AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (hereinafter, the "Agreement")
replaces in the entirety the Employment Agreement dated October 1, 1996 between
World Airways, Inc., a Delaware corporation and Xxxxx Fort, as subsequently
modified on July 16, 1998, by Amendment Number 1 to that Employment Agreement
and is entered into this 22nd day of January 1999.
THIS EMPLOYMENT AGREEMENT dated as of October 1, 1996 ("Agreement"), is by and
between World Airways, Inc., a Delaware corporation, its successors and assigns
(hereinafter "World") and Xxxxx Fort ("Fort").
WHEREAS, Fort has served as World's Executive Vice President since April 18,
1996;
WHEREAS, World desires to continue to employ Fort and Fort desires to continue
to serve World as Executive Vice President;
NOW, THEREFORE, World and Fort, in consideration of the mutual covenants and
promises contained herein, do hereby agree as follows:
1. ACCEPTANCE OF EMPLOYMENT. Subject to the terms and conditions set forth
below, World agrees to employ Fort and Fort accepts such employment.
2. TERM. The period of employment shall be from the date first written above
through December 31, 1999, unless further extended or sooner terminated as
hereinafter set forth. If either World or Fort wishes to renew this Agreement on
different terms, or World does not wish to renew this Agreement when it expires
on December 31, 1999, World shall give written notice at least one hundred
eighty (180) days prior to the expiration date. In the absence of notice, this
Agreement shall be renewed on the same terms and conditions for a term of one
year from the date of expiration.
3. POSITION AND DUTIES. Fort shall continue to serve as Executive Vice President
with the duties performed as of the date hereof, as those duties may be changed
from time to time by mutual agreement, except that Fort's responsibilities may
not be modified in a way that would be inconsistent with the status of a senior
executive. Following a Change of Control (as hereinafter defined), Fort's
responsibilities may not be changed without mutual agreement. Fort agrees to
render his services to the best of his abilities and will comply with all
policies, rules and regulations of the company and will advance and promote to
the best of his ability the business and welfare of the company. Fort shall
devote all of his working time, attention, knowledge and skills solely to the
business and interest of World. Fort may not accept any other engagement with or
without compensation which would affect his ability to devote all of his working
time and attention to the business and affairs of World without the prior
written approval of the President. Fort agrees to accept assignments on behalf
of World or affiliated companies commensurate with his responsibilities
hereunder, except that the terms and conditions of assignments exceeding 60
consecutive days outside the Washington, D.C. metropolitan area will require
mutual agreement.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. Fort shall receive a minimum salary of $200,000 per
annum payable in monthly installments in accordance with the payroll
procedures for World's salaried employees in effect during the term of
this Agreement. Fort agrees to participate equally, on a percentage
basis, in any across the board salary reductions approved by senior
management.
(b) ELIGIBILITY FOR BONUSES. Fort shall be eligible to receive an
annual bonus pursuant to World's 1996 management incentive compensation
plan and successor plans, if any, as the Board of Directors may adopt
from time to time. A copy of the 1996 Plan is attached as Exhibit A
hereto.
(c) PERFORMANCE STOCK OPTIONS. Fort has been granted options to
purchase World's Common Stock, par value $.001 per share ("World
Airways Common Stock") pursuant to the 1995 World Airways Stock Option
Plan (the "Plan") as set forth in the Stock Option Agreement between
World and Fort dated May 31, 1995 (the "Option Agreement"), a copy of
which is attached.
(d) BUSINESS EXPENSES. Fort shall be entitled to reimbursement of
reasonable business related expenses from time to time consistent with
World's policies, including, without limitation, submitting in a timely
manner appropriate documentation of such expenses.
(e) FRINGE BENEFITS. Fort shall be entitled to participate in all
employee benefit plans made available from time to time to all senior
executives of World in accordance with the terms of such plans. In the
event this Agreement is terminated by either party for any reason other
than death or for Cause, Fort may participate in World's health
programs for one year for each year of service with World (prorated in
the case of a partial year) on the same terms available to the most
senior executives of World or its affiliates, or until Fort obtains
comparable coverage, whichever is earlier.
(f) PERSONNEL POLICIES, CONDITIONS AND BENEFITS. Except as otherwise
provided herein, Fort's employment shall be subject to the personnel
policies and benefits plans which apply generally to World's employees
as the same may be interpreted, adopted, revised or deleted from time
to time, during the term of this Agreement, by World in its sole
discretion. While this Agreement is in effect, Fort shall be entitled
to one (1) month of paid vacation in each calendar year, and all paid
holidays observed by World.
(g) INDEMNIFICATION; D&O INSURANCE. World shall provide (or cause to be
provided) to Fort indemnification against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlements in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of World) by reason of his
being or having been an officer, director or employee of World or any
affiliated entity, advance expenses (including attorneys' fees)
incurred by Fort in defending any such civil, criminal, administrative
or investigative action, suit or proceeding and maintain directors' and
officers' liability insurance coverage (including coverage for
securities-related claims) upon substantially the same terms and
conditions as set forth in the Indemnification Agreement dated October
1, 1996 between Fort and World Airways, Inc.
(the "Indemnity Agreement").
5. TERMINATION OF EMPLOYMENT.
(a) DEATH. Fort's employment hereunder shall terminate upon his death,
in which event World shall have no further obligation to Fort or his
estate with respect to compensation, other than the disposition of life
insurance and related benefits and accrued and unpaid base salary and
incentive compensation for periods prior to the date of termination, if
any, pursuant to the terms of the respective employee benefits and
incentive compensation plans then in effect.
(b) BY WORLD FOR DISABILITY. If Fort incurs a disability and such
disability continues for a period of twelve (12) consecutive months,
then World may terminate this Agreement upon written notice to Fort, in
which event World shall have no obligation to Fort with respect to
compensation under Section 4(a) of this Agreement. The term
"disability" means a physical or mental illness that will prevent Fort
from performing the essential functions of his job for at least twelve
(12) months or is likely to result in death. If Fort becomes entitled
to Social Security benefits payable on account of disability, he will
be deemed conclusively to be disabled for purposes of this Agreement.
(c) BY WORLD FOR CAUSE.
(i) Except under the circumstances set forth in 5(c)(ii)
below, the President and Chief Executive Officer of World may
terminate this Agreement for Cause. "Cause" shall be defined
as (A) sustained performance deficiencies which are
communicated to Fort in written performance appraisals and/or
other written communications (including, but not limited to
memos and/or letters) by the President and Chief Executive
Officer of World, (B) gross misconduct, including significant
acts or omissions constituting dishonesty, intentional
wrongdoing or malfeasance, relating to the business of World,
or (C) commission of a felony involving fraud or dishonesty,
or (D) a material breach of this Agreement.
(ii) In the event of a Change of Control, as defined below,
Fort may only be terminated for Cause pursuant to a resolution
duly adopted by the affirmative vote of a majority of the
entire membership of the Board at a meeting of the Board
finding that, in the good faith opinion of the Board, Fort was
guilty of conduct set forth in 5(c)(i)(A), (B), (C) or (D)
provided, however, that Fort may not be terminated for Cause
unless: (1) Fort receives prior written notice of World's
intention to terminate this Agreement for Cause and the
specific reasons therefor; and (2) Fort has an opportunity to
be heard by World's Board of Directors and be given, if the
acts are correctable, a reasonable opportunity to correct the
act or acts (or non-action) giving rise to such written
notice. If the Board by resolution duly adopted by the
affirmative vote of a majority of the entire membership of the
Board finds that Fort fails to make such correction after
reasonable opportunity to do so, this Agreement may be
terminated for Cause. In the event of a disagreement between
World and Fort as to whether the termination was for Cause,
that issue shall be submitted within twenty (20) days of the
notice of termination to binding arbitration.
(d) BY WORLD FOR OTHER THAN CAUSE. In the event the Board of Directors
terminates this Agreement for reasons other than Cause as defined in
sub-paragraph (c) above, World will pay to Fort within ten (10) days of
notice of termination (or, in the case of incentive bonus compensation,
within ten (10) days of the determination of amounts payable under the
applicable bonus plan generally) the greater of eighteen month's salary
or the undiscounted remainder of his base salary, including deferred
salary and/or bonus compensation, payable under this Agreement. In
addition, all granted but unvested stock options under the Option
Agreement shall become immediately exercisable. In the event that any
payment to Fort under this paragraph is subject to any federal or state
excise tax, World shall pay to Fort an additional amount equal to the
excise tax imposed including additional federal and state income and
excise taxes as a result of the payments under this paragraph, and such
payment will be made when the excise tax and income taxes are due;
provided, however, that Fort agrees to assist World Airways by using
his best efforts to structure matters so that any payment to Fort under
this paragraph is not subject to any federal or state excise tax.
Whether an excise tax is payable, and the amount of the excise tax and
additional income taxes payable, shall be determined by World's
accountants and World shall hold Fort harmless for any and all taxes,
penalties, and interest that may become due as a result of the failure
to properly determine that an excise tax is payable or the correct
amount of the excise tax and additional income taxes, together with all
legal and accounting fees reasonably incurred by Fort in connection
with any dispute with any taxing authority with respect to such
determinations and/or payments.
(e) BY FORT FOR GOOD REASON. Fort may terminate his employment
hereunder (for purposes of this Agreement "Good Reason") after giving
at least 30 days notice in the event that: (i) World relocates its
general and administrative offices or Fort's place of employment to an
area other than the Washington, D.C. Standard Metropolitan Statistical
Area, (ii) he is assigned any duties substantially inconsistent with
his responsibilities as described by Section 3 hereof or a substantial
adverse alteration is made to the nature or status of such
responsibilities, (iii) World reduces his annual base salary as in
effect on the date hereof or as the same may be increased from time to
time except as provided in Section 4(a) herein; (iv) World fails,
without Fort's consent, to pay Fort any portion of his current
compensation, or to pay him any portion of an installment of deferred
compensation under any deferred compensation program of World, within
seven (7) days of the date such compensation is due; (v) World fails to
continue in effect any compensation plan in which Fort participates
which is material to Fort's total compensation, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has
been made with respect to such plan, or the failure by World to
continue Fort's participation therein (or in such substitute or
alternative Plan) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of Fort's
participation relative to other participants; (vi) World fails to
continue to provide Fort with benefits substantially similar to those
enjoyed by Fort under any of World's pension, life insurance, medical,
health and accident, or disability plans in which Fort was
participating, World takes any action which would directly or
indirectly materially reduce any of such benefits or deprive Fort of
any material fringe benefit enjoyed by Fort, or World fails to provide
Fort with the number of paid vacation days to which Fort is entitled
hereunder; (vii) World terminates, or proposes to terminate, Fort's
employment hereunder contrary to the requirements of Section 5(c)
hereof (for purposes of this Agreement, no such termination or
purported termination shall be effective); (viii) the Board approves
the liquidation or dissolution of World prior to the end of this
Agreement.
(f) BY FORT FOR OTHER THAN GOOD REASON. Notwithstanding the above, Fort
may upon giving reasonable notice, not to be less than 30 days,
terminate this Agreement without further obligation on the part of Fort
or World.
(g) CHANGES OF CONTROL. For purposes of this Agreement, a "Change of
Control" includes the occurrence of any one or more of the following
events:
(i) any Person is or becomes the Beneficial Owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of
securities of World representing more than 50% of the combined
voting power of World's then outstanding securities; or
(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board of World and any new director (other than
a director designated by a Person who has entered into an
agreement with World to effect a transaction described in
clause (i), (iii) or (iv) or this Section 5 (f)) whose
election by the Board of World or nomination for election by
the stockholders of World was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a majority
thereof; or
(iii) the shareholders of World approve a merger or
consolidation of World with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of World outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit
plan of World or any of its affiliates, at least 50% of the
combined voting power of the voting securities of World or
such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of World (or similar
transaction) in which no Person acquires more than 50% of the
combined voting power of World's then outstanding securities;
or
(iv) the shareholders of World approve a plan of complete
liquidation of World or an agreement for the sale or
disposition by World of all or substantially all of World's
assets.
(h) "PERSON" DEFINED. For purposes of this Section, "Person" shall have
the meaning given in Section (3)(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (i) World or WorldCorp, Inc. or any of its subsidiaries or
affiliates; (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of World or WorldCorp, Inc. or any of their
subsidiaries; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (iv) a corporation
owned, directly or indirectly, by the stockholders of World or
WorldCorp, Inc. in substantially the same proportions as their
ownership of stock of World or WorldCorp, Inc.
(i) EFFECT OF TERMINATION BY FORT. In the event that Fort decides to
terminate this Agreement and his employment with World or any successor
in interest in accordance with the provisions of Section 5(e), World
shall have the same obligations as set forth in Section 5(d) hereof.
Any other payments due or actions required under this paragraph shall
be made as lump sums or taken within 10 days of termination of the
Agreement.
(j) EXCISE TAX INDEMNITY. In the event that any payment to Fort under
Section 5(e) is subject to any federal or state excise tax, World shall
pay to Fort an additional amount equal to the excise tax imposed
including additional federal and state income and excise taxes as a
result of the payments under this paragraph, and such payment will be
made when the excise tax and income taxes are due; provided, however,
that Fort agrees to assist World Airways by using his best efforts to
structure matters so that any payment to Fort under this paragraph is
not subject to any federal or state excise tax. Whether an excise tax
is payable, and the amount of the excise tax and additional income
taxes payable, shall be determined by World's accountants and World
shall hold Fort harmless for any and all taxes, penalties, and interest
that may become due as a result of the failure to properly determine
that an excise tax is payable or the correct amount of the excise tax
and additional income taxes, together with all legal and accounting
fees reasonably incurred by Fort in connection with any dispute with
any taxing authority with respect to such determinations and/or
payments.
(k) NOTICE OF TERMINATION. Termination of this Agreement by World or
termination of this Agreement by Fort shall be communicated by written
notice to the other party hereto, specifically indicating the
termination provision relied upon.
(l) COMPANY PROPERTY. At the end of the term described in Section 2 or
in the event of termination under Section, Fort shall return all
company property, including electronic and paper files, with the
exception of the cellular phone(s).
6. CONFIDENTIALITY/RESTRICTIVE COVENANT.
(a) Fort recognizes and acknowledges that financing documents, trade
secrets, new products, copyrights, schedules, costs, performance
features, techniques, plans, methods, business and marketing plans,
dealings, arrangements, objectives, locations, customer information and
other information concerning World's business and business practices
not generally known in the aviation industry, constitute confidential
information and represent valuable, special and unique assets of World
("Confidential Information"). Fort agrees that he will not, during
employment with World or for a period of two (2) years following
termination of employment for any reason, whether voluntary or
involuntary, with or without Cause, disclose any of such Confidential
Information to any person or person not connected with World without
World's prior written approval. The parties hereto stipulate that as
between them, the foregoing matters are important, material, and
confidential and gravely affect the successful conduct of the business
of World, and World's good will, and that any breach of the terms of
this paragraph shall be a material breach of this Agreement.
(b) While employed by World and for a period of two (2) years following
termination of employment for any reason, whether voluntary or
involuntary, with or without Cause, Fort agrees that he shall not,
(i) Request, induce or attempt to induce any customer of World
to terminate any business relationship with World or to seek
to establish a similar business relationship with a person or
entity other than World;
(ii) Cause, encourage or in any way assist any person or
entity actively to solicit any aviation business from any
customer of World;
(iii) Induce or attempt to induce any of World's employees to
terminate their employment with World, or induce or attempt to
induce any of World's employees to provide aviation related
services for any other person, firm or organization;
(iv) Use any employer Confidential Information as set forth in
paragraph A of this Section or information which is not
otherwise available to the public at large for the purposes of
providing aviation related services for or through any person
or entity other than World.
Fort agrees that the restrictions set forth in this Agreement above are
reasonable, proper, and necessitated by legitimate business interests
of World and do not constitute an unlawful or unreasonable restraint
upon Fort's ability to earn a livelihood. The parties agree that in the
event any of the restrictions in this Agreement, interpreted in
accordance with the Agreement as a whole, are found to be unreasonable
by a court of competent jurisdiction, such court shall determine the
limits allowable by law and shall enforce the same. If the court
declines such enforcement, the parties agree that this agreement shall
be interpreted to provide World with the maximum protection allowed by
law.
(d) Fort acknowledges that it may be impossible to assess the monetary
damages incurred by his violation of this Agreement, or any of its
terms, and that any threatened or actual violation or breach of this
Agreement, or any of its terms, will constitute immediate and
irreparable injury to World. Therefore, Fort expressly agrees that in
addition to any and all other damages and remedies available to World
as a result of Fort's breach of this Agreement, World shall be entitled
to an injunction restraining Fort from violating or breaching this
Agreement, or any of its terms. In the event World enforces this
Agreement through Court Order, Fort agrees that the restrictions
contained in this Agreement shall remain in effect for a period of
twelve (12) consecutive months from the effective date of such Order
enforcing the Agreement.
7. BENEFICIARY. The Beneficiary of any payment due and payable at the time of
Fort's death, or otherwise due upon his death, shall be his wife, or such other
person or persons as Fort shall designate in writing to World. If no such
beneficiary shall survive Fort, any such payments shall be made to his estate.
8. INTELLECTUAL PROPERTY.
(a) Any improvements, new techniques, processes, products or
copyrightable materials made or conceived by Fort, either solely or
jointly with other person(s), (1) during Fort's period of employment by
World, during working hours; (2) during the period after
termination of his employment during which he is retained by World as a
consultant; or (3) with use of World's intellectual property or
confidential information, shall be the sole and exclusive property of
World without royalty or other consideration to Fort.
(b) Fort agrees to inform World promptly and in full of such
intellectual property by a full written report setting forth in detail
the procedures used and the results achieved.
(c) Fort shall at World's request and expense execute any and all
applications, assignments, or other instruments which World shall deem
necessary to apply for, register, and/or obtain copyrights or Letters
Patent of the United States or of any foreign country, or to otherwise
protect World's interests in such intellectual property.
(d) Fort shall assign and does hereby assign to World all interests and
rights, including but not limited to copyrights, in any such
intellectual property.
9. ARBITRATION. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, under the commercial
arbitration rules of the American Arbitration Association.
10. NO WAIVER. The failure of either party at any time to enforce any provisions
of this Agreement or to exercise any remedy, option, right, power or privilege
provided for herein, or to require the performance by the other party of any of
the provisions hereof, shall in no way be deemed a waiver of such provision at
the same or at any prior or subsequent time.
11. GOVERNING LAW. This Agreement is governed by and shall be construed in
accordance with the laws of the State of Virginia. Fort agrees to submit to
personal jurisdiction in the State of Virginia.
12. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not be deemed to affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
13. SUCCESSORS. This Agreement shall be binding upon World, its successors and
assigns, including any corporation or other business entity which may acquire
all or substantially all of World's assets or business, or within which World
may be consolidated or merged, or any surviving corporation in a merger
involving World.
14. WAIVER OF MODIFICATION OF AGREEMENT. No waiver or modification of this
Agreement shall be valid unless in writing and duly executed by both parties.
15. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
WORLD AIRWAYS, INC.
By: ________________________________
Xxxxxxx X. Xxx, Xx.
President and CEO
________________________________
Xxxxx Fort
