Exhibit 10(t)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and subscribed as of the 1st day of October 2001, by
and between THE FLIGHT INTERNATIONAL GROUP, INC., a Georgia corporation, having
its principal place of business at Newport News / Williamsburg International
Airport, Xxxxxxx Xxxx, Xxxxxxxx 00000 (the "Company"), and XXXXX X. XXXXXXX
("Executive").
WHEREAS, the Company considers it essential and in the best interest of its
stockholders to xxxxxx the continuous employment of key management personnel and
desires to retain the services of Executive on the terms and conditions provided
in this Agreement; and
WHEREAS, Executive desires to accept employment by the Company and to
render services to the Company on the terms and conditions provided in this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto hereby covenant and agree as follows:
1 . Employment
The Company hereby agrees to employ and retain Executive, and Executive
agrees to be employed and retained by the Company, to render services to the
Company for the period specified in Section 2 below, at a rate of compensation
and upon the other terms and conditions hereinafter set forth.
2. Term
The term of Executive's employment under this Agreement ("Employment Term")
shall commence as of 1 October 2001 and shall continue for a period of five (5)
years; in no event to extend beyond 30 September 2006. This Agreement supersedes
the Agreement dated 2 January 1997, terminating 31 December 2001.
3. Position and Duties
(a) Position. Executive shall serve in the capacity and with the duties and
responsibilities specified in Exhibit A hereto, and with such other duties and
responsibilities with respect to the Company, or its subsidiaries, if any, as
may be determined by the Board of Directors of the Company (the "Board") and
which are generally consistent with those specified in Exhibit A and the terms
and conditions hereof.
(b) Duties. During the Employment Term, Executive shall have the authority
and power to perform such duties consistent with those of a senior executive
holding the position set forth in Exhibit A hereto. Further, except for any
period of Disability (as
hereinafter defined) and (if approved by the Board) reasonable leaves of
absence, Executive shall devote all his business time to the performance of his
duties hereunder; provided, however, that, during the Employment Term hereunder,
Executive may, with the approval of the Board, from time to time, serve, or
continue to serve, on the board of directors of, and hold any other offices or
positions in, companies or organizations, which, in the Board's judgment, will
not present any conflict of interest with the Company or any of its subsidiaries
or affiliates or divisions, or materially adversely affect the performance of
Executive duties pursuant to this Agreement. Executive and Company acknowledge
and accept the potential conflicts set forth in Exhibit B hereto, which were
presented to and accepted by the Board of Directors on 25 July 2001.
4. Compensation and Reimbursement of Expenses
(a) Base Salary. Compensation to Executive during the Employment Term shall
be that set by the Board of Directors at its 25 July 2001 meeting, specifically,
$200,000 per year, paid in equal by weekly installments. Base salary will be
increased by ten percent (10%) each year of this Agreement, beginning 1 October
2002. The Base Salary may be further increased by the Board or a compensation
committee of the Board, taking into consideration Executive's performance,
general cost of living increases, the salaries provided by comparable
businesses, the financial condition of the Company and other similar matters.
(b) Reimbursement of Expenses. Consistent with established policies of the
Company and the Resolution of the Board of Directors at its 25 July 2001 Meeting
(Exhibit B attached hereto), the Company shall pay or reimburse Executive for
all necessary and reasonable travel and other out-of-pocket expenses incurred by
Executive in performing his obligations under this Agreement, including, without
limitation, air transportation and hotel expenses, as well as reimbursement for
expenses associated with professional dues, trade journal subscriptions and
attendance at seminars. In addition, Executive shall be reimbursed for his
necessary travel expenses to and from Newport News, Virginia and his home in
Atlanta, Georgia, per the Resolution of the Board of Directors dated 25 July
2001. Executive shall provide receipts or other reasonably detailed support for
all travel and other expenses for which Executive requests reimbursement by the
Company.
(c) The Company shall also provide to Executive, per the Resolution of the
Board of Directors dated 25 July 2001, an apartment and automobile for his use
in Newport News, Virginia.
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5. Benefits
(a) Benefit Plans. The payments provided in Section 4 hereof are in
addition to any benefits to which Executive may be, or may become, entitled
under any benefit plan or program of the Company for which key executives are or
shall become eligible, including, without limitation, participation in the
Company's health insurance plan, pension, 401(K), life and disability insurance
and stock benefits and/or plans.
(b) Executive shall be entitled to four (4) weeks vacation time per year.
(c) There shall be no material reduction or diminution of the benefits
provided in this Section 5 except for across-the-board benefit reductions
similarly affecting all personnel of the Company.
6. Benefits Payable Upon Disability
(a) Disability Benefits. During any period of Disability (as hereinafter
defined) occurring during the Employment Term, the Company shall, subject to
Section 8(b) hereof, continue to pay Executive compensation as provided in
Section 4 and extend to him the benefits provided in Sections 4 and 5 hereof;
provided, however, that, if disability benefits are provided under any
disability policy maintained by the Company, payments under such policy shall be
considered as payments by the Company. As used in this Agreement, the term
"Disability" shall mean the material inability, in the opinion of two-thirds
(2/3) of the Board (excluding Executive) set forth in a Resolution giving the
particulars thereof, of Executive to render his agreed-upon services to the
Company due to physical and/or mental infirmity.
(b) Services During Disability. During the Employment Term, notwithstanding
any Disability, Executive shall, to the extent that he is physically and
mentally able to do so, furnish information and assistance to the Company, and,
in addition, upon the reasonable request in writing on behalf of the Board, or
an executive officer designated by the Board, from time to time, he shall make
himself available to the Company to undertake reasonable assignments consistent
with his current position with the Company and his physical and mental health.
7. Early Termination
This Agreement is subject to termination prior to the Expiration Date, as
follows:
(a) Death of Executive. If Executive dies, this Agreement shall terminate
effective as of the date of the Executive's death
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and Executive's estate shall be entitled to the payments set forth in Section
8(a) hereof.
(b) Disability. If Executive has been absent from full-time service for a
period of more than ninety (90) days during any consecutive twelve (12) month
period during the Employment Term due to Disability, the Board may terminate
this Agreement effective thirty (30) days after written Notice of Termination is
sent to Executive, if Executive fails to return to the substantially full
performance of his duties.
(c) Termination by Company. The Company may terminate Executive's
employment hereunder for Cause (as hereafter defined) after delivery to
Executive of a written Notice of Termination. For purposes of this Agreement,
the term "Cause" shall mean any of the following: (a) any material violation of
Executive's responsibilities to the Company which constitutes misconduct and
results (or could result with notice from a third party or lapse of time) in
material injury to the Company; (b) any unauthorized act by Executive which
results (or reasonably could result with notice from a third party or lapse of
time) in material injury to the Company; (c) Executive's other failure to
substantially perform his obligations under this Agreement which failure or
effects thereof shall have continued for thirty (30) days after written notice
by the Company to Executive specifying such failure; or (d) for Executive's
conviction of a felony or crime of moral turpitude. For purposes of this section
7(c), no act, or failure to act, shall be deemed "cause", unless done, or
omitted to be done, in bad faith or without reasonable belief established by the
Executive that such action or omission was in the best interest of the Company.
Executive's termination for Cause shall not be deemed effective unless and until
there shall have been delivered to Executive a copy of a Resolution duly adopted
by the affirmative vote of not less than seventy-five percent (75%) of the
entire membership of the Board (excluding Executive) at a meeting of the Board
(after reasonable notice to Executive and an opportunity for Executive, together
with his counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, Executive conducted himself in a manner as set forth above
in this Section 7(c).
(d) Breach. This Agreement may be terminated at the election of Executive,
upon a breach of this Agreement by the Company. "Breach" is defined as follows:
(i) a reduction by the Company in the Base Salary below that set by the Board,
as specified in Section 4(a) hereof; (ii) the relocation of the Company's
offices at which Executive is principally employed; (iii) the failure by the
Company to pay to Executive any portion of compensation due him within thirty
(30) days of the date such compensation is due;
(iv) the assignment to Executive of any duties substantially inconsistent with
his position, or a material adverse alteration in the nature or status of
Executive's responsibilities or the conditions of employment (including, without
limitation, material reductions
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in vacation or material increase in overnight travel obligations not reasonably
required in order to conduct Executive's responsibilities under this Agreement)
from those in effect at the date of this Agreement; or (v) such other material
Breach of the Company's obligations to Executive under this Agreement. Subject
to the provisions of the following sentence, Executive may terminate this
Agreement by giving written Notice to the Company within sixty (60) days of the
event giving rise to termination. Any such Notice of Termination shall specify
the nature of the event and the effective date of termination of this Agreement
(which date shall be no earlier than thirty (30) days from the date of such
Notice and no later than forty-five (45) days from the date of Notice). The
Company shall have an opportunity to cure any such Breach, and any Breach
claimed in the Executive's Notice shall be deemed cured, and such termination as
a result of any Breach claimed shall be ineffective, in the event the Company
cures such Breach prior to the effective date of termination specified in the
Executive's written Notice of Termination, notwithstanding any other provision
of this Agreement.
8. Effect of Early Termination
(a) Upon the early termination of this Agreement as a result of Death, the
Company shall pay Executive's estate (i) his Base Salary accrued through the
effective date of termination at the rate in effect at the effective date of
termination, payable at the time such payment is due; (ii) all other amounts to
which Executive is entitled, including, without limitation, expense
reimbursement amounts accrued to the effective date of termination or amounts
under any benefit plan of the Company at the time such payments are due; and
(iii) life insurance proceeds paid on any life insurance policy owned by the
Company, and the Company shall have no further obligations under this Agreement.
(b) Upon the early termination of this Agreement as a result of Disability,
the Company shall pay Executive (i) his Base Salary accrued through the
effective date of termination at the rate in effect at the time Notice of
Termination is given, payable at the time such payment is due; (ii) all other
amounts to which Executive is entitled, including, without limitation, expense
reimbursement amounts accrued to the effective date of termination, or amounts
under any benefit plan of the Company, at the time such payments are due, and
the Company shall have no further obligations to Executive under this agreement.
(c) Upon the early termination of this Agreement by the Company for Cause,
or upon early termination by Executive pursuant to the last sentence of Section
15 hereof, the Company shall pay to Executive (i) his Base Salary accrued
through the effective date of termination at the rate in effect at the time
Notice of Termination is given, payable at the time such payment is due; and
(ii) all other amounts to which Executive is entitled, including, without
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limitation, expense reimbursement amounts accrued to the effective date of
termination or amounts under any benefit plan of the Company, and the Company
shall have no further obligation to Executive under this Agreement.
(d) Upon the early termination of this Agreement by the Company pursuant to
Section 7(c)(ii) (other than for Cause, Death, Disability and other than a
termination by the Company under circumstances constituting a Change in Control
Termination as defined in paragraph (e) of this Section 8), or upon the early
termination of this Agreement by Executive as a result of a Breach of this
Agreement by the Company (other than a termination of this Agreement by
Executive as a result of a Breach under circumstances constituting a Change in
Control Termination), the Company shall pay to Executive, in addition to the
amounts described in subparagraphs 8(a)(i) and (ii) hereinabove, (i) in lieu of
any further compensation payments to Executive for periods subsequent to the
effective date of termination, a lump sum severance payment equal to 100% of his
annual Base Salary at the rate in effect at the time Notice of Termination is
given, and (ii) all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the effective date
of termination or amounts under any benefit plan of the Company at the time such
payments are due. For a one year period after such termination, the Company
shall provide Executive with life and health insurance benefits substantially
similar to those which Executive was receiving immediately prior to the Notice
of Termination, and the Company shall have no further obligation to Executive
under this Agreement.
(e) Change in Control. A Change in Control shall be deemed to have occurred
if any person or entity other than those listed in Exhibit B attached hereto
becomes a beneficial owner of the Company through a sale of the Company or the
merger of the Company with another business.
Upon the early termination of this Agreement by the Company as a result of
a Change in Control, the Company shall pay Executive, in addition to the amounts
described in Section 8(a)(i) and (ii) hereinabove (i) in lieu of any further
compensation payments to Executive for periods subsequent to the effective date
of termination, a lump sum severance payment equal to the sum total of the
remainder of this Agreement at the rate in effect at the time Notice of
Termination is given, and (ii) all other amounts to which Executive is entitled,
including, without limitation, expense reimbursement amounts accrued to the
effective date of termination or amounts under any benefit plan of the Company
at the time such payments are due. For a one year period after such termination,
the Company shall provide Executive with life and health insurance benefits
substantially similar to those which Executive was receiving immediately prior
to the Notice of Termination, and the
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Company shall have no further obligation to Executive under this Agreement.
9. Manner of Certain Payments
If any amount payable to Executive pursuant to Section 8 cannot be finally
determined on or before the date such payments are due, the Company shall pay
Executive, on such day, an estimate, as determined in good faith by the Board,
of the minimum amount of such payments and shall pay the remainder of such
payments (together with interest at the rate of Prime + 1%) as soon as the
amount thereof can be determined, but in no event later than thirty (30) days
following the close of the fiscal quarter in which the effective date of
termination occurs. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to Executive, payable on the fifteenth day
after demand by the Company (together with interest at the rate of Prime + 1%).
Executive shall not be required to mitigate the amount of any payment provided
for in Section 8 by seeking other employment or otherwise, nor shall the amount
of any payment or benefit provided for in Section 8 be reduced by any
compensation earned by Executive as the result of employment by another employer
or by retirement benefits payable immediately upon such termination. If any
amount due hereunder is not paid within thirty (30) days after the date due,
Executive shall be entitled to interest on such amount at the rate provided in
Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended, payable
from the date such amount was due.
10. Withholding
The Company shall withhold from any benefits payable pursuant to this
Agreement such Federal, State, City, or other taxes or sums as may be required
to be withheld pursuant to any law or governmental regulations or ruling.
11. Effect of Prior Agreements
This Agreement contains the entire understanding between the parties hereto
respecting Executive's employment by the Company and supersedes and renders void
all provisions of any prior engagement agreement between the Company or any
predecessor of the Company and Executive.
12. Non-Competition
Executive covenants and agrees that he will not at any time during his
employment with the Company, and for a period of one year after the termination
of such employment, unless the termination by the Company constitutes a Breach
by the Company (whether as employee, owner, partner, agent, director, officer,
consultant, shareholder [except as the holder of not more than five
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percent (5%) of the outstanding shares of a corporation whose stock is listed on
any national or regional securities exchange or quoted in the daily listing of
over-the-counter market securities] or in any other capacity, for his own
account or for the benefit of any person or entity) establish, engage in
business or be connected with, in any manner, any person or entity which is at
the time engaged in a business which is materially in competition with the
business of the Company, except that Executive shall be entitled to continue
those relationships referred to in Section 3 herein and listed in Exhibit B
attached hereto. Upon formal Resolution by not less than 75% of the Board
(excluding Executive), this provision may be modified.
13. Confidential Information
Executive shall hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge or data relating to the
Company or its customers, which shall have been obtained by Executive during or
by reason of his employment by the Company and which shall not be public
knowledge (other than through action of Executive) or is required to be
disclosed by law. During and after the end of the Employment Term, Executive
shall not, without the prior written consent of the Company, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it, except that, while employed by the Company in the
business of and for the benefit of the Company, Executive may provide
confidential information as appropriate to attorneys, accountants, banks, etc.
Executive shall, upon request of the Company, return to the Company all original
materials or copies of any Company documents, information, knowledge or data
deemed by the Company to be secret, confidential or otherwise.
14. Indemnification
The Company shall indemnify and hold Executive harmless to the fullest
extent legally permissible under Virginia law, as amended from time to time,
against all expenses, liabilities and losses (including attorney's fees,
judgments, fines and amounts paid in settlement) reasonably incurred or suffered
by him in connection with service as a director or officer of the Company or any
subsidiary pursuant to Section 3. The Company shall advance Executive the amount
of his expenses incurred in connection with any proceeding relating to such
service to the fullest extent legally permissible under Virginia law.
15. Liability Insurance
To the extent commercially available, at premiums and other charges not in
excess of the greater of amounts currently charged the Company therefor or those
generally available to corporations of the Company's size in the Company's
industry, the Company shall
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maintain, for the benefit of Executive, a directors and officers liability
insurance policy insuring Executive's service as a director or officer of the
Company or any subsidiary pursuant to Section 3 or in effect on the date hereof,
or a directors and officers liability insurance policy which provides
substantially equivalent coverage to such insurance policy, during the entire
Employment Term. In the event the Company fails to maintain a directors and
officers liability insurance policy for the benefit of Executive for any period
of thirty (30) consecutive days, this would represent a Breach by the Company
and the Executive shall have the right to terminate his employment hereunder.
16. General Provisions
(a) Nonassignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by Executive, his beneficiaries, or legal
representatives without the Company's prior written consent.
(b) Binding Agreement. This Agreement shall be binding upon, and inure to
the benefit of, Executive and the Company and their respective heirs, executors,
administrators, successors and permitted assigns.
(c) Amendment of Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.
(d) Waiver. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.
(e) Severability. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.
(f) Notices. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States mail,
postage prepaid. If to Executive, mail shall be addressed to the Company; if to
the Company, mail shall be addressed to The Flight International Group, Inc.,
Xxx Xxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000 and directed to the attention of
the Board, with a separately mailed copy to the Secretary of the Company, and to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
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(g) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
(h) Expenses. The Company shall pay all costs and expenses, including
attorneys' fees and disbursements, incurred by the Company and incurred by
Executive, in connection with any legal proceedings, whether or not instituted
by the Company or Executive, relating to this Agreement; provided, however, that
the Company shall have no obligation to reimburse Executive for costs and
expenses, including attorneys' fees, in the event of a claim by Executive
against the Company relating to this Agreement, unless Executive is determined
to have been successful by a court of competent jurisdiction and after all
opportunities for appeal have lapsed, on the merits of such claim. The Company
also agrees to pay all costs and expenses, including attorneys' fees and
disbursements, incurred by the Company and by Executive in connection with the
preparation of this Agreement.
(i) Board Determinations. All matters to be determined by the Board of
Directors pursuant to the terms of this Agreement shall be determined by the
Board without the vote of Executive.
(j) Headings. The headings of paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
(k) Governing Law. This Agreement has been executed and delivered in the
State of Virginia, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of said State.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and Executive has signed this Agreement, all as of
the date and year first above written.
THE FLIGHT INTERNATIONAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxx
-------------------- --------------------
Title: Chief Financial Officer Executive
Attest:
/s/ Xxx X. Xxxxxxxx
--------------------
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Exhibit A
POSITION AND DUTIES
1. Position:
Chairman of the Board of Directors and President of The Flight International
Group, Inc.; President and Sole Director of all subsidiaries of The Flight
International Group, Inc.
2. Duties:
Preside at all meetings of shareholders and directors. Generally supervise
and manage the business and affairs of the Company.
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Exhibit B
CERTIFICATE OF SECRETARY
I, Xxx X. Xxxxxxxx, HEREBY CERTIFY as follows:
1. I am the Secretary of and official custodian of certain records,
including the Charter, Bylaws and Minutes of the Meetings of the Board of
Directors of THE FLIGHT INTERNATIONAL GROUP, INC., a corporation duly organized
under the laws of Georgia.
2. That the following is a true and accurate transcript of Resolutions duly
adopted at a meeting of the Board of Directors of said corporation held on the
25th day of July 2001, at which meeting the business hereinafter described and
the proceedings of said meeting were all in accordance with the Charter and
Bylaws of said corporation and that said Resolutions have not been amended or
revoked and are in full force and effect:
RESOLVED, that a contract shall be entered into by the Company and Xxxxx X.
Xxxxxxx, for Xxxxxxx'x employment as Chairman of the Board and President of
the Company, which shall incorporate the following:
The term of the contract shall be for five years from 1 October 2001. Xx.
Xxxxxxx'x salary shall be $200,000 per year and be increased by 10% on 1
October of each succeeding year during the term of the contract. In
addition, he shall be provided the customary health, insurance and vacation
benefits of the Company; necessary travel expenses to and from Newport News
and his home in Atlanta, Georgia; an apartment and car in Newport News, and
usual and necessary business expenses for travel, which shall be
appropriately accounted for.
RESOLVED, FURTHER, that the Company shall maintain its directors and
officers liability insurance policy and Xxxxxxx shall be indemnified and
held harmless thereunder to the fullest extent legally permissible under
the Georgia Business Corporation Code and the Bylaws of the Company,
against all expenses, liabilities and losses (including attorneys' fees,
judgments, fines and amounts paid in settlement) reasonably incurred or
suffered by him in connection with his service as a director and/or officer
of the Company, and such amounts shall be advanced to the fullest extent
legally permissible.
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IT IS FURTHER RESOLVED that the Board recognizes the following potential
conflicts with the employment of Xxxxxxx as Chairman of the Board and
President of the Company:
1. Xxxxxxx is 50% owner of Maritime Sales & Leasing, Inc. (MSL), which
leases to Flight International, Inc. ("FII") and others its airplanes.
2. MSL is co-owned by Xxxx Xxxx, who owns Global Jet. Global Jet and Xxxx
Xxxx have been instrumental in developing the fleet of Learjets for Phoenix
Air Group, a competitor of FII. Phoenix Air Group is the partner of FII in
the CAS-MOS contract.
3. Xxxxxxx plans to use these relationships with Phoenix Air, MSL and
others to further FII's business.
4. Xxxxxxx is President of DESCO, Aviation Consultants International, which
has been under contract to FII since January 1991. DESCO also leases one
airplane to FII.
/s/ Xxx X. Xxxxxxxx
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Secretary
(SEAL)
