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EXHIBIT (c)(5)
EMPLOYMENT AGREEMENT
OF K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT (c)(5)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is dated as of August 10, 1999,
by and between COMAIR, INC., an Ohio corporation ("Company"), with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
("Executive").
W I T N E S S E T H:
WHEREAS, the Company is organized under the laws of the State of Ohio
and engaged in the airline business; and
WHEREAS, Company and Executive desire to enter into an employment
agreement to employ Executive as an officer of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
1. Employment. The Company does hereby employ Executive, subject
to the terms and conditions hereinafter contained, as an executive employee with
the title of Senior Vice President or such other executive title or titles
hereafter determined by the Board of Directors of Company, and Executive accepts
such employment upon the terms and conditions herein contained.
2. Term. The term of this Agreement shall be two (2) years, which
shall commence on August 1, 1999, and shall terminate on July 31, 2001, unless
sooner terminated in accordance with the provisions hereof; provided, however,
on July 31 of each year during the term commencing in 2001, this Agreement shall
be extended for an additional year unless either party shall give thirty (30)
days' prior written notice not to automatically extend the term for an
additional year.
3. Duties and Responsibilities.
(a) Position and Responsibilities. On the terms and
subject to the conditions set forth in this Agreement, Employer shall
employ Executive to serve in an executive capacity with the Company.
Executive shall perform all duties customarily attendant to the
position of Senior Vice President of Company (or other executive
position) and shall perform such services and duties commensurate with
his position as may from time to time be prescribed by the Board of
Directors of Company (the "Board"). Executive shall perform the
services hereunder at Company's offices in Erlanger, Kentucky, and
shall do such traveling as may be reasonably required of him in the
performance of his duties.
(b) Acceptance. Executive hereby accepts such employment
and agrees that throughout the period of his employment hereunder, he
will devote substantially his full
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business time, attention, knowledge, and skills faithfully, diligently,
and to the best of his ability, in the furtherance of the business of
Company; provided, that Executive shall be permitted to serve on the
boards of directors of such other companies as the Board shall approve,
such approval not to be unreasonably withheld, and that Executive may
make personal investments, or act as a director and engage in other
activities for any charitable, educational or other non-profit
institution, if such investments and activities do not materially
interfere with the performance of Executive's duties hereunder.
4. Compensation. Company shall pay Executive in full payment for
any and all services rendered by him hereunder, including, without limitation,
all services as an officer of Company, its subsidiaries or affiliates, a salary
at an annual rate of Two Hundred Twenty Thousand and 00/100 Dollars ($220,000),
subject to increase (but not decrease) at the discretion of the Board of
Directors and payable in accordance with the customary payroll practices of
Company (but not less often than monthly). If Executive's salary is increased by
the Board of Directors, such increased salary shall become the minimum amount of
compensation payable to Executive under this Agreement, and will not be reduced
thereafter. Executive shall also participate in the Company's (or Holdings')
annual performance based incentives, or any replacement or successor to such
incentives, and shall be eligible to receive bonuses thereunder in accordance
with the terms thereof.
5. Additional Employment Benefits. Executive shall be entitled to
participate in all benefits made generally available by Company to its executive
officers during the period covered by this Agreement including, without
limitation, vacations, pension plans, profit sharing plans, stock option plans,
deferred compensation plans, hospitalization insurance, health and accident
insurance, disability insurance, group term life insurance, automobile
allowances and all other fringe benefits which may be provided by Company for
its executive officers during the term of employment.
6. Indemnification. The Company shall indemnify Executive (and
Executive's legal representatives or other successors) to the fullest extent
permitted by the Articles of Incorporation and Code of Regulations of the
Company and the laws of the State of Ohio, as in effect at such time or from
time to time, and Executive shall be entitled to the protection of any insurance
policies the Company or Holdings may elect to maintain generally for the benefit
of its directors and officers (and to the extent the Company or Holdings
maintains such an insurance policy or policies, Executive shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any Company officer or director), against
all costs, charges and expenses whatsoever incurred or sustained by Executive or
Executive's legal representatives at the time such costs, charges and expenses
are incurred or sustained, in connection with any action, suit or proceeding to
which Executive (or Executive's legal representatives or other successors) may
be made a party by reason of Executive's being or having been a director,
officer or employee of the Company.
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7. Termination. Executive's rights under this Agreement shall
continue until expiration of the term under Section 2 hereof, unless prior
thereto: (i) Executive dies; (ii) Executive is dismissed without cause pursuant
to Section 8 hereof; (iii) Executive is dismissed for cause as defined in
Section 9 hereof; or (iv) Company determines that Executive has become disabled,
as provided in Section 10 hereof.
8. Early Termination.
(a) Notwithstanding anything to the contrary herein, the
Company shall have the right at any time, at its sole option, to
terminate Executive's employment hereunder without cause upon thirty
(30) days' prior written notice; provided, however, if the Company
delivers notice that Executive's employment is terminated pursuant to
this Section 8(a) or delivers notice not to automatically extend the
term pursuant to Section 2 hereof, Company shall pay Executive, and
Executive shall accept in full satisfaction of Company's obligations
under this Agreement, an amount, payable in a lump sum payment promptly
upon termination, equal to two (2) times the sum of (i) the annual base
salary in effect at the termination date, plus (ii) the average annual
bonus compensation payable to Executive during the prior three (3)
fiscal years, and (iii) the average annual award under the Deferred
Compensation Plan (as hereinafter defined) during the prior three (3)
fiscal years.
(b) In the event of a "change in control" of the Company
(as hereinafter defined), (i) this Agreement shall be deemed terminated
as of the date of the Change in Control, and the Company shall pay to
Executive the payment required under Section 8(a) hereof; and (ii) the
Executive shall be entitled to receive from the Company the following
additional benefits:
(1) The Company shall pay Executive a lump sum,
in cash, equal to Executive's earned but unpaid base salary
and other earned but unpaid cash entitlements for the period
through and including the date of termination of Executive's
employment, including unused earned and accrued vacation pay
and unreimbursed business expenses. In addition, Executive
shall be entitled to any other benefits earned or accrued by
Executive for the period through and including the date of
termination of Executive's employment under any other employee
benefit plans and arrangements maintained by the Company, in
accordance with the terms of such plans and arrangements,
except as modified herein.
(2) All outstanding stock options held by
Executive shall become immediately vested, nonforfeitable and
exercisable as of the date of the Change in Control.
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(3) All of the Executive's rights in and to the
account under the Comair Holdings, Inc. Deferred Incentive
Compensation Plan ("Deferred Compensation Plan") shall
automatically vest in full without further action as of the
date of the Change in Control, and the Company shall pay, or
cause the trustee under the Deferred Incentive Compensation
Rabbi Trust Agreement ("Rabbi Trust Agreement") to pay
Executive a lump sum equal to Executive's account in full as
vested hereunder.
(4) The Company shall provide Executive with a
term life insurance policy and disability policy for a period
of twenty-four (24) months (with premiums pre-paid for such
period) on Executive's life, providing Executive's
beneficiaries with a death benefit and disability benefits of
an amount equal to such benefits provided by the Company
during the period prior to the Change in Control.
(5) The Company shall provide Executive and
Executive's spouse, for a period of twenty-four (24) months,
family medical insurance coverage and benefits comparable to
such insurance coverage provided to executives of the Company;
provided, however, at the election of the Executive, the
Company shall pay Executive a lump sum, in cash, equal to the
present value (as of the date of the Change in Control) of
medical insurance coverage for such period.
(6) Executive, Executive's spouse and Executive's
dependent children, for so long as they are under age 18 (or
under age 23 if a full-time student), shall be entitled to
free system-wide flight privileges on Company flights to any
location which the Company serves for a period of twenty-four
(24) months. Such privileges shall entitle Executive,
Executive's spouse and Executive's dependent children to
unlimited positive space (or space available, at Executive's
option) tickets; provided further that all of such flight
privileges shall otherwise be subject to the same conditions
and restrictions as pertain from time to time to the flight
privileges generally provided by the Company to its
executives. Nothing herein shall be deemed as a limitation
upon any flight privileges for which Executive may otherwise
qualify.
(c) A "Change in Control" means the occurrence of any of
the following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than Comair
Holdings, Inc. ("Holdings"), Company or a subsidiary, or any
Holdings, Company or subsidiary's employee benefit plan
(including any trustee of such plan acting as trustee) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
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Exchange Act), directly or indirectly of securities of the
Holdings or Company representing 50% or more of the combined
voting power of Holdings' or Company's then outstanding
securities;
(ii) Any transaction or event relating to the
Company or any subsidiary required to be described pursuant to
the requirements of Item 6(e) of Schedule 14A of the
Securities and Exchange Commission under the Exchange Act (as
in effect on the effective date of this Agreement), whether or
not Holdings, the Company or subsidiary is then subject to
such reporting requirement;
(iii) When, during any period of 2 consecutive
years during the term of this Agreement, the individuals who,
at the beginning of such period, constitute the Board of the
Holdings, cease for any reason other than death to constitute
at least a two-thirds (2/3) majority thereof; provided,
however, that a director who was not a director at the
beginning of such period shall be deemed to have satisfied the
two-year requirement if such director was elected by, or on
the recommendation of, at least two-thirds (2/3) of the
directors who were directors at the beginning of such period
(either actually or by prior operation of this Subsection
8(c)(iii)); or
(iv) The occurrence of a transaction requiring
shareholder approval for the acquisition of Holdings or the
Company by an entity other than any subsidiary through
purchase of assets, by merger, or otherwise.
(d) If any portion of the payments hereunder or any other
payment under this Agreement, or under any other agreement with, or
plan of the Company including, but not limited to, stock options and
other long-term incentives (in the aggregate "Total Payments") would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Executive shall be
entitled to under this paragraph and Company agrees to pay a lump sum,
in cash, an additional amount such that after payment by Executive of
all of Executive's applicable Federal, state and local taxes, including
any Excise Tax, imposed upon such additional amount, Executive will
retain an amount equal to the Excise Tax imposed on the Total Payments.
For purposes of this Section 8, Executive's applicable Federal, state
and local taxes shall be computed at the maximum marginal rates, taking
into account the effect of any loss of personal exemptions resulting
from receipt of the additional payments hereunder.
(e) After the date of a Change in Control, the Company
shall not (other than pursuant to Section 8(b)(ii)(3) hereof) take any
steps to disturb or alter Executive's (or Executive's beneficiaries')
rights to receive amounts deferred under the Deferred
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Compensation Plan in accordance with such Executive's applicable
payment elections as in effect from time to time. Nothing herein or in
the Rabbi Trust Agreement shall relieve the Company of its obligation
to pay benefits under the Deferred Compensation Plan in accordance with
the terms of such Plan, to the extent such benefits are not paid under
the Rabbi Trust Agreement.
(f) In the event of a dissolution or liquidation of
Holdings or the Company or any merger (other than a merger for the
purpose of the re-domestication of Holdings or the Company not
involving a Change in Control), consolidation, exchange or other
transaction in which Holdings or the Company, respectively, is not the
surviving corporation or in which the outstanding shares of Holdings or
the Company, respectively, are converted into cash, other securities or
other property, Company shall pay to Executive or the estate or legal
representative of Executive, an amount equal to the payment due under
Sections 8(a) and 8(b) hereof upon such dissolution, liquidation,
merger, consolidation, exchange or other transaction. Executive shall
also receive all vested benefits or other amounts and benefits which
Executive is entitled to receive under any plan, policy, practice or
program of the Company at the date of such dissolution, liquidation,
merger, consolidation, exchange or other transaction in accordance with
such plan, policy, practice or program.
(g) If Executive's employment is terminated due to death
or disability, Company shall, thereafter, pay to Executive or the
estate or legal representative of Executive an amount equal to the
payment due under Section 8(a) hereof upon termination of this
Agreement. Executive shall also receive all vested benefits or other
amounts and benefits which Executive is entitled to receive under any
plan, policy, practice or program of the Company at or subsequent to
the date of such death or disability in accordance with such plan,
policy, practice or program.
9. Termination for Cause.
(a) Anything herein to the contrary notwithstanding,
Company shall have the right to terminate Executive's employment
hereunder for cause, as such term is defined in the following section.
(b) For the purpose of this Section 9, the term "cause"
means (and shall be limited to) (i) fraud, misappropriation,
embezzlement, intentional and material damage to the property of
Company; or (ii) material breach of any of the provisions of this
Agreement described in Section 12.
(c) Upon termination of Executive's employment for cause
pursuant to this Section 9, Executive shall not, except as otherwise
required by law, be entitled to receive any
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further compensation other than accrued benefits under benefit plans of
the Company, including without limitation stock option, deferred
compensation, profit sharing and pension plans, if any, and shall be
completely relieved of his position as an officer of Company, its
subsidiaries and affiliates, and Executive covenants and agrees to
deliver at the termination date all resignations necessary to effect
the foregoing.
10. Disability.
(a) If, during the term of this Agreement, Executive
contracts an illness or other disability which prevents performance by
him of his duties as an executive officer for a consecutive period of
six (6) months or more, then Company, at its option, may at any time
thereafter terminate this Agreement by serving thirty (30) days'
written notice thereof on Executive and this Agreement shall terminate
and come to an end upon the date set forth in said notice as if such
date were the termination date of this Agreement. If prior to the date
specified in such notice, Executive's illness or incapacity shall have
been eliminated or corrected and Executive is physically and mentally
able to perform his duties as an executive officer and shall have taken
up and is performing such duties on a full time basis, he shall be
entitled to resume employment hereunder as though such notice had not
been given.
(b) During any period of disability and prior to the
termination of this Agreement as in this Section provided, Executive
shall continue to be paid in full by Company in accordance with the
provisions of Section 4, except that Company shall deduct from
Executive's compensation as herein provided an amount equal to any
disability insurance payments received by Executive for such period
pursuant to disability insurance policies paid for and maintained by
Company for the benefit of Executive.
(c) If there should be any dispute between the parties as
to Executive's physical or mental disability at any time, such
questions shall be settled by the majority opinion of three impartial,
reputable physicians, one of whom shall be selected by Company, another
by Executive, and the third by the two physicians selected by Company
and Executive. The certificate of two such physicians as to the matter
in dispute shall be final and binding on the parties.
(d) Upon the date of termination of this Agreement under
this Section 10 due to disability, Executive shall receive the payments
and benefits set forth in Section 8(g) hereof.
11. Non-Exclusivity of Benefits. Unless specifically provided
herein, neither the provisions of this Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish
Executive's rights as an employee of the Company, whether existing now or
hereafter, under any compensation and/or benefit plans (qualified or
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nonqualified), programs, policies, or practices provided by the Company, for
which Executive may qualify. Vested benefits or other amounts which Executive is
otherwise entitled to receive under any plan, policy, practice, or program of
the Company, at or subsequent to the date of termination of Executive's
employment shall be payable in accordance with such plan, policy, practice, or
program except as expressly modified by this Agreement.
12. Confidentiality and Non-Competition.
(a) Except as otherwise required by law, rule or
regulation, court order or valid subpoena, Executive will not at any
time during the term of this Agreement or thereafter, except as
authorized by Company, knowingly divulge, furnish or make accessible to
any person, firm, corporation or other entity, any such confidential
and sensitive information and any other information not otherwise
publicly available which he presently possesses or which he may obtain
during the course of his employment with respect to the business,
customers and affairs of Company or any subsidiary or affiliate of
Company or trade secrets, developments, know-how methods or other
information and data pertaining to practices, equipment, developments
or any confidential or secret aspect of the business of Company or any
subsidiary or affiliate of Company, and that all such matters and
information shall be kept strictly and absolutely confidential.
Executive, upon termination of his employment, irrespective of the
time, manner or cause of termination, will surrender and deliver to
Company all lists, books, records and data of every kind relating to or
in connection with the business of Company or any subsidiary or
affiliate of Company, and all property belonging to Company and any
subsidiary or affiliate of Company.
(b) During the term of this Agreement and, in the event
that Executive's employment with Company is terminated for any reason
other than a Change in Control as defined in Section 8 hereof, for a
period of one (1) year after such termination, Executive shall not,
directly or indirectly, engage in or contract with others to engage in
any business enterprise, line of work, consulting contract, joint
venture or other arrangement which conducts a business or businesses
substantially similar to the business conducted by Company in any area
in which Company or any of its affiliates or subsidiaries provides or
plans to provide air transportation to the public. Executive
acknowledges that the geographic area covered hereby, and the period
and nature of the agreed restrictions are reasonable and necessary for
the protection of the business of Company. All provisions of this
paragraph concerning non-competition are severable; and while it is the
intention of the parties that all of said provisions shall be
enforceable, if any one of the same shall be held to be unenforceable
in whole or in part, the remainder shall continue to be in full force
and effect.
13. Irreparable Injury. Executive acknowledges that his compliance
with his duties and obligations under Section 12 is necessary to protect the
goodwill and other proprietary interests
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of Company and the purposes and essence of this Agreement. Executive
acknowledges that a breach of his duties and obligations under Section 12 will
result in irreparable and continuing damage to Company for which there will be
no adequate remedy at law; and agrees that, in the event of any breach of any of
the aforesaid duties and obligations, Company and its successors and assigns
shall be entitled to injunctive or other equitable relief and to such other and
further relief as may be proper.
14. Assignment and Successors in Interest. To the extent that the
obligations provided for herein require the personal performance of Executive,
Executive's rights, interests and obligations as provided herein may not be
assigned. Except as otherwise provided in the immediately preceding section of
this sentence, all rights, privileges and obligations of the parties hereto
shall inure to the benefit of and be binding upon their respective successors,
assigns, heirs, executors, administrators and estates. The Company will require
any successor (whether by reason of a Change in Control, direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform the obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
15. Notice. Any notice required or permitted hereunder shall be
given in writing and delivered to the other party by U. S. registered or
certified mail; if to Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; if to Executive, ▇/▇ ▇▇▇▇▇▇,
▇▇▇., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ International Airport,
Cincinnati, Ohio 45275, or such other address as either party may specify in a
written notice to the other party.
16. Entire Agreement and Amendment. This Agreement embodies the
entire agreement between the parties and supersedes all prior agreements,
whether written or oral, relating to the object matter herein. Any amendment
hereto shall be in writing and executed by the duly authorized representatives
of each party.
17. Choice of Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Kentucky.
18. Severability. If any portion of this Agreement shall be held
unenforceable for any reason, the same shall not affect the validity or
enforceability of the remaining provisions contained herein.
19. Headings. The section headings used in this Agreement are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS: COMAIR HOLDINGS, INC.
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
