EMPLOYMENT TRANSITION AND SEPARATION AGREEMENT
Exhibit
10.34
THIS
EMPLOYMENT TRANSITION AND SEPARATION AGREEMENT (this “Agreement”) is made and
entered into as of November 2, 2010, by and between REPUBLIC AIRWAYS HOLDINGS
INC., a Delaware corporation (the “Company”), and XXXXXX XXX XXXXXX (the
“Executive”).
R
E C I T A L S
WHEREAS,
the Executive is party to the Second Amended and Restated Employment Agreement
dated as of August 1, 2003, as amended (the “Prior Agreement”); and
WHEREAS,
the Executive desires to end his employment with the Company;
WHEREAS,
the Company and Executive desire to effect an orderly transition of Executive
duties; and
WHEREAS,
the Company and the Executive desire to supersede the Prior Agreement and to
enter into this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Employment. The
Company agrees to continue to employ the Executive, and the Executive agrees to
render his services on such matters for which he was formerly responsible, as
well as such additional duties as may be assigned to him from time to time by
the Company’s Chief Executive Officer, to the Company, as its Executive Vice
President and Chief Financial Officer, during the Term (as defined
below). In connection with his employment, the Executive shall serve
without additional payment or compensation of any kind as the Executive Vice
President and Chief Financial Officer of any other direct or indirect subsidiary
or affiliate of the Company designated by the Board of Directors of the Company
(the “Board”) (collectively, the “Subsidiaries”). The Executive shall
render his services at the direction of the Board at the Company’s offices in
Indianapolis, Indiana. The Executive agrees to use his best efforts
to promote and further the business, reputation and good name of the Company and
the Subsidiaries (collectively, the “Company Group”) and the Executive shall
promptly and faithfully comply with all instructions, directions, requests,
rules and regulations made or issued from time to time by the
Company.
2. Term. The
term of employment pursuant to this Agreement (the “Term”) shall continue until
April 1, 2011; provided that either the Company or Executive may, at any time
after January 1, 2011, terminate the Executive’s employment during the Term for
any reason or for no reason by providing the other party with 15 days prior
written notice of such termination. Notwithstanding the foregoing,
the Executive's employment may be terminated by the Company for “Cause” as
provided in Section 8 below. The Company and the Executive may also
terminate the Executive's employment at any time by mutual written
agreement. The term of Executive's employment will also terminate
upon the death of the Executive. In the event the Company terminates
the Executive’s employment for Cause as provided in Section 8 below, the
Executive shall not be entitled to any Severance Benefits (as defined in Section
4 below) or other compensation of any kind following the effective date of such
termination, except as contemplated herein.
3. Compensation.
(a) As
full and complete compensation for all the Executive’s services hereunder,
during the Term, the Company shall pay the Executive an annual base salary of
$225,000 (“Base Salary”). In the event the Executive's employment
terminates prior to the expiration of the Term, the Company shall pay to the
Executive any accrued but unpaid Base Salary through the termination
date.
(b) The
Company shall pay the Executive a bonus in the amount of $225,000 on or before
December 31, 2010.
4. Severance
Benefits. In the event Executive's employment terminates for
any reason (whether such employment termination is at the end of the Term or
earlier as provided in Section 2 above), except for termination by the Company
for Cause as provided in Section 8 below, the Company shall pay or provide the
Executive with the following severance benefits (collectively, the "Severance
Benefits") provided that the Company receives a release within 30 days following
termination of the Executive's employment signed by the Executive, substantially
in the form attached hereto as Exhibit A, that is no
longer revocable. The Severance Benefits are subject to the
applicable provisions of Section 25 of this Agreement.
(a) The
Company shall pay to the Executive as severance compensation salary continuation
at the rate of $225,000 per annum (the “Severance Compensation”). The
term during which the Executive receives Severance Compensation shall either be
until December 31, 2013 or until the date which is 30 months after the date the
Executive terminates his employment hereunder, if prior to April 1, 2011 (the
“Severance Term”).
If the
Executive dies during the Severance Term, the Company shall continue to pay the
Severance Compensation to the Executive's estate or other legal
successor. The Company shall pay the Severance Compensation
consistent with its customary payroll practices.
(b) During
the first 18 months of the Severance Term, the Executive shall elect COBRA
coverage at his expense. Following the COBRA period, for 33 months
thereafter, the Company shall reimburse the Executive $2,500, on a monthly
basis, for the cost of health, dental and vision insurance from a source other
than the Company for himself, his spouse and his eligible dependents, provided
that the Executive presents evidence of such insurance to the
Company.
(c) During
the Severance Term, the Company shall provide the Executive, his spouse and his
eligible dependents privileges to travel on any airlines operated by the Company
or Subsidiaries with the priority code PSIP (Positive Space) or similar
designation, and companion or other eligible travelers will travel with the
priority code SA3P (Standby Space) or similar
designation. Additionally, during each year of the Severance Term,
the Company shall provide the Executive with a barter account of $10,000 that
the Executive may use to purchase airline travel on Frontier
Airlines. Any unused amount in such barter account shall not carry
over from year to year.
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5. No Other
Compensation. Except as otherwise expressly provided herein,
or in any other written document executed by the Company and the Executive, no
other compensation or other consideration shall become due or payable to the
Executive on account of the services rendered to the Company
Group. The Company shall have the right to deduct and withhold from
the compensation payable to the Executive hereunder any amounts required to be
deducted and withheld under the provisions of any statute, regulation,
ordinance, order or any other amendment thereto, heretofore or hereafter
enacted, requiring the withholding or deduction of compensation.
6. Medical, 401K and Travel
Benefits. During the Term, the Company agrees that the
Executive shall be entitled to participate in any retirement, 401K, travel,
disability, medical, pension, profit sharing, group insurance, or any other plan
or arrangement, or in any other benefits now or hereafter generally available to
executives of the Company (“Benefit Plans”), in each case to the extent that the
Executive shall be eligible under the general provisions thereof.
7. Vacation. During
the Term, the Executive shall be entitled to take 15 days of paid vacation,
which vacation shall be taken on dates to be selected by mutual agreement of the
Company and the Executive. The Executive shall not be entitled to any
payout of unused vacation upon the termination of his employment for any
reason.
8. Termination for Cause by the
Company. The Company, by written notice to the Executive, may
immediately terminate Executive’s employment hereunder for Cause. As
used herein, a termination by the Company “for Cause” shall mean that the
Executive has (i) willfully refused to perform a material part of his duties
hereunder if such refusal continues for a period of five business days after the
Company provides the Executive with written notice stating the duties the
Executive refused to perform, (ii) materially breached the provisions of
Sections 9, 10, 11 or 12 hereof, (iii) acted fraudulently or dishonestly in his
relations with the Company which action is materially injurious to the Company,
(iv) committed larceny, embezzlement, conversion or any other act involving the
misappropriation of Company funds or assets in the course of his employment, or
(v) been convicted of any felony or other crime involving an act of moral
turpitude.
9. Confidential
Information. The Executive recognizes and acknowledges that he
shall receive in the course of his employment hereunder certain confidential
information and trade secrets concerning the Company Group’s business and
affairs which may be of great value to the Company Group. The
Executive therefore agrees that he will not disclose any such information
relating to the Company Group, the Company Group’s personnel or their operations
other than in the ordinary course of business or in any way use such information
in any manner which could adversely affect the Company Group’s
business. For purposes of this Agreement, the terms “trade secrets”
and “confidential information” shall include any and all information concerning
the business and affairs of the Company Group and any division or other
affiliate of the Company Group that is not generally available to the
public.
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10. Non-Competition. The
Executive agrees that without the prior written consent of the Board, during the
Term, and for the longer of 12 months following the termination or expiration of
this Agreement or for so long as Severance Compensation is paid, he will not
participate as an advisor, partner, joint venturer, investor, lender, consultant
or in any other capacity in any business transaction or proposed business
transaction (a) with respect to which the Executive had a material personal
involvement on behalf of the Company Group during the last 12 months of his
employment with the Company, or (b) that could reasonably be expected to compete
with the Company Group’s business or operations or proposed or contemplated
business or transactions of the Company Group that are (I) known by the
Executive as of the date of such termination or expiration, and (II)
contemplated by the Company Group to proceed during the 12 month period
following such termination or expiration. For these purposes, the
mere ownership by the Executive of securities of a public company not in excess
of 2% of any class of such securities shall not be considered to be competition
with the Company Group.
11. Non-Solicitation. The
Executive agrees that during the Term, and for the longer of 12 months following
the termination or expiration of this Agreement or for so long as Severance
Compensation is paid, he shall not, without the prior written consent of the
Company, directly or indirectly, employ or retain, or have or cause any other
person or entity to employ or retain, any person who was employed by the Company
Group or any of its divisions or affiliates while the Executive was employed by
the Company.
12. Non-disparagement. The
Executive agrees that during the Term, and for the longer of 12 months following
the termination or expiration of this Agreement or for so long as Severance
Compensation is paid, the Executive shall not make any statements, either
directly or through other persons or entities, which are disparaging to the
Company or any of its affiliates, management, officers, directors, services,
products, operations, prospects or other matters relating to the Company’s
businesses. The Company, through its officers and directors, shall
not make any statements, either directly or through other persons or entities,
which are disparaging to the Executive.
13. Breach of this
Agreement. If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 9, 10, 11 or 12 of this
Agreement, then the Company shall have the right and remedy to have those
provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed by the Executive that the rights and privileges of
the Company granted in Sections 9, 10, 11 and 12 are of a special, unique and
extraordinary character and any such breach or threatened breach will cause
great and irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company.
14. Notices. Any
notice required or permitted under this Agreement shall be in writing and either
delivered personally or sent by a nationally recognized overnight courier,
express mail, or certified or registered mail, postage prepaid, return receipt
requested, at the following respective address unless the party notifies the
other party in writing of a change of address. A notice delivered
personally shall be deemed delivered and effective as of the date of
delivery. A notice sent by overnight courier or express mail shall be
deemed delivered and effective the next business day after it is deposited with
the postal authority or commercial carrier. A notice
sent by certified or registered mail shall be deemed delivered and
effective three days after it is deposited with the postal
authority.
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If to the
Company:
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Republic Airways Holdings, Inc. | ||
| 0000
Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxxxx,
XX 00000
Attn: President
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If to the
Executive:
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Xxxxxx
Xxx Xxxxxx
0000
Xxxxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
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15. Applicable
Law. This Agreement was negotiated and entered into within the
State of Indiana. All matters pertaining to this Agreement shall be
governed by the laws of the State of Indiana applicable to contracts made and to
be performed wholly therein. Nothing in this Agreement shall be
construed to require the commission of any act contrary to law, and wherever
there is any conflict between any provision of this Agreement and any material
present or future statute, law, governmental regulation or ordinance as a result
of which the parties have no legal right to contract or perform, the latter
shall prevail, but in such event the provision(s) of this Agreement affected
shall be curtailed and limited only to the extent necessary to bring it or them
within the legal requirements.
16. Entire Agreement;
Modification; Consents and Waivers. This Agreement contains
the entire agreement of the parties with respect to the subject matter hereof
and supersedes any and all prior agreements or understandings, written or oral,
between the parties with respect to the subject matter hereof. No
interpretation, change, termination or waiver of or extension of time for
performance under any provision of this Agreement shall be binding upon any
party unless in writing and signed by the party intended to be bound
thereby. Except as otherwise provided in this Agreement, no waiver of
or other failure to exercise any right under or default or extension of time for
performance under any provision or this Agreement shall affect the right of any
party to exercise any subsequent right under or otherwise enforce said provision
or any other provision hereof or to exercise any right or remedy in the event of
any other default, whether or not similar.
17. Severability. The
parties acknowledge that, in their view, the terms of this Agreement are fair
and reasonable as of the date signed by them, including as to the scope and
duration of post-termination activities. Accordingly, if any one or
more of the provisions contained in this Agreement shall for any reason, whether
by application of existing law or law which may develop after the date of this
Agreement, be determined by an arbitrator or court of competent jurisdiction to
be excessively broad as to scope of activity, duration or territory, or
otherwise unenforceable, the parties hereby jointly request such court to
construe any such provision by limiting or reducing it so as to be enforceable
to the maximum extent in favor of the Company compatible with then-applicable
law. If any one or more of the terms, provisions, covenants or
restrictions of this Agreement shall nonetheless be determined by an arbitrator
or court of competent jurisdiction to be invalid, void or unenforceable, then
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
18. Assignment. The
Company may, at its election, assign this Agreement or any of its rights
hereunder. This Agreement may not be assigned by the
Executive.
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19. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
20. Arbitration. Each
of the parties hereby irrevocably and unconditionally consents to arbitrate any
dispute arising out of or relating in any manner to this Agreement or the
employment relationship contemplated hereby or the termination thereof, or any
alleged breach of any term or provision of this Agreement. Such
arbitration shall be conducted in Xxxxxx County, Indiana by a single arbitrator
in accordance with the employment dispute resolution rules of the American
Arbitration Association then in effect. Judgment may be entered on
the arbitrator’s award in any federal or state court in Indiana (and the parties
expressly consent to the jurisdiction of such court), or in any other court
having jurisdiction. The Company shall be responsible for, and shall
pay, 75% of all costs and expenses of any arbitration hereunder, including,
without limitation, all costs, fees and expenses of the American Arbitration
Association and arbitrator. The Executive shall be responsible for,
and shall pay, 25% of all costs and expenses of any arbitration hereunder,
including, without limitation, all costs, fees and expenses of the American
Arbitration Association and arbitrator. Each of the parties agrees
that in any arbitration arising out of or relating to this Agreement or the
employment relationship contemplated hereby or the termination thereof, or any
alleged breach of any term or provision of this Agreement or in any action to
enter judgment on an award in such arbitration each party shall bear its own
attorneys' fees.
21. Survival. The
provisions of Sections 4 and 9 through 25 of this Agreement shall survive any
expiration or termination of this Agreement.
22. Options Under Prior
Agreement. The vesting of any options to purchase stock of the
Company previously granted to the Executive under the terms of the Prior
Agreement or any agreement entered into contemporaneously with the Prior
Agreement shall be governed by the terms of such agreement notwithstanding any
provision of this Agreement.
23. Indemnification. The
Company shall, to the fullest extent allowed by law, defend, indemnify and hold
harmless the Executive from and against any and all demands, claims, suits,
liabilities, actions asserted or brought against the Executive or in which the
Executive is made a party, including, without limitation, all litigation costs
and attorneys’ fees incurred by the Executive or judgments rendered against the
Executive, in connection with any matter arising within the course and scope of
Executive’s employment with the Company or service as an officer, director or
manager of the Company or any of the Subsidiaries. The right of the
Executive to indemnification hereunder shall vest at the time of occurrence or
performance of any event, act or omission giving rise to any demand, claim,
suit, liability, action or legal proceeding of the nature referred to in this
Section 23 and, once vested, shall survive the termination of Executive’s
employment with the Company for any reason.
24. Mutual
Statement. The Company and the Employee acknowledge that the
Employee's separation of employment as contemplated by this Agreement is
voluntary, and each of the parties agrees to describe such separation consistent
with the statement attached hereto as Exhibit
B.
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25. Section 409A
Compliance.
(a) Any
payments conditioned upon a termination of the Executive’s employment will be
deemed to be conditioned upon the Executive’s separation from service within the
meaning of Treasury Regulation Section 1.409A-1(h) and will be construed and
interpreted accordingly. If the Executive is a “specified employee”
within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of
the Executive’s separation from service, then the Executive shall not be
entitled to any severance payments or other benefits pursuant to this Agreement
until the earlier of (a) the date which is six months after the date of the
Executive’s separation from service, or (b) the date of the Executive’s
death. This paragraph shall only apply if, and to the extent required
in order to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and Treasury Regulation Section
1.409A-3(i)(2). Any amounts otherwise payable to the Executive upon
or in the six-month period following the Executive’s separation from service
that are not so paid by reason of this paragraph shall be paid to the Executive
(or the Executive’s estate, as the case may be) as soon as practicable (and in
all events within twenty days) after the expiration of such six-month period or
(if applicable, the date of the Executive’s death).
(b) Any
taxable reimbursement of expenses payable to the Executive shall be paid to the
Executive on or before the last day of the Executive’s taxable year following
the taxable year in which the related expense was incurred. Expense
reimbursements and in-kind benefits provided to the Executive shall not be
subject to liquidation or exchange for another benefit and the amount of such
reimbursements or in-kind benefits that the Executive receives in one taxable
year shall not affect the amount of such reimbursements or benefits that the
Executive may receive in any other taxable year.
(c) It
is intended that any amounts payable under this Agreement and the Company’s and
the Executive’s exercise of any authority or discretion hereunder shall comply
with, and avoid the imputation of any tax, penalty or interest under Section
409A of the Code. This Agreement shall be construed and interpreted
consistent with that intent. Should the Company pay the Executive
contrary to clause (a) or (b) of Section 25(a) above, the Company shall
indemnify the Executive for any taxes due thereon as a result.
[Remainder
of page intentionally left blank]
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IN
WITNESS WHEREOF, the parties hereto have executed this Employment Transition and
Separation Agreement as of the date first above written.
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REPUBLIC
AIRWAYS HOLDINGS, INC.
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By:
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Name:
Xxxxx X. Xxxxxx
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Title: Chairman
of the Compensation
Committee
of the Board of Directors
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| XXXXXX XXX XXXXXX | |||
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EXHIBIT
A
FORM
OF RELEASE
In
exchange for the payments and benefits set forth in the Employment Transition
and Separation Agreement between Republic Airways Holdings Inc. (the “Company”) and me
dated November 2, 2010 (the “Agreement”), and to
be provided following the Effective Date (as defined below) of this General
Release and subject to the terms of the Agreement, and my execution (without
revocation) and delivery of this General Release:
1. (a) On
behalf of myself, my agents, assignees, attorneys, heirs, executors and
administrators, I hereby release the Company and its predecessors, successors
and assigns, their current and former parents, affiliates, subsidiaries,
divisions and joint ventures (collectively, the “Company Group”) and
all of their current and former officers, directors, employees, and agents, in
their capacity as Company Group representatives (individually and collectively,
“Releasees”)
from any and all controversies, claims, demands, promises, actions, suits,
grievances, proceedings, complaints, charges, liabilities, damages, debts,
taxes, allowances, and remedies of any type, including but not limited to those
arising out of my employment with the Company Group (individually and
collectively, “Claims”) that I may
have by reason of any matter, cause, act or omission. This release
applies to Claims that I know about and those I may not know about occurring at
any time on or before the date of execution of this General
Release.
(b) This
General Release includes a release of all rights and Claims under, as amended,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Rehabilitation Act of 1973, the Civil Rights Acts of 1866 and
1991, the Americans with Disabilities Act of 1990, the Employee Retirement
Income Security Act of 1974, the Equal Pay Act of 1963, the Family and Medical
Leave Act of 1993, the Older Workers Benefit Protection Act of 1990, the
Occupational Safety and Health Act of 1970, the Worker Adjustment and Retraining
Notification Act of 1989 and the Xxxxxxxx-Xxxxx Act of 2002, as well as any
other federal, state, or local statute, regulation, or common law regarding
employment, employment discrimination, termination, retaliation, equal
opportunity, or wage and hour. I specifically understand that I am
releasing Claims based on age, race, color, sex, sexual orientation or
preference, marital status, religion, national origin, citizenship, veteran
status, disability and other legally protected categories.
(c) This
General Release also includes a release of any Claims for breach of contract,
any tortious act or other civil wrong, attorneys’ fees, and all compensation and
benefit claims including without limitation Claims concerning salary, bonus, and
any award(s), grant(s), or purchase(s) under any equity and incentive
compensation plan or program.
(d) In
addition, I am waiving my right to pursue any Claims against the Company Group
and Releasees under any applicable dispute resolution procedure, including any
arbitration policy.
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I
acknowledge that this General Release is intended to include, without
limitation, all Claims known or unknown that I have or may have against the
Company Group and Releasees through the Effective Date of this General
Release. Notwithstanding anything herein, I expressly reserve and do
not release pursuant to this General Release (and the definition of “Claims”
will not include) (i) my rights with respect to the enforcement of the
Agreement, including but not limited to the right to receive Severance Benefits
(as defined in the Agreement), if any, and other payments, benefits and
indemnifications specified in the Agreement, (ii) any rights or interest under
any Benefit Plans (as defined in the Agreement), (iii) any right to
indemnification pursuant to the Company’s Certificate of Incorporation or
By-laws as in effect on the date hereof, (iv) the protections of the Company
Group’s directors and officers liability insurance, if any, in each case, to the
same extent provided to other senior executives of the Company, (v) any claims
and rights that cannot be waived by law, (vi) the vesting and exercise of any
equity grant pursuant to the terms of the applicable equity award agreement or
the applicable equity incentive plan, (vii) any rights as a stockholder of the
Company, and (viii) any rights under Sections 12 and 13 of the Agreement
following termination of employment.
2. I
acknowledge that I have had at least 21 calendar days from the date of my
termination of employment with the Company (the “Termination Date”) to
consider the terms of this General Release, that I have been advised to consult
with an attorney regarding the terms of this General Release prior to executing
it, that I have consulted with my attorney, that I fully understand all of the
terms and conditions of this General Release, that I understand that nothing
contained herein contains a waiver of claims arising after the date of execution
of this General Release, and I am entering into this General Release knowingly,
voluntarily and of my own free will. I further understand that my
failure to sign this General Release and return such signed General Release to
the Company, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000 by 5:00 pm on
the 22nd day
after the Termination Date will render me ineligible for the payments and
benefits described herein and in the Agreement.
3. I
understand that once I sign and return this General Release to the Company, I
have 7 calendar days to revoke it. I may do so by delivering to the
Company, 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000 written notice of
my revocation within the 7-day revocation period (the “Revocation
Period”). This General Release will become effective on the
8th
day after I sign and return it to the Company (“Effective Date”);
provided that I have not revoked it during the Revocation Period.
YOU ARE
HEREBY ADVISED BY THE COMPANY TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
GENERAL RELEASE.
I HAVE
READ THIS GENERAL RELEASE AND UNDERSTAND ALL OF ITS TERMS. I SIGN AND ENTER THIS
GENERAL RELEASE KNOWINGLY AND VOLUNTARILY, WITH FULL KNOWLEDGE OF WHAT IT
MEANS.
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XXXXXX
XXX XXXXXX
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| Date: | |||
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EXHIBIT
B
[MUTUAL
STATEMENT REGARDING EMPLOYMENT SEPARATION]
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