1
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into effective as of November
13, 1998 by and between AMR Services Corporation, a Delaware corporation (the
"Company"), and Xxxx Xxxxxx ("Executive"), having a mailing address at 0000 Xxxx
Xxxx Xx., Xxxxxxxxxxx, XX 00000.
R E C I T A L S
The Board of Directors of the Company has determined that it is in the best
interests of the Company to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction during a possible sale of the Company.
To enhance and induce Executive's uninterrupted service to the Company, and to
provide Executive with specific contractual assurance of Executive's continued
employment with the Company following a sale of the Company, the Company wishes
to provide in this Agreement for the employment of the Executive upon the terms
and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. Employment. Upon the terms and subject to the conditions contained in
this Agreement, the Executive agrees to provide full-time services for the
Company. The Executive agrees to devote his best efforts to the business of the
Company, and to perform his duties in a diligent, trustworthy, and business-like
manner, all for the purpose of advancing the business of the Company.
2. Duties. Executive's duties, title and reporting relationship within the
Company's management structure shall during the term of this Agreement be
commensurate with Executive's current duties, title and reporting relationship,
as briefly outlined on Exhibit A attached hereto. Subject to the provisions of
Section 10(e)(A), the Executive's duties may, from time to time, be changed or
modified at the discretion of the President of the Company.
3. Employment Term. Subject to the terms and conditions hereof, the Company
agrees to employ the Executive for a term commencing on the effective date of
this Agreement and, subject to Section 11(k), continuing through the second
anniversary of the date of consummation (the "Closing Date") of any transaction
involving the sale of substantially all of the assets of the Company or a
controlling equity interest in the Company to, or any merger, consolidation,
business combination, or similar transaction with, a party unaffiliated with AMR
2
Corporation. This Agreement may be extended beyond the foregoing term by mutual
agreement of the parties.
4. Salary and Benefits.
(a) Base Salary. From and after the effective date of this Agreement, the
Company shall continue to pay to Executive his current annual base salary of
$ , pro rated for periods of less than 12 months, less applicable
withholding and salary deductions, in accordance with the Company's standard
payroll practices. On January 1, 1999 and during the remaining term of this
Agreement, Executive's base salary shall be increased to $ . After the
Closing Date, Executive's base salary shall be reviewed and considered for
adjustment by the Company at least annually. The Company may not, however,
reduce the Executive's base salary at any time during the term of this
Agreement.
(b) Annual Bonus Payment. The Company shall pay Executive an annual bonus
during the term of this Agreement. The first such bonus shall be paid on or
before March 15, 2000 (relating to the year 1999), and on or before the March
15, 2001 (relating to the year 2000). If the Agreement expires in 2001 and is
not renewed by mutual agreement of the parties, a prorated bonus shall be paid
to Executive for any portion of the year 2001 falling within the term of this
Agreement. Such prorated bonus shall be payable within thirty days following the
expiration date of this Agreement. The foregoing annual bonus shall be an amount
equal to 30% of the Executive's base salary for the applicable year (the
"Guaranteed Bonus"). In the event the Company's Board of Directors continues the
Company's annual incentive plan (or adopts a new plan), and the pay out under
such plan would be greater than the Guaranteed Bonus, Executive shall in lieu of
the Guaranteed Bonus be eligible to receive the pay out determined in accordance
with such plan.
(c) Vacation. The Executive shall be entitled to no less than 30 days of
paid vacation during each full year of his employment pursuant to this
Agreement. Vacations shall be taken at such times as are consistent with the
reasonable business needs of the Company.
(d) Reimbursement of Expenses. The Company shall reimburse the Executive
for all reasonable out-of-pocket expenses incurred by the Executive in the
course of his duties, in accordance with Company policies in effect from time to
time.
(e) Employee Benefits. The Executive shall be entitled to participate in
the employee benefit programs generally available to employees of the Company,
and to all normal perquisites provided to senior executives of the Company, it
being understood and agreed, however, that (i) the programs and perquisites made
available to Executive during the term of this Agreement shall be commensurate
with those provided to Executive immediately prior to the date of this Agreement
(except for benefits of the type provided under the AMR Long Term Incentive Plan
which may change or be eliminated from and after the Closing Date), and (ii)
unless provided pursuant to a separate agreement or policy adopted by the
Company prior to the Closing Date, the Company shall not make air travel
privileges available to Executive or other employees of the Company after the
Closing Date.
-2-
3
(f) Stay-In-Place Benefits. In addition to any other amounts due Executive
hereunder, the Company shall pay to Executive certain amounts and make certain
other benefits/privileges available to Executive as outlined in the letter to
Executive from the President of AMR Global Services dated September 23, 1998.
The Company's obligation to pay the foregoing amounts and make the foregoing
benefits/privileges available shall be contingent upon Executive not (i)
voluntarily terminating his employment prior to the Closing Date (other than for
Good Reason); or (ii) being terminated by the Company for Cause prior to the
Closing Date.
(g) Signing Bonus. In addition to any other amounts due Executive hereunder
or provided for in the letter referred to in Section 4(f), promptly following
the Closing Date the Company shall pay to Executive a bonus equal to two month's
of Executive's base salary, provided that Executive executes and delivers this
Agreement to the Company prior to November 13, 1998. Executive's base salary in
effect immediately prior to the Closing Date shall be used in calculating the
foregoing bonus amount. The Company's obligation to pay the foregoing bonus
shall be contingent upon Executive not (i) voluntarily terminating his
employment prior to the Closing Date (other than for Good Reason); or (ii) being
terminated by the Company for Cause prior to the Closing Date.
5. Termination of Employment. The Board of Directors of the Company may
terminate the employment of the Executive at any time as it deems appropriate.
Executive shall likewise be entitled at any time to terminate his employment
with the Company. Upon such termination, the Company's and Executive's further
rights and obligations shall be determined as set forth in the remaining
provisions of this Section 5 and as otherwise provided in this Agreement.
(a) Termination Without Cause; Resignation for Good Reason. If the
Executive's employment is terminated by the Company without Cause, or the
Executive voluntarily terminates his employment for Good Reason:
(i) The Company shall continue to pay the Executive his base salary and
Guaranteed Bonus as provided in Sections 4(a) and (b) above until the end
of the term of this Agreement (prorated through the termination date);
(ii) The Company shall maintain in full force and effect for the
continued benefit of the Executive, until the end of the term of this
Agreement, all employee benefit plans and programs or arrangements in which
the Executive was entitled to participate immediately prior to the date of
termination, provided that his continued participation is possible under
the general terms and provisions of such plans and programs (it being
understood and agreed, however, that unless provided pursuant to a separate
agreement or policy adopted by the Company prior to the Closing Date, the
Company shall not make air travel privileges available to Executive or
other employees of the Company after the Closing Date). In the event that
the Executive's participation in any such plan or program is barred, the
Company shall arrange to provide the Executive with benefits substantially
similar to those which he is entitled to receive under such plans and
programs.
-3-
4
(b) Voluntary Resignation or Termination for Cause. If the Executive shall
voluntarily terminate his employment other than for Good Reason, or if the
Company shall discharge the Executive for Cause, this Agreement shall terminate
immediately and the Company shall have no further obligation to make any payment
under this Agreement which has not already become payable, but has not yet been
paid; provided, however, that with respect to any stock options, performance
shares, career equity shares, incentive plans, deferred compensation
arrangements, or other plans or programs in which the Executive is participating
at the time of termination of his employment, the Executive's rights and
benefits under each such plan shall be determined in accordance with the terms,
conditions, and limitations of the plan in question.
(c) Mitigation of Amounts Payable Hereunder. The Executive shall not be
required to mitigate the amount of any payment provided for in this Section 5 by
seeking other employment or otherwise, nor shall the amount of an payment
provided for in this Section 5 be reduced by any compensation earned by the
Executive as the result of employment by another employer after the date of
termination, or otherwise.
6. Relocation.
(a) If at any time during the term of this Agreement the Company requires
the Executive to Relocate, the Company shall pay (or reimburse the Executive)
for all reasonable moving expenses, incurred by him relating to a change of his
principal residence in connection with such Relocation and to indemnify the
Executive against any loss (defined as the difference between the actual sale
price of such residence and the higher of (i) his aggregate investment in such
residence, or (ii) the fair market value of such residence as determined by a
real estate appraiser designated by the Company and reasonably satisfactory to
Executive) realized on the sale of the Executive's principal residence in
connection with any such change of residence. In addition, Executive's base
salary provided for in Section 4(a) shall be increased for the remaining term of
this Agreement if and to the extent the Company requires Executive to Relocate
to an area with a higher cost of living. Such increase shall be proportional to
the cost of living differential between the Current Location and the new
location, as determined in accordance with an index selected by the Company
published by the U.S. Department of Labor that indicates the cost of living
differential between various U.S. metropolitan areas.
(b) If the Company Relocates Executive during the term of this Agreement,
and Executive's employment with the Company is thereafter terminated prior to
the second anniversary of the Relocation (regardless of whether Executive is at
the time of such termination employed under this Agreement, any extension hereof
or as an at-will employee or otherwise), then the Company shall, upon
Executive's request, pay (or reimburse the Executive) for all reasonable moving
expenses incurred by him in relocating his principal residence back to
Executive's Current Location or other location within the United States
designated by Executive, and indemnify Executive against any loss (as defined in
Section 6(a) above) realized on the sale of the Executive's principal residence
in connection with any such change of residence; provided, however, that if
Executive wishes to relocate to a location other than his Current Location, then
Executive shall be responsible for and pay any relocation expenses in excess of
the cost of relocating to his Current Location.
-4-
5
7. Confidential Information. The Executive recognizes and acknowledges that
he will have access to certain information of members of the Company Group and
that such information is confidential and constitutes valuable, special and
unique property of such members of the Company Group. The Executive shall not at
any time, either during or subsequent to the term of this Agreement, disclose to
others, use, copy or permit to be copied, except in pursuance of his duties for
and on behalf of the Company, it successors, assigns or nominees, any
Confidential Information of any member of the Company Group (regardless of
whether developed by the Executive) without the prior written consent of the
Company. The Executive shall maintain in confidence any Confidential Information
of third parties received as a result of his employment with the Company in
accordance with the Company's obligations to such third parties and the policies
established by the Company.
8. Delivery of Documents upon Termination. The Executive shall deliver to
the Company or its designee at the termination of his employment all
correspondence, memoranda, notes, records, drawings, sketches, plans, customer
lists, product compositions, and other documents and all copies thereof, made,
composed or received by the Executive, solely or jointly with others, that are
in the Executive's possession, custody, or control at termination and that are
related in any manner to the past, present, or anticipated business of any
member of the Company Group. In this regard, the Executive hereby grants and
conveys to the Company all right, title and interest in and to, including
without limitation, the right to possess, print, copy, and sell or otherwise
dispose of, any reports, records, papers, summaries, photographs, drawings or
other documents, and writings, and copies, abstracts or summaries thereof, that
may be prepared by the Executive or under his direction or that may come into
his possession in any way during the term of his employment with the Company
that relate in any manner to the past, present or anticipated business of any
member of the Company Group.
9. Remedies. The Executive acknowledges that a remedy at law for any breach
or attempted breach of the Executive's obligations under Sections 7 and 8 may be
inadequate, agrees that the Company may be entitled to specific performance and
injunctive and other equitable remedies in case of any such breach or attempted
breach, and further agrees to waive any requirement for the securing or posting
of any bond in connection with the obtaining of any such injunctive or other
equitable relief.
10. Definitions. For purposes of this Agreement, capitalized terms shall
have the respective meanings set forth below or as elsewhere provided in this
Agreement:
(a) "Cause" means (A) the willful and continued failure by the Executive to
perform his duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that he has not
substantially performed his duties and specifying a reasonable period during
which Executive shall be afforded an opportunity to cure such failure, or (B)
the willful engaging by the Executive in gross misconduct materially and
demonstrably injurious to the Company. For purposes of this paragraph, no act,
or failure to act, on the Executive's part shall be
-5-
6
considered "willful" unless done, or omitted to be done, by him (i) not in good
faith and (ii) without reasonable belief that his action or omission was in the
best interest of the Company.
(b) "Company Group" means the Company, and any entity that from time
to time directly or indirectly controls, is controlled by, or is under common
control with, the Company, and for purposes of this definition "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
(c) "Confidential Information" means with respect to any person
means any secret or confidential information or know-how and shall include, but
shall not be limited to, the plans, customers, costs, prices, uses, and
applications of products and services, results of investigations, studies or
experiments owned or used by such person, and all apparatus, products,
processes, compositions, samples, formulas, computer programs, computer hardware
designs, computer firmware designs, and servicing, marketing or manufacturing
methods and techniques at any time used, developed, investigated, made or sold
by such person, before or during the term of this Agreement, that are not
readily available to the public or that are, maintained as confidential by such
person.
(d) "Disability" means Executive's qualification for long-term
disability benefits under the Company's disability plan or insurance policy; or,
if no such plan or policy is then in existence (or if Executive does not
participate in such plan or policy), Executive becoming unable to perform his or
her employment duties for a period of four continuous months (or four months in
any six-month period) because of ill health or physical or mental disability.
(e) "Good Reason" means:
(A) Without his express written consent, the assignment to the
Executive of any duties not commensurate with his current duties, title
and reporting relationship, as specified in Exhibit A, or any removal
of the Executive from or any failure to re-elect the Executive to any
of such positions, except in connection with the termination of his
employment (i) for Cause or as a result of his death, or (ii) by the
Executive other than for Good Reason;
(B) A reduction by the Company of Executive's base salary (as
in effect from time to time) or Executive's Guaranteed Bonus;
(C) The taking of any action by the Company which would
materially and adversely affect the Executive's participation in or
materially reduce his benefits under any benefit or compensation plan,
or the failure by the Company to (i) pay any relocation expense or
indemnify Executive against any relocation loss to the extent provided
for in Section 6 above, or (ii) provide the Executive with at least
that number of paid vacation days to which he is entitled as set forth
in Section 4(c) above (provided, however, that discontinuance of
Executive's travel privileges after the Closing Date (without prejudice
to any travel commitments made in any other agreement) shall not give
rise to a Good Reason); or
-6-
7
(D) Without his express written consent, requiring Executive
to Relocate prior to the first anniversary of the Closing Date (it
being understood and agreed that requiring Relocation after such
anniversary date shall not constitute a "Good Reason").
(f) "Relocation" or "Relocate" means a requirement by the Company
that Executive primarily perform his duties at a location more than 50 miles
from the Current Location and such new location is further from Executive's
principal residence than the Current Location. A Relocation shall be deemed to
occur on the date Executive actually begins to primarily perform his duties at
the new location. "Current Location" means the location where Executive
primarily performs his duties as of the effective date of this Agreement.
11. Miscellaneous Provisions.
(a) Successors of the Company. The Company 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 the
Company, to assume and agree to perform this Agreement. Except for purposes of
the foregoing sentence, as used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid.
(b) Disability. If, during the term of this Agreement, the Executive
incurs a Disability, the Company shall continue to pay to the Executive all
amounts payable under Sections 4(a) and (b) above during the remaining term of
this Agreement. In addition, the Company shall maintain in full force and effect
for the continued benefit of the Executive, until the end of the term of this
Agreement, all employee benefit plans and programs or arrangements in which the
Executive was entitled to participate immediately prior to the date of
Disability, provided that his continued participation is possible under the
general term and provisions of such plans and programs (it being understood and
agreed, however, that unless provided pursuant to a separate agreement or policy
adopted by the Company prior to the Closing Date, the Company shall not make air
travel privileges available to Executive or other employees of the Company after
the Closing Date). In the event that the Executive's participation in any such
plan or program is barred, the Company shall arrange to provide the Executive
with benefits substantially similar to those which he is entitled to receive
under such plans and programs. Amounts payable under this Section 11(b) shall be
in addition to any amounts paid under any disability insurance policies that may
be maintained in Executives favor.
(c) Executive's Heirs, etc. The Executive may not assign his rights
or delegate his duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any cash compensation amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless other provided herein,
shall be paid in accordance with the terms of this Agreement to his designee or,
if there be no such designee, to his estate.
-7-
8
(d) Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed, in the case of Executive, to his address set forth on the first page
of this Agreement and, in the case of the Company, to the address of its
headquarters office (provided that all notices to the Company shall be directed
to the attention of the President of the Company with a copy to the Secretary of
the Company), or to such other address designated in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
(e) Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer as may be specifically
designated by the Board of Directors of the Company (which shall in any event
include the Company's President). No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
(f) Invalid Provisions. Should any portion of this Agreement be adjudged or
held to be invalid, unenforceable or void, such holding shall not have the
effect of invalidating or voiding the remainder of this Agreement and the
parties hereby agree that the portion so held invalid, unenforceable or void
shall, if possible, be deemed amended or reduced in scope, or otherwise be
stricken from this Agreement to the extent required for the purposes of validity
and enforcement thereof.
(g) Survival of the Executive's Obligations. The Executive's obligations
under Section 7 and 8 of this Agreement shall survive regardless of whether the
Executive's employment by the Company is terminated, voluntarily or
involuntarily, by the Company or the Executive, with or without Cause.
(h) Counterparts. This Agreement may be executed in one or- more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(i) Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Texas.
(j) Captions and Gender. The use of captions and Section headings herein is
for purposes of convenience only and shall not effect the interpretation or
substance of any provisions contained herein. Similarly, the use of the
masculine gender with respect to pronouns in this Agreement is for purposes of
convenience and includes either sex who may be a signatory.
-8-
9
(k) Termination of Agreement if No Sale. Notwithstanding any other
provision of this Agreement, if the Closing Date has not occurred by ,
the Company shall thereafter be entitled to terminate this Agreement at any time
without further obligation or liability.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
date first written above.
AMR Services Corporation
By: /s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx
President
/s/ Xxxx Xxxxxx
-------------------------------
Xxxx Xxxxxx
Exhibit A: Job Description
-9-
10
EXHIBIT A
Senior Vice President - Marketing and Planning
As Senior Vice President - Marketing and Planning, Executive reports to the
President of the Company. Executive is responsible for sales, marketing and
business development for the Company. Executive participates in formulation and
administration of Company policies and long range goals and objectives.
