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EXHIBIT (c)(2)
RESTATED EMPLOYMENT AGREEMENT
OF XXXXX X. XXXXXXX
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EXHIBIT (c)(2)
RESTATED EMPLOYMENT AGREEMENT
THIS RESTATED EMPLOYMENT AGREEMENT ("Agreement") is dated as of August
10, 1999 by and between COMAIR HOLDINGS, INC. a Kentucky corporation ("Company")
and XXXXX X. XXXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, the Company and Executive entered into an Employment Agreement
dated December 23, 1983 as restated by Restated Employment Agreement dated as of
June l, 1988, and further restated by Restated Employment Agreement dated as of
April 1, 1998, as amended by Amendment to Restated Employment Agreement dated as
of May 18, 1999, which they desire to amend and restate; and
WHEREAS, Company desires to continue to employ Executive as Chairman
and Chief Executive Officer, and Executive desires to continue to perform such
duties;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
1. Employment. The Company does hereby continue to employ
Executive, subject to the terms and conditions hereinafter set forth, as an
executive employee and officer of the Company with the title of Chairman of the
Board and Chief Executive Officer or such other executive title or titles as
determined by the Board of Directors of Company from time to time, and Executive
accepts such employment upon the terms and conditions herein set forth.
2. Term. The term of this Agreement shall be for three (3) years,
which shall commence on August 1, 1999 and shall terminate on July 31, 2002,
unless sooner terminated in accordance with the provisions hereof; provided,
however, on July 31 of each year during the term commencing in 2002, this
Agreement shall be extended for an additional year unless either party shall
give thirty (30) days prior written notice not to automatically extend the term
for an additional year.
3. Duties and Responsibilities.
(a) Executive agrees during the term of his employment
hereunder to use his best efforts, skills and abilities to promote
Company' s business and interests and to perform such duties consistent
with his appointment as Chairman of the Board and Chief Executive
Officer as may be assigned to him by the Board of Directors of Company
or the Executive Committee of the Board of Directors of the Company.
Executive shall maintain communication with the Board of Directors of
Company concerning his areas of
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responsibility and shall supply them with written reports, business
plans, budgets, forecasts and other studies concerning the business of
the Company as he shall prepare from time to time during his employment
by the Company hereunder, which reports, plans, budgets, forecasts and
other studies shall be implemented only with the approval of the Board
of Directors.
(b) Executive agrees to abide by any and all rules and
regulations governing the transaction of business as the Board of
Directors of Company may from time to time adopt or approve.
4. Election as Director and Officer. It is contemplated that
Executive will continue to be elected as a member of the Board of Directors, a
member of the Executive Committee of the Board of Directors and as Chief
Executive Officer of Company and shall be retained in such posts throughout his
employment by Company.
5. Compensation. Company shall pay Executive in full payment for
any and all services rendered by him hereunder, including, without limitation,
all services as an officer or Director or both of Company, its subsidiaries or
affiliates, at an annual rate of Five Hundred Fifty-Five Thousand and 00/100
Dollars ($555,000), subject to increase (but not decrease) at the discretion of
the Board of Directors and payable in accordance with the customary payroll
practices of Company (but not less often than monthly). If Executive's salary is
increased by the Board of Directors, such increased salary shall become the
minimum amount of compensation payable to Executive under this Agreement, and
will not be reduced thereafter. Executive shall also participate in the
Company's annual performance based incentives or any replacement or successor to
such incentives, and shall be eligible to receive bonuses thereunder in
accordance with the terms thereof.
6. Additional Employment Benefits. Executive shall be entitled to
participate in all benefits made generally available by Company to its executive
officers during the period covered by this Agreement, including, without
limitation, vacations, pension plans, profit sharing plans, stock option plans,
deferred compensation plans, hospitalization insurance, health and accident
insurance, disability insurance, group term life insurance, automobile
allowances, and all other fringe benefits which may be provided by Company for
any of its executive officers during the term of employment pursuant to this
Agreement.
7. Indemnification. The Company shall indemnify Executive (and
Executive's legal representatives or other successors) to the fullest extent
permitted by the Certificate of Incorporation and By-Laws of the Company and the
laws of the Commonwealth of Kentucky, as in effect at such time or from time to
time, and Executive shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers (and to the extent the Company maintains such an
insurance policy or policies, Executive shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the
coverage
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available for any Company officer or director), against all costs, charges and
expenses whatsoever incurred or sustained by Executive or Executive's legal
representatives at the time such costs, charges and expenses are incurred or
sustained, in connection with any action, suit or proceeding to which Executive
(or Executive's legal representatives or other successors) may be made a party
by reason of Executive's being or having been a director, officer or employee of
the Company.
8. Termination. Executive's rights under this Agreement shall
continue until expiration of the term under Section 2 hereof, unless prior
thereto: (i) Executive dies; (ii) Executive is dismissed without cause pursuant
to Section 9 hereof; (iii) Executive is dismissed for cause as defined in
Section 10 hereof; or (iv) Company determines that Executive has become
disabled, as provided in Section 11 hereof.
9. Early Termination.
(a) Notwithstanding anything to the contrary herein, the
Company shall have the right at any time, at its sole option, to
terminate Executive's employment hereunder without cause upon thirty
(30) days' prior written notice; provided, however, if the Company
delivers notice that Executive's employment is terminated pursuant to
this Section 9(a) or delivers notice not to automatically extend the
term pursuant to Section 2 hereof, Company shall pay Executive, and
Executive shall accept in full satisfaction of Company's obligations
under this Agreement, an amount, payable in a lump sum payment promptly
upon termination, equal to three (3) times the sum of (i) the annual
base salary in effect at the termination date, plus (ii) the average
annual bonus compensation payable to Executive during the prior three
(3) fiscal years, and (iii) the average annual award under the Deferred
Compensation Plan (as hereinafter defined) during the prior three (3)
fiscal years,
(b) In the event of a "change in control" of the Company
(as hereinafter defined), (i) this Agreement shall be deemed terminated
as of the date of the Change in Control, and the Company shall pay to
Executive the payment required under Section 9(a) hereof ; and (ii) the
Executive shall be entitled to receive from the Company the following
additional benefits:
(1) The Company shall pay Executive a lump sum,
in cash, equal to Executive's earned but unpaid base salary
and other earned but unpaid cash entitlements for the period
through and including the date of termination of Executive's
employment, including unused earned and accrued vacation pay
and unreimbursed business expenses. In addition, Executive
shall be entitled to any other benefits earned or accrued by
Executive for the period through and including the date of
termination of Executive's employment under any other employee
benefit plans and arrangements maintained by the Company, in
accordance with the terms of such plans and arrangements,
except as modified herein.
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(2) All outstanding stock options held by
Executive shall become immediately vested, nonforfeitable and
exercisable as of the date of the Change in Control.
(3) All of the Executive's rights in and to the
account under the Comair Holdings, Inc. Deferred Incentive
Compensation Plan ("Deferred Compensation Plan") shall
automatically vest in full without further action as of the
date of the Change in Control, and the Company shall pay, or
cause the trustee under the Deferred Incentive Compensation
Rabbi Trust Agreement ("Rabbi Trust Agreement") to pay
Executive a lump sum equal to Executive's account in full as
vested hereunder.
(4) The Company shall provide Executive with a
fully paid-up term life insurance policy and disability policy
(with premiums pre-paid for the remainder of Executive's life)
on Executive's life, providing Executive's beneficiaries with
a death benefit and disability benefits of an amount equal to
such benefits provided by the Company during the period prior
to the Change in Control.
(5) The Company shall provide Executive and
Executive's spouse, for the remainder of their respective
lives, family medical insurance coverage and benefits
comparable to such insurance coverage provided to executives
of the Company; provided, however, at the election of the
Executive, the Company shall pay Executive a lump sum, in
cash, equal to the present value (as of the date of the Change
in Control) of medical insurance coverage for the remaining
joint life expectancy of Executive and Executive's spouse.
(6) Executive and Executive's spouse, for the
remainder of their respective lives, and Executive's dependent
children, for so long as they are under age 18 (or under age
23 if a full-time student), shall be entitled to free
system-wide flight privileges on Company flights to any
location which the Company serves. Such privileges shall
entitle Executive, Executive's spouse and Executive's
dependent children to unlimited positive space (or space
available, at Executive's option) tickets; provided further
that all of such flight privileges shall otherwise be subject
to the same conditions and restrictions as pertain from time
to time to the flight privileges generally provided by the
Company to its executives. Nothing herein shall be deemed as a
limitation upon any flight privileges for which Executive may
otherwise qualify.
(7) Executive shall, during the remainder of
Executive's lifetime, have access to and the right to travel
upon reasonable notice (based on industry standards) on
private aircraft furnished by the Company substantially
comparable to the largest
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corporate aircraft operated by the Company (or any subsidiary
or affiliate) as of the date of the Change in Control, at the
sole cost and expense of the Company; provided, however, if
such travel exceeds fifty (50) flight hours (measured by block
hours) in any twelve (12) month period, Executive shall
reimburse the Company for such excess travel in an amount
equal to the Company's actual out of pocket operating costs.
(c) A "Change in Control" means the occurrence of any of
the following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than Company or a
subsidiary, or any Company or subsidiary's employee benefit
plan (including any trustee of such plan acting as trustee)
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly of securities of the
Company or Comair, Inc, ("Comair") representing 50% or more of
the combined voting power of the Company's or Comair's then
outstanding securities;
(ii) Any transaction or event relating to the
Company or any subsidiary required to be described pursuant to
the requirements of Item 6(e) of Schedule 14A of the
Securities and Exchange Commission under the Exchange Act (as
in effect on the effective date of this Agreement), whether or
not the Company or subsidiary is then subject to such
reporting requirement;
(iii) When, during any period of 2 consecutive
years during the term of this Agreement, the individuals who,
at the beginning of such period, constitute the Board of the
Company, cease for any reason other than death to constitute
at least a two-thirds (2/3) majority thereof; provided,
however, that a director who was not a director at the
beginning of such period shall be deemed to have satisfied the
two-year requirement if such director was elected by, or on
the recommendation of, at least two-thirds (2/3) of the
directors who were directors at the beginning of such period
(either actually or by prior operation of this Subsection
9(c)(iii)); or
(iv) The occurrence of a transaction requiring
shareholder approval for the acquisition of the Company or
Comair by an entity other than any subsidiary through purchase
of assets, by merger, or otherwise.
(d) If any portion of the payments hereunder or any other
payment under this Agreement, or under any other agreement with, or
plan of the Company, including but not limited to stock options and
other long-term incentives (in the aggregate "Total Payments") would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and
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penalties, are hereinafter collectively referred to as the "Excise
Tax"), then Executive shall be entitled to under this paragraph and
Company agrees to pay a lump sum, in cash, an additional amount such
that after payment by Executive of all of Executive's applicable
Federal, state and local taxes, including any Excise Tax, imposed upon
such additional amount, Executive will retain an amount equal to the
Excise Tax imposed on the Total Payments. For purposes of this Section
9, Executive's applicable Federal, state and local taxes shall be
computed at the maximum marginal rates, taking into account the effect
of any loss of personal exemptions resulting from receipt of the
additional payments hereunder.
(e) After the date of a Change in Control, the Company
shall not (other than pursuant to Section 9(b)(ii)(3) hereof) take any
steps to disturb or alter Executive's (or Executive's beneficiaries')
rights to receive amounts deferred under the Deferred Compensation Plan
in accordance with such Executive's applicable payment elections as in
effect from time to time. Nothing herein or in the Rabbi Trust
Agreement shall relieve the Company of its obligation to pay benefits
under the Deferred Compensation Plan in accordance with the terms of
such Plan, to the extent such benefits are not paid under the Rabbi
Trust Agreement.
(f) In the event of a dissolution or liquidation of the
Company or Comair or any merger (other than a merger for the purpose of
the re-domestication of the Company or Comair not involving a Change in
Control), consolidation, exchange or other transaction in which the
Company or Comair, respectively is not the surviving corporation or in
which the outstanding shares of the Company or Comair, respectively are
converted into cash, other securities or other property, Company shall
pay to Executive or the estate or legal representative of Executive, an
amount equal to the payment due under Sections 9(a) and 9(b) hereof
upon such dissolution, liquidation, merger, consolidation, exchange or
other transaction. Executive shall also receive all vested benefits or
other amounts and benefits which Executive is entitled to receive under
any plan, policy, practice or program of the Company at the date of
such dissolution, liquidation, merger, consolidation, exchange or other
transaction in accordance with such plan, policy, practice or program.
(g) If Executive's employment is terminated due to death
or disability, Company shall, thereafter, pay to Executive or the
estate or legal representative of Executive an amount equal to the
payment due under Section 9(a) hereof upon termination of this
Agreement. Executive shall also receive all vested benefits or other
amounts and benefits which Executive is entitled to receive under any
plan, policy, practice or program of the Company at or subsequent to
the date of such death or disability in accordance with such plan,
policy, practice or program.
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10. Termination for Cause.
(a) Anything herein to the contrary notwithstanding,
Company shall have the right to terminate Executive's employment
hereunder for cause, as such term is defined in the following section.
(b) For the purpose of this Section 10, the term "cause"
means (and shall be limited to) (i) fraud, misappropriation,
embezzlement, intentional and material damage to the property of
Company; or (ii) material breach of any of the provisions of this
Agreement described in Section 13.
(c) Upon termination of Executive's employment for cause
pursuant to this Section 10, Executive shall not, except as otherwise
required by law, be entitled to receive any further compensation other
than accrued benefits under benefit plans of the Company, including
without limitation stock option, deferred compensation, profit sharing
and pension plans, if any, and shall be completely relieved of his
position as an officer and director of Company, its subsidiaries and
affiliates, and Executive covenants and agrees to deliver at the
termination date all resignations necessary to effect his termination
as an employee, officer and director.
11. Disability.
(a) If, during the term of this Agreement, Executive
contracts an illness or other disability which prevents performance by
him of his duties as an executive officer for a consecutive period of
six (6) months or more, then Company at its option, may at any time
thereafter terminate this Agreement by serving thirty (30) days written
notice thereof on Executive and this Agreement shall terminate and come
to an end upon the date set forth in said notice as if such date were
the termination date of this Agreement. If prior to the date specified
in such notice, Executive's illness or incapacity shall have been
eliminated or corrected and Executive is physically and mentally able
to perform his duties as an executive officer and shall have taken up
and is performing such duties on a full time basis, he shall be
entitled to resume employment hereunder as though such notice had not
been given.
(b) During any period of disability and prior to the
termination of this Agreement as in this Section provided, Executive
shall continue to be paid in full by Company in accordance with the
provisions of Section 5, except that Company shall deduct from
Executive's compensation as herein provided an amount equal to any
disability insurance payments received by Executive for such period
pursuant to disability insurance policies paid for and maintained by
Company for the benefit of Executive.
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(c) If there should be any dispute between the parties as
to Executive's physical or mental disability at any time, such
questions shall be settled by the majority opinion of three impartial,
reputable physicians, one of whom shall be selected by Company, another
by Executive, and the third by the two physicians selected by Company
and Executive. The certificate of two such physicians as to the matter
in dispute shall be final and binding on the parties.
(d) Upon the date of termination of this Agreement under
this Section 11 due to disability, Executive shall receive the payments
and benefits set forth in Section 9(g) hereof.
12. Non-Exclusivity of Benefits. Unless specifically provided
herein, neither the provisions of this Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish
Executive's rights as an employee of the Company, whether existing now or
hereafter, under any compensation and/or benefit plans (qualified or
nonqualified), programs, policies, or practices provided by the Company, for
which Executive may qualify. Vested benefits or other amounts which Executive is
otherwise entitled to receive under any plan, policy, practice, or program of
the Company at or subsequent to the date of termination of Executive's
employment shall be payable in accordance with such plan, policy, practice, or
program except as expressly modified by this Agreement.
13. Confidentiality and Non-Competition.
(a) Except as otherwise required by law, rule or
regulation, court order or valid subpoena, Executive will not at any
time during the term of this Agreement or thereafter, except as
authorized by Company, knowingly divulge, furnish or make accessible to
any person, firm, corporation or other entity, any such confidential
and sensitive information and any other information not otherwise
publicly available which he presently possesses or which he may obtain
during the course of his employment with respect to the business,
customers and affairs of Company or any subsidiary or affiliate of
Company or trade secrets, developments, know-how methods or other
information and data pertaining to practices, equipment, developments
or any confidential or secret aspect of the business of Company or any
subsidiary or affiliate of Company, and that all such matters and
information shall be kept strictly and absolutely confidential.
Executive, upon termination of his employment, irrespective of the
time, manner or cause of termination, will surrender and deliver to
Company all lists, books, records and data of every kind relating to or
in connection with the business of Company or any subsidiary or
affiliate of Company, and all property belonging to Company and any
subsidiary or affiliate of Company.
(b) During the term of this Agreement and, in the event
that Executive's employment with Company is terminated for any reason
other than a Change in Control as defined in Section 9 hereof, for a
period of one (1) year after such termination, Executive
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shall not, directly or indirectly, engage in or contract with others to
engage in any business enterprise, line of work, consulting contract,
joint venture or other arrangement which conducts a business or
businesses substantially similar to the business conducted by Company
in any area in which Company or any of its affiliates or subsidiaries
provides or plans to provide air transportation to the public.
Executive acknowledges that the geographic area covered hereby, and the
period and nature of the agreed restrictions are reasonable and
necessary for the protection of the business of Company. All provisions
of this paragraph concerning non-competition are severable; and while
it is the intention of the parties that all of said provisions shall be
enforceable, if any one of the same shall be held to be unenforceable
in whole or in part, the remainder shall continue to be in full force
and effect.
14. Irreparable Injury. Executive acknowledges that his compliance
with his duties and obligations under Section 13 is necessary to protect the
goodwill and other proprietary interests of Company and the purposes and essence
of this Agreement. Executive acknowledges that a breach of his duties and
obligations under Section 13 will result in irreparable and continuing damage to
Company for which there will be no adequate remedy at law; and agrees that, in
the event of any breach of any of the aforesaid duties and obligations, Company
and its successors and assigns shall be entitled to injunctive or other
equitable relief and to such other and further relief as may be proper.
15. Assignment and Successors in Interest. To the extent that the
obligations provided for herein require the personal performance of Executive,
Executive's rights, interests and obligations as provided herein may not be
assigned. Except as otherwise provided in the immediately preceding section of
this sentence, all rights, privileges and obligations of the parties hereto
shall inure to the benefit of and be binding upon their respective successors,
assigns, heirs, executors, administrators and estates. The Company will require
any successor (whether by reason of a Change in Control, direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform the obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
16. Notice. Any notice required or permitted hereunder shall be
given in writing and delivered to the other party by U. S. registered or
certified mail; if to Company, at Xxxx Xxxxxx Xxx 00000, Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxx 00000; if to Executive, at P. O. Xxx
000, Xxxxxx, Xxxxxxxx 00000, or such other address as either party may specify
in a written notice to the other party.
17. Entire Agreement and Amendment. This Agreement embodies the
entire agreement between the parties and supersedes all prior agreements,
whether written or oral, relating to the object matter herein. Any amendment
hereto shall be in writing and executed by the duly authorized representatives
of each party.
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18. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky.
19. Severability. If any portion of this Agreement shall be held
unenforceable for any reason, the same shall not affect the validity or
enforceability of the remaining provisions contained herein.
20. Headings. The section headings used in this Agreement are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS: COMAIR HOLDINGS, INC.
BY: /s/ Xxxxx X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
