Exhibit 10.4
AMENDED AND RESTATED
XXXXX BONUS AGREEMENT
This Amended and Restated Bonus Agreement (this "Bonus Agreement") is made
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this 4th day of February, 2000, by and between PS Group, Inc., a Delaware
corporation (the "Company"), and Xxxxxxxx X. Xxxxx ("Employee"), and is
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effective as of the 18th day of December, 1999, with reference to the following
facts:
A. Employee has served as Vice President-Finance and Chief Financial
Officer of the Company since May 29, 1976. Employee has also served as Vice
President-Finance and Chief Financial Officer of the Company's parent
corporation, PS Group Holdings, Inc., a Delaware corporation ("Holdings"), since
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1996;
B. On December 18, 1999, Holdings entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Heritage Air Holdings Statutory Trust, a
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Connecticut statutory trust ("Parent"), and PSG Acquisition, Inc., a Delaware
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corporation ("Merger Sub"), providing for the merger of Merger Sub with and into
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Holdings (the "Merger"), as a result of which the stockholders of Holdings will
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receive $12 per share for each of their shares and Holdings will become a
wholly-owned subsidiary of Parent;
C. The Board of Directors of Holdings has determined that Employee's
services to Holdings and its subsidiaries merit a payment to Employee of a
bonus, if the Merger occurs, in consideration for the Employee relinquishing, as
of the Effective Time, his rights under his Employment Agreement with the
Company dated as of January 15, 1988, as amended (the "Current Employment
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Agreement"). To give effect to such determination, concurrently with the
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execution of the Merger Agreement, the Company, with the approval of its Board
of Directors, entered into a Bonus Agreement dated December 18, 1999 (the
"Original Agreement") with Employee;
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D. On December 18, 1999, concurrently with the execution of the Merger
Agreement, Employee entered into an employment agreement with the Company (the
"New Employment Agreement") which entitled Employee, within the period specified
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therein, to elect to be employed, effective at the effective time of the Merger
(the "Effective Time"), on the terms set forth in the New Employment Agreement
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(which terms will supercede the terms of the Current Employment Agreement) for a
term ending on the first anniversary of the date on which the Effective Time
occurs (the "First Anniversary"). Within the time specified in the New
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Employment Agreement, Employee elected to be employed on the terms thereof if
the Effective Time occurs. Notwithstanding such election, Employee's employment
with each of the Company's
affiliates, all of his directorships with each of the Company's affiliates, and
all of his offices with each of the Company's affiliates, will terminate at the
Effective Time;
E. In light of Employee's decision to elect employment under the New
Employment Agreement, a portion of the bonus referred to in Recital C will be
paid to Employee at the Effective Time and the balance will be deferred (without
interest) until, and paid on, the First Anniversary, in each case subject to the
terms and conditions of this Bonus Agreement; and
F. The Company and Employee now wish to amend and restate the Original
Agreement in its entirety.
NOW, THEREFORE, the Company and Employee hereby agree as follows:
1. Bonus Payments.
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(a) In recognition of Employee's valuable contribution to the Company,
Holdings and their affiliates, the Company shall pay Employee the
following bonus payments (each, a "Bonus Payment") if the Merger
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occurs:
(i) Immediately following the Effective Time, the Company shall pay
Employee the sum of $385,000; and
(ii) Subject to Section 1(d), on the First Anniversary the Company
shall pay Employee the sum of $165,000 (the "Deferred Amount").
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(b) No interest shall be payable on any Bonus Payment in respect of the
period prior to its due date hereunder.
(c) All Bonus Payments shall be subject to any deductions or withholdings
required by law.
(d) If Employee dies or suffers a "Disability" (as defined in the New
Employment Agreement) prior to the payment of the Deferred Amount, the Deferred
Amount shall be paid, on its due date, to Employee's executor or administrator
or to such other person as Employee has theretofore specified in a signed
document delivered to the Company.
(e) Notwithstanding anything to the contrary in Sections 1(a), (b) and (d):
(i) the Company's obligation to make the Bonus Payment due immediately
following the Effective Time shall be conditioned on Employee having
executed, on or after the date on which the Effective Time occurs, and not
having thereafter revoked within the revocation period specified therein, a
Release substantially in the form of Exhibit 1 to this Bonus Agreement; and
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(ii) the Company's obligation to pay the Deferred Amount shall be
conditioned on Employee having executed, on or after the First Anniversary,
and not having thereafter revoked within the revocation period specified
therein, a second Release substantially in the form of said Exhibit 1.
(f) Anything in this Bonus Agreement to the contrary notwithstanding, if
any amounts to be paid to Employee (or to his executor, administrator or other
payee specified by him) under this Bonus Agreement, or any other plan, agreement
or program of the Company or any of its affiliates, would result in a "parachute
payment" (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), then the aggregate of such "parachute payments" shall
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be reduced so that the aggregate of the amounts paid to Employee which would
otherwise constitute "parachute payments" will equal three times Employee's
"base amount" (as defined in Section 280G(b)(3) of the Code) less $1.00. Any
determination to be made under the preceding sentence shall be made by an
independent accounting firm with a nationally recognized tax practice that has
not performed services for the Company or any of its affiliates, which firm
shall be selected by the Company and be reasonably acceptable to Employee, it
being agreed that such accounting firm may not be the Company's or Holdings'
independent auditors. The Company agrees to pay the accounting firm's fees and
expenses with respect to any such determination. Nothing herein shall limit the
parties' respective rights in the event that an applicable government taxing
authority or court takes a position which is inconsistent with any such
determination.
(g) Nothing in this Bonus Agreement shall affect Employee's right to
receive, when his employment by the Company terminates for any reason (whether
before or after the Effective Time), all vacation pay that has accrued under the
Company's existing vacation policy as applied to Employee.
2. Benefit Accruals.
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Benefit accruals with respect to Employee under the Retirement Plan
for Corporate Officers of PS Group, Inc. and Participating Subsidiaries, dated
March 12, 1984, shall cease as of the Effective Time.
3. Confidentiality.
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Employee agrees that he will not use for his own benefit or disclose to any
third party, either during his employment or thereafter, any confidential
information or data concerning the business or activities of the Company, Parent
or any of their respective subsidiaries or affiliates acquired at any time
while employed or rendering services to the Company or any of its subsidiaries
or affiliates, or any of their respective predecessors or successors.
Employee's obligations under this covenant and any liability for failure to
satisfy these obligations shall survive any termination of this Bonus Agreement.
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4. Termination.
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This Bonus Agreement shall terminate, and be null and void, in the event
that, prior to the Effective Time:
(a) The Merger Agreement is terminated pursuant to its terms; or
(b) Employee's services as an employee of the Company cease for any reason
other than Employee's death or Disability.
5. Entire Agreement.
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This Bonus Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supercedes, as of the Effective Time,
all other written, oral or implied agreements between the parties including,
without limitation, the Current Employment Agreement and the Original Agreement.
The Employment Agreement dated December 18, 1999 between the Company and
Employee shall remain in full force and effect. This Bonus Agreement may be
modified or amended only by a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Bonus Agreement
as of the day and year first written above.
PS GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
Chief Executive Officer
EMPLOYEE
/s/ X. X. Xxxxx
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Xxxxxxxx X. Xxxxx
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Exhibit 1
Release From All Claims
__________________, [2000]
[Name]
[Title]
PS Group, Inc.
[Address]
Dear ______________:
In consideration of the payment to me (or to my executor, administrator or
other payee designated by me in writing, in the event of my death), on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties (as defined below) from any and all claims, actions, causes of
action, suits, costs, controversies, judgements, decrees, verdicts, damages,
liabilities, attorneys' fees, covenants, contracts, and agreements
(collectively, "Claims") that I may have, or in the future may possess, with
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respect to the Company Parties, including, but not limited to, any Claims
relating to my employment with the Company Parties or the termination thereof,
any Claims arising under Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, each of these
as amended, or any other federal or state or local law, whether such Claim
arises under statute, common law or in equity, and whether or not I or any of
the Company Parties is presently aware of the existence of such Claim, but
excluding the following Claims (the "Excluded Claims"): (i) Claims under the
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Amended and Restated Bonus Agreement dated February __, 2000 between the Company
and me; (ii) Claims under the Employment Agreement dated December 18, 1999
between the Company and me; (iii) Claims for accrued vacation pay; (iv) Claims
under the Retirement Plan for Corporate Officers of PSA, Inc. Participating
Subsidiaries as amended and restated as of March 12, 1984; (v) Claims under the
Split Dollar Life Insurance Agreement dated January 1, 1986 (as modified by
letter dated March 23, 1999) between the Company and me; and (vi) Claims for
indemnification in respect of my services as a director and/or officer and/or
employee of any of the Company Parties in accordance with Sections 5.06(a) and
(b) of the Merger Agreement and related claims under the directors' and
officers' liability insurance policy obtained in accordance with Section 5.06(c)
of the Merger Agreement. I also hereby forever release, discharge and waive any
right I may have to recover in any proceeding brought by any federal, state or
local agency against any of the Company Parties to enforce any such
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laws, but excluding Excluded Claims. I agree that the Bonus Payments shall be in
full satisfaction of any and all Claims for payment or other benefits of any
kind that I may have against the Company Parties except for any other Excluded
Claims.
For purposes of this letter, the "Company Parties" means the Company,
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Parent and any and all of their respective predecessor or successor companies,
shareholders, subsidiaries and affiliates wherever located and each of their
present, former and future directors, officers, employees, agents, attorneys,
heirs and assigns. Capitalized terms that are used but not defined herein have
the meanings assigned to them in the Bonus Agreement.
In addition to the foregoing, in consideration of the payment, on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties from any and all Claims (other than Excluded Claims) that I may
have as of the date I sign this letter arising under the Federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules
and regulations promulgated thereunder (the "ADEA"). By signing this letter, I
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hereby acknowledge and confirm the following: (i) I was advised by the Company
to consult with an attorney of my choice prior to signing this letter and to
have such attorney explain to me the terms of this letter, including, without
limitation, the terms relating to my release of claims arising under the ADEA;
(ii) I was given a period of not fewer than 21 days to consider the terms of
this letter and to consult with an attorney of my choosing with respect thereto;
and (iii) I am providing the release and discharge set forth in this paragraph
only in exchange for consideration in addition to anything of value to which I
am already entitled.
To ensure that the foregoing release is fully enforceable in accordance
with its terms, I agree to waive any and all rights of Section 1542 of the
California Civil Code (to the extent applicable) as it exists from time to time
or a successor provision thereto, which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor.
In addition, to ensure that the foregoing release is fully enforceable in
accordance with its terms, subject to the payment, on their respective due
dates, of the Bonus Payments, I agree to waive any protection that may exist
under any comparable or similar statute and under any principle of common law of
the United States or any and all States with respect to all Claims (other than
Excluded Claims).
THIS MEANS THAT (EXCEPT AS EXPRESSLY PROVIDED HEREIN) BY SIGNING THIS
LETTER, I WILL HAVE WAIVED ANY RIGHT I MAY HAVE HAD TO BRING A LAWSUIT OR MAKE
ANY CLAIM AGAINST THE COMPANY
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PARTIES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY PARTIES UP TO THE DATE OF
THE SIGNING OF THIS LETTER.
In addition I have been advised of my right to revoke this letter during
the seven-day period after signing, provided such revocation is in writing,
signed by me and delivered to the Company. I understand that in the event of
any such revocation, all obligations of the Company with respect to the Bonus
Payments will terminate and be of no further effect as of the date of such
revocation.
___________________________________
Xxxxxxxx X. Xxxxx
ACKNOWLEDGED:
PS GROUP, INC.
By: ___________________________________
Name: Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
Title: Chief Executive Officer
Date: __________________________ [2000]* [ ]**
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* Release under Section 1(e)(i) of the foregoing Bonus Agreement.
** Release under Section 1(e)(ii) of the foregoing Bonus Agreement.
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