MANAGEMENT COMPENSATION AGREEMENT (Vice President and Chief Financial Officer) between PINNACLE AIRLINES, INC. and PETER D. HUNT dated as of December 12, 2008
Exhibit
10.29
AMENDED
AND RESTATED
(Vice
President and Chief Financial Officer)
between
PINNACLE
AIRLINES, INC.
and
XXXXX
X. XXXX
dated
as of
December
12, 2008
Amended
and Restated Management Compensation Agreement
for the
Vice President and Chief Financial Officer
of
Pinnacle
Airlines, Inc.
This
Amended and Restated Management Compensation Agreement (the "Agreement") is
made, entered into, and effective as of December 12, 2008, by and between
Pinnacle Airlines, Inc. a Delaware corporation ("Company") and Xxxxx X. Xxxx
("Executive").
Executive
is currently employed by Company pursuant to the terms of that certain
Management Compensation Agreement dated August 11, 2005; and
Company
and Executive wish to continue that employment relationship and to state the
terms and conditions of such employment and compensation.
(a)
Company shall pay Executive (i) his accrued and unpaid Base Salary through the
Date of Termination, (ii) any accrued and unpaid bonus or additional
compensation under any annual bonus plan (the "Incentive Bonus") for any
calendar year ended before the Date of Termination, (iii) a pro rata share
(based on days employed during the applicable year) of any unpaid Incentive
Bonus Executive would otherwise have received with respect to the year in which
the Date of Termination occurs, payable at the time the Incentive Bonus would
otherwise be payable to Executive; provided, however, that 100%
of the Incentive Bonus shall be determined solely with reference to the actual
financial performance of Company for the full year (based on the goals
previously established with respect thereto) (rather than a portion of the
Incentive Bonus determined on the basis of individual performance), if there are
such financial goals previously established; provided, further, in
the event that no Company financial performance goals have been established for
such year, then that portion of the Incentive Bonus that would have (but for
this Section 4.2(a)) related to the achievement of the individual performance
target shall be deemed to have been fully achieved and shall determine 100% of
the Incentive Bonus potential, and (iv) any vested or accrued and unpaid
payments, rights or benefits Executive may be otherwise entitled to receive
pursuant to the terms of any written retirement, pension or other employee
benefit or compensation plan maintained by Company at the time or times provided
therein.
(b) In
addition to the compensation and benefits described in Section
4.2(a):
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(i)
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In
the event of Executiveβs involuntary Separation From Service by Company
action other than for Cause or Separation From Service by Executive for
Good Reason, Company shall pay Executive, in substantially equal
installments at Executive's regular pay intervals in effect prior to such
Separation From Service, over a period of eighteen (18) months beginning
no later than the first regular Company payroll payment date (the "First
Severance Payment Date") which occurs within thirty (30) days following
the later of (x) Executive's Separation from Service and (y) the lapse of
any right of Executive to revoke the general release he will have signed
substantially (as determined by counsel to Company) in the form attached
hereto as Attachment "B"
(the "General Release"), which General Release must be executed within
twenty one (21) days following the Separation From Service for any such
amount to be payable), an aggregate amount equal to one-and-one-half (1.5)
(the "Multiple") times the sum of (i) Executive's annual Base Salary and
(ii) the target Incentive Bonus for Executive with respect to the year in
which the Separation From Service occurs (or if no target has been set for
that year, the target Incentive Bonus for the most recent year in which a
target Incentive Bonus was in
effect).
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(ii)
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Until
the earlier of twenty-four (24) months after Executive's Separation From
Service (or eighteen (18) months if payment is made pursuant to Section
4.3(a)) or the date Executive is employed by a new employer, the Executive,
his dependents, beneficiaries and estate shall be entitled to all benefits
under Company's group medical and dental insurance plans as if the Executive
were still employed by Company hereunder during such period, with benefits
or premium payments, as applicable, to be paid with the same frequency and
at the same time as applies for active employees of the
Company.
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(iii)
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On
the date of Separation From Service, Executive's rights under any
compensation or benefits programs shall become vested and any restrictions
on stock options or contractual rights granted to Executive shall be
removed.
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(iv)
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Notwithstanding
any other provision of this Agreement to the contrary, in the case of any
compensation which is subject to Code Section 409A, if the Executive is a
Specified Employee at the time of a Separation From Service and the
payment or provision of such compensation is made as a result of the
Separation From Service, then no portion of such benefits or other such
compensation shall be made before the date that is six (6) months after
the date of the Separation from Service or, if earlier, the date of death
of the Specified Employee. Any compensation which would
otherwise be paid within such six (6) month period after a Separation From
Service shall be paid on the date which is six (6) months and one day
after the Separation From Service, or the first business day
thereafter. The provisions and application of this paragraph
will be construed and applied in a manner consistent with Code Section
409A and Treasury Regulations of other guidance issued
thereunder.
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(c) Executive
shall not be required to mitigate the amount of any payment provided for in this
Section 4.2 by seeking other employment or otherwise, and no such payment shall
be offset or reduced as a result of Executive obtaining new
employment.
(d) Notwithstanding
anything else to the contrary in this Agreement, Company's obligation regarding
the payments, benefit continuation and acceleration provided for in Section
4.2(b)(i), (ii) and (iii) is expressly conditioned upon the execution, delivery
and non-revocation of the General Release.
(a) In the event a Change in
Control occurs after the date of this Agreement, the Multiple shall be two (2.0)
instead of one-and-one-half (1.5). In addition to Company's
payment and benefits obligations to Executive upon events described in Section
4.2, if Executive
remains employed by Company for the six-month period following the Change in
Control, then, during
the thirty (30) days following that six-month period, Executive shall be
entitled to terminate his employment as a Separation From Service without Good Reason, and upon
any such Separation From Service Company shall be obligated to make the payments
and provide the benefits to Executive as set forth
in Section 4.2, except
that the aggregate amount payable pursuant to the Multiple (as set forth in this
Section 4.3(a)) shall be paid in a lump sum on the First Severance Payment
Date.
(b) Nothing
set forth in Section 4.3(a) is intended or shall be construed to limit
Executive's right to terminate his employment for Good Reason during the
aforementioned six month period or to limit Company's obligation to make the
payments or provide the benefits set forth in Section 4.2 upon events described
in Section 4.2.
(c) Executive
shall not be required to mitigate the amount of any payment provided for in this
Section 4.3 by seeking other employment or otherwise, and no such payment shall
be offset or reduced as a result of Executive obtaining new
employment.
Upon
termination of Executive's employment in a Separation From Service by Company or
by Executive, then within seventy five (75) days after the Separation From
Service Company shall transfer to Executive the transferable ownership of any
Company owned insurance policy or policies on the life of
Executive. Executive shall be solely responsible for the payment of
any premiums due after the Date of Termination.
Executive's
termination of employment or separation From Service, for any reason, shall
constitute, as of the date of such termination and to the extent applicable, a
resignation as an officer of Company and a resignation from the Board (and any
committees thereof) and the Board of Directors (and any committees thereof) of
any of Company's affiliates and from the board of directors or similar governing
body of any corporation, limited liability company or other entity in which
Company or any affiliate holds an equity interest and with respect to which
board or similar governing body Executive serves as Company's or such
affiliate's designee or other representative.
the press
or other media in any country.
(a) This
Agreement shall bind any successor to Company, whether by purchase, merger,
consolidation or otherwise, in the same manner and to the same extent that
Company would be obligated under this Agreement if no such succession had taken
place.
(b) This
Agreement shall not be assignable by Executive. This Agreement and
all rights of Executive hereunder shall inure to the benefit of and be
enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and
legatees.
The term
of this Agreement shall commence on the Effective Date and end upon Executive's
termination of employment. The rights and obligations of Company and
Executive shall survive the termination of this Agreement to the fullest extent
necessary to give effect to the terms hereof.
Notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered by hand or e-mail,
the day after delivery to Federal Express for overnight delivery, two days after
delivery to the United States Postal Service for mailing,
addressed:
(a) if to
Executive, to the address set forth on the signature page hereto,
and
(b) if to
Company, c/o Pinnacle Airlines, Inc., 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxx,
XX 00000 Attention: Chairman of the Board of Directors, or, in each
case, to such other address as may have been furnished in writing.
All
payments required to be made by Company hereunder shall be subject to the
withholding and/or deduction of such amounts as are required to be withheld or
deducted pursuant to any applicable law or regulation. Company shall
have the right and is hereby authorized to withhold or deduct from any
compensation or other amount owing to Executive, applicable withholding taxes
and deductions and to take such action as may be necessary in the opinion of
Company to satisfy all obligations for the payment of such taxes or
deductions.
As used
herein, the following terms have the following meanings:
"Agreement" shall mean
this Management Compensation Agreement, as the same may be amended, supplemented
or otherwise modified from time to time in accordance herewith.
"Affiliate" shall mean
any corporation, trust, partnership, limited liability company or other
organization which controls, is controlled by, or is under common control with
Company.
"Base Salary" shall
mean the salary of Executive in effect from time to time under Section
2.1.
"Board" shall mean the
Board of Directors of Company.
"Bonus
Plan" See Attachment
"A".
"Cause" shall mean
with respect to termination by Company of Executive's employment hereunder (i)
an act or acts of dishonesty by Executive resulting in, or intended to result
in, directly or indirectly, any personal enrichment of Executive, (ii) an act or
acts of dishonesty by Executive intended to cause substantial injury to Company,
(iii) material breach (other than as a result of a Disability) by Executive of
Executive's obligations under this Agreement which action was (a) undertaken
without a reasonable belief that the action was in the best interests of Company
and (b) not remedied within a reasonable period of time after receipt of written
notice from Company specifying the alleged breach, (iv) Executive's conviction
of, or plea of nolo contendere to, (a) a crime constituting a felony
under the laws of any country, the United States or any state thereof or (b) a
misdemeanor involving moral turpitude, (v) a material breach of (a) Company's
policies and procedures in effect from time to time or (b) the provisions of
this Agreement; provided, however, that such breach shall constitute "Cause"
only if Company gives Executive notice pursuant to Section 9 hereof, which shall
include a detailed and specific description of the alleged material breach or
breaches.
"Change in Control"
shall have the meaning given such term in the Stock Incentive Plan in
effect on
the effective date of this Agreement, provided that, for purposes of this
definition, the term "Permitted Holders" shall include Northwest Airlines
Corporation or any affiliate of Northwest Airlines Corporation.
"Date of Termination"
shall mean, with respect to Executive, the date of termination of Executive's
employment hereunder after the notice period provided by Section
3.4.
"Disability" shall
mean Executive's physical or mental condition which prevents continued
performance of his duties hereunder, if Executive establishes by medical
evidence that such condition will be permanent and continuous during the
remainder of Executive's life or is likely to be of at least three (3) years
duration.
"Effective Date" shall
mean January 1,
2005.
"Good Reason" shall
mean with respect to an Executive, any one or more of the
following:
(a) a
material reduction in Executive's Base Salary or level of target bonus under the
Bonus Plan or any successor bonus plan without Executive's consent;
(b) any
substantial and sustained diminution in Executive's title, position,
authority, or responsibilities hereunder (unless due to Executive's disability);
or
(c) a
failure by Company to comply with any provision of this Agreement; provided, however, that the
foregoing events shall constitute Good Reason only if Company fails to cure such
event within thirty (30) days after receipt from Executive of written notice of
the event which constitutes Good Reason; provided, further, that "Good
Reason" shall cease to exist for an event on the 90th day following the later of
its occurrence or Executive's knowledge thereof, unless Executive has given
Company written notice thereof prior to such date.
In order
for Executive's termination of his employment to be considered for Good Reason,
such termination must occur within one (1) year after the event giving rise to
such Good Reason. Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good
Reason hereunder.
"Incentive
Bonus" See Attachment
"A".
"Notice of
Termination" shall mean a notice specifying the Date of
Termination.
βSeparation From
Serviceβ means the time at which the parties reasonably anticipate that
no further services will be performed by Executive after a certain date, or that
the level of bona fide services Executive would perform after such date (whether
as an employee or as an independent contractor) would permanently decrease to no
more than 20 percent of the average level of bona fide services performed
(whether as an employee or an independent contractor) by the individual over the
immediately preceding 36-month period. If Executive provides services both as an
employee and as an independent contractor, Executive must separate from service
both as an employee and as an independent contractor to be treated as having a
Separated From Service. If Executive ceases providing services an employee and
begins providing services as an independent contractor, Executive will not be
considered to have a Separation From Service until Executive has ceased
providing services in both capacities. The provisions and application of this
paragraph will be construed and applied in a manner consistent with Code Section
409A and Treasury Regulations of other guidance issued thereunder.
βSpecified Employeeβ
means a service provider who, as of the date of the service providerβs
Separation from Service, is a key employee of a service recipient any stock of
which is publicly traded on an established securities market or otherwise. A key
employee is any individual who is described in Code Section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with the Regulations thereunder and
disregarding section 416(i)(5)) at any time during the 12-month period ending on
a Specified Employee identification date. The provisions and application of this
paragraph will be construed and applied in a manner consistent with Code Section
409A and Treasury Regulations of other guidance issued thereunder.
Executive
hereby represents to Company that the execution and delivery of this Agreement
by Executive and Company and the performance by Executive of Executive's duties
hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a
party or otherwise bound.
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Executive
and an officer of Company authorized by the Board to do so. No waiver
of any provision of this Agreement shall be deemed a continuing waiver or a
waiver of any other provision, whether or not similar.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Tennessee, without regard to principles
of conflicts of laws. The provisions of this Agreement are intended to be
construed and applied in a mannner consistent with compliance with Code Section
409A, where applicable. Accordingly, the provisions hereof shall be
construed and applied consistent with such intent, to the extent
applicable.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement which shall remain in full force and effect.
Except as
otherwise provided in Paragraph 17 of this Agreement, all disputes and
controversies arising from or in conjunction with Executive's employment with,
or any termination from, Company and all disputes and controversies arising
under or in connection with this Agreement (except claims for vested benefits
brought under ERISA) shall be settled by mandatory arbitration conducted before
one arbitrator having knowledge of employment law in accordance with the rules
for expedited resolution of employment disputes of the American Arbitration
Association then in effect. The arbitration shall be held in the Memphis,
Tennessee metropolitan area at a location selected by Company. The determination
of the arbitrator shall be made within thirty (30) days following the close of
the hearing on any dispute or controversy and shall be final and binding on the
parties. The parties hereby waive their right to a trial of any and all claims
arising out of this Agreement or breach of this Agreement. Each party
agrees to pay his or its
own costs and expenses incurred in connection with any arbitration including,
without limitation, attorney's fees and one-half of the arbitrator's fees,
unless the arbitrator determines that such expenses must be otherwise allocated
under applicable law to maintain the validity of this Section 16.
Notwithstanding
Section 16 of this Agreement, if Executive breaches or threatens to commit a
breach of Section 6 of this Agreement, Company shall have the right to specific
performance (i.e., the right and remedy to have the terms and conditions of
Section 6 specifically enforced by a court of competent jurisdiction), it being
agreed that any breach or threatened breach of Section 6 would cause irreparable
injury and that money damages may not provide an adequate remedy. If
Company exercises its right to seek specific performance in a court of competent
jurisdiction, Executive may assert any claims he may have against Company or its
affiliates in such action, and nothing set forth in Paragraph 16 of this
Agreement is intended or shall be construed to limit Executive's right to assert
such claims.
Executive
shall provide his reasonable cooperation in connection with any investigation,
action or proceeding (or any appeal from any action or proceeding) which relates
to events occurring during Executive's employment hereunder. This provision
shall survive any termination of this Agreement.
Notwithstanding
the foregoing, Executive and Company agree that (i) to the extent permitted by
any Federal statute (the "Act") that limits compensation of Executive hereunder,
any payments or benefits payable to Executive under this Agreement (including,
without limitation, payments under Sections 2 and 4 hereof) or pursuant to any
other compensation or benefit plan of Company or other arrangement between
Company and Executive that do not comply with the Act shall be deferred until
such payments or benefits may be paid under the Act, and (ii) to the extent the
Act does not permit the deferral of any such payments or benefits, the maximum
compensation and/or severance Executive may receive from Company under this
Agreement or any other compensation or benefit plan of Company or other
arrangement between Company and Executive will not exceed the amount allowed
under the Act.
This
Agreement, any award agreement between Company and Executive entered into
pursuant to Company's stock Incentive Compensation Programs, and Company's
employee benefit plans in which Executive will continue to participate as
provided in this Agreement, contain the entire understanding between Company and
Executive with respect to Executive's employment with Company and supersede in
all respects any prior or other agreement or understanding between Company or
any affiliate of Company and Executive with respect to Executive's
employment.
PINNACLE
AIRLINES, INC.
By: /s/ Xxxxxx X.
Xxxxxxxx
Xxxxxx X.
Xxxxxxxx
Chairman
EXECUTIVE:
/s/ Xxxxx X.
Xxxx
Xxxxx X. Xxxx;
000
Xxxxxx Xxxxx, Xxxxxxx, XX 00000;
E-mail
address: xxxxx@xxxxxxxxx.xxx
Attachment
"A"
INCENTIVE COMPENSATION
PROGRAMS
1. Cash
Incentives: Annual Management Bonus Plan
2. Stock
Incentives: 2003 Stock Incentive Plan
Attachment
"B"
GENERAL
RELEASE
This
Release is made and entered into by Xxxxx X. Xxxx (the "Executive") and Pinnacle
Airlines, Inc. (the "Company").
In
consideration of the payments, benefit continuation and acceleration provided
for in Section 4.2(b)(i), (ii) and (iii) of this Management Compensation
Agreement, Executive, on behalf of himself and for any person or entity who may
claim by or through him, irrevocably and unconditionally releases, waives, and
forever discharges Company, its past, present, and future subsidiaries,
divisions, affiliates, successors, and their respective officers, directors,
attorneys, agents, and present and past employees from any and all claims or
causes of action that Executive had, has, or may have relating to Executive's
employment with Company and/or termination therefrom up to and including the
date of this Agreement, including but not limited to any claims under Title VII
of the Civil Rights Act of 1964, as amended, the Tennessee Human Rights Act, the
Age Discrimination in Employment Act ("ADEA"), and claims under any other
federal, state, or local statute, regulation, or ordinance, including wrongful
or retaliatory discharge.
This
Release shall not be construed as an admission by Company of any liability,
wrongdoing, or violation of any law, statute, regulation, agreement or policy,
and Company denies any such liability or wrongdoing.
Executive
acknowledges and agrees that this Release includes a release and waiver as to
claims under the ADEA. Executive acknowledges and confirms that he
understands and agrees to the terms and conditions of this Release; that these
terms are written in layperson terms, and that he has been fully advised of his
rights to seek the advice and assistance of consultants, including an attorney,
to review this Release. Executive further acknowledges that he does
not waive any rights or claims under the ADEA that arise after the date this
Release is signed by him, and specifically, Executive understands that he is
receiving money and benefits beyond anything of value to which he is already
entitled from Company. Executive acknowledges that he has had up to
21 days to consider whether to accept and sign this Release, and has had
adequate time and opportunity to review the Release and consult with any legal
counsel or other advisors of his choosing. Executive understands that
if he signs this Release before the expiration of the 21-day period, his
signature will evidence his voluntary election to forego waiting the full 21
days to sign this Release. If Executive chooses not to accept, or the
21-day period expires without his acceptance, then the offer in this Release is
null and void. Executive further acknowledges that in compliance with
the Older Workers' Benefit Protection Act of 1990, he has been fully advised by
Company of his right to revoke and nullify this Release, and that this
revocation must be exercised, if at all, within seven days of the date he signs
this Release. Executive may revoke his acceptance at any time within
the seven days following his signing of this Release by notifying Company of his
decision to revoke the acceptance by writing directed and delivered to Pinnacle
Airlines, Inc., 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Attention: Chairman of the Board.
Acceptance
of this offer is strictly voluntary. This Release shall become
effective and enforceable only after the seven-day revocation period has
expired. Should Executive decline to accept the benefits of this
Release, or if is revoked by him, Executive will not receive the proposed
additional compensation and benefits.
By his
signature below, Executive accepts the terms of this Release.
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PINNACLE
AIRLINES, INC.
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EXECUTIVE
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By:
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Name:
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Name:
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Title:
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Address:
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Date:
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_________________________
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Date:
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