EMPLOYMENT AGREEMENT
This Employment Agreement between World Airways, Inc., a Delaware
corporation ("World" or the "Company") and Xxxxx Xxxxxxx ("Xxxxxxx") is entered
into this 1st day of September, 1999.
WHEREAS, Sigalas has agreed to serve as World's General Counsel and
Corporate Secretary as of September 1, 1999.
NOW, THEREFORE, World and Sigalas, in consideration of the foregoing and
other mutual covenants and promises contained herein, the sufficiency of which
are hereby acknowledged, hereby agree as follows:
1. ACCEPTANCE OF EMPLOYMENT. Subject to the terms and conditions set forth
below, World agrees to employ Sigalas and Sigalas accepts such employment.
2. TERM. The period of employment shall be from September 1, 1999, through
September 30, 2002, unless further extended or sooner terminated as hereinafter
set forth. In the absence of notice, this Agreement shall be renewed on the same
terms and conditions for one year from the date of expiration. Not later than
February 15, 2002, Sigalas shall initiate discussions with the Chairman of the
Board (hereinafter "Chairman") regarding the renewal of this Agreement. At that
time, if Sigalas wishes to renew this Agreement on different terms, Sigalas
shall give written notice to the Chairman. If the Chairman does not wish to
renew this Agreement at its expiration, or wishes to renew on different terms,
the Chairman shall give written notice to Sigalas no later than February 28,
2002.
3. POSITION AND DUTIES. Sigalas shall continue to serve as General Counsel
and Corporate Secretary with the duties performed as of September 1, 1999. The
Chairman will have reasonable latitude to make changes in Sigalas'
responsibilities, except that Sigalas' responsibilities may not be modified in a
way that would be inconsistent with the status of General Counsel and Corporate
Secretary. Following a Change of Control (as hereinafter defined), Sigalas'
responsibilities may not be changed without mutual agreement. Sigalas agrees to
render her services to the best of her abilities and will comply with all
policies, rules and regulations of the company and will advance and promote to
the best of her ability the business and welfare of the Company. Sigalas shall
devote all of her working time, attention, knowledge and skills solely to the
business and interests of World. Sigalas may not accept any other engagement
with or without compensation which would affect her ability to devote all of her
working time and attention to the business and affairs of World without the
prior written approval of the Chairman of the Board. Sigalas agrees to accept
assignments on behalf of World or affiliated companies commensurate with her
responsibilities hereunder, except that the terms and conditions of assignments
exceeding 60 consecutive days outside the Washington, DC metropolitan area will
require mutual agreement.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. Sigalas shall receive a minimum salary of $175,000 per
annum payable in accordance with the payroll procedures for World's salaried
employees in effect during the term of this Agreement. Sigalas agrees to
participate equally, on a percentage basis, in any across the board salary
reductions approved by senior management.
(b) PERFORMANCE STOCK OPTIONS. Sigalas has been granted 50,000 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 Agreements between World and Sigalas dated
December 23, 1997, and April 7, and September 1, 1999 (together, the "Options"
and the "Option Agreement"). In the event of a Change in Control as defined
below, all Options shall be immediately exercisable.
(c) BUSINESS EXPENSES. Sigalas 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.
(d) FRINGE BENEFITS. Sigalas shall be entitled to participate in all
employee benefit plans made available from time to time to all 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, Sigalas
may participate in World's health and other benefit programs for a period of one
year from the date of Sigalas' termination, or until Sigalas obtains comparable
coverage, whichever is earlier.
(e) PERSONNEL POLICIES, CONDITIONS AND BENEFITS. Except as otherwise
provided herein, Sigalas' 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, Sigalas shall accrue vacation at the rate of one month per year and such
vacation shall be taken in accordance with the Company's procedures.
(f) INDEMNIFICATION; D&O INSURANCE. Subject to Section 6(b) of this
Agreement, World shall provide (or cause to be provided) to Sigalas
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
her being or having been an officer, director or employee of World or any
affiliated entity, advance expenses (including attorneys' fees) incurred by
Sigalas 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 July 12, 1999, between Sigalas and World Airways, Inc. (the
"Indemnity Agreement").
5. TERMINATION OF EMPLOYMENT.
(a) DEATH. Sigalas's employment hereunder shall terminate upon her
death, in which event World shall have no further obligation to Sigalas or her
estate with respect to compensation, other than the disposition of life
insurance and related benefits and accrued and unpaid base salary and incentive
compensation, if any, for periods prior to the date of termination pursuant to
the terms of the respective employee benefits and incentive compensation plans
then in effect.
(b) By World for Disability. If Sigalas is unable, or fails, to perform
services pursuant to this agreement through illness or physical or mental
disability and such failure or disability shall exist for twelve (12)
consecutive months, then World may terminate this Agreement upon written notice
to Sigalas, in which event World shall have no obligation to Sigalas with
respect to compensation under Section 4(a) of this Agreement. If Sigalas becomes
entitled to Social Security benefits payable on account of disability, she 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 Chairman of the Board may terminate this Agreement for Cause.
"Cause" shall be defined as (A) sustained performance deficiencies
which are communicated to Sigalas in written performance
appraisals and/or other written communications (including, but not
limited to memos and/or letters) by the Chairman, (B) gross
misconduct, including significant acts or omissions constituting
dishonesty, intentional wrongdoing or malfeasance, whether or not
relating to the business of World, or (C) commission of a felony
or any crime involving fraud or dishonesty, or (D) a material
breach of this Agreement.
(ii)In the event of a Change of Control, as defined below, Sigalas
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, Sigalas was guilty of
conduct set forth in 5(c)(i)(A), or (B), provided, however, that
Sigalas may not be terminated for Cause hereunder unless: (1)
Sigalas receives prior written notice of World's intention to
terminate this Agreement for Cause and the specific reasons
therefore; and (2) Sigalas has an opportunity to be heard by
World's Board 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 Sigalas fails to make such
correction after reasonable opportunity to do so, this Agreement
may be terminated for Cause.
(d) BY WORLD FOR OTHER THAN CAUSE. In the event the Board terminates
this Agreement for reasons other than Cause or Disability as defined in
sub-paragraph (c) above, World will pay to Sigalas within ten (10) days of
notice of termination (or, in the case of incentive bonus compensation, if any,
within ten (10) days of determination of amounts payable under the applicable
bonus plan) eighteen months base salary, in each case including deferred salary
and/or bonus compensation, if any, payable under this Agreement. In addition,
all granted but unvested Options under the Option Agreements shall become
immediately exercisable. In the event that any payment to Sigalas under this
paragraph is subject to any federal or state excise tax, World shall pay to
Sigalas 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 Sigalas agrees to assist World
Airways by using her best efforts to structure matters so that any payment to
Sigalas 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 Sigalas harmless from 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 Sigalas in connection with any dispute with any taxing authority
with respect to such determinations and/or payments.
(e) BY SIGALAS FOR GOOD REASON. Sigalas may terminate her employment
hereunder (for purposes of this Agreement "Good Reason") after giving at least
30 days notice in the event that, without Sigalas' consent, (i) World relocates
its general and administrative offices or Sigalas' place of employment to an
area other than the Washington, D.C. Standard Metropolitan Statistical Area,
(ii) she is assigned any duties substantially inconsistent with Section 3
hereof, (iii) World reduces her 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) above; (iv) World fails, without Sigalas' consent, to pay Sigalas
any portion of her current compensation, or to pay her 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 Sigalas participates
which is material to Sigalas' total compensation, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or to continue Sigalas' 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
Sigalas' participation relative to other participants; (vi) World fails to
continue to provide Sigalas with benefits substantially similar to those enjoyed
by Sigalas under any of World's pension, life insurance, medical, health and
accident, or disability plans in which Sigalas was participating, World takes
any action which would directly or indirectly materially reduce any of such
benefits or deprive Sigalas of any material fringe benefit enjoyed by Sigalas;
(vii) World terminates, or proposes to terminate, Sigalas' 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); or
(viii) the Board approves the liquidation or dissolution of World prior to the
end of this Agreement. In the event that Sigalas decides to terminate this
Agreement and her employment with World or any successor in interest in
accordance with the provisions of this 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.
(f) BY SIGALAS FOR OTHER THAN GOOD REASON. Notwithstanding the above,
Sigalas may upon giving reasonable notice, not to be less than 30 days,
terminate this Agreement without further obligation on the part of Sigalas 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, other than the Company, 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
(iiithe 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 their 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) NOTICE OF TERMINATION. Termination of this Agreement by World or
termination of this Agreement by Sigalas shall be communicated by written notice
to the other party hereto, specifically indicating the termination provision
relied upon.
(j) COMPANY PROPERTY. At the termination of Sigalas's employment,
whether voluntary or involuntary, Sigalas shall return all company property,
including without limitation all electronic and paper files and documents and
all copies thereof.
6. CONFIDENTIALITY.
(a) Sigalas recognizes and acknowledges that she will acquire during
her employment with World information that is confidential to World and that
represents valuable, special and unique assets of World ("Confidential
Information"). Such Confidential Information (whether or not reduced to tangible
form) includes, but is not limited to: trade secrets; financing documents and
information; financial data; new product information; copyrights; information
relating to schedules and locations; cost and pricing information; performance
features; business techniques; business methods; business and marketing plans or
strategies; business dealings and arrangements; business objectives; customer
information; sales information; acquisition, merger or business development
plans or strategies; research and development projects; legal documents and
information; personnel information; and any and all other information concerning
World's business and business practices that is not generally known or made
available to the public or to World's competitors or is not readily
ascertainable by other means, which, if misused or disclosed, could adversely
affect the business of World. Sigalas agrees that she will not, during
employment with World and for a period of two (2) years following termination of
employment for any reason, whether voluntary or involuntary, with or without
Cause, directly or indirectly:
(i) disclose any Confidential Information to any person, company
or other entity (other than authorized persons employed by or
affiliated with World who, in the interest of World, have a
business need to know such information), or
(ii) use any Confidential Information in any way, except as
required by his duties to World or by law, unless she obtains
World's prior written approval of such disclosure or use. World's
rights under this Section shall be cumulative to, and shall not
limit, World's rights under the Virginia Uniform Trade Secrets Act
or any other state or federal trade secret or unfair competition
statute or law. 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) Section 4(f) of this Agreement and any other indemnity agreements
between Sigalas and World shall not apply to actions, suits or proceedings to
enforce World's rights under, or that otherwise relate to, this Agreement,
including without limitation, this Section 6.
(c) References in this Section 6 to "World" include World Airways, Inc.
and any and all of its current or future parents, subsidiaries, affiliated
companies, and divisions.
7. BENEFICIARY. The Beneficiary of any payment due and payable at the time
of Sigalas' death, or otherwise due upon her death, shall be such person or
persons as Sigalas shall designate in writing to World. If no such beneficiary
shall survive Sigalas, any such payments shall be made to her estate.
8. INTELLECTUAL PROPERTY.
(a) Any improvements, new techniques, processes, inventions, works,
discoveries, products or copyrightable or patentable materials made or conceived
by Sigalas, either solely or jointly with other person(s), (1) during Sigalas'
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 Sigalas.
(b) Sigalas 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) Sigalas 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) Sigalas shall assign and does hereby assign to World all interests
and rights, including but not limited to copyrights, in any such intellectual
property.
9. 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.
10. GOVERNING LAW. All questions concerning the construction, validity,
application and interpretation of this Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia without giving
effect to any choice of law or conflict of law provision or rule (whether of
Virginia or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than Virginia. Sigalas agrees to submit to personal
jurisdiction in the State of Virginia.
11. 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.
12. SUCCESSORS. This Agreement shall inure to the benefit of and 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.
13. WAIVER OF MODIFICATION OF AGREEMENT. No waiver or modification of this
Agreement shall be valid unless in writing and duly executed by both parties.
14. 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: ________________________________________
Xxxxxx X. Xxxxxx
Chairman and CEO
________________________________________
Xxxxx Xxxxxxx
