SEVERANCE AGREEMENT
Exhibit 10.1
J.
Xxxxxx
Xxxxxxxxx (‘Xxxxxxxxx”) and ATA Holdings Corp. (“ATA Holdings”), together with
ATA Holdings’ subsidiaries ATA Airlines, Inc. (“ATA Airlines”), Ambassadair
Travel Club, Inc., ATA Leisure Corp., Amber Travel, Inc., American Trans
Air
Execujet, Inc., ATA Cargo, Inc., and C8 Airlines, Inc. (collectively, ATA
Airlines and the other subsidiaries of ATA Holdings identified above shall
be
referred to as the “ATA Subsidiaries” and ATA Holdings and the ATA Subsidiaries
collectively shall be referred to as the “ATA Group”), hereby execute this
Severance Agreement (“Agreement”) as of the 31st
of
August, 2005 and agree as follows:
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1.
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Employment
History, Retirement and Termination.
Mikelsons has been employed by ATA Holdings or ATA Airlines or
their
predecessor entities and their affiliated entities respectively
since
1973. Mikelsons wishes to retire. This Agreement provides for (i)
the
termination of Mikelsons's employment as President and Chief Executive
Officer of ATA Holdings, (ii) Mikelsons’ resignation as an officer and/or
as the sole member of the Board of Directors of each member of
the ATA
Subsidiaries, respectively, and (iii) the retirement and resignation
of
Mikelsons from the position of Chairman of the Board of ATA Holdings.
Mikelsons hereby retires from and resigns, effective as of 5:00p.m.,
Indianapolis time, on August 31, 2005 (the "Severance Date"), as
(i) the
President and Chief Executive Officer of ATA Holdings and (ii)
an officer
and/or member of the Board of Directors of each member of the ATA
Subsidiaries, with Mikelsons being relieved of all employment duties
and
performance obligations effective as of the Severance Date. After
the
Severance Date, Mikelsons
shall continue to serve as non-executive Chairman of the Board
of ATA
Holdings until the earlier of the "Effective Date" (as defined
therein) of
a confirmed plan of reorganization of the ATA Group or December
31, 2005
(“Chair Retirement Date”), and in such capacity as non-executive Chairman
of the Board, Mikelsons shall not be an employee of ATA Holdings.
During
the period that Mikelsons is serving as non-executive Chairman
of the
Board, he shall be entitled to and receive the same rights and
privileges
as all other members of the Board of Directors of ATA Holdings,
including,
but not limited to, and to the extent such exist, directors fees
and
indemnification and coverage under the directors and officers liability
insurance policies of each member of the ATA Group, provided that
any such
directors fees may be no more than any other director receives
in the same
period and in no event exceed the aggregate of $10,000. On the
Chair
Retirement Date, Mikelsons shall retire from his position as Chairman
of
the Board of ATA Holdings and resign from such Board.
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2.
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Authority.
ATA
Holdings and each member of the ATA Subsidiaries, respectively,
is the
subject of a case under chapter 11 of the United States Bankruptcy
Code
pending in the United States Bankruptcy Court, Southern District
of
Indiana, Indianapolis Division (the “Bankruptcy Court”), jointly
administered under case number 04-19866. The parties agree and
acknowledge
that this Agreement is being entered into pursuant to an Order
of the
Bankruptcy Court dated August 25, 2005, approving generally the
terms of
this Agreement (the “Order”) and (ii) the counsel for the Official
Committee of Unsecured Creditors appointed in the chapter 11 cases
of the
ATA Group, shall have the right to review the terms hereof to confirm
that
such terms are consistent with the Order.
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3.
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Voluntary
Agreement.
Mikelsons, ATA Holdings and each of the ATA Subsidiaries, respectively,
desire to resolve any and all claims and disputes or issues which
have
arisen or could arise concerning Mikelsons's employment with or
service
for the ATA Group and the termination of that employment and service.
To
accomplish such a resolution, they have voluntarily entered into
this
Agreement. Each member of the ATA Group, respectively, expressly
agrees
and acknowledges that its obligations,
including, without limitation, the obligations to pay the Severance
Benefit and the Non-Compete Payments, as each is defined herein,
shall in
no way depend on the continued existence, operation or solvency
of any
other member of the ATA Group.
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4.
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Salary
and Vacation Benefits.
The ATA Group will pay Mikelsons any and all salary payments and
any
earned, but unused, vacation benefits ("Vacation Payment") to which
Mikelsons is entitled up to and including the Severance Date, less
all
customary payroll withholdings, including deductions for federal,
state
and local taxes. The Vacation Payment, if any, will be paid to
Mikelsons
on the first regular payroll date following the Severance
Date.
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5.
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Confirmation
of Receipt of Salary and Benefits.
Mikelsons has received or will receive all wages, salary payments
and
earned, but unused, vacation benefits and bonuses which were or
are due
and payable to Mikelsons by any member of the ATA Group on or prior
to the
Severance Date or the first pay date after the Severance Date.
Except for
the salary payments and Vacation Payment provided for in Section
4 of this
Agreement and the additional compensation and considerations provided
for
in Section 6 of this Agreement, Mikelsons shall not be entitled
to payment
by any member of the ATA Group of any additional amounts for wages,
salary, vacation benefits or
bonuses.
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6.
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Additional
Considerations.
In
consideration of Mikelsons’ service to the ATA Group and execution of and
compliance with the terms of this Agreement, and in full payment
of any
remaining obligations of the ATA Group to Mikelsons (other than
as set
forth in or contemplated by this Agreement, the Non-Compete Agreement
(as
hereinafter defined) and the respective Articles of Incorporation
and
by-laws of each member of the ATA Group), the ATA Group agrees
to provide
to Mikelsons, and Mikelsons agrees to accept, the following additional
payments and benefits:
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a.
As of
the Severance Date, the ATA Group shall pay to Mikelsons severance pay (the
“Severance Benefit”) in the aggregate gross sum of $650,000, less the amount of
applicable federal and state withholding and employment taxes, payable on
fixed
bi-weekly terms over a period of one year beginning two weeks following the
Severance Date (the "Severance Period"). The Severance Benefit shall be deemed
fully earned on the Severance Date and shall not be affected in the event
of
Mikelsons’ death prior to the end of the Severance Period and shall continue to
be paid to Mikelsons’ designees (however such designees may be designated,
whether by will, trust or testamentary or other instrument) in accordance
with
the above payment schedule until paid in full.
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b. Concurrent
with the execution of this Agreement, Mikelsons shall execute an appropriate
confidentiality and non-competition agreement (“Non-Compete Agreement”) for a
two-year period to commence at the end of the Severance Period (the "Non-Compete
Term"). As consideration to Mikelsons for the Non-Compete Agreement, ATA
Holdings, ATA Airlines and each other member of the ATA Group shall pay to
Mikelsons the annual aggregate gross sum of $200,000, payable quarterly
(collectively, the "Non-Compete Payments") for each year of the Non-Compete
Term. The Non-Compete Payments shall be paid to Mikelsons, in accordance
with
and subject to the terms of the Non-Compete Agreement, beginning September
1,
2006 and on each December 1, March 1, June 1 and September 1 thereafter until
paid in full. All Non-Compete Payments shall be paid as a credit against
the JGM
Obligations (as defined in Section 12 hereof). The Non-Compete
Payments shall be deemed fully earned in the event of Mikelsons’ death during
the Non-Compete Term, with any remaining Non-Compete Payments owed to Mikelsons
to be aggregated and applied to the JGM Obligations (as hereinafter defined).
x. Xxxxxxxxx
and his spouse, Xxxxxx Xxxxxxxxx (“Xxx. Xxxxxxxxx”) shall receive lifetime
positive space travel on each
airline operated by any member of the ATA Group and successors thereto. No
member of the ATA Group shall have any liability to reimburse Mikelsons for
income or other taxes arising from, or payable by, Mikelsons or Xxx. Xxxxxxxxx
by reason of this benefit or its utilization. Mikelsons agrees that he will
not
resell or permit to be resold by Xxx. Xxxxxxxxx any flight passes or tickets
issued pursuant to this benefit.
d. From
and
after the Severance Date, upon their respective requests, Mikelsons and Xxx.
Xxxxxxxxx may receive a distribution of their vested 401(k) plan benefits,
respectively, subject to the terms of such plan.
e. After
the
Severance Date and pursuant to its terms, Mikelsons at his expense may convert
the MetLife group term life insurance policy provided by one or more members
of
the ATA Group into a personal policy;
f. After
the
Severance Date, the ATA Group agrees to continue to include Mikelsons and
Xxx.
Xxxxxxxxx among the individuals covered in any health insurance plans offered
by
the ATA Group at their requests respectively, provided that (i) the
inclusion of Mikelsons and Xxx. Xxxxxxxxx, respectively, is permissible under
such plans; (ii) Mikelsons and Xxx. Xxxxxxxxx, respectively, reimburse
the
ATA Group no less frequently than monthly for the employee cost of such
coverage; (iii) to the extent that Mikelsons may be covered, such
inclusion
on the ATA Group’s health insurance plans shall not extend after the third
anniversary of the Severance Date; and (iv) to the extent Xxx. Xxxxxxxxx
may be covered, such inclusion in the ATA Group’s health insurance plans shall
not extend beyond Xxx. Xxxxxxxxx' 65th birthday. If and to the extent that
it is
or becomes impermissible to include Mikelsons or Xxx. Xxxxxxxxx among
individuals covered by the ATA Group’s health insurance plan, the ATA Group
shall not be deemed in default of this undertaking and shall not have any
obligation to pay all or any the costs of Mikelsons’ or Xxx. Xxxxxxxxx’
alternative coverages.
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g. After
the
Severance Date, all as more fully set forth in a separate lease agreement,
Mikelsons shall be permitted continued use through December 31, 2007 of the
2005
Jeep Grand Cherokee owned by ATA Airlines, and shall have no obligation to
reimburse ATA Airlines for such use. Mikelsons shall be solely responsible
for
all costs of insurance, licensing, taxes, gas, maintenance, repairs and any
other miscellaneous expenses typically associated with the ownership or
operation of a vehicle.
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7.
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Confidential
and Proprietary Information.
Mikelsons recognizes Mikelsons's continuing responsibilities to
each
member of the ATA Group with respect to confidential and proprietary
information and material. Mikelsons therefore covenants and agrees
that:
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a.
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prior
to the Severance Date, Mikelsons has not disclosed, outside the
ordinary
course of business to others not employed by, or a director or
agent of, a
member of the ATA Group, any
proprietary, confidential or competitively-sensitive information
and
materials which are the property of or relate to the ATA Group
or the
business of any member of the ATA Group, including, without limitation,
(i) all information and materials, whether or not reduced to writing
or
other tangible medium of expression, created by, provided to or
otherwise
disclosed to Mikelsons in connection with Mikelsons’ employment with any
member of the ATA Group or continued interim service as the non-executive
Chairman of the Board of ATA Holdings Corp. (excepting only information
and materials already known by the general public); (ii) trade
secrets,
(iii) the names and addresses of any member of the ATA Group's
past,
present or prospective customers or business contacts, and all
information
relating to such customers or business contacts, regardless of
whether
such information was supplied or produced by any member of the
ATA Group
or such customers or business contacts; (iv) the terms of employment
between any member of the ATA Group and its employees; (v) proprietary
information regarding or with respect to any member of the ATA
Group’s
services, products, prices, pricing methods, fees, costs, processes,
training materials, financing sources, marketing plans or techniques,
business plans, operational strategies and tactical plans; and
(vi) the
financial condition and operating results of any member of the
ATA
Group
(all such trade secrets and confidential and/or proprietary information
of
ATA Holdings or any other member of the ATA Group shall be hereinafter
referred to collectively as the "Confidential
Information");
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b.
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subsequent
to the Severance Date, Mikelsons will not, without prior written
consent
from ATA Holdings, use or disclose to anyone any of the Confidential
Information;
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x.
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Xxxxxxxxx
has returned, or will return, prior to September 30, 2005, to ATA
Holdings
all originals and all copies (including all computer or other
electronically-stored data) of all materials of any kind whatsoever
constituting or containing any of the Confidential Information
which are
or were in Mikelsons’ possession or custody or under Mikelsons’ control
during Mikelsons’ employment and up to and including the Severance Date;
that Mikelsons has not given any such materials, either directly
or
indirectly, to others not in the employ or a director or agent
of a member
of the ATA Group without prior written consent of a member of the
ATA
Group; and that in the future Mikelsons will not obtain or give
any such
materials, either directly or indirectly, to others not in the
employ or a
director or agent of a member of the ATA Group without ATA Holdings
prior
written consent; and
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d.
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in
conjunction with maintaining strict confidentiality as set forth
herein,
in
the event that Mikelsons is requested by oral or written order,
inquiry or
request for information or documents in legal proceedings, government
investigations, interrogatories, subpoenas or any other similar
process to
disclose any Confidential Information, he agrees that he will provide
notice of any such order, inquiry or request to ATA Holdings so
that it
may seek an appropriate protective order, or by mutual written
agreement
waive compliance with the provisions of this Agreement. Finally,
Mikelsons shall not make or publish disparaging statements concerning
ATA
Holdings or any other member of the ATA Group, their respective
products
or services, or current or former officers, directors, attorneys,
agents
or employees.
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8.
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Company
Property.
Mikelsons represents and covenants that Mikelsons has returned,
or will
return prior to September 30, 2005, all other property of any member
of
the ATA Group, including but not limited to keys, credit cards,
files,
personal computers, documents and any other such property of any
member of
the ATA Group in Mikelsons's possession or custody at Mikelsons's
office,
personal residence, or elsewhere, with the exception of the vehicle
contemplated by Section 6(g) hereof and such property or materials
Mikelsons reasonably desires to retain in service as the non-executive
Chairman of the Board of ATA Holdings up to and through the Chair
Retirement Date, which property Mikelsons will return to ATA Holdings
by
not later than the Chair Retirement Date. No later than September
30,
2005, Mikelsons shall remove from the ATA Group’s offices or facilities
Mikelsons’ personal assets, furniture and any other personal property
located at such offices or
facilities
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9.
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Cooperation.
If
it is necessary for any member of the ATA Group to call upon Mikelsons
to
provide evidence in any judicial, administrative or other proceedings
occurring during the Severance Period, Mikelsons agrees to cooperate
in
making himself available for such proceedings, and the ATA Group
agrees to
reimburse Mikelsons’ reasonable out-of-pocket expenses for such matters.
If it is necessary for any member of the ATA Group to call upon
Mikelsons
to provide evidence in any judicial, administrative or other proceedings
occurring subsequent to the Severance Period, Mikelsons agrees
to
cooperate in making himself reasonably available for such proceedings,
and
the ATA Group agrees to pay Mikelsons reasonable compensation for
his time
(at a rate to be mutually agreed upon by the ATA Group and Mikelsons
at
such time) and to reimburse Mikelsons’ reasonable out-of-pocket expenses
for such matters.
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5
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10.
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Mutual
Release.
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| x. |
Xxxxxxxxx
hereby covenants not to xxx, releases and forever discharges ATA
Holdings,
ATA Airlines and each other member of the ATA Group, and the officers,
directors, employees, agents, successors and assigns of each member
of the
ATA Group from any and all claims, liabilities, demands, actions
and
causes of action of every nature, kind and character, known and
unknown,
which have or may have arisen or accrued to Mikelsons by reason
of
Mikelsons’ employment by or service for ATA Holdings or any other member
of the ATA Group, including, without limitation, any and all claims
that
the retirement and termination of Mikelsons’ employment and/or resignation
of Mikelsons’ board directorships resulted from a violation or breach of
any federal, state, or local statute, regulation, ordinance, or
common
law, or any contract, any charges or claims regarding possible
discrimination (based on age, race, national origin, ethnic background,
sex, disability, religion), wrongful termination, or express or
implied
contract, any and all claims for salary, vacation pay, fringe benefits,
bonuses, severance pay, profit sharing benefits, costs and attorneys'
fees
and any and all claims for other compensation, benefits, damages
or fees,
whether or not any of such claims have been or could have been
asserted by
Mikelsons at any time up to and including the Chair Retirement
Date,
excepting only: (1) any claims, liabilities, demands, actions
and
causes of action which may arise under this Agreement or the Non-Compete
Agreement as the result of the failure of any member of the ATA
Group to
perform under, or any breach of, this Agreement or the Non-Compete
Agreement; (2) any claims for indemnification which may arise under
the
Articles of Incorporation or by-laws of any member of the ATA Group;
(3) any outstanding and properly documented expense reports
that have
not been reimbursed as of the Severance Date, or with respect to
outstanding and properly documented expense reports in connection
with
Mikelsons’ continuing service as non-executive Chairman of the Board of
ATA Holdings, reimbursed as of the Chair Retirement Date; (4) any
benefits claims (not including any bonus or bonus claims) outstanding
on
the Severance Date that have not been reimbursed (consistent with
the
provisions of the applicable benefits plans); and (5) all
other
amounts to which Mikelsons is entitled under any retirement savings
plan
administered by any member of the ATA Group. Mikelsons agrees to
indemnify
and hold harmless each member of the ATA Group, and the officers,
directors, employees, agents, successors and assigns of each member
of the
ATA Group, from and against any and all claims, demands, damages,
liabilities, obligations, costs, expenses, attorneys fees', actions,
causes of action and/or claims for relief arising from any demand,
claim
or action released herein or in connection with any lawsuit, action
or
other proceeding initiated or prosecuted contrary to the provisions
of
this Agreement.
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6
Further,
with particularity with respect to any claim based on alleged age
discrimination: (i) Mikelsons acknowledges that the ATA Group has advised
him
that his employment with the ATA Group was covered by the Age Discrimination
in
Employment Act of 1967 (29 U.S.C. § 621 et. seq.),
as
amended (commonly referred to as the “ADEA”); (ii) Mikelsons acknowledges that
the ATA Group has advised him by this writing to consult with an attorney
prior
to signing this Agreement and that he has done so; (iii) Mikelsons acknowledges
in exchange for this waiver he is receiving consideration beyond what he
would
otherwise be entitled to under any contract or employee benefit plan; (iv)
Mikelsons acknowledges that the ATA Group has advised him that under the
ADEA he
has up to twenty-one (21) days to consider and accept this Agreement by signing
and returning this Agreement to the ATA Group; and (v) Mikelsons acknowledges
that the ATA Group has advised him that for a period of seven (7) days following
Mikelsons’ signing of this Agreement, Mikelsons’ may revoke this Agreement by
written notice to the ATA Group. This Agreement will not become binding and
enforceable until the 7-day revocation period has expired.
b. Each
member of the ATA Group, respectively, hereby covenants not to xxx, releases
and
forever discharges Mikelsons and his heirs, successors and assigns from any
and
all claims, liabilities, demands, actions and causes of action of every nature,
kind and character, known and unknown, costs and attorneys' fees, which have
or
may have arisen or accrued to any member of the ATA Group in connection with
any
act or omission relating to Mikelsons’ employment by or service for any member
of the ATA Group, including, without limitation, his services as a fiduciary
in
connection with any employee benefit plan, and Mikelsons’ service as a member of
the board of directors of any member of the ATA Group, whether or not any
of
such claims have been or could have been asserted by any or each member of
the
ATA Group at any time up to and including the Chair Retirement Date, excepting
only (1) any claims, liabilities, demands, actions and causes of action
which may arise as the result of the failure of Mikelsons to perform under,
or
any breach of, this Agreement or the Non-Compete Agreement and (2) the JGM
Obligations. Each member of the ATA Group, respectively, agrees to indemnify
and
hold harmless Mikelsons and his heirs, successors and assigns, from and against
any and all claims, demands, damages, liabilities, obligations, costs, expenses,
attorneys fees', actions, causes of action and/or claims for relief arising
from
any demand, claim or action released herein or in connection with any lawsuit,
action or other proceeding initiated or prosecuted contrary to the provisions
of
this Agreement.
x. Xxxxxxxxx
hereby represents and covenants that he (i) has not, on or prior to the date
of
this Agreement, transferred or assigned any claim, demand, action or cause
of
action against any member of the ATA Group that he has released and discharged
under Section 10(a) hereof and (ii) will not, subsequent to the date of this
Agreement, transfer or assign any claim, demand, action or cause of action
against any member of the ATA Group that he has released and discharged under
Section 10(a) hereof. Each member of the ATA Group, respectively, hereby
represents and covenants that none of them (i) has, on or prior to the date
of
this Agreement, transferred or assigned any claim, demand, action or cause
of
action against Mikelsons that it has released and discharged under Section
10(b)
hereof and (ii) will, subsequent to the date of this Agreement, transfer
or
assign any claim, demand, action or cause of action against Mikelsons that
it
has released and discharged under Section 10(b) hereof.
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Continuing
Indemnification.
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a. Each
member of the ATA Group shall indemnify and reimburse Mikelsons against all
Liability and Expense
that may be incurred for
all
acts or omissions of Mikelsons in his capacity as an officer, director or
employee of each member of the ATA Group up to and through the Chair Retirement
Date
for, in
connection with, or resulting from any Claim
to the
fullest extent authorized or permitted by law, as the same exists or may
hereafter be amended (but in the case of any such amendment,
only to
the extent that such amendment permits the ATA Group to provide broader
indemnification rights than such law permitted the ATA Group to provide prior
to
such amendment), or otherwise consistent with the public policy of the State
of
Indiana. In furtherance of the foregoing, and not by way of limitation,
Mikelsons shall be indemnified and reimbursed by each member of the ATA Group
against all Liability and reasonable Expense that may be incurred by him
in
connection with or resulting from any Claim, (1) if Mikelsons is Wholly
Successful with respect to the Claim, or (2) if not Wholly Successful, then
if
Mikelsons is determined to have acted in good faith, in what he reasonably
believed to be the best interests of the ATA Group or at least not opposed
to
its best interests and, in addition, with respect to any criminal claim is
determined to have had reasonable cause to believe that his conduct was lawful
or had no reasonable cause to believe that his conduct was unlawful. The
termination of any Claim, by judgment, order, settlement (whether with or
without court approval), or conviction or upon a plea of guilty or of nolo
contendere, or its equivalent, shall not create a presumption that Mikelsons
did
not meet the standards of conduct set forth in clause (2) of this subsection
(a).
b.
The
term "Claim" as used in this Section 11 shall include every pending, threatened,
or completed claim, action, suit, or proceeding (including but not limited
to
arbitration, mediation or other form of alternative dispute resolution) and
all
appeals thereof (whether asserted or unasserted on the date of this Agreement,
or brought by or in the right of any member of the ATA Group or otherwise),
civil, criminal, administrative, or investigative, formal or informal, in
which
Mikelsons may become involved, as a party or otherwise: (1) by reason of
his
having been an officer, director employee, trustee or agent of any member
of the
ATA Group prior to the Chair Retirement Date, or (2) by reason of any action
taken or not taken by him in his capacity as an officer, director, employee,
fiduciary or agent of or for any member of the ATA Group prior to the Chair
Retirement Date or arising out of his status as such.
c. The terms
"Liability" and "Expense" as used in this Section 11 shall include, but
shall
not
be limited to, counsel fees, expert and investigation costs and disbursements
and amounts
of judgments, fines, or
penalties against (including excise taxes assessed with respect
to an employee benefit plan), and amounts paid in settlement by or on behalf
of
Mikelsons.
d. The term
"Wholly Successful" as used in this Section 11 shall mean (1) termination
of any Claim, whether on the merits or otherwise, against Mikelsons in
question
without any finding of liability or guilt against him, (2) approval by a
court,
with
knowledge of the indemnity herein provided, of a settlement of any Claim,
or (3)
the expiration
of a reasonable period of time after the making or threatened making of any
Claim
without the institution of the same, without any payment or promise made
to
induce
a
settlement.
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e. The
rights of indemnification and reimbursement provided under this Section 11
are
not exclusive and shall be in addition to any rights to which Mikelsons may
otherwise be entitled by contract, vote of directors not a party to the Claim,
vote of shareholders, the Articles of Incorporation or by-laws of any member
of
the ATA Group or as a matter of law. In the event of any conflict in any
indemnification or reimbursement provided to Mikelsons by contract, director
or
shareholder vote, the Articles of Incorporation or by-laws of any member
of the
ATA Group, as a matter of law or this Agreement, Mikelsons shall be entitled
to
the broadest indemnification and reimbursement provided by any of the
foregoing.
f. All
obligations of each member of the ATA Group under this Section 11 shall survive
the Severance Date and the termination of Mickelsons’ service in any capacity
covered by this Section 11.
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12.
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Affirmation
of Indebtedness.
Mikelsons
acknowledges and affirms that (i) he is indebted to one or more
members of
the ATA Group as affirmed in that certain letter agreement, dated
as of
October 26, 2004 (the “JGM Debt Agreement”), in the initial principal
amount of Six Hundred Fifty-three Thousand Two Hundred Twenty-five
Dollars
and Nine Cents($653,225.09) (the “JGM Obligations”), and (ii) nothing
herein shall alter
the repayment terms or obligations of Mikelsons with respect to
the JGM
Obligations, except as contemplated by the payment of the Non-Compete
Payments as credits to be applied to the JGM Obligations. The ATA
Group
represents and agrees that all payments under the JGM Debt Agreement
have
been made as agreed prior to the date of this Agreement and that,
as of
July 31, 2005, the outstanding principal balance of the JGM Obligations
is
$612,285.
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13.
Directors
and Officers Liability Insurance. Each
member of the ATA Group and its successors and assigns shall continue to
extend
to and cover Mikelsons under and within its directors and officers liability
insurance policies, respectively, for so long and on the same terms as such
policies are maintained for current directors and officers, for all acts
and
omissions up
to and
through the Chair Retirement Date
of
Mikelsons in
his
capacity as a director or officer of
such
member of the ATA Group, consistent with and to
the
fullest extent authorized or permitted by its
Articles
of Incorporation and by-laws.
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14.
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Severability.
Should any provision of this Agreement be declared or determined
by any
court of competent jurisdiction to be illegal, invalid or unenforceable,
the legality, validity and enforceability of the remaining parts,
terms or
provisions shall not be affected thereby and said illegal, unenforceable
or invalid part, term or provision shall be deemed not to be a
part of
this Agreement. Should any particular confidentiality covenant,
provision
or clause of this Agreement be held unreasonable or contrary to
public
policy for any reason, including, without limitation, the time
period,
geographic area and/or scope of activity covered by any confidentiality
covenant, provision or clause, Mikelsons and each member of the
ATA Group
acknowledge and agree that such covenant, provision or clause shall
automatically be deemed modified such that the contested covenant,
provision or clause will have the closest effect permitted by applicable
law to the original form and shall be given effect and enforced
as so
modified to whatever extent would be reasonable and/or enforceable
under
applicable law.
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9
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15.
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Mikelsons
Acknowledgment.
Mikelsons represents and acknowledges that in executing this Agreement,
Mikelsons does not rely and has not relied upon any representation
or
statement with regard to the subject matter, basis or effect of
this
Agreement, other than those specifically stated in this
Agreement.
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16.
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Entire
Agreement.
Except for the Non-Compete and Confidentiality Agreement provided
for in
Section 6.b. hereof and the lease provided for in Section 6.g.
hereof,
this Agreement sets forth the entire agreement between the parties
hereto,
and fully supersedes any and all prior agreements or understandings,
written or oral, between the parties hereto pertaining to the subject
matter hereof. It may be modified only by the agreement of the
parties
hereto memorialized in writing and executed by each of
them.
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17.
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Amendment;
Waiver; Successors.
This Agreement may not be modified, amended or waived in any manner
except
by a written document executed by the ATA Group and Mikelsons,
with the
approval of the Bankruptcy Court to the extent required. The waiver
by
either party of compliance with any provision of this Agreement
by the
other party shall not operate or be construed as a waiver of any
other
provision of this Agreement (whether or not similar), or a continuing
waiver or a waiver of any subsequent breach by such party of a
provision
of this Agreement. This Agreement and the covenants herein shall
extend to
and inure to the benefit of and shall be binding upon the legal
representatives, heirs, successors and assigns of Mikelsons and
the legal
representatives, successors and assigns of the ATA Group. Further,
the parties agree that this Agreement shall be incorporated into,
and
assumed as part of, any plan of reorganization confirmed in any
of the
pending chapter 11 cases of the members of the ATA Group.
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18.
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Governing
Law and Forum. Mikelsons
acknowledges and agrees that the State of Indiana has a substantial
connection with this Agreement. This Agreement shall therefore
be governed
by and construed according to the internal laws of the State of
Indiana,
without regard to conflict of law principles. The parties further
agree
that any disputes arising under this Agreement and/or any action
brought
to enforce this Agreement may be brought in a state court of competent
jurisdiction in Xxxxxx County, Indiana, or in the federal court
for the
Southern District of Indiana, and the parties consent to personal
jurisdiction of such courts and waive any defense of forum
non-conveniens.
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10
IN
WITNESS WHEREOF, Mikelsons and each member of the ATA Group have executed
this
Agreement on the date(s) indicated below.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
ATA
Airlines, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
Ambassadair
Travel Club, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
ATA
Leisure Corp.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
Amber
Travel, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
American
Trans Air Execujet, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
ATA
Cargo, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
C8
Airline, Inc.
By:
/s/ Xxxxx X. Xxxx, Senior Vice President and General Counsel
(Title)
Dated:
August 31, 2005
By:
/s/ J. Xxxxxx Xxxxxxxxx
J.
Xxxxxx
Xxxxxxxxx
Date:
August 31, 2005
11
