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Exhibit 10.33
AMENDMENT TO EMPLOYMENT AGREEMENT
This AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is entered into
effective as of January 15, 1999 by and among AMERICA WEST HOLDINGS CORPORATION,
a Delaware corporation ("Holdings"), AMERICA WEST AIRLINES, INC., a Delaware
corporation and a wholly-owned subsidiary of Holdings ("AWA"), THE LEISURE
COMPANY, a Delaware corporation and a wholly-owned subsidiary of Holdings
("Leisure", and, together with AWA and Holdings, "Employers" and individually,
an "Employer"), and XXXXXXX X. XXXXXX ("Xxxxxx").
RECITALS
A. The Employers and Xxxxxx have executed that certain Employment Agreement
dated as of February 17, 1998 (the "Original Agreement").
B. In consideration of the premises, and other good and valuable
consideration, the receipt of which is hereby acknowledged by the parties, the
Employers and Xxxxxx desire to amend the Original Agreement as specified herein.
AGREEMENT
The Employers and Xxxxxx, intending to be legally bound, agree as follows:
1. AMENDMENT.
(a) AMENDMENT OF SECTION 1.1. Section 1.1 of the Original Agreement is
hereby amended to add a new paragraph (vi) and to modify paragraphs (iv) and (v)
of the definition of "Change in Control" as follows:
"(iv) an Employer's stockholders shall approve a merger or
consolidation involving the Employer other than (A) a merger or
consolidation in which the voting securities of the Employer outstanding
immediately prior thereto will become (by operation of law), or are to be
converted into, voting securities of the surviving corporation or its
parent corporation immediately after such merger or consolidation that are
owned by the same person or entity or persons or entities as immediately
prior thereto and possess at least 75% of the Voting Power held by the
voting securities of the surviving corporation or its parent corporation,
or (B) a merger or consolidation effected to implement a recapitalization
of the Employer (or similar transaction) in which no person (excluding the
Employers) acquires more than 25% of the Voting Power; or
(v) Holdings' stockholders shall approve a merger, consolidation,
reorganization, disposition of assets, liquidation or other transaction (or
series of related transactions) in which neither Holdings nor AWA will
survive as a publicly-owned corporation whose common stock is registered
under the Exchange Act; or
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(vi) Holdings or AWA shall sell or otherwise dispose of, or shall
enter into a transaction or series of related transactions providing for
the sale or other disposition of, or the stockholders of Holdings or AWA
shall approve a transaction or series of related transactions providing for
the sale or other disposition of, all or substantially all of the stock or
assets of AWA."
(b) AMENDMENT OF SECTION 1.1. Section 1.1 of the Original Agreement is
hereby amended such that paragraphs 6 and 7 of the definition of "Good Reason"
are amended to read in their entirety as follows and paragraph 8 of such
definition is deleted:
"(6) the failure of an Employer to obtain any assumption agreement
required by Section 9.5(a); or
(7) the failure of Xxxxxx to be elected or appointed, or to be
re-elected or re-appointed, as a director of an Employer as contemplated by
Section 2.2(g)."
(c) AMENDMENT OF SECTION 3.3(c). Section 3.3(c) of the Original Agreement
is hereby amended to read in its entirety as follows:
"(c) Upon the occurrence of a Change in Control, or in the event
Xxxxxx'x employment is terminated by Xxxxxx pursuant to Section 4.1 for
Good Reason or by Holdings pursuant to Section 4.2 for a reason other than
Misconduct or Disability, the 1998 Stock Option shall become automatically
vested in full and may be exercised at any time thereafter; provided,
however, in no event shall the 1998 Stock Option be exercisable after
February 17, 2008."
(d) AMENDMENT OF SECTION 3.4. Section 3.4 of the Original Agreement is
hereby amended to read in its entirety as follows:
"Effective as of January 15, 1999, Xxxxxx has been granted an option
to purchase 150,000 Shares for $17.125 per Share pursuant to the Incentive
Plan (the "1999 Stock Option"). The following provisions of this Section
3.4 constitute the agreement required with respect to the 1999 Stock Option
under Paragraph 4(i) of the Incentive Plan:
(a) The 1999 Stock Option shall be exercisable as to one-third of the
Shares covered thereby immediately on the date of grant, as to an
additional one-third of the Shares covered thereby on December 31, 1999 and
as to the remaining one-third of the Shares covered thereby on December 31,
2000, so that the 1999 Stock Option will be exercisable in full on December
31, 2000.
(b) Upon the exercise of the 1999 Stock Option, the Person exercising
the 1999 Stock Option shall pay to Holdings an amount equal to the exercise
price, such amount to be paid (i) in cash, (ii) by delivering to Holdings
issued and outstanding Shares which have an aggregate Market Value per
Share at the date of exercise equal to the exercise price, (iii) by
directing Holdings to sell a sufficient number of Shares to be acquired on
exercise of the 1999 Stock Option through a broker approved by Holdings, in
which event the proceeds of such sale
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shall be applied by Holdings to the payment of the exercise price and any
applicable withholding taxes, with any surplus then remaining to be paid to
the Person exercising the 1998 Stock Option or its designee or (iv) by any
combination of the foregoing.
(c) Upon the occurrence of a Change in Control, or in the event
Xxxxxx'x employment is terminated by Xxxxxx pursuant to Section 4.1 for
Good Reason or by Holdings pursuant to Section 4.2 for a reason other than
Misconduct or Disability, the 1999 Stock Option shall become automatically
vested in full and may be exercised at any time thereafter; provided,
however, in no event shall the 1999 Stock Option be exercisable after
January 15, 2009.
(d) In the event Xxxxxx'x employment is terminated by Xxxxxx pursuant
to Section 4.1 other than for Good Reason or on account of Disability or by
Holdings pursuant to Section 4.2 for Misconduct, the 1999 Stock Option, to
the extent then vested, may be exercised at any time within six months
following the Termination Date, but not thereafter. To the extent the 1999
Stock Option is not vested on such Termination Date, the portion thereof
that is not vested on such Termination Date shall automatically lapse and
be canceled unexercised as of such Termination Date.
(e) The 1999 Stock Option shall become automatically vested in full on
the date of Xxxxxx'x death and may be exercised at any time within the
one-year period beginning on the date of Xxxxxx'x death, but not
thereafter.
(f) In the event Xxxxxx'x employment is terminated by reason of
Disability, the 1999 Stock Option shall become automatically vested in full
on the date of such Disability and may be exercised at any time within the
36-month period beginning on the date of such Disability, but not
thereafter.
(g) Except as otherwise provided herein, the 1999 Stock Option may be
exercised in whole or in part or in two or more successive parts.
(h) The 1999 Stock Option shall not be transferable by Xxxxxx except
for transfers permitted by the Incentive Plan and except for transfers by
will or by laws of descent and distribution. During the lifetime of Xxxxxx,
the 1999 Stock Option may not be exercised by anyone other than Xxxxxx or
the Person to whom the 1999 Stock Option has been transferred in accordance
with the Incentive Plan.
(i) The 1999 Stock Option may be exercised from time to time by a
notice in writing which identifies the 1999 Stock Option and specifies the
number of Shares in respect of which it is being exercised. Such notice
shall be delivered to the Secretary of Holdings or addressed to the
Secretary of Holdings at its principal corporate offices. The date of
exercise of the 1999 Stock Option shall be the date the exercise notice is
hand delivered or mailed to the Secretary of Holdings, whichever is
applicable. An election to exercise the 1999 Stock Option shall be
irrevocable.
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(j) The 1999 Stock Option is not intended to qualify as an incentive
stock option under Section 422 of the Code.
(k) The provisions of this Section 3.4 shall survive the termination
of Xxxxxx'x employment hereunder."
(e) AMENDMENT OF SECTION 4.4(a). Section 4.4(a) of the Original Agreement
is hereby amended to read in its entirety as follows:
"(a) Severance Payment. Employers shall promptly pay to Franke a
severance payment (the "Severance Payment"), in cash or other immediately
available funds, in the amount of either (i) $1.5 million, if such
termination occurs prior to or more than two years after the effective date
of a Change in Control, or (ii) the greater of either (x) $1.5 million or
(y) 200% of the sum of Xxxxxx'x Base Salary as in effect on the date of
termination plus a 50% target bonus, if such termination occurs within the
two year period beginning on the effective date of a Change in Control;
provided, however, that if any payments, distributions, accelerations of
vesting or other benefits by or from the Employers to or for the benefit of
Xxxxxx (whether actually or deemed paid or payable, distributed or
distributable or received or receivable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payment required under this Section 4.4(a) (collectively with the Severance
Payment, the "Section 4999 Payment")) would be subject to the excise tax
imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Xxxxxx with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Xxxxxx shall be entitled to receive
from the Employers an additional payment (a "Gross-Up Payment") in an
amount such that after payment by Xxxxxx of all taxes (including, without
limitation, any income and employment taxes and any interest and penalties
imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up
Payment, Xxxxxx retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Section 4999 Payment. All calculations required
by this Section 4.4(a) shall be performed by the independent auditors
retained by Holdings most recently prior to the Change in Control (the
"Auditors"), based on information supplied by the Employers and Xxxxxx. All
fees and expenses of the Auditors shall be paid by the Employers. In the
event Xxxxxx shall become entitled to receive a Severance Payment pursuant
to this paragraph (a) under circumstances which also entitle him to receive
another severance payment under any severance policy or plan of an
Employer, then the other severance payment due to Xxxxxx pursuant to such
policy or plan shall be automatically reduced by the amount of the
Severance Payment (but shall not be reduced by the amount of any Gross-Up
Payment)."
(f) AMENDMENT OF SECTION 5.2(a). The proviso at the end of Section 5.2(a)
of the Original Agreement is hereby amended to read in its entirety as follows:
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"provided, however, that this Section 5.2 shall not apply and shall have no
further force or effect if either (i) at any time Xxxxxx'x employment is
terminated by Xxxxxx for Good Reason or by Holdings for any reason other
than Misconduct, or (ii) within two years following a Change in Control
Xxxxxx'x employment is terminated by either Xxxxxx or Holdings for any
reason or for no reason."
2. MISCELLANEOUS PROVISIONS.
(a) ORIGINAL AGREEMENT. The Original Agreement, as amended by this
Amendment, shall continue in full force and effect after the date hereof.
(b) WHOLE AGREEMENT. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in the Original Agreement, as amended by this Amendment, have been
made or entered into by either party with respect to the subject matter of this
Amendment.
IN WITNESS WHEREOF, each of the parties has executed this Amendment, in the
case of the Employers by their duly authorized officers, effective as of the day
and year first above written.
AMERICA WEST HOLDINGS CORPORATION
By:___________________________________________
Chairman of Compensation/Human
Resources Committee
AMERICA WEST AIRLINES, INC.
By:___________________________________________
THE LEISURE COMPANY
By:___________________________________________
______________________________________________
XXXXXXX X. XXXXXX
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