EXHIBIT 10.22
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made this 31st day of December, 2002
by and between Great Lakes Aviation, Ltd., an Iowa corporation ("Company"), and
Xxxxxxx X. Xxxx ("Employee").
WHEREAS, the Company and Employee desire to enter into this Agreement to
set forth all terms and conditions of Employee's employment by the Company.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency whereof are hereby acknowledged, Employee and the
Company desire to enter into this Agreement, upon the terms and conditions
hereinafter set forth.
1. Employment; Duties. During Employee's employment hereunder, he
shall serve at the discretion of the Board of Directors as the Company's
Chairman of the Board of Directors, and shall preside at all meetings of the
Board of Directors. As Chairman the duties will include but not be limited to
such areas as setting meeting times, agendas and coordinating board discussions
on items, voting where required and oversight of the proper recordings of such
procedures, and shall also perform such other duties as may properly belong to
the office or as shall be prescribed from time to time by the Board of
Directors. Employee will not have the day-to-day responsibilities for making
decisions relating to the Company's operations other than those related to Board
Approved Company policies and oversight matters. Employee shall be provided
support as directed by the board of directors to perform his duties as Chairman.
Employee shall perform his duties as directed by the board of directors.
Additionally, Employee shall do such traveling as may reasonably be required by
the Company in connection with the performance of his duties and
responsibilities. Employee represents and warrants to the Company that (a) his
acceptance of employment under this Agreement and his performance of the duties
contemplated herein are not in conflict with any obligation, undertaking or
agreement between Employee and any third party and (b) he has not and will not,
during the course of his employment with the Company, utilize or disclose
outside of his authorized responsibilities as an Employee any confidential or
proprietary information, trade secrets, materials, documents or company property
without authorization of the board of directors.
2. Term. The employment of Employee by Company as provided in
Section 1 will commence on December 31, 2002, and end on the day preceding the
second anniversary date of this Agreement ("Expiration Date"), unless terminated
as hereinafter provided or extended. A renewal or extension may be considered by
the board of directors at their discretion twelve months prior to the Expiration
Date as noted.
3. Compensation and Related Matters.
3.1 Base Salary. The Company shall pay to Employee an annual
base salary of One Hundred Twenty Thousand Dollars ($120,000), payable
in periodic installments in accordance with the standard payroll
practices of the Company in effect from time to time.
3.2 Fringe Benefits. Employee shall be entitled to
participate in and to receive benefits on an ongoing basis as are
customarily provided to the executive officers of the Company.
3.3 Expenses. Company will reimburse Employee for all
reasonable business expenses incurred in performing services hereunder,
upon Employee's presentation to Company from time to time of itemized
accounts describing such expenditures, all in accordance with Company's
policy in effect from time to time with respect to the reimbursements of
business expenses.
3.4 Withholding. As applicable, all payments to Employee
under this Section 3 shall be subject to required withholding for
federal and state income taxes, FICA contributions and other required
deductions.
3.5 Stock Options. Employee and the Company shall enter into
a Stock Option Agreement pursuant to the Company's 1993 Stock Option
Plan, to be dated effective December 31, 2002, or such other date that a
corporate restructuring is effectuated. Employee will be granted 200,000
stock options to purchase shares of the Company's common stock at an
exercise price of $0.40 per share. Such options shall vest ratably on
the first and second anniversary date of this Agreement.
4. Termination.
4.1 Elimination as Director. Employee's employment hereunder
shall terminate upon a decision by the Board of Directors to terminate
his employment as Chairman of the Board.
4.2 Death. Employee's employment hereunder shall terminate
upon his death.
4.3 By Company for Disability. Subject to applicable law,
Company shall have the right to terminate Employee's employment
hereunder if Employee becomes Disabled, upon delivery of a Notice of
Termination to Employee. For the purposes hereof Employee shall be
deemed "Disabled" if: (i) as a result of Employee's incapacity due to
physical or mental illness, including without limitation, chemical
dependency, Employee shall have been unable to perform the major duties
of his employment for three months (whether or not consecutive) during
any twelve month period; or (ii) Employee is found to be permanently
disabled by (A) any insurer pursuant to the terms of any insurance
contract then in effect, (B) the Social Security Administration for
purposes of Social Security
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disability payments or (C) by any tribunal or court. Upon request of the
Board of Directors (or if there be only two members of the Board of
Directors) by any member of the Board of Directors, Employee agrees to
submit to successive medical examinations by such physicians as may be
designated by the Board of Directors and shall consent to the disclosure
of the results of such examinations and a prognosis relative to
Employee's condition. Any and all such examinations shall be conducted
at the expense of the Company.
4.4 By Company for Cause. Company may terminate Employee's
employment hereunder for Cause. For purposes of this Agreement, Company
shall have "Cause" to terminate Employee's employment hereunder upon (i)
the material failure by Employee to perform his duties hereunder if such
failure has not been cured within ten days after written demand for
performance is delivered by Company that specifically identifies the
manner in which Company believes Employee has not performed his duties,
(ii) the willful engaging by Employee in conduct which evidences a
disregard for the interests of Company, momentarily or otherwise,
including material violation of the established rules, regulations and
policies of Company or (iii) the commission by Employee of a felony,
gross misdemeanor or act of dishonesty.
4.5 By Employee for Company's Breach. Prior to the
Expiration Date, Employee may terminate his employment hereunder for a
failure by Company to comply with any material provision of this
Agreement which has not been cured within ten (10) days after written
notice of such noncompliance has been given by Employee to Company.
4.6 Notice of Termination. Any termination of Employee's
employment by Company or by Employee (other than termination pursuant to
Subsection 4.2 hereof) shall be communicated by written Notice of
Termination to the other party hereto.
4.7 Date of Termination. "Date of Termination" shall mean:
(a) if Employee's employment is terminated by his death, the date of his
death; (b) if Employee is eliminated from the Board of Directors, by the
effective date of such elimination; and (c) if Employee's employment is
terminated for any other reason, the date on which a Notice of
Termination is given.
5. Compensation Upon Termination or During Disability.
5.1 During Disability. During any period that Employee fails
to perform his duties hereunder as a result of incapacity due to
physical or mental illness ("disability period"), Employee shall
continue to receive the full compensation for which he is entitled to
offset by his base draw(offset by any payments to Employee received
pursuant to disability benefit plans maintained by Company or disability
benefits from governmental entities) until his employment resumes or is
terminated pursuant to Section 4 hereof, and upon such termination,
Employee shall be entitled to all amounts to which Employee is entitled
pursuant
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to Company disability plans, programs and policies all in accordance
with the terms thereof.
5.2 Death. If Employee's employment is terminated by his
death, Company shall, within ten days following the date of Employee's
death, pay to Employee's estate or Employee's designated beneficiary the
full amount of compensation owed to him through the Date of Termination,
and, thereafter, payment of any other amounts to which Employee is
entitled pursuant to Company death benefit plans, programs and policies
in accordance with the terms thereof.
5.3 Termination Without Cause. Employee shall be an at-will
employee of the Company. Employee may be terminated by the Company at
any time for any reason, or no reason, upon six months written notice.
Employee may terminate his employment upon six months notice. If
Employee is terminated by the Company without cause or by Employee
because of Company's breach of this Agreement, Employee shall receive
his regular base pay for the remainder of the contract period. Stock
options, if any, shall continue to vest during the remainder of the
contract period.
5.4 Termination With Cause. If Employee is terminated with
Cause, compensation shall be paid to Employee through the Date of
Termination and all unvested stock options, if any, will terminate as of
that date.
6. Non-Disclosure. Employee acknowledges that he has received and
will continue to receive and contribute to the production of confidential
information concerning the Company's business, or in certain cases, the business
of its customers ("Confidential Information"). Except as required by his duties
hereunder, Employee will not, either during his employment by Company or at any
time thereafter, use any Confidential Information for his own benefit or
disclose any Confidential Information to any third person. Employee agrees to
refrain from any acts or omissions that would reduce the value of the
Confidential Information. Upon termination of Employee's employment with
Company, Employee shall leave with or return to Company all records,
correspondence, compositions, articles, writing, programs, codes, devices,
equipment, other papers which incorporate, embody or disclose any Confidential
Information (whether written, prepared or made by Employee or others), including
all copies and memorializations thereof. The obligations set forth in this
Section 6 shall not apply to any information or knowledge the entirety of which
is now publicly known or subsequently becomes publicly known, other than as a
direct or indirect result of the breach of this Agreement by Employee or the
breach of a confidentiality obligation owed to Company by any third party. For
the purposes hereof:
(a) The term "Confidential Information" means all
information or material proprietary to Company or designated as
Confidential Information by Company or by a customer of the Company and
not generally known by non-Company personnel, of or to which Employee
obtains knowledge or access through or as a result of Employee's
relationship (whether prior or subsequent to
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the date hereof) with Company (including information conceived,
originated, discovered or developed in whole or in part by Employee).
Confidential Information includes, but is not limited to, the following
types of information and other information of a similar nature (whether
or not reduced to writing), discoveries, inventions (whether or not
patentable), ideas, concepts, software in various stages of development,
designs, drawings, specifications, techniques, models, data, devices,
source codes, object codes, documentation, formulae, patterns,
computations, diagrams, flow charts, research and development data,
programs, processes, procedures, know-how, Trade Secrets, marketing
techniques and materials, strategies, marketing and development plans,
customer names and other information related to customers, price lists,
pricing policies and financial information. Confidential Information
also includes any information described above which Company obtains from
another party and which Company treats as proprietary or designates as
Confidential Information, whether or not owned by or developed by
Company.
(b) The term "Trade Secrets" means information, including a
formula pattern, compilation, program device, method, technique or
process, that derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value from its
disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
7. Intellectual Property.
(a) Disclosure and Assignment. Employee shall promptly
disclose in writing to Company complete information concerning each and
every invention, discovery, improvement, device, design, apparatus,
practice, process, method or product, whether patentable or not, made,
developed, perfected, devised, authored, conceived or first reduced to
practice by Employee, either solely or in collaboration with others,
during the term of this Agreement, whether or not during regular working
hours, relating either directly or indirectly to the business, products,
practices or techniques of the employer (hereinafter referred to as
"Developments"). Employee, to the extent that he has the legal right to
do so, hereby acknowledges that any and all of such Developments are the
property of Company and hereby assigns and agrees to assign to Company
any and all of Employee's right, title and interest in and to any and
all of such Developments.
(b) Limitation on Section 7(a). The provisions of Section
7(a) shall not apply to any Development meeting the following
conditions:
(i) such Development was developed entirely on
Employee's own time; and
(ii) such Development was made without the use of any
Company equipment, supplies, facility or trade secret
information; and
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(iii) such Development does not relate (A) directly to
the business of Company, or (B) to Company's actual or
demonstrably anticipated research or development; and
(iv) such Development does not result from any work
performed by Employee for Company.
(c) Assistance of Employee. Upon request and without further
compensation therefor, but at no expense to Employee, and whether during
the term of this Agreement or thereafter, Employee shall do all lawful
acts, including, but not limited to, the execution of papers and lawful
oaths and the giving of testimony, that in the opinion of Company, its
successors and assigns, may be necessary or desirable in obtaining,
sustaining, reissuing, extending and enforcing United States and foreign
Letters Patent, including, but not limited to, design patents, on any
and all of such Developments, and for perfecting, affirming and
recording Company's complete ownership and title thereto, and to
cooperate otherwise in all proceedings and matters relating thereto.
(d) Records. Employee shall keep complete, accurate and
authentic accounts, notes, data and records of all Developments in the
manner and form requested by Company. Such accounts, notes, data and
records shall be the property of Company, and, upon its request,
Employee shall promptly surrender same to it or, if not previously
surrendered upon its request or otherwise, Employee shall surrender the
same, and all copies thereof, to Company upon the conclusion of his
employment.
(e) Obligations, Restrictions and Limitations. Employee
understands that Company may enter into agreements or arrangements with
agencies of the United States Government, and that Company may be
subject to laws and regulations which impose obligations, restrictions
and limitations on it with respect to inventions and patents which may
be acquired by it or which may be conceived or developed by employees,
consultants or other agents rendering services to it. Employee agrees
that he shall be bound by all such obligations, restrictions and
limitations applicable to any such invention conceived or developed by
him during the term of this Agreement and shall take any and all further
action which may be required to discharge such obligations and to comply
with such restrictions and limitations.
8. Covenant Not To Compete. Employee agrees that during his
employment by Company, while receiving compensation under this Agreement and for
one year following Employee's Date of Termination, whichever occurs later, he
shall not, unless agreed to in writing by the Company, directly or indirectly,
in any manner or capacity (whether alone or as a partner, joint venturer or
stockholder, or creditor, agent, advisor, officer, director or employee for any
person, or through any agency or by any other means whatsoever) engage in any
activity or conduct which competes with any business conducted by the Company or
call upon or otherwise solicit any Accounts or
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Customers. For the purposes hereof "Accounts" and "Customers" shall mean any
Accounts or Customers which the Company has done business with within the
24-month period preceding the termination of Employee's employment, or any
Accounts or Customers to whom the Company has made a business proposal to or
solicited business from. Employee acknowledges that this Covenant Not To Compete
was contained in Company's initial offer of employment to Employee and was an
integral part of said offer of employment.
9. Injunctive Relief. Employee acknowledges and agrees that it
would be difficult to compensate Company fully for damages for any violation of
the provisions of Sections 7 and 8 of this Agreement. Accordingly, Employee
specifically agrees that Company shall be entitled to temporary and permanent
injunctive relief to enforce the provisions of this Agreement, that such relief
may be granted without the necessity of proving actual damages, and that, in
connection with any such proceeding Employee shall waive and hereby waives the
defense that Company has an adequate remedy at law. This provision with respect
to injunctive relief shall not, however, diminish the right of Company to claim
and recover damages in addition to injunctive relief. If any court shall
determine that Company is entitled to injunctive relief, Company shall not be
required to furnish a bond to obtain such preliminary or temporary relief.
10. Arbitration. Any claims or disputes of any nature between the
parties arising from or related to the performance, breach, termination,
expiration, application or meaning of this Agreement shall be resolved
exclusively by arbitration before the American Arbitration Association, pursuant
to the Association's rules for commercial arbitration.
(a) The decision of the arbitrator(s) shall be final and
binding upon both parties. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In
the event of submission of any dispute to arbitration, each party shall,
not later than 30 days prior to the date set for hearing, provide to the
other party and to the arbitrator(s) a copy of all exhibits upon which
the party intends to rely at the hearing and a list of all persons whom
each party intends to call as witnesses at the hearing.
(b) This paragraph 10 shall have no application to claims by
the Company asserting violations of or seeking to enforce, by injunction
or otherwise, regarding the Noncompetition, Confidentiality and
Inventions provisions of this Agreement. Such claims may be maintained
by the Company in a lawsuit
11. Miscellaneous.
11.1 Recitals. The recitals to this Agreement are true and
correct and constitute a part of this Agreement.
11.2 No Assignment. Neither this Agreement nor any rights or
obligations hereunder may be assigned or delegated by any party hereto
without the written consent of the other parties.
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11.3 Remedies Cumulative. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. The election of
any one or more remedies by any party hereto shall not constitute a
waiver of the right to pursue other available remedies.
11.4 Notices. All notice, requests, and other communications
from any of the parties hereto to another shall be in writing and shall
be considered to have been fully given or served if personally
delivered, telecopied, sent by national overnight delivery service, or
sent by first class, certified or registered mail, return receipt
requested, postage prepaid, to the party at his or its address as
provided below, or to such other addresses such party may hereinafter
designate by written notice to the other parties: (a) if to the Company,
to Great Lakes Aviation, Ltd., 0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx
00000, Attention: Chief Executive Officer, or (b) if to Employee, to the
address last shown for Employee in the records of the Company. Such
notice shall be deemed to be received when delivered if delivered
personally, upon receipt of electronic sent confirmation (or other
confirmation of receipt) if telecopied, the next business day if sent by
a national overnight delivery service, or three business days after the
date mailed if sent by certified or registered mail. Any notice of any
change in such address shall also be given in the manner set forth
above. Whenever the giving of notice is required, the giving of such
notice may be waived in writing by the party entitled to receive such
notice.
11.5 Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Iowa.
11.6 Entire Agreement; Amendment. This Agreement constitutes
the entire agreement, and supersedes all other prior and contemporaneous
agreements and undertaking, both written and oral, among the parties
hereto relating to the subject matter hereof. There are no
representations, warranties, covenants, statements, conditions, terms of
obligations other than those contained herein or relating to the subject
matter hereof. No amendments or modifications to or variations of this
Agreement shall be deemed valid unless in writing and executed by
Employee and Company.
11.7 Meanings of Pronouns; Singular and Plural Words. All
pronouns used in this Agreement shall be deemed to refer to the
masculine, feminine, neuter, singular and plural, as the identity of the
person to which or to whom reference is made may require. Unless the
context in which any word is used shall clearly indicate to the
contrary, words used in the singular shall include the plural, and words
used in the plural shall include the singular.
11.8 Interpretation. When a reference is made in this
Agreement to Sections or Subsections such reference shall be to a
Section or Subsection of this
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Agreement unless otherwise indicated. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
11.9 Benefit. This Agreement shall inure to the benefit of
and be enforceable by Employee or by Employee's personal and legal
representatives, executors, administrators, heirs, devisees and
legatees.
11.10 Severability; Blue Pencil. To the extent that any
provision of this Agreement shall be determined to be invalid or
unenforceable, the invalid or unenforceable portion of such provision
shall be deleted from this Agreement, and the validity and
enforceability of the remainder of such provision and of this Agreement
shall be unaffected. In furtherance of and not in limitation of the
foregoing, it is expressly agreed that should the duration of or
geographical extent of, or business activities covered by, the
noncompetition covenant contained in Section 8 be determined to be in
excess of that which is valid or enforceable under applicable law, then
such provision shall be construed to cover only that duration, extent,
or those activities which may validly or enforceably be covered.
Employee acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement shall be construed in a manner
which renders its provisions valid and enforceable to the maximum extent
(not exceeding its express terms) possible under applicable law.
11.11 No Waiver. No delay on the part of either party in
exercising any right hereunder shall operate as a waiver of such right,
nor shall any waiver, express or implied, by either party of any right
hereunder, or of any failure to perform hereunder or breach hereof by
either party, constitute or be deemed to constitute a waiver of any
other failure to perform hereunder or breach hereof by either party,
whether of a similar or dissimilar nature thereto.
11.12 Attorneys' Fees. If any litigation shall ensue between
the parties concerning the interpretation of or performance under this
Agreement, the prevailing party shall recover from the nonprevailing
party its reasonable attorneys' and other fees and expenses, if and to
the extent fixed by the court.
11.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but
all of which counterparts shall together constitute one and the same
instrument.
11.14 Survival. The provisions of Sections 7 and 8 shall
survive any termination of this Agreement and the termination of
Employee's employment hereunder irrespective of the date of occurrence.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first written above.
Great Lakes Aviation, Ltd.
By /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Chairman of the Compensation
Committee of the Board of Directors
Employee:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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