with the
designated representatives of Parent and its affiliates to manage the operations
of the Company and its subsidiaries that remain after the Merger, and shall use
his best efforts in consultation with the designated representatives of the
Company to maximize the value of the assets of the Company and its subsidiaries
(either through ongoing management of such assets or sales thereof) and minimize
the liabilities of the Company and its subsidiaries. Employee shall also perform
various duties reasonably requested by the Company that were previously
performed by Xxxxxxx Xxxxx (to the extent such duties continue to be necessary
after the Effective Time and are not performed by Xx. Xxxxx pursuant to her
Consulting Agreement with the Company). Employee shall be based in San Diego,
California with limited travel requirements (unless mutually agreed), and his
offices shall be located at the existing offices of the Company until such time
as the current lease is terminated and such offices are relocated within the San
Diego, California area.
4. Exclusive Services. Employee shall devote his energies and
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abilities to the full time performance of his duties under this Agreement, and
shall carry out such duties in a competent and efficient manner. Employee shall
not without the written consent of the Company render services for compensation
to any other employer or person during the Term, nor shall Employee engage in
any other activity which conflicts or interferes with the performance of his
duties hereunder.
5. Compensation. (a) As consideration for his services hereunder,
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Employee shall receive an annual salary of $192,500, payable in accordance with
the Company's normal payroll practices.
(b) Any amounts paid to Employee pursuant to this Agreement shall be
subject to any deductions or withholdings required by law.
6. Benefits. (a) Except as provided below and subject to the terms
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thereof, Employee shall continue to participate in those employee benefit plans
maintained by the Company (including the Company's existing medical plan
(subject to any modifications imposed by the insurance carrier), but excluding
the 401(k) plan) in which he is participating immediately prior to the date
hereof; provided, however, that this Agreement shall not prohibit the Company
from modifying or replacing any such plan with a plan that provides no less
advantageous benefits in the aggregate than the prior plan.
(b) Benefit accruals with respect to Employee under the Retirement
Plan for Corporate Officers of PSA, Inc. and Participating Subsidiaries, dated
March 12, 1984, shall cease as of the Effective Time.
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7. Bonus. In addition to the compensation and benefits described in
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Sections 5 and 6 of this Agreement, Employee shall be eligible to receive an
annual discretionary bonus based on Parent's assessment of his performance.
Employee's entitlement to such bonus, or a pro-rated portion thereof for any
partial calendar year, shall be determined in the sole discretion of Parent.
8. Confidentiality. Employee agrees that he will not use for his own
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benefit or disclose to any third party, either during his employment or
thereafter, any confidential information or data concerning the business or
customers of the Company, Parent or any of their respective subsidiaries or
affiliates acquired at any time while employed or rendering services to the
Company or any of its subsidiaries or affiliates, or any of their respective
predecessors or successors. Employee's obligations under this covenant, and any
liability for failure to satisfy these obligations, shall survive any
termination of this Agreement.
9. Termination. In addition to the termination provisions of the
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second sentence of Section 2, this Agreement shall terminate under the following
circumstances:
(a) This Agreement shall automatically terminate upon the death,
Disability or resignation of Employee. For purposes of this Agreement,
"Disability" means a physical or mental disability or infirmity of
Employee, as determined by a physician of recognized standing selected by
the Company, that prevents (or in the opinion of such physician, is
reasonably expected to prevent) the normal performance of Employee's duties
with the Company for any continuous period of 180 days, or for 180 days
during any one twelve-month period.
(b) The Company may terminate this Agreement for Cause (as defined
below). For purposes of this Agreement, "Cause" means (i) commission by
Employee of a significant act of dishonesty, deceit or breach of fiduciary
duty in the performance of his duties hereunder; (ii) the gross neglect or
willful failure of Employee to perform his duties hereunder; (iii) any act
by Employee which reflects materially and adversely upon the Company,
Parent or any of their respective subsidiaries or affiliates; or (iv) any
material breach by Employee of this Agreement.
10. Effect of Termination. If this Agreement is terminated on account
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of Employee's death, Disability or resignation or by the Company for Cause, the
Company shall cease to have any obligations hereunder; provided, however, that
such termination shall not affect Employee's obligations under Section 8 or the
entitlement of Employee or his heirs to any death, disability or retirement
payments to which they may be entitled as of the date of termination under any
employee benefit plans maintained by the Company.
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11. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties concerning the subject matter hereof, and supersedes, as of
the Effective Time, all other written, oral or implied agreements between the
parties, including, without limitation, (i) the Employment Agreement dated as of
January 15, 1988 between the Company and Employee, as amended from time to time,
and (ii) any agreement, arrangement or understanding providing for severance or
"change of control" benefits or payments; provided, however, this Agreement
shall have no effect with respect to (a) the Split Dollar Life Insurance
Agreement executed by Employee on January 1, 1986, as amended by the letter
dated March 23, 1999 and (b) the Bonus Agreement dated as of December 18, 1999
between the Company and Employee. This Agreement may be modified or amended only
by a writing signed by both parties.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Execution Date.
PS GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
Title: Chief Executive Officer
EMPLOYEE
/s/ X. X. Xxxxx
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Xxxxxxxx X. Xxxxx
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