Exhibit 10.64
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of July 16, 1999, by and between
CHAUTAUQUA AIRLINES, INC. (hereinafter referred to as the "Company"), a New York
corporation, and Xxxxxx Xxxxxx (hereinafter referred to as the "Executive").
R E C I T A L S
WHEREAS, the Company desires to employ the Executive, and the Executive
is desirous of accepting such employment by the Company, upon the terms and
conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT. Subject to the satisfaction of the conditions set forth
in this Section 1, the Company agrees to employ the Executive, and the Executive
agrees to render his services to the Company, as its Vice President and Chief
Financial Officer, during the Term (as defined below). The Executive shall
render his services at the direction of the President and the Board of Directors
of the Company at the Company's offices in Indianapolis, Indiana. The Executive
agrees to use his best efforts to promote and further the business, reputation
and good name of the Company and the Executive shall promptly and faithfully
comply with all instructions, directions, requests, rules and regulations made
or issued from time to time by the Company. This Agreement shall be subject to
the satisfaction of a satisfactory drug test (which the Company shall promptly
arrange) by the Executive.
2. TERM. The term of employment pursuant to this Agreement (the "Term")
shall commence on or before August 2, 1999 and continue until July 31, 2003;
provided that either party may terminate this Agreement by providing the other
with 30 days prior written notice of such termination. Notwithstanding the
foregoing, this Agreement may be terminated by the Company or by the Executive
in the event that "Cause" for such termination exists as provided in Section 7
below. In the event (i) the Company terminates this Agreement or the Executive's
employment other than for Cause, or (ii) the Executive terminates this Agreement
or the Executive's employment for Cause, the Company shall pay the Executive
Severance Compensation as provided in Section 3(c) hereof. In the event the
Company terminates this Agreement or the Executive's employment for Cause, or in
the event the Executive terminates this Agreement or his employment other than
for Cause, the Executive shall not be entitled to any Severance Compensation or
other compensation of any kind following the effective date of such termination.
3. COMPENSATION. As full and complete compensation for all the
Executive's services hereunder, the Company shall pay the Executive the
compensation described below.
(a) CASH COMPENSATION.
(i) During the Term, the Company shall pay the Executive an
annual base salary of $130,000 ("Base Salary"). In the event this
Agreement is terminated prior to the expiration of the Term, the
Company shall pay to the Executive, in addition to any Severance
Compensation payable under Section 3(c), any accrued but unpaid Base
Salary through the termination date.
(ii) In addition to the Base Salary, during the Term, the
Company shall pay to the Executive an annual bonus (a "Bonus") in the
amount of $52,000 or such greater amount as the board of directors of
the Company shall determine in its discretion. The Bonus shall be paid
each year during the Term at the end of the calendar year and shall be
prorated (x) for the 1999 calendar year for the period from the
commencement date of the Executive's employment through the end of such
calendar year, and (y) for the 2003 calendar year for the period from
January 1, 2003 through the end of the Term. In the event this
Agreement or the Executive's employment is terminated, the Executive
shall not be entitled to any Bonus Compensation for such year or any
subsequent period.
(b) EQUITY COMPENSATION.
(i) Concurrently with the execution and delivery of this
Agreement, the Company shall issue to the Executive, as compensation
and without cost to the Executive, options (the "Options") to purchase
30,000 shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), representing 1.5% of the shares of Common Stock
that are currently issued and outstanding. The Options shall have an
exercise price per share of $26.75, which is equivalent to an
enterprise value of $53.5 million. The Options shall vest and become
immediately exercisable as to 1/48 of the shares subject to the Options
on the last day of each month during the Term, subject to termination
as provided below. The Executive shall have the right to exercise any
vested Options at any time within 5 years after the date that such
Options became vested and any Options not exercised within such
deadline shall be deemed terminated and void.
(ii) In the event this Agreement or the Executive's employment
is terminated (x) by the Company for Cause, or (y) by the Executive
other than for Cause, the Options shall cease vesting as of the date
that the Company or the Executive provides notice of such termination,
and any unvested Options shall immediately terminate and become void.
In the event this Agreement or the Executive's employment is terminated
(x) by the Company other than for Cause, or (y) by the Executive for
Cause, the Options shall vest as and to the extent provided in Section
3(c) hereof.
(iii) Notwithstanding anything to the contrary otherwise
contained herein, if at any time during the Term the Company shall, by
stock dividend, stock split, combination, reclassification or exchange,
or through merger, consolidation or otherwise, change its shares of
Common Stock into a different number, kind or class of shares or other
securities or property, then the Board of Directors may, in its sole
discretion, either make the
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Options immediately exercisable or arrange for a successor or surviving
corporation, if any, to grant replacement options, or to adjust the
number of shares covered by the Options and the price of each share.
The determination of the Board of Directors shall be conclusive.
(iv) Notwithstanding anything to the contrary otherwise
contained herein, if at any time during the Term the Company shall
issue additional shares of Common Stock to any party that is affiliated
with Wexford Management LLC (an "Affiliate"), the Executive shall have
the right, but not the obligation, to purchase for the same
consideration and on the same terms that such shares of Common Stock
shall be issued to such Affiliate up to 1.5% of the shares issued to
such Affiliate. The grant of any stock options to any director or
officer of the Company shall not provide the Executive with any rights
under this Section 3(b)(iv).
(v) In the event Wexford Management LLC or any Affiliate has
the right to sell all or a portion of the shares of Common Stock of the
Company held by them in an public offering (whether an initial offering
or a subsequent offering), a private sale or other transaction, or to
register all or a portion of the shares of Common Stock of the Company
held by them, the Executive shall be offered the right to sell or
register as the case may be pro rata with Wexford and such Affiliate
all or a portion of the Shares of Common Stock for which he holds
vested Options.
(c) SEVERANCE COMPENSATION. In the event (i) the Company terminates this
Agreement or the Executive's employment other than for Cause, or (ii) the
Executive terminates this Agreement or his employment for Cause, the Company
shall pay to the Executive as Severance Compensation $130,000, provided that in
the event the remainder of the Term is less than 12 months, such Severance
Compensation shall be prorated for the remainder of the Term. For example, if
the Company terminates this Agreement other than for Cause with 6 months
remaining in the Term, the Company shall pay the Executive Severance
Compensation of $65,000. The Executive shall also receive as Severance
Compensation (i) subject to the next following sentence, an immediate vesting of
those Options that would have vested during the 12 months after such
termination, or such lesser period through the end of the Term, if the
Executive's employment had not been terminated, and (ii) continuation of medical
benefits for the lesser of 12 months or the remainder of the Term.
Notwithstanding the foregoing, in the event the Executive terminates this
Agreement or his employment for Cause as a result of a Change of Control (as
defined herein), all unvested Options shall immediately vest.
4. NO OTHER COMPENSATION. Except as otherwise expressly provided
herein, or in any other written document executed by the Company and the
Executive, no other compensation or other consideration shall become due or
payable to the Executive on account of the services rendered hereunder. The
Company shall have the right to deduct and withhold from the compensation
payable to the Executive hereunder any amounts required to be deducted and
withheld under the provisions of any statute, regulation, ordinance, order or
any other amendment thereto, heretofore or hereafter enacted, requiring the
withholding or deduction of compensation.
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5. BENEFITS.
(a) MEDICAL & 401K BENEFITS. The Company agrees that the Executive shall be
entitled to participate in any retirement, 401K, disability, medical, pension,
profit sharing, group insurance, or any other plan or arrangement, or in any
other benefits now or hereafter generally available to executives of the
Company, in each case to the extent that the Executive shall be eligible under
the general provisions thereof, provided that the Company shall waive any
waiting period for participation in any such plan.
(b) REIMBURSEMENT OF LIVING EXPENSES. Prior to the Executive's relocation to
Indianapolis, Indiana, which shall take place no later than September 1, 1999,
the Company will pay for or reimburse the Executive for all travel, hotel and
other documented out-of-pocket expenses reasonably incurred by him and his
immediate family in connection with the performance of his duties hereunder in
Indianapolis.
(c) RELOCATION EXPENSES. The Company shall pay for or reimburse the Executive
for all out-of-pocket relocation expenses reasonably incurred by him and his
immediate family in connection with his relocation to Indianapolis, including,
without limitation, moving costs, brokerage commission costs, and a state and
federal tax "gross up" on such relocation expenses, provided that such expenses
shall not exceed $75,000 in the aggregate.
6. VACATION. The Executive shall be entitled to take three weeks of
paid vacation which shall accrue monthly during each 12 months of the
Executive's employment hereunder, and which vacation shall be taken on dates to
be selected by mutual agreement of the Company and the Executive.
7. TERMINATION FOR CAUSE.
(a) TERMINATION FOR CAUSE BY THE COMPANY. The Company, by written notice to the
Executive, may immediately terminate this Agreement and the Executive's
employment hereunder for Cause. As used herein, a termination by the Company
"for Cause" shall mean that the Executive has (i) willfully or materially
refused to perform a material part of his duties hereunder, (ii) materially
breached the provisions of Sections 8, 9 or 10 hereof, (iii) acted fraudulently
or dishonestly in his relations with the Company, (iv) committed larceny,
embezzlement, conversion or any other act involving the misappropriation of
Company funds or assets in the course of his employment, or (v) been indicted or
convicted of any felony or other crime involving an act of moral turpitude.
(b) TERMINATION FOR CAUSE BY THE EXECUTIVE. The Executive, by 20 business days
prior written notice to the Company, may terminate this Agreement and his
employment hereunder for Cause, provided that the Company shall have the right
to cure such Cause within such 20 business day period. As used herein, a
termination by the Executive "for Cause" shall mean that (i) the Company has
materially diminished the duties and responsibilities of the Executive, (ii) the
Company has required the Executive to relocate his residence from Indianapolis
to another location without the
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consent of the Executive or (iii) a Change of Control has occurred. As used
herein, a "Change of Control" shall mean a transaction, other than a public
offering (whether an initial offering or a subsequent offering) of Common Stock
of the Company, as a result of which the number of shares of Common Stock of the
Company collectively owned by Wexford and its Affiliates is not greater than the
number of shares of Common Stock owned by any other shareholder of the Company.
8. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges
that he shall receive in the course of his employment hereunder certain
confidential information and trade secrets concerning the Company's business and
affairs which may be of great value to the Company. The Executive therefore
agrees that he will not disclose any such information relating to the Company,
the Company's personnel or its operations other than in the ordinary course of
business or in any way use such information in any manner which could adversely
affect the Company's business. For purposes of this Agreement, the terms "trade
secrets" and "confidential information" shall include any and all information
concerning the business and affairs of the Company and any division, subsidiary
or other affiliate of the Company that is not generally available to the public.
9. NON-COMPETITION. The Executive agrees that without the prior written
consent of Wexford Management LLC ("Wexford") during the Term and for a period
of 12 months following the termination or expiration of this Agreement, he will
not participate as an advisor, partner, joint venturer, investor, lender,
consultant or in any other capacity in any business transaction or proposed
business transaction (a) with respect to which the Executive had a material
personal involvement on behalf of the Company during the last 12 months of his
employment with the Company, or (b) that could reasonably be expected to
interfere with the Company's business or operations as of the date of such
termination or expiration. For these purposes, the mere ownership by the
Executive of securities of a public company not in excess of 2% of any class of
such securities shall not be considered to be competition with the Company.
10. NON-SOLICITATION. The Executive agrees that during the Term, and
for a period of 12 months following the termination or expiration of this
Agreement, he shall not, without the prior written consent of the Company,
directly or indirectly, employ or retain, or have or cause any other person or
entity to employ or retain, any person who was employed by the Company or any of
it subsidiaries or affiliates while the Executive was employed by the Company.
11. BREACH OF THIS AGREEMENT. If the Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Sections 8, 9 or 10 of
this Agreement, then the Company shall have the right and remedy to have those
provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed by the Executive that the rights and privileges of
the Company granted in Sections 8, 9 and 10 are of a special, unique and
extraordinary character and any such breach or threatened breach will cause
great and irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company.
12. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing (including facsimile, telegraphic, telex or cable
communication) and shall be deemed to
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have been duly given when delivered by hand, faxed or mailed, certified or
registered mail, return receipt requested and postage prepaid:
If to the Company: Chautauqua Airlines, Inc.
0000 Xxxxx Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Fax No.: 000-000-0000
Attention: Xxxxx X. Xxxxxxx, President
with a copy to: Wexford Management LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, fax 000-000-0000
and Xxxxxx Xxxxx, fax 000-000-0000
If to the Executive: Xxxxxx Xxxxxx
[at his most recent address as provided to
the Company in writing] or by e-mail at:
xxxxxxx000@xxx.xxx
13. APPLICABLE LAW. This Agreement was negotiated and entered into
within the State of Indiana. All matters pertaining to this Agreement shall be
governed by the laws of the State of Indiana applicable to contracts made and to
be performed wholly therein. Nothing in this Agreement shall be construed to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any material present or
future statute, law, governmental regulation or ordinance as a result of which
the parties have no legal right to contract or perform, the latter shall
prevail, but in such event the provision(s) of this Agreement affected shall be
curtailed and limited only to the extent necessary to bring it or them within
the legal requirements.
14. ENTIRE AGREEMENT; MODIFICATION; CONSENTS AND WAIVERS. This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes any and all prior agreements or
understandings, written or oral, between the parties with respect to the subject
matter hereof. No interpretation, change, termination or waiver of or extension
of time for performance under any provision of this Agreement shall be binding
upon any party unless in writing and signed by the party intended to be bound
thereby. Except as otherwise provided in this Agreement, no waiver of or other
failure to exercise any right under or default or extension of time for
performance under any provision or this Agreement shall affect the right of any
party to exercise any subsequent right under or otherwise enforce said provision
or any other provision hereof or to exercise any right or remedy in the event of
any other default, whether or not similar.
15. SEVERABILITY. The parties acknowledge that, in their view, the
terms of this Agreement are fair and reasonable as of the date signed by them,
including as to the scope and duration of post-termination activities.
Accordingly, if any one or more of the provisions contained in this Agreement
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shall for any reason, whether by application of existing law or law which may
develop after the date of this Agreement, be determined by an arbitrator or
court of competent jurisdiction to be excessively broad as to scope of activity,
duration or territory, or otherwise unenforceable, the parties hereby jointly
request such court to construe any such provision by limiting or reducing it so
as to be enforceable to the maximum extent in favor of the Company compatible
with then-applicable law. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall nonetheless be determined by an
arbitrator or court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
16. ASSIGNMENT. The Company may, at its election, assign this Agreement
or any of its rights hereunder. This Agreement may not be assigned by the
Executive.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
18. ARBITRATION. Each of the parties hereby irrevocably and
unconditionally consents to arbitrate any dispute arising out of or relating in
any manner to this Agreement or the employment relationship contemplated hereby
or the termination thereof, or any alleged breach of any term or provision of
this Agreement. Such arbitration shall be conducted in Indianapolis, Indiana by
a single arbitrator in accordance with the rules of the American Arbitration
Association then in effect. Judgement may be entered on the arbitrator's award
in any federal or state court in Indiana (and the parties expressly consent to
the jurisdiction of such court), or in any other court having jurisdiction. Each
of the Parties agrees that in any arbitration arising out of or relating to this
Agreement or the employment relationship contemplated hereby or the termination
thereof, or any alleged breach of any term or provision of this Agreement or in
any action to enter judgment on an award in such arbitration each party shall
bear its own fees and expenses.
19. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. The Executive
represents and warrants to the Company that his execution and delivery of this
Agreement and his employment with the Company hereunder do not contravene, and
will not result in any breach of or constitute any default under any agreement
or instrument to which the Executive is a party or may be bound.
20. SURVIVAL. The provisions of Sections 8 through 19 of this Agreement
shall survive any expiration or termination of this Agreement.
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IN WITNESS WHEREOF, that parties hereto have executed this Employment
Agreement as of the date first above written.
CHAUTAUQUA AIRLINES, INC.
By:
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Name:
Title:
XXXXXX XXXXXX
/s/ Xxxxxx Xxxxxx
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